<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE TO
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
WAVE TECHNOLOGIES INTERNATIONAL, INC.
(NAME OF SUBJECT COMPANY)
------------------------
WTI ACQUISITION CORPORATION
THE THOMSON CORPORATION
(NAMES OF FILING PERSONS (IDENTIFYING STATUS AS OFFEROR, ISSUER OR OTHER
PERSON))
------------------------
COMMON STOCK, PAR VALUE $9.75 PER SHARE
(TITLE OF CLASS OF SECURITIES)
------------------------
94352Q -- 10 -- 9
(CUSIP NUMBER OF CLASS OF SECURITIES)
MICHAEL S. HARRIS, ESQ.
THE THOMSON CORPORATION
METRO CENTER AT ONE STATION PLACE
STAMFORD CONNECTICUT 06902
TELEPHONE (203) 969-8700
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSONS AUTHORIZED TO RECEIVE NOTICES AND
COMMUNICATIONS ON BEHALF OF FILING PERSONS)
------------------------
COPY TO:
DAVID W. HELENIAK, ESQ.
SHEARMAN & STERLING
599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
(212) 848-4000
CALCULATION OF FILING FEE
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TRANSACTION VALUATION* AMOUNT OF FILING FEE**
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$47,406,810.75 $9,481.36
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</TABLE>
* Estimated for purposes of calculating the amount of the filing fee only.
Calculated by multiplying $9.75, the per share tender offer price, by
4,862,237, the sum of the 4,265,845 currently outstanding shares of Common
Stock sought in the Offer and the 596,392 shares of Common Stock subject to
options that will be vested as of March 22, 2000.
** Calculated as 1/50 of 1% of the transaction value.
[ ] Check the box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid:
- --------------------------------
Form or Registration No.:
- -------------------------------
Filing Party:
- ----------------------------------------------
Date Filed:
- -----------------------------------------------
Check the box if the filing relates solely to preliminary communications made
before the commencement of a tender offer.
Check the appropriate boxes to designate any transactions to which the statement
relates:
[X] third-party tender offer subject to Rule 14d-1.
[ ] issuer tender offer subject to Rule 13e-4.
[ ] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
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<PAGE> 2
This Tender Offer Statement on Schedule TO (this "Schedule TO"), is filed
by WTI Acquisition Corporation, a Delaware corporation ("Purchaser") and an
indirect wholly owned subsidiary of The Thomson Corporation, a corporation
organized under the laws of Ontario, Canada ("Thomson"). This Schedule TO
relates to the offer by Purchaser to purchase all outstanding shares of Common
Stock, par value $0.50 per share (the "Shares"), of Wave Technologies
International, Inc., a Missouri corporation (the "Company"), at a purchase price
of $9.75 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 22, 2000 (the "Offer
to Purchase") and in the related Letter of Transmittal, copies of which are
attached hereto as Exhibits (a)(1) and (a)(2) (which, together with any
amendments or supplements thereto, collectively constitute the "Offer"). The
information set forth in the Offer to Purchase and the related Letter of
Transmittal is incorporated herein by reference with respect to Items 1-9 and 11
of this Schedule TO. The Agreement and Plan of Merger, dated as of March 10,
2000, among Thomson US Holdings Inc. ("Parent"), Purchaser and the Company, a
copy of which is attached as Exhibit (d)(1) hereto is incorporated herein by
reference with respect to Items 5 and 11 of this Schedule TO.
ITEM 10. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Not applicable.
ITEM 12. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase dated March 22, 2000.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies
and Nominees to Clients.
(a)(6) Form of Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Form of Letter to 401(k) Plan Participants.
(a)(8) Summary Advertisement as published in The Wall Street Journal on March
22, 2000.
(a)(9) Press Release issued by Thomson on March 10, 2000.
(d)(1) Agreement and Plan of Merger, dated as of March 10, 2000, among Parent,
Purchaser and the Company.
(d)(2) Confidentiality Agreement dated January 13, 1999, between Thomson and the
Company, as amended on January 22, 1999.
(g) None.
(h) None.
ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3.
Not applicable.
1
<PAGE> 3
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: March 22, 2000
WTI ACQUISITION CORPORATION
By: /s/ MICHAEL S. HARRIS
------------------------------------
Name: Michael S. Harris
Title: Vice President
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: March 22, 2000
THE THOMSON CORPORATION
By: /s/ MICHAEL S. HARRIS
------------------------------------
Name: Michael S. Harris
Title: Senior Vice President,
General Counsel and Secretary
2
<PAGE> 4
EXHIBIT INDEX
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EXHIBIT NO.
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(a)(1) Offer to Purchase dated March 22, 2000.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(5) Form of Letter from Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees to Clients.
(a)(6) Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
(a)(7) Form of Letter to 401(k) Plan Participants.
(a)(8) Summary Advertisement as published in The Wall Street
Journal on March 22, 2000.
(a)(9) Press Release issued by Thomson on March 10, 2000.
(d)(1) Agreement and Plan of Merger, dated as of March 10, 2000,
among Parent, Purchaser and the Company.
(d)(2) Confidentiality Agreement dated January 13, 1999, between
Thomson and the Company, as amended on January 22, 1999.
(g) None
(h) None
</TABLE>
3
<PAGE> 1
EXHIBIT (A)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
WAVE TECHNOLOGIES INTERNATIONAL, INC.
AT
$9.75 NET PER SHARE
BY
WTI ACQUISITION CORPORATION
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
THE THOMSON CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, APRIL 18, 2000, UNLESS THE OFFER IS EXTENDED
THE OFFER IS BEING MADE PURSUANT TO THE TERMS OF AN AGREEMENT AND PLAN OF
MERGER DATED AS OF MARCH 10, 2000 (THE "MERGER AGREEMENT") AMONG THOMSON US
HOLDINGS, INC. ("PARENT"), WTI ACQUISITION CORPORATION ("PURCHASER") AND WAVE
TECHNOLOGY INTERNATIONAL, INC. (THE "COMPANY").
------------------------
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT THE
MERGER AGREEMENT (AS DEFINED HEREIN) AND THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING EACH OF THE OFFER AND THE MERGER (EACH AS DEFINED HEREIN) ARE FAIR TO,
AND IN THE BEST INTEREST OF, THE HOLDERS OF SHARES, HAS APPROVED, ADOPTED AND
DECLARED ADVISABLE THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
THEREBY INCLUDING EACH OF THE OFFER AND MERGER AND HAS RESOLVED TO RECOMMEND
THAT THE HOLDERS OF SHARES ACCEPT THE OFFER AND TENDER SHARES PURSUANT TO THE
OFFER.
------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST
THE NUMBER OF SHARES THAT SHALL CONSTITUTE TWO-THIRDS OF THE THEN OUTSTANDING
SHARES ON A FULLY DILUTED BASIS (INCLUDING, WITHOUT LIMITATION, ALL SHARES
ISSUABLE UPON THE CONVERSION OF ANY CONVERTIBLE SECURITIES OR UPON THE EXERCISE
OF ANY OPTIONS, WARRANTS, OR RIGHTS (OTHER THAN THE RIGHTS ISSUED PURSUANT TO
THE RIGHTS AGREEMENT, DATED AS OF SEPTEMBER 17, 1998 (THE "RIGHTS AGREEMENT")
BETWEEN THE COMPANY AND CHASEMELLON SHAREHOLDER SERVICES, L.L.C., AS RIGHTS
AGENT AND OTHER THAN ANY SHARES ISSUABLE UPON THE EXERCISE OF ANY OPTIONS IN
RESPECT OF WHICH THE PURCHASER HAS RECEIVED AN AGREEMENT FROM THE OPTION HOLDER
NOT TO EXERCISE SUCH OPTION UNTIL AFTER THE RECORD DATE FOR ANY MEETING OF THE
STOCKHOLDERS OF THE COMPANY FOR THE PURPOSE OF CONSIDERING AND TAKING ACTION ON
THE MERGER AGREEMENT, THE OFFER AND THE MERGER) (THE "MINIMUM CONDITION") AND
(II) ANY APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST
IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR ACT"), HAVING EXPIRED OR BEEN
TERMINATED, PRIOR TO THE EXPIRATION OF THE OFFER (THE "HSR CONDITION"). THE
OFFER IS ALSO SUBJECT TO CERTAIN OTHER CONDITIONS CONTAINED IN THIS OFFER TO
PURCHASE. SEE SECTIONS 1 AND 14, WHICH SET FORTH IN FULL THE CONDITIONS TO THE
OFFER.
------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either (i) complete and sign the accompanying Letter of
Transmittal (or a manually signed facsimile thereof) in accordance with the
instructions in the Letter of Transmittal and mail or deliver it together with
the certificate(s) evidencing tendered Shares, and any other required documents,
to the Depositary or tender such Shares pursuant to the procedure for book-entry
transfer set forth in Section 3 or (ii) request such stockholder's broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction for such stockholder. Any stockholder 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 such stockholder desires to tender such Shares.
A stockholder who desires to tender Shares and whose certificates evidencing
such Shares are not immediately available, or who cannot comply with the
procedure for book-entry transfer on a timely basis, may tender such Shares by
following the procedure for guaranteed delivery set forth in Section 3.
Questions or requests for assistance may be directed to the Information
Agent at its address and telephone number set forth on the back cover of this
Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of
Transmittal and the Notice of Guaranteed Delivery may also be obtained from the
Information Agent or from brokers, dealers, commercial banks or trust companies.
------------------------
March 22, 2000
<PAGE> 2
TABLE OF CONTENTS
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PAGE
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SUMMARY OF THE OFFER............................................... I
INTRODUCTION..................................................... 1
1. Terms of the Offer; Expiration Date......................... 3
2. Acceptance for Payment and Payment for Shares............... 4
3. Procedures for Accepting the Offer and Tendering Shares..... 6
4. Withdrawal Rights........................................... 8
5. Certain Federal Income Tax Consequences..................... 9
6. Price Range of Shares; Dividends............................ 10
7. Certain Information Concerning the Company.................. 10
8. Certain Information Concerning Purchaser and Thomson........ 12
9. Financing of the Offer and the Merger....................... 13
10. Background of the Offer; Contacts with the Company; the
Merger Agreement; Interests of Certain Persons in the
Merger...................................................... 13
11. Purpose of the Offer; Plans for the Company After the Offer
and the Merger.............................................. 24
12. Dividends and Distributions................................. 26
13. Possible Effects of the Offer on the Market for Shares,
Nasdaq Listing, Margin Regulations and Exchange Act
Registration................................................ 27
14. Certain Conditions of the Offer............................. 28
15. Certain Legal Matters and Regulatory Approvals.............. 29
16. Fees and Expenses........................................... 31
17. Miscellaneous............................................... 31
</TABLE>
<TABLE>
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SCHEDULES
Schedule I. Directors and Executive Officers of Thomson and Purchaser... I-1
Schedule II. Additional Information Pursuant to Section 14(f) of the II-1
Securities Exchange Act of 1934 and Rule 14f-1
Thereunder................................................
Schedule III. Missouri General and Business Corporation Law Section III-1
351.455 Dissenter's Rights................................
Schedule IV. Schedule of Transactions in Shares During the Past 60 IV-1
Days......................................................
</TABLE>
<PAGE> 3
SUMMARY OF THE OFFER
This summary of the offer highlights selected information from this offer
to purchase, and may not contain all of the information that is important to
you. To better understand our offer to stockholders of Wave Technologies
International, Inc. and for a complete description of the legal terms of the
offer, you should read this entire offer to purchase carefully, as well as those
additional documents to which we have referred you. Questions or requests for
assistance may be directed to the Information Agent at its address and telephone
number on the last page of this offer to purchase.
PRINCIPAL TERMS OF OFFER: - The Thomson Corporation ("Thomson"), through its
wholly owned subsidiary WTI Acquisition
Corporation ("WTI") is offering to purchase all
the shares of common stock, par value $0.50 per
share, of Wave Technologies International, Inc.
("Wave") that are issued and outstanding, for
$9.75 per share. Tendering stockholders will not
have to pay brokerage fees or commissions.
- The offer is the first step in Thomson's plan to
acquire all the shares of Wave common stock that
are issued and outstanding. If the offer is
successful, Thomson will acquire any remaining
shares of Wave common stock as promptly as
practicable thereafter in a merger for $9.75 per
share, in cash. No appraisal rights are available
in connection with the offer; however,
stockholders may have appraisal rights in
connection with the merger. For a more detailed
discussion of appraisal rights, see Section 11.
- Unless WTI extends the offer, the offer will
expire at 12:00 midnight, New York City time, on
Tuesday, April 18, 2000.
- If WTI decides to extend the offer, WTI will
issue a press release giving the new expiration
date no later than 9:00 a.m., New York City time,
on the next business day after the previously
scheduled expiration date.
WAVE BOARD RECOMMENDATION: - The Board of Directors of Wave has unanimously
determined that the merger agreement and the
transactions contemplated thereby, including each
of the offer and merger, are fair to, and in the
best interests of, the stockholders of Wave; has
approved, adopted and declared advisable the
merger agreement and the transactions
contemplated thereby, including each of the offer
and merger, and has resolved to recommend that
stockholders accept the offer and tender their
shares pursuant to the offer.
CONDITIONS TO THE OFFER: - WTI is not required to complete the offer,
unless:
- at least two-thirds of the then outstanding
shares of Wave common stock are validly
tendered and not withdrawn prior to the
expiration of the offer; and
- any applicable waiting period under the HSR
Act has expired or been terminated prior to
the expiration of the offer.
- See Sections 1 and 14 which set forth in full all
the conditions to the offer.
FINANCING OF THE OFFER AND
MERGER: - WTI will obtain all necessary funds to purchase
the shares of Wave common stock from Thomson or
its affiliates. Thomson and its affiliates will
provide such funds from existing resources. For a
more
I
<PAGE> 4
detailed description of the financing of the
offer and the merger, see Section 9.
EXTENSION OF OFFER: - WTI may, without the consent of Wave, extend the
period of the offer as follows:
- if any of the conditions to WTI's obligation
to accept for payment shares of Wave common
stock are not satisfied or waived on or
prior to the scheduled expiration of the
offer;
- if any rule, regulation or interpretation of
the SEC or its staff requires the offer to
be extended;
- on one or more occasions, for an aggregate
period of not more than 10 business days
beyond the latest applicable date that the
offer may be extended, if, as of such date,
all of the conditions to WTI's obligation to
accept for payment the shares of Wave common
stock are satisfied or waived, but the
number of shares of Wave common stock
validly tendered and not withdrawn pursuant
to the offer equals 80% or more, but less
than 90% of the outstanding shares of Wave
common stock on a fully diluted basis; or
- if, on the initial scheduled expiration date
of the offer, the sole condition remaining
unsatisfied is the failure of the waiting
period under the HSR Act to have expired or
been terminated, in which case, WTI may
extend the offer from time to time until the
earlier to occur of (i) June 30, 2000 and
(ii) the fifth business day after the
expiration or termination of the applicable
waiting period under the HSR Act.
- During any such extension of the offer, all
shares of Wave common stock previously tendered
and not withdrawn will remain subject to the
offer and subject to your right to withdraw any
tendered shares of Wave common stock. See Section
4.
PROCEDURE FOR TENDERING
SHARES OF COMMON STOCK: - In order for you to validly tender shares of Wave
common stock pursuant to the offer, you must
deliver the following documents to the Depositary
at one of its addresses listed on the back cover
of this offer to purchase, prior to the
expiration of the offer:
- a letter of transmittal (or a manually
signed facsimile thereof), properly
completed and duly executed (and any other
documents required by the letter of
transmittal) and share certificates
evidencing tendered shares of Wave common
stock;
- in the case of a book-entry transfer, an
agent's message (and any other documents
required by the letter of transmittal) and a
book-entry confirmation (including an
agent's message if you have not delivered a
letter of transmittal); or
- if your share certificates are not
immediately available or you cannot deliver
your share certificates and all other
required documents to the Depositary prior
to the expiration of the offer, or you
cannot complete the procedure for delivery
by book-entry transfer on a timely basis,
you may still tender your shares of
II
<PAGE> 5
Wave common stock if you comply with the guaranteed delivery procedures
described in Section 3 of this offer to purchase.
- For a detailed description of the procedures for
tendering shares of Wave common stock, see
Section 3.
WITHDRAWAL RIGHTS: - You may withdraw any tender of shares of Wave
common stock at any time prior to the expiration
of the offer, and, unless WTI has previously
accepted them pursuant to the offer, you may also
withdraw any tender of shares of Wave common
stock at any time after May 20, 2000. See Section
4.
WITHDRAWAL PROCEDURE: - If, after tendering shares of Wave common stock
in the offer, you decide to withdraw such
tendered shares, you may withdraw the tendered
shares by providing timely notice of such
withdrawal to the depositary. If you tendered
shares of Wave common stock by giving
instructions to a broker or bank, you must
instruct the broker or bank to arrange for the
withdrawal of the shares of Wave common stock.
For further details, see Section 4.
MARKET VALUE OF SHARES: - On March 9, 2000, the last full trading day
before WTI announced its offer to purchase all
the shares of Wave common stock that are issued
and outstanding, the last reported closing price
per share of Wave common stock was $7.375. Before
deciding whether to tender, you should obtain a
current market quotation for the shares of Wave
common stock.
ADDITIONAL INFORMATION: - Any questions or requests for additional
information or assistance may be directed to the
Information Agent at its address and telephone
number on the last page of this offer to
purchase.
III
<PAGE> 6
To the Holders of Common Stock of
Wave Technologies International, Inc.:
INTRODUCTION
WTI Acquisition Corporation, a Delaware corporation ("Purchaser") and an
indirect wholly owned subsidiary of The Thomson Corporation, a corporation
organized under the laws of Ontario, Canada ("Thomson"), hereby offers to
purchase all the shares of common stock, par value $0.50 per share ("Shares"),
of Wave Technologies International, Inc., a Missouri corporation (the
"Company"), that are issued and outstanding for $9.75 per Share, net to the
seller in cash, without interest, 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 this Offer to Purchase and any amendments or supplements
hereto or thereto, collectively constitute the "Offer"). See Section 8 for
additional information concerning Thomson and Purchaser.
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, stock transfer taxes with respect to the purchase of Shares by
Purchaser pursuant to the Offer. However, any tendering stockholder or other
payee who fails to complete and sign the Substitute Form W-9 that is included in
the Letter of Transmittal may be subject to a required back-up U.S. federal
income tax withholding of 31% of the gross proceeds payable to such stockholder
or other payee pursuant to the Offer. See Section 5. Purchaser or Thomson will
pay all charges and expenses of ChaseMellon Shareholder Services, L.L.C. (the
"Depositary") and Innisfree M&A Incorporated (the "Information Agent") incurred
in connection with the Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") HAS UNANIMOUSLY
DETERMINED THAT THE MERGER AGREEMENT (AS DEFINED BELOW) AND THE TRANSACTIONS
CONTEMPLATED THEREBY, INCLUDING EACH OF THE OFFER AND THE MERGER (EACH AS
DEFINED HEREIN) ARE FAIR TO, AND IN THE BEST INTEREST OF, THE HOLDERS OF SHARES,
HAS APPROVED, ADOPTED AND DECLARED ADVISABLE THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING EACH OF THE OFFER AND MERGER, AND
HAS RESOLVED TO RECOMMEND THAT HOLDERS OF SHARES ACCEPT THE OFFER AND TENDER
SHARES PURSUANT TO THE OFFER.
U.S. Bancorp Piper Jaffray Inc. has delivered to the Board its opinion to
the effect that the cash consideration to be paid for the Company common stock
in the Offer and the Merger is fair to the holders of Shares from a financial
point of view as of March 10, 2000. A copy of the written opinion of U.S.
Bancorp Piper Jaffray is contained in the Company's Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9"), which has been filed with
the Securities and Exchange Commission (the "Commission") in connection with the
Offer and which is being mailed to stockholders concurrently herewith, and
stockholders are urged to read such opinion carefully in its entirety for a
description of the assumptions made, matters considered and limitations of the
review undertaken by U.S. Bancorp Piper Jaffray.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST
THE NUMBER OF SHARES THAT SHALL CONSTITUTE TWO-THIRDS OF THE THEN OUTSTANDING
SHARES ON A FULLY DILUTED BASIS (INCLUDING, WITHOUT LIMITATION, ALL SHARES
ISSUABLE UPON THE CONVERSION OF ANY CONVERTIBLE SECURITIES OR UPON THE EXERCISE
OF ANY OPTIONS, WARRANTS, OR RIGHTS (OTHER THAN THE RIGHTS ISSUED PURSUANT TO
THE RIGHTS AGREEMENT, DATED AS OF SEPTEMBER 17, 1998 (THE "RIGHTS AGREEMENT")
BETWEEN THE COMPANY AND CHASEMELLON SHAREHOLDER SERVICES, L.L.C., AS RIGHTS
AGENT AND OTHER THAN ANY SHARES ISSUABLE UPON THE EXERCISE OF ANY OPTIONS IN
RESPECT OF WHICH THE PURCHASER HAS RECEIVED AN AGREEMENT FROM THE OPTION HOLDER
NOT TO EXERCISE SUCH OPTION UNTIL AFTER THE RECORD DATE FOR ANY MEETING OF THE
STOCKHOLDERS OF THE COMPANY FOR THE PURPOSE OF CONSIDERING AND TAKING ACTION ON
THE MERGER AGREEMENT, THE OFFER AND THE MERGER) (THE "MINIMUM
1
<PAGE> 7
CONDITION") AND (II) ANY APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR ACT"), HAVING EXPIRED
OR BEEN TERMINATED, PRIOR TO THE EXPIRATION OF THE OFFER (THE "HSR CONDITION").
THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER CONDITIONS CONTAINED IN THIS OFFER TO
PURCHASE. SEE SECTIONS 1 AND 14, WHICH SET FORTH IN FULL THE CONDITIONS TO THE
OFFER.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of March 10, 2000 (the "Merger Agreement"), among Thomson US Holdings Inc., a
Delaware corporation and a wholly owned subsidiary of Thomson ("Parent"),
Purchaser and the Company. The Merger Agreement provides, among other things,
that as promptly as practicable after the purchase of Shares pursuant to the
Offer and the satisfaction or, if permissible, waiver of the other conditions
set forth in the Merger Agreement and in accordance with the relevant provisions
of the General Corporation Law of the State of Delaware ("Delaware Law") and the
Missouri General and Business Corporation Law ("Missouri Law"), Purchaser will
be merged with and into the Company (the "Merger"). As a result of the Merger,
the Company will continue as the surviving corporation (the "Surviving
Corporation") and will become an indirect wholly owned subsidiary of Thomson. At
the effective time of the Merger (the "Effective Time"), each Share issued and
outstanding immediately prior to the Effective Time (other than Shares held in
the treasury of the Company and other than Shares held by stockholders who shall
have demanded and perfected appraisal rights under Missouri Law) shall be
canceled and converted automatically into the right to receive $9.75 in cash, or
any higher price that may be paid per Share in the Offer, without interest (the
"Merger Consideration"). Stockholders who demand and fully perfect appraisal
rights under Missouri Law will be entitled to receive, in connection with the
Merger, cash for the fair value of their Shares as determined pursuant to the
procedures prescribed by Missouri Law. See Section 11. The Merger Agreement is
more fully described in Section 10. Certain federal income tax consequences of
the sale of Shares pursuant to the Offer and the Merger, as the case may be, are
described in Section 5.
The Merger Agreement provides that, promptly upon the purchase by Purchaser
of Shares pursuant to the Offer and from time to time thereafter, Purchaser
shall be entitled to designate up to such number of directors, rounded up to the
next whole number, on the Board as will give Purchaser representation on the
Board equal to the product of the total number of directors on the Board (giving
effect to the directors elected pursuant to this section) multiplied by the
percentage that the aggregate number of Shares then beneficially owned by
Purchaser or any affiliate of Purchaser following such purchase bears to the
total number of Shares then outstanding. In the Merger Agreement, the Company
has agreed, at such time, promptly to take all actions necessary to cause
Purchaser's designees to be elected as directors of the Company, including
increasing the size of the Board or securing the resignations of incumbent
directors, or both.
The consummation of the Merger is subject to the satisfaction or waiver of
certain conditions, including the consummation of the Offer, and, if necessary,
the approval and adoption of the Merger Agreement and the Merger by the
requisite vote of the stockholders of the Company. For a more detailed
description of the conditions to the Merger, see Section 10. Under the Company's
Articles of Incorporation and Missouri Law, the affirmative vote of the holders
of at least two-thirds of the outstanding Shares is required to approve and
adopt the Merger Agreement and the Merger. Consequently, if Purchaser acquires
(pursuant to the Offeror otherwise) at least two-thirds of the outstanding
Shares, then Purchaser will have sufficient voting power to approve and adopt
the Merger Agreement and the Merger without the vote of any other stockholder.
SEE SECTIONS 10 AND 11.
Under Missouri Law, if Purchaser acquires, pursuant to the Offer or
otherwise, at least 90% of the then outstanding Shares, Purchaser will be able
to approve and adopt the Merger Agreement and the Merger without a vote of the
Company's stockholders. In such event, Parent, Purchaser and the Company have
agreed to take, at the request of Purchaser, all necessary and appropriate
action to cause the Merger to become effective in accordance with Missouri Law
as promptly as reasonably practicable after such acquisition, without a meeting
of the Company's stockholders. If, however, 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
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required under Missouri Law, a significantly longer period of time will be
required to effect the Merger. See Section 11.
The Company has advised Purchaser that as of March 10, 2000, 4,265,845
Shares were issued and outstanding, and 596,392 Shares were reserved for
issuance pursuant to outstanding employee stock options and no Shares were held
in the treasury of the Company. As a result, as of such date, the Minimum
Condition would be satisfied if Purchaser acquired 3,241,492 Shares. Also, as of
such date, Purchaser could cause the Merger to become effective in accordance
with Missouri Law, without a meeting of the Company's stockholders, if Purchaser
acquired 3,839,261 Shares, plus 90% of all Shares issued upon exercise of
employee stock options prior to the Merger becoming effective.
No appraisal rights are available in connection with the Offer; however,
stockholders may have appraisal rights in connection with the Merger regardless
of whether the Merger is consummated with or without a vote of the Company's
stockholders. See Section 11.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
1. TERMS OF THE OFFER; EXPIRATION DATE.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of such extension or
amendment), Purchaser will accept for payment and pay for all Shares validly
tendered (and not withdrawn in accordance with the procedures set forth in
Section 4) on or prior to the Expiration Date. "Expiration Date" means 12:00
midnight, New York City time, on Tuesday, April 18, 2000, unless and until
Purchaser (subject to the terms and conditions of the Merger Agreement) shall
have extended the period during which the Offer is open, in which case
Expiration Date shall mean the latest time and date at which the Offer, as may
be extended by Purchaser, shall expire.
The Offer is subject to the conditions set forth under Section 14,
including the satisfaction of the Minimum Condition and the HSR Condition.
Subject to the applicable rules and regulations of the Commission and subject to
the terms and conditions of the Merger Agreement, Purchaser expressly reserves
the right to waive any such condition in whole or in part, in its sole
discretion. Subject to the applicable rules and regulations of the Commission
and subject to the terms and conditions of the Merger Agreement, Purchaser also
expressly reserves the right to increase the price per Share payable in the
Offer and to make any other changes in the terms and conditions of the Offer;
provided, however, that the Purchaser may not decrease the price per Share
payable in the Offer, reduce the maximum number of Shares to be purchased in the
Offer or impose conditions to the Offer in addition to those set forth in
Section 14.
The Merger Agreement provides that Purchaser may, without the consent of
the Company, (i) extend the Offer beyond the scheduled expiration date, which
shall be 20 business days following the commencement of the Offer, if, at the
scheduled expiration of the Offer, any of the conditions to Purchaser's
obligation to accept for payment Shares, shall not be satisfied or waived, (ii)
extend the Offer for any period required by any rule, regulation or
interpretation of the Commission, or the staff thereof, applicable to the Offer,
or (iii) on one or more occasions, extend the Offer for an aggregate period of
not more than 10 business days beyond the latest applicable date that would
otherwise be permitted under clause (i) or (ii) of this sentence, if, as of such
date, all of the conditions to Purchaser's obligations to accept Shares for
payment are satisfied or waived, but the number of Shares validly tendered and
not withdrawn pursuant to the Offer equals 80% or more, but less than 90% of
outstanding Shares on a fully diluted basis. The Merger Agreement also provides
that, if, on the initial scheduled expiration date of the Offer, the sole
condition remaining unsatisfied is the failure of the waiting period under the
HSR Act to have expired or been terminated, then Purchaser shall extend the
Offer from time to time until the earlier to occur of (i) June 30, 2000 and (ii)
the fifth business day after the expiration or termination of the applicable
waiting period under the HSR Act. During any such extension, all Shares
previously tendered and not withdrawn will remain subject to the Offer and
subject to the right of a tendering stockholder to withdraw such stockholder's
Shares. See Section 4. Under no circumstances will
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<PAGE> 9
interest be paid on the purchase price for tendered Shares, whether or not the
Offer is extended. Any extension of the Offer may be effected by Purchaser
giving oral or written notice of such extension to the Depositary.
Purchaser shall pay for all Shares validly tendered and not withdrawn
promptly following the acceptance of Shares for payment pursuant to the Offer.
Notwithstanding the immediately preceding sentence and subject to the applicable
rules of the Commission and the terms and conditions of the Offer, Purchaser
also expressly reserves the right (i) to delay payment for Shares in order to
comply in whole or in part with applicable laws (any such delay shall be
effected in compliance with Rule 14e-1(c) under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), which requires Purchaser to pay the
consideration offered or to return Shares deposited by or on behalf of
stockholders promptly after the termination or withdrawal of the Offer), (ii) to
extend or terminate the Offer and not to accept for payment or pay for any
Shares not theretofore accepted for payment or paid for, upon the occurrence of
any of the conditions to the Offer specified in Section 14, and (iii) to amend
the Offer or to waive any conditions to the Offer in any respect consistent with
the provisions of the Merger Agreement described above, in each case by giving
oral or written notice of such delay, termination, waiver or amendment to the
Depositary and by making public announcement thereof.
Any such extension, delay, termination, waiver or amendment will be
followed as promptly as practicable by public announcement thereof, such
announcement in the case of an extension to be made no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
Expiration Date. Subject to applicable law (including Rules 14d-4(c), 14d-6(d)
and 14e-1 under the Exchange Act, which require that material changes be
promptly disseminated to stockholders in a manner reasonably designed to inform
them of such changes) and without limiting the manner in which Purchaser may
choose to make any public announcement, Purchaser will have no obligation to
publish, advertise or otherwise communicate any such public announcement other
than by issuing a press release to the Dow Jones News Service or the Public
Relations Newswire.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, Purchaser will extend the Offer to the extent required by Rules l4d-4(c),
l4d-6(d) and 14e-1 under the Exchange Act. Subject to the terms of the Merger
Agreement, if, prior to the Expiration Date, Purchaser should decide to increase
the consideration being offered in the Offer, such increase in the consideration
being offered will be applicable to all stockholders whose Shares are accepted
for payment pursuant to the Offer and, if at the time notice of any such
increase in the consideration being offered is first published, sent or given to
holders of such Shares, the Offer is scheduled to expire at any time earlier
than the period ending on the tenth business day from and including the date
that such notice is first so published, sent or given, 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 on which the
principal offices of the Commission in Washington, D.C. are open to accept
filings, or, in the case of determining a date when any payment is due, any day
on which banks are not required or authorized to close in The City of New York,
and consists of the time period from 12:01 a.m. through 12:00 midnight, New York
City time.
The Company has provided Purchaser with the Company's stockholder list and
security position listings, including the most recent list of names, addresses
and security positions of non-objecting beneficial owners in the possession of
the Company, for the purpose of disseminating the Offer to holders of Shares.
This Offer to Purchase and the related Letter of Transmittal will be mailed by
Purchaser to record holders of Shares whose names appear on the Company's
stockholder list 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
stockholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing.
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), Purchaser will accept for payment all Shares
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<PAGE> 10
validly tendered (and not properly withdrawn in accordance with Section 4) prior
to the Expiration Date promptly after the occurrence of the Expiration Date.
Purchaser shall pay for all Shares validly tendered and not withdrawn promptly
following the acceptance of Shares for payment pursuant to the Offer.
Notwithstanding the immediately preceding sentence and subject to applicable
rules and regulations of the Commission and the terms of the Merger Agreement,
Purchaser expressly reserves the right to delay payment for Shares in order to
comply in whole or in part with applicable laws. See Sections 1 and 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 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 manually signed facsimile thereof),
properly completed and duly executed, with any required signature guarantees or
an Agent's Message (as defined below), in connection with the book-entry
transfer and (iii) any other documents required under the Letter of Transmittal.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of the
Book-Entry Confirmation which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that are the subject of such Book-Entry
Confirmation, that such participant has received and agrees to be bound by the
Letter of Transmittal and that Purchaser may enforce such agreement against such
participant.
On March 20, 2000, Thomson filed 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, it is anticipated that the waiting period
under the HSR Act applicable to the Offer will expire at 11:59 p.m., New York
City time, on April 4, 2000. Prior to the expiration or termination of such
waiting period, the FTC or the Antitrust Division may extend such waiting period
by requesting additional information from Thomson with respect to the Offer. If
such a request is made, the waiting period will expire at 11:59 p.m., New York
City time, on the tenth calendar day after substantial compliance with such a
request. Thereafter, the waiting period may only be extended by court order. The
waiting period under the HSR Act may be terminated prior to expiration by the
FTC and the Antitrust Division. Thomson has requested early termination of the
waiting period, although there can be no assurance that this request will be
granted. See Section 15 for additional information regarding the HSR Act.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance for payment of such Shares 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 Purchaser and
transmitting such payments to tendering stockholders whose Shares have been
accepted for payment. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE
FOR SHARES BE PAID, REGARDLESS OF ANY DELAY IN MAKING SUCH PAYMENT.
If any tendered Shares are not accepted for payment for any reason pursuant
to the terms and conditions of the Offer, or if Share Certificates are submitted
evidencing more Shares than are tendered, Share Certificates evidencing
unpurchased Shares will be returned, without expense to the tendering
stockholder (or, in the case of Shares tendered by book-entry transfer into the
Depositary's account at a Book-Entry Transfer Facility pursuant to the procedure
set forth in Section 3, such Shares will be credited to an account maintained at
such Book-Entry Transfer Facility), as promptly as practicable following the
expiration or termination of the Offer.
Purchaser reserves the right to transfer or assign, in whole or from time
to time in part, to one or more of its affiliates, the right to purchase all or
any portion of the Shares tendered pursuant to the Offer, but any such transfer
or assignment will not relieve Purchaser of its obligations under the Offer and
will in no way prejudice
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<PAGE> 11
the rights of tendering stockholders to receive payment for Shares validly
tendered and accepted for payment pursuant to the Offer.
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES.
In order for a holder of Shares validly to tender Shares pursuant to the
Offer, the Letter of Transmittal (or a manually signed facsimile thereof),
properly completed and duly executed, together 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 at one of its addresses set forth on the back cover of this Offer to
Purchase and either (i) the Share Certificates evidencing tendered Shares must
be received by the Depositary at such address or such 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 (including an Agent's
Message if the tendering stockholder has not delivered a Letter of Transmittal),
in each case prior to the Expiration Date, or (ii) the tendering stockholder
must comply with the guaranteed delivery procedures described below.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT
THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF 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.
Book-Entry Transfer. The Depositary will establish accounts 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 a 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 procedures for such transfer. However, although delivery of Shares
may be effected through book-entry transfer at the Book-Entry Transfer Facility,
the Letter of Transmittal (or a manually signed facsimile thereof), properly
completed and duly executed, together with any required signature guarantees, or
an Agent's Message, and any other required documents, must, in any case, be
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase prior to the Expiration Date, or the tendering
stockholder must comply with the guaranteed delivery procedure described below.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.
Signature Guarantees. Signatures on all Letters of Transmittal must be
guaranteed by a firm which is a member of the Security Transfer Agent Medallion
Signature Program, or by any other "eligible guarantor institution," as such
term is defined in Rule 17Ad-15 under the Exchange Act (each of the foregoing
being referred to as an "Eligible Institution"), except in cases where Shares
are tendered (i) by a registered holder of Shares who has not completed either
the box entitled "Special Payment Instructions" or the box entitled "Special
Delivery Instructions" on the Letter of Transmittal or (ii) for the account of
an Eligible Institution. If a Share Certificate is registered in the name of a
person other than the signer of the Letter of Transmittal, or if payment is to
be made, or a Share Certificate not accepted for payment or not tendered is to
be returned, to a person other than the registered holder(s), then the Share
Certificate must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name(s) of the registered holder(s) appear on
the Share Certificate, with the signature(s) on such Share Certificate or stock
powers guaranteed by an Eligible Institution. See Instructions 1 and 5 of the
Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates evidencing such Shares are
not immediately available or such stockholder cannot deliver the Share
Certificates and all other required documents to the Depositary prior to the
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Expiration Date, or such stockholder cannot complete the procedure for delivery
by book-entry transfer on a timely basis, such Shares may nevertheless be
tendered, provided that all the following conditions are satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by Purchaser, is
received prior to the Expiration Date by the Depositary as provided below;
and
(iii) the Share Certificates (or a Book-Entry Confirmation) evidencing
all tendered Shares, in proper form for transfer, in each case together
with the Letter of Transmittal (or a manually signed 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 are received
by the Depositary within three Nasdaq National Market ("Nasdaq") trading
days after the date of execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or mail or by
facsimile transmission to the Depositary and must include a guarantee by an
Eligible Institution in the form set forth in the form of Notice of Guaranteed
Delivery made available by Purchaser.
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 the
Share Certificates evidencing such Shares, or a Book-Entry Confirmation of the
delivery of such Shares, and the Letter of Transmittal (or a manually signed
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.
Determination of Validity. ALL QUESTIONS AS TO THE FORM OF DOCUMENTS AND
THE VALIDITY, FORM, ELIGIBILITY (INCLUDING TIME OF RECEIPT) AND ACCEPTANCE FOR
PAYMENT OF ANY TENDER OF SHARES WILL BE DETERMINED BY PURCHASER, IN ITS SOLE
DISCRETION, WHICH DETERMINATION SHALL BE FINAL AND BINDING ON ALL PARTIES.
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, in
the opinion of its counsel, be unlawful. Purchaser also reserves the absolute
right to waive any condition of the Offer to the extent permitted by applicable
law and the Merger Agreement 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. NO TENDER OF SHARES
WILL BE DEEMED TO HAVE BEEN VALIDLY MADE UNTIL ALL DEFECTS AND IRREGULARITIES
HAVE BEEN CURED OR WAIVED. NONE OF PURCHASER, THOMSON OR ANY OF THEIR RESPECTIVE
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.
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.
A tender of Shares pursuant to any of the procedures described above will
constitute the tendering stockholder's acceptance of the terms and conditions of
the Offer, as well as the tendering stockholder's representation and warranty to
Purchaser that (i) such stockholder has the full power and authority to tender,
sell, assign and transfer the tendered Shares (and any and all other Shares or
other securities issued or issuable in respect of such Shares), and (ii) when
the same are accepted for payment by Purchaser, Purchaser will acquire good and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances and not subject to any adverse claims.
The acceptance for payment by Purchaser of Shares pursuant to any of the
procedures described above will constitute a binding agreement between the
tendering stockholder and Purchaser upon the terms and subject to the conditions
of the Offer.
Appointment as Proxy. By executing the Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of Purchaser as
such stockholder's agents, 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 Purchaser (and with respect to any
and all other Shares or other securities issued or issuable in
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<PAGE> 13
respect of such Shares on or after March 10, 2000). 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 when, and only to the extent
that, Purchaser accepts such Shares for payment. Upon such acceptance for
payment, all prior powers of attorney and proxies given by such stockholder with
respect to such Shares (and such other Shares and securities) will be revoked,
without further action, and no subsequent powers of attorney or proxies may be
given nor any subsequent written consent executed by such stockholder (and, if
given or executed, will not be deemed to be effective) with respect thereto. The
designees of Purchaser will, with respect to the Shares for which the
appointment is effective, be empowered to exercise all voting and other rights
of such 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 or
otherwise. Purchaser reserves the right to require that, in order for Shares to
be deemed validly tendered, immediately upon Purchaser's payment for such
Shares, Purchaser must be able to exercise full voting rights with respect to
such Shares (and such other Shares and securities).
UNDER THE "BACKUP WITHHOLDING" PROVISIONS OF U.S. FEDERAL INCOME TAX LAW,
THE DEPOSITARY MAY BE REQUIRED TO WITHHOLD 31% OF ANY PAYMENTS OF CASH PURSUANT
TO THE OFFER. TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING WITH RESPECT TO
PAYMENT TO CERTAIN STOCKHOLDERS OF THE PURCHASE PRICE OF SHARES PURCHASED
PURSUANT TO THE OFFER, EACH SUCH STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH
SUCH STOCKHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER AND CERTIFY THAT SUCH
STOCKHOLDER IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY
COMPLETING THE SUBSTITUTE FORM W-9 IN THE LETTER OF TRANSMITTAL. SEE INSTRUCTION
10 OF THE LETTER OF TRANSMITTAL.
4. WITHDRAWAL RIGHTS.
Tender of Shares made pursuant to the Offer are irrevocable except that
such Shares may be withdrawn at any time prior to the Expiration Date and,
unless theretofore accepted for payment by Purchaser pursuant to the Offer, may
also be withdrawn at any time after May 20, 2000. If Purchaser extends the
Offer, is delayed in its acceptance for payment of Shares or is unable to accept
Shares for payment pursuant to the Offer for any reason, then, without prejudice
to Purchaser's rights under the Offer, the Depositary may, nevertheless, on
behalf of Purchaser, retain tendered Shares, and such Shares may not be
withdrawn except to the extent that tendering stockholders are entitled to
withdrawal rights as described in this Section 4, subject to Rule 14e-1(c) under
the Exchange Act. Any such delay will be by an extension of the Offer to the
extent required by law.
For a withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover page of this Offer to Purchase. Any such
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 of such Shares, 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.
ALL QUESTIONS AS TO THE FORM AND VALIDITY (INCLUDING TIME OF RECEIPT) OF
ANY NOTICE OF WITHDRAWAL WILL BE DETERMINED BY PURCHASER, IN ITS SOLE
DISCRETION, WHOSE DETERMINATION WILL BE FINAL AND BINDING. NONE OF PURCHASER,
THOMSON OR ANY OF THEIR RESPECTIVE AFFILIATES OR ASSIGNS, THE DEPOSITARY, THE
INFORMATION AGENT OR ANY OTHER PERSON WILL BE UNDER ANY DUTY TO GIVE ANY
NOTIFICATION OF ANY DEFECTS OR IRREGULARITIES IN ANY NOTICE OF WITHDRAWAL OR
INCUR ANY LIABILITY FOR FAILURE TO GIVE ANY SUCH NOTIFICATION.
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 prior to the
Expiration Date by following one of the procedures described in Section 3.
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5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following is a summary of the principal federal income tax consequences
of the Offer and the Merger to holders whose Shares are purchased pursuant to
the Offer or whose Shares are converted into the right to receive cash in the
Merger (whether upon receipt of the Merger Consideration or pursuant to the
proper exercise of dissenter's rights). The discussion applies only to holders
of Shares in whose hands Shares are capital assets, and may not apply to Shares
received pursuant to the exercise of employee stock options or otherwise as
compensation, or to holders of Shares who are not citizens or residents of the
United States of America.
THE TAX DISCUSSION SET FORTH BELOW IS INCLUDED FOR GENERAL INFORMATION
PURPOSES ONLY AND IS BASED UPON PRESENT LAW. BECAUSE INDIVIDUAL CIRCUMSTANCES
MAY DIFFER, EACH HOLDER OF SHARES SHOULD CONSULT SUCH HOLDER'S OWN TAX ADVISOR
TO DETERMINE THE APPLICABILITY OF THE RULES DISCUSSED TO SUCH STOCKHOLDER AND
THE PARTICULAR TAX EFFECTS OF THE OFFER AND THE MERGER, INCLUDING THE
APPLICATION AND EFFECT OF STATE, LOCAL AND OTHER TAX LAWS.
The receipt of the offer price and the receipt of cash pursuant to the
Merger (whether as Merger Consideration or pursuant to the proper exercise of
dissenter's rights) will be a taxable transaction for federal income tax
purposes (and also may be a taxable transaction under applicable state, local
and other income tax laws). In general, for federal income tax purposes, a
holder of Shares will recognize gain or loss equal to the difference between
such holder's adjusted tax basis in the Shares sold pursuant to the Offer or
converted to cash in the Merger and the amount of cash received therefor. Gain
or loss must be determined separately for each block of Shares (i.e., Shares
acquired at the same cost in a single transaction) sold pursuant to the Offer or
converted to cash in the Merger. Such gain or loss will be capital gain or loss.
Individual holders will be subject to tax on the net amount of such gain at a
maximum rate of 20% provided that the Shares were held for more than 12 months.
Special rules (and generally lower maximum rates) apply to individuals in lower
tax brackets. The deduction of capital losses is subject to certain limitations.
Stockholders should consult their own tax advisors in this regard.
Payments in connection with the Offer or the Merger may be subject to
backup withholding at a 31% rate. Backup withholding generally applies if a
stockholder (i) fails to furnish such stockholder's social security number or
taxpayer identification number ("TIN"), (ii) furnishes an incorrect TIN, (iii)
fails properly to report interest or dividends or (iv) under certain
circumstances, fails to provide a certified statement, signed under penalties of
perjury, that the TIN provided is such stockholder's correct number and that
such stockholder is not subject to backup withholding. Backup withholding is not
an additional tax but merely an advance payment, which may be refunded to the
extent it results in an overpayment of tax. Certain persons, including
corporations and financial institutions generally, are exempt from backup
withholding. Certain penalties apply for failure to furnish correct information
and for failure to include the reportable payments in income. Each stockholder
should consult with such stockholder's own tax advisor as to such stockholder's
qualifications for exemption from withholding and the procedure for obtaining
such exemption.
9
<PAGE> 15
6. PRICE RANGE OF SHARES; DIVIDENDS.
The Shares are listed and principally traded on Nasdaq. The following table
sets forth, for the quarters indicated, the high and low sales prices per Share
on Nasdaq as reported by the Dow Jones News Service and the amount of cash
dividends paid per Share according to published financial sources.
SHARES MARKET DATA
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
--------- --------- ---------
<S> <C> <C> <C>
1998:
First Quarter........................................... $ 8.12500 $ 5.87500 None
Second Quarter.......................................... 6.87500 3.68750 None
Third Quarter........................................... 5.81250 2.56250 None
Fourth Quarter.......................................... 5.12500 2.56250 None
1999:
First Quarter........................................... $ 5.50000 $ 3.62500 None
Second Quarter.......................................... 5.96875 2.87500 None
Third Quarter........................................... 5.25000 2.56250 None
Fourth Quarter.......................................... 12.50000 2.75000 None
2000:
First Quarter (through March 9, 2000)................... $ 9.50000 $3.375000 None
</TABLE>
On March 9, 2000, the last full trading day prior to the announcement of
the execution of the Merger Agreement and of Purchaser's intention to commence
the Offer, the closing price per Share as reported on Nasdaq was $7.375. On
March 21, 2000, the last full trading day prior to the commencement of the
Offer, the closing price per Share as reported on Nasdaq was $9.375. As of March
21, 2000, the approximate number of holders of record of the Shares was 250.
STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
7. CERTAIN INFORMATION CONCERNING THE COMPANY.
Except as otherwise set forth in this Offer to Purchase, all of the
information concerning the Company contained in this Offer to Purchase,
including financial information, has been furnished by the Company or has been
taken from or based upon publicly available documents and records on file with
the Commission and other public sources. Neither Purchaser nor Thomson assumes
any responsibility for the accuracy or completeness of the information
concerning the Company furnished by the Company or contained in such documents
and records or for any failure by the Company to disclose events which may have
occurred or may affect the significance or accuracy of any such information but
which are unknown to Purchaser or Thomson.
General. The Company is a Missouri corporation with its principal
executive offices located at 10845 Olive Boulevard, Suite 250, St. Louis,
Missouri, and its telephone number is (314) 995-5767. The Company was
incorporated in Missouri in 1988. In June 1994 the Company made its initial
public offering of common stock, which trades on Nasdaq under the symbol "WAVT".
The Company designs, develops and delivers integrated training solutions
addressing technical certification, including computer programming, networking
and operating systems certifications. The Company delivers its certification
training by integrating Internet-based assessment, self-study materials,
Internet mentoring and intervention and live instructor led training, either
in-person or over the Internet. The Company produces and distributes course
books, self-study guides, training videos, CD-ROM and computer-based training
materials.
Certain Projected Financial Data of the Company. Prior to entering into
the Merger Agreement, Thomson conducted a due diligence review of the Company
and in connection with such review received certain projections of the Company's
future operating performance. The Company does not in the ordinary course
publicly disclose projections and these projections were not prepared with a
view to public disclosure.
10
<PAGE> 16
The Company has advised Thomson and Purchaser that these projections were
prepared by the Company's management based on numerous assumptions including,
among others, projections of revenues, operating income, benefits and other
expenses, depreciation and amortization, capital expenditure and working capital
requirements. No assurances can be given with respect to any such assumptions.
These projections do not give effect to the Offer or the potential combined
operations of Thomson and the Company or any alterations Thomson may make to the
Company's operations or strategy after the consummation of the Offer. The
information set forth below is presented for the limited purpose of giving the
stockholders access to the material financial projections prepared by the
Company's management that were made available to Thomson and Purchaser in
connection with the Merger Agreement and the Offer.
WAVE TECHNOLOGIES INTERNATIONAL, INC.
INCOME STATEMENT
FORECAST(*)
<TABLE>
<CAPTION>
DESCRIPTION FY 2000 FY 2001 FY 2002 FY 2003 FY 2004
----------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Total Revenue....................................... 39,150 47,700 60,102 78,133 101,572
Total Costs and Expenses............................ 37,846 44,800 54,200 67,700 84,800
Operating Income.................................... 1,304 2,900 5,902 10,433 16,772
Net Income after Taxes.............................. 741 1,785 3,652 6,395 10,228
</TABLE>
(*) All amounts in thousands.
Certain matters discussed herein, including, but not limited to these
projections, are forward-looking statements that involve risks and
uncertainties. Forward-looking statements include the information set forth
above under "Certain Projected Financial Data of the Company". While presented
with numerical specificity, these projections were not prepared by the Company
in the ordinary course and are based upon a variety of estimates and
hypothetical assumptions which may not be accurate, may not be realized, and are
also inherently subject to significant business, economic and competitive
uncertainties and contingencies, all of which are difficult to predict, and most
of which are beyond the control of the Company. Accordingly, there can be no
assurance that any of the Projections will be realized and the actual results
for the years ending April 30, 2000, 2001, 2002, 2003 and 2004 may vary
materially from those shown above.
In addition, these projections were not prepared in accordance with
generally accepted accounting principles, and neither the Company's nor
Thomson's independent accountants has examined or compiled any of these
projections or expressed any conclusion or provided any other form of assurance
with respect to these projections and accordingly assume no responsibility for
these projections. These projections were prepared with a limited degree of
precision, and were not prepared with a view to public disclosure or compliance
with the published guidelines of the Commission or the guidelines established by
the American Institute of Certified Public Accountants regarding projections,
which would require a more complete presentation of data than as shown above.
The inclusion of these projections herein should not be regarded as a
representation by Thomson and Purchaser or any other person that the projected
results will be achieved. These projections should be read in conjunction with
the historical financial information of the Company. None of Thomson, Purchaser,
or any other person assumes any responsibility for the accuracy or validity of
the foregoing projections. Forward-looking statements also include those
preceded by, followed by or that include the words "believes", "expects",
"anticipates" or similar expressions.
Available Information. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is required 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 proxy statements
distributed to the Company's stockholders and filed with the Commission. Such
reports, proxy statements and other information should be available for
inspection at the public reference facilities maintained by the Commission at
Judiciary Plaza,
11
<PAGE> 17
450 Fifth Street, N.W., Washington, D.C. 20549, and also should be available for
inspection at the Commission's regional offices located at Seven World Trade
Center, 13th Floor, New York, New York 10048 and the Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of
such materials may also be obtained by mail, upon payment of the Commission's
customary fees, by writing to its principal office at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549. The Commission also maintains a World Wide
Website on the Internet at http://www.sec.gov that contains reports and other
information regarding issuers that file electronically with the Commission.
8. CERTAIN INFORMATION CONCERNING PURCHASER AND THOMSON.
General. Purchaser is a newly incorporated Delaware corporation organized
in connection with the Offer and the Merger and has not carried on any
activities other than in connection with the Offer and the Merger. The principal
offices of Purchaser are located at Metro Center, One Station Place, Stamford,
Connecticut, and its telephone number is (203) 969-8700. Purchaser is an
indirect wholly owned subsidiary of Thomson.
Until immediately prior to the time that Purchaser will purchase Shares
pursuant to the Offer, it is not anticipated that Purchaser will have any
significant assets or liabilities or engage in activities other than those
incident to its formation and capitalization and the transactions contemplated
by the Offer and the Merger. Because Purchaser is newly formed and has minimal
assets and capitalization, no meaningful financial information regarding
Purchaser is available.
Thomson is a corporation organized under the laws of Ontario, Canada. Its
principal offices are located at Suite 2706, P.O. Box 24, 66 Wellington Street
West, Toronto, Ontario, M5K 1A1, Canada. The principal activity of Thomson is
specialized information and publishing (IP) worldwide. In addition, Thomson has
important interests in newspaper publishing in North America and in leisure and
travel in the United Kingdom and in Sweden. Thomson is currently comprised of
four business groups: Thomson Corporation Publishing International (TCPI) and
Thomson Financial & Professional Publishing Group (TFPPG), Thomson's two IP
business groups, and Thomson Newspapers (TN) and Thomson Travel Group (TTG). The
common stock of Thomson is listed for trading on the Toronto Stock Exchange,
Montreal Stock Exchange and London Stock Exchange.
The name, citizenship, business address, business telephone number,
principal occupation or employment, and five-year employment history for each of
the directors and executive officers of Purchaser and Thomson and certain other
information are set forth in Schedule I hereto. Except as described in this
Offer to Purchase and in Schedule I hereto, none of Thomson, Purchaser or, to
the best knowledge of such corporations, any of the persons listed on Schedule I
to the Offer of Purchase has during the last five years (i) been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) been a party to any judicial or administrative proceeding (except for
matters that were dismissed without sanction or settlement) that resulted in a
judgment, decree or final order enjoining the person from future violations of,
or prohibiting activities subject to, federal or state securities laws or
finding any violation of such laws.
Except as described in this Offer to Purchase, (i) none of Purchaser,
Thomson nor, to the best knowledge of Purchaser and Thomson, any of the persons
listed in Schedule I to this Offer to Purchase or any associate or majority
owned subsidiary of Purchaser, Thomson or any of the persons so listed,
beneficially owns or has any right to acquire any Shares and (ii) none of
Purchaser, Thomson nor, to the best knowledge of Purchaser and Thomson, any of
the persons or entities referred to above nor any director, executive officer or
subsidiary of any of the foregoing has effected any transaction in the Shares
during the past 60 days.
Except as provided in the Merger Agreement and as otherwise described in
this Offer to Purchase, none of Purchaser, Thomson nor, to the best knowledge of
Purchaser and Thomson, any of the persons listed in Schedule I to this Offer to
Purchase, has any agreement, arrangement, understanding, whether or not legally
enforceable, with any other person with respect to any securities of the
Company, including, but not limited to, the transfer or voting of such
securities, joint ventures, loan or option arrangements, puts or calls,
guaranties of loans, guaranties against loss or the giving or withholding of
proxies, consents or authorizations. Except as set forth in this Offer to
Purchase, since May 1, 1997, neither Purchaser nor Thomson nor, to the best
knowledge
12
<PAGE> 18
of Purchaser and Thomson, any of the persons listed on Schedule I hereto, has
had any transaction with the Company or any of its executive officers, directors
or affiliates that is required to be reported under the rules and regulations of
the Commission applicable to the Offer. Except as set forth in this Offer to
Purchase, since May 1, 1997, there have been no negotiations, transactions or
material contacts between any of Purchaser, Thomson, or any of their respective
subsidiaries or, to the best knowledge of Purchaser and Thomson, any of the
persons listed in Schedule I to this Offer to Purchase, on the one hand, and the
Company or its affiliates, on the other hand, concerning a merger, consolidation
or acquisition, tender offer for or other acquisition of any class of the
Company's securities, an election of the Company's directors or a sale or other
transfer of a material amount of assets of the Company.
9. FINANCING OF THE OFFER AND THE MERGER.
The total amount of funds required by Purchaser to consummate the Offer and
the Merger and to pay related fees and expenses is estimated to be approximately
$45,000,000. Purchaser will obtain all of such funds from Thomson or its
affiliates. Thomson and its affiliates will provide such funds from existing
resources.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY; THE MERGER AGREEMENT;
INTERESTS OF CERTAIN PERSONS IN THE MERGER.
BACKGROUND OF THE MERGER AND THE OFFER
During the fourth quarter of 1998 and at various times during 1999,
executives of Thomson Learning, a division of Thomson ("Thomson Learning") met
with executives of Wave to discuss ways that the two companies could work
together to pursue common business interests. In connection with these
discussions, on January 13, 1999, Course Technologies, a division of Thomson
Learning, and Wave entered into a Confidentiality Agreement and Wave provided
Thomson with information on Wave's product lines and business strategies. The
Confidentiality Agreement was subsequently amended on January 22, 1999. On
several occasions during the Spring of 1999, as part of these discussions,
executives of Thomson Learning expressed to executives of Wave, Thomson's
interest in a possible acquisition of Wave.
On September 29, 1999, Eric Shuman, Senior Vice President and Chief
Financial Officer of Thomson Learning, and Tim McEwen and Susan Yules, the Chief
Executive Officer and Chief Financial Officer, respectively, of the Life Long
Learning Group of Thomson Learning, and representatives of Scott-Macon, Ltd.,
Thomson's financial adviser, met with Kenneth W. Kousky, the President and Chief
Executive Officer of Wave and a representative of U.S. Bancorp Piper Jaffray,
Wave's financial adviser, in St. Louis, Missouri to again discuss ways in which
the two companies could work together, including the possible acquisition of
Wave by Thomson. On November 30, 1999, Messrs. Shuman and McEwen called Mr.
Kousky and Mr. Shuman suggested the possible acquisition of Wave by Thomson. On
December 1, 1999, Messrs. Shuman and McEwen met with Mr. Kousky, to discuss
further a possible acquisition and a range of values for Wave. Messrs. Shuman,
McEwen and Kousky had several additional discussions by telephone in December
1999 and January 2000 regarding a possible acquisition, but were unable to reach
agreement on a value for the Company.
13
<PAGE> 19
On February 4, 2000, David Shaffer, the Executive Vice President and Chief
Operating Officer of Thomson, sent the following letter to Mr. Kousky:
[LETTERHEAD OF THOMSON]
CONFIDENTIAL
February 4, 2000
Mr. Kenneth W. Kousky
Chairman and CEO
Wave Technologies International, Inc.
10845 Olive Boulevard, Suite 250
St. Louis, Missouri 63141
Dear Ken:
As you know from our conversations throughout 1999, Thomson has been very
interested in acquiring the business of Wave Technologies International, Inc.
While we are disappointed that our discussions have thus far not borne fruit, we
would like to discuss with you our proposal, described in more detail below, to
acquire the Wave Technologies International, Inc. business.
Based upon the information we have reviewed, we are prepared to offer $9
per share to acquire all of the outstanding common stock of Wave Technologies
International, Inc. We would encourage senior management of Wave Technologies
International, Inc. to remain with the company, and believe that we could offer
very competitive compensation, benefits and rewards, and an attractive work
environment for key employees. Although we have reviewed certain information
pertaining to Wave Technologies International, Inc., we would need to conduct
confirmatory due diligence in order to confirm our valuation of the business. We
believe that we can complete all such work expeditiously.
As you know, Thomson is extremely interested in building a premier
corporate IT training and testing business. Our recently announced acquisition
of Prometric underscores our commitment to this area. We believe the addition of
Wave Technologies International, Inc. will afford us and you the opportunity to
take advantage of the growth in this market.
Our proposal is subject to our completing satisfactory confirmatory due
diligence, negotiating appropriate definitive agreements and obtaining approval
from Thomson's Board of Directors. Our proposal is not subject to financing. For
the avoidance of doubt, this letter shall not be construed as a binding offer.
This letter is provided to you on a strictly confidential basis. Neither
Thomson's interest in Wave Technologies International, Inc. nor the contents of
this letter may be disclosed to any other person other than your professional
advisors without our prior written consent. In particular, we will withdraw our
proposal immediately in the event that such confidentiality is breached.
In order to move forward toward reaching a definitive agreement, which we
believe could be reached during the next several weeks, we would require an
exclusive negotiating period through March 1, 2000, during which time Wave
Technologies International, Inc. would not initiate or proceed with discussions
with any third party or consider any other acquisition proposal. During that
time we would be prepared to negotiate all aspects of the proposal set forth in
this letter.
We believe that Wave Technologies International, Inc. would complement our
existing business interests and that our offer is in the best interests of your
shareholders. We are firmly committed to moving forward quickly to reach a
mutually acceptable agreement. We would be happy to meet with you in St. Louis
or another mutually convenient location to amplify our proposal. In any event,
we would appreciate a response by 5:00 p.m., on February 14, 2000.
14
<PAGE> 20
If you have any questions or if you would like to meet to discuss our
proposal, please contact me at (203) 969-8782, or Eric Shuman, CFO of Thomson
Learning, at (203) 425-2559.
Very truly yours,
/s/ DAVID SHAFFER
--------------------------------------
David H. Shaffer
cc: Eric Shuman
Between February 4 and February 14, 2000, Messrs. Shuman and McEwen
discussed a possible range of values for Wave with Raymond J. Kalinowsky, a
member of the Wave Board of Directors and representatives of U.S. Bancorp Piper
Jaffray. In a telephone conversation on February 14, 2000 among Mr. Kalinowsky,
Mr. Shuman and a representative of U.S. Bancorp Piper Jaffray, the parties
continued to discuss the terms of a potential acquisition transaction.
On February 17, 2000, Thomson and Wave executed the following letter in
which Wave agreed not to engage in discussions or negotiations with any person
other than Thomson concerning an acquisition of Wave through March 1, 2000:
[LETTERHEAD OF THOMSON LEARNING]
CONFIDENTIAL
February 17, 2000
Mr. Ray Kalinowski
44 Portland Drive
Frontenac, MO 63131
Dear Mr. Kalinowski:
We have been engaged in discussions with you concerning our possible
acquisition of Marathon. While exact structure and terms have yet to be agreed
upon, we have proposed the general terms and structure discussed with you and
your representatives earlier this week.
In order to move forward toward reaching a definitive agreement, which we
believe could be reached during the next couple of weeks, we require an
exclusive negotiating period through March 1, 2000, during which time Marathon
would not initiate or proceed with discussions with any third party. During that
time, we would be prepared to negotiate all aspects of the proposal set forth in
this letter.
As discussed, we would encourage senior management of Marathon to remain
with the company, and believe that we could offer very competitive compensation,
benefits and rewards, and an attractive work environment for key employees.
Specifically, the employment terms we are prepared to offer key employees are
set forth in a separate letter being sent simultaneously herewith.
We are prepared to conduct due diligence during the early part of next week
and will send a due diligence checklist under separate cover so that you can set
up a data room.
Further , this letter is provided to you on a strictly confidential basis.
Neither our interest in Marathon nor the contents of this letter may be
disclosed to any other person other than your and our professional advisors
without our prior written consent. In particular, we will withdraw our proposal
immediately in the event that such confidentiality is breached. Notwithstanding
the foregoing, after consulting with us, you may publicly announce the content
of this letter and our discussions if you are advised by your counsel that you
are required
15
<PAGE> 21
to make such disclosure under applicable law, including applicable federal
securities laws or rules of any exchanges or quotation system on which
Marathon's stock is traded or quoted.
Except for the obligation in the second paragraph (regarding the exclusive
period) and the fifth paragraph (regarding confidentiality) of this letter,
neither we nor Marathon will have any legal obligation to each other or any
other person or entity in respect of any possible transaction by reason of this
letter or any other communications by or among the parties or any of their
representatives, except and only to the extent set forth in a definitive
agreement and then only on the terms and subject to the conditions thereof.
We believe that Marathon would complement our existing business interests
and that our offer is in the best interests of your shareholders. We are firmly
committed to moving forward quickly to reach a mutually acceptable agreement and
we look forward to completing our due diligence.
If you have any questions please contact me at (203) 425-2559.
Very truly yours,
/s/ ERIC L. SHUMAN
--------------------------------------
Eric L. Shuman
cc: Eric Nicholson, U.S. Bancorp Piper Jaffray
John Gillis, Armstrong Teasdale LLP
Robert Christie
Timothy McEwen
Accepted on Behalf of Marathon
/s/ RAY KALINOWSKI
--------------------------------------
Ray Kalinowski
Director
This agreement was orally extended on March 1, 2000 through March 7, 2000.
On February 22 and 23, 2000, Mr. Kousky and J. Michael Bowles, Wave's Chief
Financial Officer, a representative of U.S. Bancorp Piper Jaffray and counsel
for Wave met with executives of Thomson Learning, including Mr. McEwen, and
counsel for Thomson in St. Louis, Missouri to discuss Wave's business strategies
and the terms of a possible acquisition of Wave by Thomson, and to begin a due
diligence review of Wave by Thomson and its counsel.
On February 25, 2000, counsel for Thomson provided a draft Merger Agreement
to counsel for Wave. During the period from February 22 through March 9, 2000, a
number of meetings, on-site visits to Wave's facilities, calls and other
activities took place between representatives of Thomson and Wave and their
respective counsel in furtherance of Thomson's due diligence efforts. During
this period, counsel for Thomson and Wave also negotiated the terms of the
Merger Agreement.
On March 10, 2000, Parent, Purchaser and Wave signed the Merger Agreement
and issued a press release announcing the Merger. On March 22, 2000, the
Purchaser commenced the Offer.
THE MERGER AGREEMENT
THE FOLLOWING IS A SUMMARY OF CERTAIN PROVISIONS OF THE MERGER AGREEMENT.
THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MERGER AGREEMENT,
WHICH IS INCORPORATED HEREIN BY REFERENCE, AND A COPY OF
16
<PAGE> 22
WHICH HAS BEEN FILED AS AN EXHIBIT TO THE TENDER OFFER STATEMENT ON SCHEDULE TO
(THE "SCHEDULE TO") FILED BY PURCHASER AND THOMSON WITH THE COMMISSION IN
CONNECTION WITH THE OFFER. THE MERGER AGREEMENT MAY BE EXAMINED AND COPIES MAY
BE OBTAINED AT THE PLACES SET FORTH IN SECTION 7. DEFINED TERMS USED HEREIN AND
NOT DEFINED HEREIN SHALL HAVE THE RESPECTIVE MEANINGS ASSIGNED TO THOSE TERMS IN
THE MERGER AGREEMENT.
The Offer. The Merger Agreement provides for the commencement of the Offer
as promptly as reasonably practicable after the initial public announcement of
Purchaser's intention to commence the Offer. The obligation of Purchaser to
accept for payment Shares tendered pursuant to the Offer is subject to the
satisfaction of the Minimum Condition and certain other conditions that are
described in Section 14 hereof. Purchaser and Parent have agreed that no change
in the Offer may be made which decreases the price per Share payable in the
Offer, which reduces the maximum number of Shares to be purchased in the Offer
or which imposes conditions to the Offer in addition to those set forth in
Section 14.
The Merger. The Merger Agreement provides that, upon the terms and subject
to the conditions thereof, and in accordance with Delaware Law and Missouri Law,
Purchaser shall be merged with and into the Company. As a result of the Merger,
the separate corporate existence of Purchaser will cease and the Company will
continue as the Surviving Corporation and will become an indirect wholly owned
subsidiary of Parent. Upon consummation of the Merger, each issued and then
outstanding Share (other than any Shares held in the treasury of the Company, or
owned by Purchaser, Parent or any direct or indirect wholly owned subsidiary of
Parent or of the Company and any Shares which are held by stockholders who have
not voted in favor of the Merger or consented thereto in writing and who shall
have demanded properly in writing appraisal for such Shares in accordance with
Missouri Law) shall be canceled and converted automatically into the right to
receive the Merger Consideration.
Pursuant to the Merger Agreement, each share of common stock, par value
$0.01 per share, of Purchaser issued and outstanding immediately prior to the
Effective Time shall be converted into and exchanged for one validly issued,
fully paid and non-assessable share of common stock, par value $0.50 per share,
of the Surviving Corporation.
The Merger Agreement provides that the directors of Purchaser immediately
prior to the Effective Time will be the initial directors of the Surviving
Corporation and that the officers of the Company immediately prior to the
Effective Time will be the initial officers of the Surviving Corporation.
Subject to the Merger Agreement, at the Effective Time, the Certificate of
Incorporation of Purchaser, as in effect immediately prior to the Effective
Time, will be the Articles of Incorporation of the Surviving Corporation;
provided, however, that, at the Effective Time, Article I of the Articles of
Incorporation of the Surviving Corporation will be amended to read as follows:
"The name of the corporation is Wave Technologies International, Inc.". Subject
to the Merger Agreement, at the Effective Time, the By-laws of Purchaser, as in
effect immediately prior to the Effective Time, will be the By-laws of the
Surviving Corporation.
Stockholders' Meeting. Pursuant to the Merger Agreement, the Company
shall, if required by applicable law in order to consummate the Merger, duly
call, give notice of, convene and hold an annual or special meeting of its
stockholders as promptly as practicable following consummation of the Offer for
the purpose of considering and taking action on the Merger Agreement and the
Merger (the "Stockholders' Meeting"). If Purchaser acquires at least two-thirds
of the outstanding Shares, Purchaser will have sufficient voting power to
approve the Merger, even if no other stockholder votes in favor of the Merger.
Proxy Statement. The Merger Agreement provides that the Company shall, if
approval of the Company's stockholders is required by applicable law to
consummate the Merger, promptly following consummation of the Offer, file with
the Commission under the Exchange Act, and use its best efforts to have cleared
by the Commission, a proxy statement and related proxy materials (the "Proxy
Statement") with respect to the Stockholders' Meeting and shall cause the Proxy
Statement and all required amendments and supplements thereto to be mailed to
the holders of Shares at the earliest practicable time. The Company has agreed
to include in the Proxy Statement, and not subsequently withdraw or modify in
any manner adverse to Purchaser or Parent, the unanimous recommendation of the
Board that the stockholders of the Company approve and adopt the Merger
Agreement and the Merger and to use its best efforts to obtain such approval and
adoption. Parent and Purchaser have agreed to cause all Shares then owned by
them and their subsidiaries
17
<PAGE> 23
to be voted in favor of approval and adoption of the Merger Agreement and the
Merger. The Merger Agreement provides that, in the event that Purchaser shall
acquire at least 90% of the then outstanding Shares, Parent, Purchaser and the
Company will take all necessary and appropriate action to cause the Merger to
become effective, in accordance with Missouri Law, as promptly as reasonably
practicable after such acquisition, without a meeting of the Company's
stockholders.
Conduct of Business by the Company Pending the Merger. Pursuant to the
Merger Agreement, the Company has covenanted and agreed that, between the date
of the Merger Agreement and the Effective Time, unless Parent shall otherwise
agree in writing, which consent will not be unreasonably withheld, the
businesses of the Company and its subsidiaries (the "Subsidiaries" and,
individually, a "Subsidiary") will be conducted only in, and the Company and the
Subsidiaries shall not take any action except in, the ordinary course of
business and in a manner consistent with past practice; and the Company shall
use its reasonable best efforts to preserve substantially intact the business
organization of the Company and the Subsidiaries, to keep available the services
of the current officers, employees and consultants of the Company and the
Subsidiaries and to preserve the current relationships of the Company and the
Subsidiaries with customers, suppliers and other persons with which the Company
or any Subsidiary has significant business relations. The Merger Agreement
provides that, by way of amplification and not limitation, except as
contemplated therein, neither the Company nor any Subsidiary shall, between the
date of the Merger Agreement and the Effective Time, directly or indirectly, do,
or propose to do, any of the following, without the prior written consent of
Parent, which consent will not be unreasonably withheld: (a) amend or otherwise
change its Articles of Incorporation or By-laws or equivalent organizational
documents; (b) issue, sell, pledge, dispose of, grant, encumber, or authorize
the issuance, sale, pledge, disposition, grant or encumbrance of (i) any shares
of any class of capital stock of the Company or any Subsidiary, or any options,
warrants, convertible securities or other rights of any kind to acquire any
shares of such capital stock, or any other ownership interest (including,
without limitation, any phantom interest), of the Company or any Subsidiary
(except for the issuance of a maximum of 631,660 Shares issuable pursuant to (A)
options outstanding on the date of the Merger Agreement under the Company Stock
Option Plans and other agreements (B) the Wave Technologies, Inc. Employee Stock
Purchase Plan and (C) the Wave Technologies, Inc. Profit Sharing and 401(k)
Plan) or (ii) any assets of the Company or any Subsidiary, except in the
ordinary course of business and in a manner consistent with past practice; (c)
declare, set aside, make or pay any dividend or other distribution, payable in
cash, stock, property or otherwise, with respect to any of its capital stock;
(d) reclassify, combine, split, subdivide or redeem or purchase or otherwise
acquire, directly or indirectly, any of its capital stock; (e) (i) acquire
(including, without limitation, by merger, consolidation, or acquisition of
stock or assets or any other business combination) any corporation, partnership,
other business organization or any division thereof or any material amount of
assets, (ii) incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee or endorse, or otherwise become responsible for,
the obligations of any person, or make any loans or advances except in the
ordinary course of business and consistent with past practice, (iii) enter into
any contract or agreement other than in the ordinary course of business and
consistent with past practice, (iv) authorize, or make any commitment with
respect to, any single capital expenditure which is in excess of $50,000 or
capital expenditures which are, in the aggregate, in excess of $100,000 for the
Company and the Subsidiaries taken as a whole, or (v) enter into or amend any
contract, agreement, commitment or arrangement with respect to any of the
foregoing matters, except in the ordinary course of business and consistent with
past practice; (f) increase the compensation payable or to become payable or the
benefits provided to its director s, officers or employees, except for increases
in the ordinary course of business and consistent with past practice in salaries
or wages of employees of the Company or any Subsidiary who are not directors or
officers of the Company, or grant any severance or termination pay to, or enter
into any employment or severance agreement with any director, officer or other
employee of the Company or of any Subsidiary, or establish, adopt, enter into or
amend any collective bargaining, bonus, profit-sharing, thrift, compensation,
stock option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund, policy
or arrangement for the benefit of any director, officer or employee; (g) take
any action, other than reasonable and usual actions in the ordinary course of
business and consistent with past practice, with respect to accounting policies
or procedures; (h) make any tax election or settle or compromise any material
United States federal, state, local or United
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Kingdom or other non-United States income tax liability; (i) pay, discharge or
satisfy any claim, liability or obligation (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge or
satisfaction, in the ordinary course of business and consistent with past
practice, of liabilities reflected or reserved against in the 1999 Balance Sheet
or subsequently incurred in the ordinary course of business and consistent with
past practice; (j) amend, modify or consent to the termination of any material
contracts, or amend, waive, modify or consent to the termination of the
Company's or any Subsidiary's rights thereunder, other than in the ordinary
course of business and consistent with past practice; (k) commence or settle any
litigation, suit, claim, action, proceeding or investigation; or (l) announce an
intention, enter into any formal or informal agreement or otherwise make a
commitment, to do any of the foregoing.
Company Board Representation. The Merger Agreement provides that, promptly
upon the purchase by Purchaser of Shares pursuant to the Offer, and from time to
time thereafter, Purchaser shall be entitled to designate up to such number of
directors, rounded up to the next whole number, on the Board as shall give
Purchaser representation on the Board equal to the product of the total number
of directors on the Board (giving effect to the directors elected pursuant to
this sentence), multiplied by the percentage that the aggregate number of Shares
beneficially owned by Purchaser or any affiliate of Purchaser following such
purchase bears to the total number of Shares then outstanding, and the Company
shall, at such time, promptly take all actions necessary to cause Purchaser's
designees to be elected as directors of the Company, including increasing the
size of the Board or securing the resignations of incumbent directors, or both.
The Merger Agreement also provides that, at such times, the Company shall use
its reasonable best efforts to cause persons designated by Purchaser to
constitute the same percentage as persons designated by Purchaser shall
constitute of the Board of (i) each committee of the Board, (ii) each board of
directors of each Subsidiary, and (iii) each committee of each such board, in
each case only to the extent permitted by applicable law. Notwithstanding the
foregoing, until the Effective Time, the Company has agreed to use its
reasonable best efforts to ensure that at least two members of the Board and
each committee of the Board and such boards and committees of the Subsidiaries,
as of the date of the Merger Agreement, who are not employees of the Company
shall remain members of the Board and of such boards and committees.
The Merger Agreement provides that, following the election or appointment
of Purchaser's designees in accordance with the immediately preceding paragraph
and prior to the Effective Time, any amendment of the Merger Agreement or the
Articles of Incorporation or By-laws of the Company, any termination of the
Merger Agreement by the Company, any extension by the Company of the time for
the performance of any of the obligations or other acts of Parent or Purchaser,
or waiver of any of the Company's rights thereunder, will require the
concurrence of a majority of those directors of the Company then in office who
were neither designated by Purchaser nor are employees of the Company or any
Subsidiary.
Access to Information. Pursuant to the Merger Agreement, until the
Effective Time, the Company shall, and shall cause the Subsidiaries and the
officers, directors, employees, auditors and agents of the Company and the
Subsidiaries to, afford the officers, employees and agents of Parent and
Purchaser complete access at all reasonable times to the officers, employees,
agents, properties, offices, plants and other facilities, books and records of
the Company and each Subsidiary, and shall furnish Parent and Purchaser with
such financial, operating and other data and information as Parent or Purchaser,
through its officers, employees or agents, may reasonably request and Parent and
Purchaser have agreed to keep such information confidential, except in certain
circumstances.
No Solicitation of Transactions. The Company has agreed that neither it
nor any Subsidiary shall, directly or indirectly, through any officer, director,
agent or otherwise, (i) solicit, initiate or encourage the submission of, any
Acquisition Proposal or (ii) except as required by the fiduciary duties of the
Board under applicable law after having received advice from outside legal
counsel (x) participate in any discussions or negotiations regarding or (y)
after also entering into a customary confidentiality agreement on terms no less
favorable to the Company than those contained in the Confidentiality Agreement,
furnish to any person, any information with respect to, or otherwise cooperate
in any way with respect to, or assist or participate in, facilitate or
encourage, any unsolicited proposal that constitutes, or may reasonably be
expected to lead to, a Superior Proposal.
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The Company has also agreed that neither the Board nor any committee
thereof shall (i) withdraw or modify, or propose to withdraw or modify, in a
manner adverse to Parent or Purchaser, the approval or recommendation by the
Board or any such committee of the Merger Agreement, the Offer, the Merger or
any other transaction contemplated thereby (ii) approve or recommend, or propose
to approve or recommend, any Acquisition Proposal or (iii) enter into any
agreement with respect to any Acquisition Proposal. Notwithstanding the
foregoing, in the event that, prior to the time of acceptance for payment of
Shares pursuant to the Offer, the Board determines in good faith that it is
required to do so by its fiduciary duties under applicable law after having
received advice from outside legal counsel, the Board may withdraw or modify its
approval or recommendation of the Offer and the Merger, but only to terminate
the Merger Agreement in accordance with the termination provisions specified
therein (and, concurrently with such termination, cause the Company to enter
into an agreement with respect to a Superior Proposal).
The Company has agreed to, and will direct or cause its directors,
officers, employees, representatives and agents to, immediately cease and cause
to be terminated any discussions or negotiations with any parties that may be
ongoing with respect to any Acquisition Proposal. The Company has also agreed to
promptly advise Parent orally (to be confirmed as soon as reasonably practicable
in writing) of (i) any Acquisition Proposal or any request for information with
respect to any Acquisition Proposal, the material terms and conditions of such
Acquisition Proposal or request and the identity of the person making such
Acquisition Proposal or request and (ii) any changes in any such Acquisition
Proposal or request.
"Acquisition Proposal" means (i) any proposal or offer from any person
relating to any direct or indirect acquisition of (A) all or a substantial part
of the assets of the Company or of any Subsidiary or (b) over 15% of any class
of equity securities of the Company or of any Subsidiary; (ii) any tender offer
or exchange offer, as defined pursuant to the Exchange Act, that, if
consummated, would result in any person beneficially owning 15% or more of any
class of equity securities of the Company or any Subsidiary; (iii) any merger,
consolidation, business combination, sale of all or a substantial part of the
assets, recapitalization, liquidation, dissolution or similar transaction
involving the Company or any Subsidiary, other than the Offer and the Merger, or
(iv) any other transaction the consummation of which would reasonably be
expected to impede, interfere with, prevent or materially delay the Offer or the
Merger.
"Superior Proposal" means any Acquisition Proposal on terms which the Board
determines, in its good faith judgment (after having received the advice of U.S.
Bancorp Piper Jaffray or another financial advisor of nationally recognized
reputation), to be more favorable to the Company's stockholders than the Offer
and the Merger.
Except as required by the Board's fiduciary duties under applicable law
after having received advice from outside legal counsel, the Company has agreed
not to release any third party from, or waive any provision of, any
confidentiality or standstill agreement to which the Company is a party.
Employee Stock Options. The Merger Agreement also provides that, effective
as of the Effective Time, the Company will use reasonable best efforts,
including obtaining the consent of the individual option holders, if necessary,
to (i) terminate the Company's 1993 Stock Option Plan, 1995 Stock Option Plan,
the Company's Outside Directors Stock Option Plan and 1997 Stock Option Plan,
each as amended through the date of this Agreement (the "Company Stock Option
Plans"), (ii) cancel, at the Effective Time, each outstanding option to purchase
shares of Company Common Stock granted under the Company Stock Option Plans
(each, a "Company Stock Option") that is outstanding and unexercised as of such
date. Each holder of a Company Stock Option that is outstanding and unexercised
at the Effective Time will be entitled to receive from the Surviving Corporation
immediately after the Effective Time, in exchange for the cancellation of such
Company Stock Option, an amount in cash equal to the excess, if any, of (x) the
Merger Consideration over (y) the per share exercise price of such Company Stock
Option, multiplied by the number of shares of Company Common Stock subject to
such Company Stock Option.
Directors' and Officers' Indemnification Insurance. The Merger Agreement
further provides that the By-laws of the Surviving Corporation will contain
provisions no less favorable with respect to indemnification than are set forth
in Article VII, of the By-laws of the Company, which provisions shall not be
amended, repealed or otherwise modified for a period of six years from the
Effective Time in any manner that would
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affect adversely the rights thereunder of individuals who, at the Effective
Time, were directors, officers, employees, fiduciaries or agents of the Company,
unless such modification shall be required by law.
The Merger Agreement also provides that the Surviving Corporation will use
its reasonable best efforts to maintain in effect for three years from the
Effective Time, if available, the current directors' and officers' liability
insurance policies maintained by the Company (provided that the Surviving
Corporation may substitute therefor policies of at least the same coverage
containing terms and conditions that are not materially less favorable) with
respect to matters occurring prior to the Effective Time; provided, however,
that in no event shall the Surviving Corporation be required to expend more than
an amount per year equal to 200% of current annual premiums paid by the Company
for such insurance (which premiums the Company has represented to Parent and
Purchaser to be $35,000 in the aggregate).
Parent, Purchaser and the Company have also agreed that in the event 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 or (ii) transfers all or substantially all of its properties and assets
to any person, then and in each such case, proper provision shall be made so
that the successors and assigns of the Company or the Surviving Corporation, as
the case may be, or at Parent's option, Parent, shall assume the foregoing
indemnity obligations.
Further Action; Reasonable Best Efforts. The Merger Agreement provides
that, subject to its terms and conditions, each of the parties thereto shall (i)
make promptly its respective filings, and thereafter make any other required
submissions, under the HSR Act with respect to the Merger Agreement or the
transactions contemplated thereby and (ii) use its reasonable best efforts to
take, or cause to be taken, all appropriate action, 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 Merger including, without
limitation, using its reasonable best efforts to obtain all Permits, consents,
approvals, authorizations, qualifications and orders of Governmental Authorities
and parties to contracts with the Company and the Subsidiaries as are necessary
for the consummation of the Merger and to fulfill the conditions to the Offer
and the Merger; provided that neither the Company, Purchaser nor Parent will be
required to take any action, including entering into a consent decree, hold
separate orders or other arrangements, that (i) requires the divestiture of any
assets of any of the Purchaser, Parent, Company or any of their respective
subsidiaries or (ii) limits Parent's freedom of action with respect to, or its
ability to retain, the Company and the Subsidiaries or any portion thereof or
any of Parent's or its affiliates' other assets or businesses. In case, at any
time after the Effective Time, any further action is necessary or desirable to
carry out the purposes of the Merger Agreement, the proper officers and
directors of each party to the Merger Agreement are required to use their
reasonable best efforts to take all such action. Parent or the Purchaser will
pay all fees associated with the HSR submission.
The Merger Agreement also provides that each of the parties thereto will
cooperate and use its reasonable best efforts vigorously to contest and resist
any Action, including administrative or judicial Action, and to have vacated,
lifted, reversed or overturned any decree, judgment, injunction or other order
(whether temporary, preliminary or permanent) that is in effect and that
restricts, prevents or prohibits consummation of the Merger including, without
limitation, by vigorously pursuing all available avenues of administrative and
judicial appeal.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto including
representations by the Company and Seller as to the absence of certain changes
or events concerning the Company's business, compliance with law, absence of
litigation, employee benefit plans, labor matters, property and leases,
intellectual property, environmental matters, taxes, amendments to the Rights
Agreement, material contracts, insurance and brokers.
Conditions to the Merger. Under the Merger Agreement, the respective
obligations of each party to effect the Merger are subject to the satisfaction,
at or prior to the Effective Time, of the following conditions: (a) If and to
the extent required by Missouri Law, the Merger Agreement and the Merger shall
have been approved and adopted by the affirmative vote of the stockholders of
the Company; (b) any waiting period (and any extension thereof) applicable to
the consummation of the Merger under the HSR Act shall have
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expired or been terminated; (c) no Governmental Authority shall have enacted,
issued, promulgated, enforced or entered any Law (whether temporary, preliminary
or permanent) which is then in effect and has the effect of making the
acquisition of Shares by Parent or Purchaser or any affiliate of either of them
illegal or otherwise restricting, preventing or prohibiting consummation of the
Merger; and (d) Purchaser or its permitted assignee shall have purchased all
Shares validly tendered and not withdrawn pursuant to the Offer.
Termination. The Merger Agreement provides that it may be terminated and
the Merger may be abandoned at any time prior to the Effective Time,
notwithstanding any requisite approval and adoption of the Merger Agreement and
the Merger by the stockholders of the Company (a) by mutual written consent of
each of Parent, Purchaser and the Company duly authorized by the Boards of
Directors of Parent, Purchaser and the Company; or (b) by either Parent,
Purchaser or the Company if (i) the Effective Time shall not have occurred on or
before June 30, 2000; provided, however, that the right to terminate the Merger
Agreement under (b)(i) will not be available to any party whose failure to
fulfill any obligation under the Merger Agreement has been the cause of, or
resulted in, the failure of the Effective Time to occur on or before such date
or (ii) any Governmental Authority shall have enacted, issued, promulgated,
enforced or entered any injunction, order, decree or ruling (whether temporary,
preliminary or permanent) which has become final and nonappealable and has the
effect of making consummation of the Offer or the Merger illegal or otherwise
preventing or prohibiting consummation of the Offer or the Merger; or (c) by
Parent if (i) due to an occurrence or circumstance that would result in a
failure to satisfy any condition set forth in Section 14 hereto, Purchaser shall
have (A) failed to commence the Offer within 10 business days following the date
of the Merger Agreement, (B) terminated the Offer without having accepted any
Shares for payment thereunder or (C) failed to accept Shares for payment
pursuant to the Offer within 90 days following the commencement of the Offer
(provided, however, that the applicable time period specified in (A) and (C)
above shall be extended until the earlier to occur of (x) the fifth business day
following expiration or termination of any applicable waiting period under the
HSR Act and (y) June 30, 2000, unless such action or inaction under (A), (B) or
(C) shall have been caused by or resulted from the failure of Parent or
Purchaser to perform, in any material respect, any of their material covenants
or agreements contained in the Merger Agreement, or the material breach by
Parent or Purchaser of any of their material representations or warranties
contained in the Merger Agreement or (ii) prior to the purchase of Shares
pursuant to the Offer, the Board or any committee thereof shall have withdrawn
or modified in a manner adverse to Purchaser or Parent its approval or
recommendation of the Merger Agreement, the Offer, the Merger or any other
transaction contemplated thereby, or shall have recommended or approved any
Acquisition Proposal, or shall have resolved to do any of the foregoing; or (d)
by the Company, upon approval of the Board, if (i) Purchaser shall have (A)
failed to commence the Offer within 10 business days following the date of the
Merger Agreement, (B) terminated the Offer without having accepted any Shares
for payment thereunder or (C) failed to accept Shares for payment pursuant to
the Offer within 90 days following the commencement of the Offer (provided,
however, that the applicable time period specified in (A) and (C) above shall be
extended until the earlier to occur of (x) the fifth business day following
expiration or termination of any applicable waiting period under the HSR Act and
(y) June 30, 2000, unless such action or inaction under (A), (B) or (C) shall
have been caused by or resulted from the failure of the Company to perform, in
any material respect, any of its material covenants or agreements contained in
the Merger Agreement or the material breach by the Company of any of its
material representations or warranties contained in the Merger Agreement or (ii)
prior to the purchase of Shares pursuant to the Offer, if the Board determines
in good faith that it is required to do so by its fiduciary duties under
applicable law after having received advice from outside legal counsel in order
to enter into a definitive agreement with respect to a Superior Proposal, upon
three business days' prior written notice to Parent, setting forth in reasonable
detail the identity of the person making, and the final terms and conditions of,
the Superior Proposal and after duly considering any proposals that may be made
by Parent during such three business day period; provided, however, that any
termination of the Merger Agreement pursuant to (d)(ii) above shall not be
effective until the Company has made full payment of all amounts described below
under the section entitled "Fees and Expenses".
Effect of Termination. In the event of the termination of the Merger
Agreement, the Merger Agreement shall forthwith become void, and there shall be
no liability on the part of any party thereto, except (i) as set forth below
under the section entitled "Fees and Expenses" and (ii) nothing in the Merger
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Agreement shall relieve any party from liability for any breach thereof prior to
the date of such termination, provided, however, that the Confidentiality
Agreement shall survive any termination of the Merger Agreement.
Fees and Expenses. The Merger Agreement provides that in the event that
(i) any person (including, without limitation, the Company or any affiliate
thereof), other than Parent or any affiliate of Parent, shall have become the
beneficial owner of more than 15% of the then-outstanding Shares, and the Merger
Agreement shall have been terminated pursuant to the provisions described above
in clause (b)(i), (c) or (d); or (ii) any person shall have commenced, publicly
proposed or communicated to the Company an Acquisition Proposal that is publicly
disclosed and (A) the Offer shall have remained open for at least 20 business
days, (B) the Minimum Condition shall not have been satisfied, (C) the Merger
Agreement shall have been terminated pursuant to the termination provision
described above and (D) the Company enters into an agreement with the respect to
an Acquisition Proposal, or an Acquisition Proposal is consummated, in each case
within 12 months after such termination of the Merger Agreement; or (iii) the
Merger Agreement is terminated (A) pursuant to (x) the provisions described
above in (c)(ii) or (d)(ii) or (y) to the provisions described above in (c)(i)
or (d)(i), to the extent that the failure to commence, the termination or the
failure to accept any Shares for payment, as set forth in the provisions
described above in (c)(i) or (d)(i), as the case may be, will relate to the
failure of the Company to perform, in any material respect, any of its material
covenants or agreements contained in the Merger Agreement or the knowing or
intentional breach by the Company of any of its material representations or
warranties contained in the Merger Agreement and (B) the Company enters into an
agreement with respect to an Acquisition Proposal, or an Acquisition Proposal is
consummated, in each case within 12 months after the termination of the Merger
Agreement or (iv) the Company enters into an agreement with respect to an
Acquisition Proposal that was commenced, publicly proposed or communicated to
the Company prior to the termination of the Merger Agreement pursuant to the
termination provision described above or such an Acquisition Proposal is
consummated, in each case within 12 months after such termination, and the
Company shall not theretofore have been required to pay the Fee to Parent
pursuant to the provisions described above in (a)(i), (a)(ii) or (a)(iii); then,
in any such event, the Company shall pay Parent promptly (but in no event later
than one business day after the first of such events shall have occurred) a fee
of $1.5 million (the "Fee"), which amount shall be payable in immediately
available funds, plus all out-of-pocket expenses and fees up to $250,000, in the
aggregate (including, without limitation, all fees of counsel, accountants,
experts and consultants to Parent and Purchaser, the fees associated with the
HSR submission, and all printing and advertising expenses and filing fees)
actually incurred or accrued by either of them or on their behalf in connection
with the Offer and the Merger (all the foregoing being referred to herein
collectively as the "Expenses"). Except as set forth in this paragraph and all
fees associated with the HSR submission, all costs and expenses incurred in
connection with the Merger Agreement, the Offer and the Merger shall be paid by
the party incurring such expenses, whether or not any transaction contemplated
thereby is consummated.
CONFIDENTIALITY AGREEMENT
THE FOLLOWING IS A SUMMARY OF CERTAIN PROVISIONS OF THE CONFIDENTIALITY
AGREEMENT, DATED JANUARY 13, 1999, BETWEEN THE COMPANY AND THOMSON, AS AMENDED
ON JANUARY 22, 1999 (THE "CONFIDENTIALITY AGREEMENT"). THIS SUMMARY IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO THE CONFIDENTIALITY AGREEMENT, WHICH IS
INCORPORATED HEREIN BY REFERENCE, AND A COPY OF WHICH HAS BEEN FILED WITH THE
COMMISSION AS AN EXHIBIT TO THE SCHEDULE TO. THE CONFIDENTIALITY AGREEMENT MAY
BE EXAMINED AND COPIES MAY BE OBTAINED AT THE PLACES SET FORTH SET FORTH IN
SECTION 7.
On January 13, 1999, the Company and Course Technology, an affiliate of
Parent, executed a Confidentiality Agreement (the "Confidentiality Agreement").
The Confidentiality Agreement was amended by a letter agreement executed on
January 22, 1999. Pursuant to the terms of the Confidentiality Agreement, the
Company agreed to provide to Course Technology or an affiliate certain
confidential and proprietary information concerning the Company and Course
Technology, on behalf of itself and any of its affiliates which received any of
the confidential information, agreed among other things: (1) to keep the
confidential information confidential, (2) not to use the Confidential
Information for any purpose other than to evaluate a
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possible acquisition transaction with the Company, (3) not to disclose the fact
that the confidential information had been made available to Course and (4) that
neither Course nor any of its affiliates would in any manner, directly or
indirectly, except at the specific invitation of the Company, for a period of
one year after the date of the Confidentiality Agreement, (a) effect or seek,
offer or propose to effect, or cause or participate in or in any way assist any
other person to effect or seek, offer or propose (whether publicly or otherwise)
to effect or participate in (i) any acquisition of any securities or assets of
the Company or any of its subsidiaries, (ii) any tender or exchange offer,
merger or other business combination involving the Company or any of its
subsidiaries, (iii) any recapitalization, restructuring, liquidation,
dissolution or other extraordinary transaction with respect to the Company or
any of its subsidiaries, or (iv) make any solicitation of proxies or consents to
vote any voting securities of the Company, or (c) otherwise act to seek control
or influence the management, board of directors or policies of the Company, or
(d) take any action which might force the Company to make a public announcement
regarding any of the types of matters set forth above.
INTEREST OF CERTAIN PERSONS IN THE MERGER
Thomson has requested that Kenneth Kousky, the Chairman of the Board,
President and Chief Executive Officer of Wave, remain as the President of Wave
following the Merger at a base salary of $225,000 per year, subject to review on
March 1, 2001. Under the terms of Thomson's proposal to Mr. Kousky, he would
participate in (1) a short term incentive plan that would allow him to earn an
incentive bonus of between 50% and 100% of his base salary if Wave meets certain
financial targets to be established by the parties and (2) a three year long
term incentive plan that would allow Mr. Kousky to earn an additional incentive
bonus of up to 50% of his base salary in the first two years and 100% of his
base salary in the third year if Wave meets certain financial targets to be
established by the parties, including in each case a guaranteed portion for the
remainder of fiscal year 2000. Thomson's offer provides that if Mr. Kousky's
employment were terminated, he would receive severance in the form of salary
continuation for 12 months, provided that he executes a separation letter, which
would include an agreement by Mr. Kousky not to compete with Wave for a period
of one year from the date of termination of his employment. Mr. Kousky would
also participate in other benefit plans available to similarly situated
employees of Thomson Learning. Thomson and Mr. Kousky and his counsel are
negotiating the terms of an employment agreement, but no agreement has been
reached to date. The foregoing is a summary of Thomson's proposal to Mr. Kousky.
The Offer and the Merger are not conditioned on Mr. Kousky accepting these or
any other terms of employment.
11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY AFTER THE OFFER AND THE MERGER.
Purpose of the Offer. The Offer is being made pursuant to the Merger
Agreement. The purpose of the Offer and the Merger is for Thomson to acquire
control of, and the entire equity interest in, the Company. The purpose of the
Merger is for Thomson to acquire all Shares not purchased pursuant to the Offer.
Upon consummation of the Merger, the Company will become an indirect wholly
owned subsidiary of Thomson.
Under Missouri Law, the approval of the Board and the affirmative vote of
the holders of two-thirds of the outstanding Shares is required to approve and
adopt the Merger Agreement and the transactions contemplated thereby, including
the Merger. The Board of Directors of the Company has unanimously determined
that each of the Offer and the Merger is fair to, and in the best interests of,
the holders of Shares, has approved, adopted and declared advisable the Merger
Agreement and the Merger (such approval and adoption having been made in
accordance with Missouri Law) and has resolved to recommend that Stockholders
accept the Offer and tender their Shares pursuant to the Offer. Unless the
Merger is consummated pursuant to the short-form merger provisions under
Missouri Law described below, the only remaining required corporate action of
the Company is the approval and adoption of the Merger Agreement and the Merger
by the affirmative vote of the holders of a at least two-thirds of the Shares.
Accordingly, if the Minimum Condition is satisfied, Purchaser will have
sufficient voting power to cause the approval and adoption of the Merger
Agreement and the Merger without the affirmative vote of any other stockholder.
In the Merger Agreement, the Company has agreed to duly call, give notice
of, convene and hold an annual or special meeting of its stockholders as
promptly as practicable following consummation of the Offer for the purpose of
considering and taking action on the Merger Agreement and the Merger, if such
action is
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required by Missouri Law. Thomson and Purchaser have agreed that all Shares
owned by them and their subsidiaries will be voted in favor of the approval and
adoption of the Merger Agreement and the Merger.
The Merger Agreement provides that, promptly upon the purchase by Purchaser
of Shares pursuant to the Offer, Purchaser will be entitled to designate
representatives to serve on the Board in proportion to Purchaser's ownership of
Shares following such purchase. See Section 10. Purchaser expects that such
representation would permit Purchaser to exert substantial influence over the
Company's conduct of its business and operations.
Short-Form Merger. Under Missouri Law, if Purchaser acquires, pursuant to
the Offer or otherwise, at least 90% of the then outstanding Shares, Purchaser
will be able to approve the Merger without a vote of the Company's stockholders.
In such event, Parent, Purchaser and the Company have agreed in the Merger
Agreement to take, at the request of Purchaser, all necessary and appropriate
action to cause the Merger to become effective as promptly as reasonably
practicable after such acquisition, without a meeting of the Company's
stockholders. If, however, Purchaser does not acquire at least 90% of the
outstanding Shares pursuant to the Offer or otherwise and a vote of the
Company's stockholders is required under Missouri Law, a significantly longer
period of time would be required to effect the Merger.
Appraisal Rights. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders who have not tendered
their Shares will have certain rights under Missouri Law to dissent from the
Merger and demand appraisal of, and to receive payment in cash of the fair value
of, their Shares. Stockholders who perfect such rights by complying with the
procedures set forth in Section 351.455 of Missouri Law ("Section 351.455") will
have the "fair value" of their Shares (exclusive of any element of value arising
from the accomplishment or expectation of the Merger) determined by the Missouri
Circuit Court and will be entitled to receive a cash payment equal to such fair
value for the Surviving Corporation. In addition, such dissenting stockholders
would be entitled to receive payment of a fair rate of interest from the date of
consummation of the Merger on the amount determined to be the fair value of
their Shares. In Phelps v. Watson-Stillman Co. the Missouri Supreme Court stated
that the "net asset value" is not the sole test in determining the fair value of
the Shares.
Thomson does not intend to object, assuming the proper procedures are
followed, to the exercise of appraisal rights by any stockholder and the demand
for appraisal of, and payment in cash for the fair value of, the Shares. Thomson
intends, however, to cause the Surviving Corporation to argue in an appraisal
proceeding that, for purposes of such proceeding, the fair value of each Share
is less than or equal to the Merger Consideration. In this regard, stockholders
should be aware that opinions of investment banking firms as to the fairness
from a financial point of view (including U.S. Bancorp Piper Jaffray's) are not
necessarily opinions as to "fair value" under Section 351.455.
The foregoing summary of the rights of dissenting stockholders under
Missouri Law does not purport to be a complete statement of the procedures to be
followed by stockholders desiring to exercise any dissenters' rights under
Missouri Law. The preservation and exercise of dissenters' rights require strict
adherence to the applicable provisions of Missouri Law. The text of Section
351.455 is attached to this Offer to Purchase at Schedule III.
Going Private Transactions. The Commission has adopted Rule 13e-3 under
the Exchange Act which is applicable to certain "going private" transactions and
which may under certain circumstances be applicable to the Merger or another
business combination following the purchase of Shares pursuant to the Offer in
which Purchaser seeks to acquire the remaining Shares not held by it. Purchaser
believes that Rule 13e-3 will not be applicable to the Merger. Rule 13e-3
requires, 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
transaction be filed with the Commission and disclosed to stockholders prior to
consummation of the transaction.
Plans for the Company. It is expected that, initially following the
Merger, the business and operations of the Company will, except as set forth in
this Offer to Purchase, be continued by the Company substantially as they are
currently being conducted. Thomson will continue to evaluate the business and
operations of the
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Company during the pendency of the Offer and after the consummation of the Offer
and the Merger, and will take such actions as it deems appropriate under the
circumstances then existing. Thomson intends to seek additional information
about the Company during this period. Thereafter, Thomson intends to review such
information as part of a comprehensive review of the Company's business,
operations, capitalization and management with a view to optimizing exploitation
of the Company's potential in conjunction with Thomson's businesses. It is
expected that the business and operations of the Company would form an important
part of Thomson's future business plans.
Except as indicated in this Offer to Purchase, Thomson does not have any
present plans or proposals which relate to or would result in (i) any
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, relocation of any operations of the Company or any of its
subsidiaries, (ii) any purchase, sale or transfer of a material amount of
assets, involving the Company or any of its subsidiaries, (iii) any material
change in the Company's present indebtedness, capitalization or dividend policy,
(iv) any change in the present board of directors or management of the Company,
(v) any other material change in the Company's corporate structure or business,
(vi) any class of equity security of the Company being delisted from a national
stock exchange or ceasing to be authorized to be quoted in an automated
quotation system operated by a national securities association, (vii) any class
of equity securities of the Company becoming eligible for termination of
registration under Section 12(g)(4) of the Exchange Act, (viii) the suspension
of the Company's obligation to file reports under Section 15(d) of the Act, (ix)
the acquisition by any person of additional securities of the Company, or the
disposition of securities of the Company, or (x) any changes in the Company's
charter, bylaws or other governing instruments or other actions that could
impede the acquisition of control of the Company.
12. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that the Company shall not, between the date
of the Merger Agreement and the Effective Time, without the prior written
consent of Parent, which consent will not be unreasonably withheld, (a) issue,
sell, pledge, dispose of, grant, encumber, or authorize the issuance, sale,
pledge, disposition, grant or encumbrance of (i) any shares of any class of
capital stock of the Company or any Subsidiaries, or any options, warrants,
convertible securities or other rights of any kind to acquire any shares of such
capital stock, or any other ownership interest (including, without limitation,
any phantom interest), of the Company or any Subsidiaries (except for the
issuance of a maximum of 631,660 Shares issuable pursuant to (A) options
outstanding on the date hereof under the Company Stock Option Plans outstanding
and other agreements, (B) the Wave Technologies, Inc. Employee Stock Purchase
Plan and (C) the Wave Technologies, Inc. Profit Sharing and 401(k) Plan) or (ii)
any assets of the Company or any Subsidiaries, except for transactions in the
ordinary course of business consistent with past practice; (b) declare, set
aside, make or pay any dividend or other distribution, payable in cash, stock,
property or otherwise, with respect to any of its capital stock or (c)
reclassify, combine, split, subdivide or redeem, or purchase or otherwise
acquire, directly or indirectly, any of its capital stock. See Section 10. If,
however, the Company should, during the pendency of the Offer, (i) split,
combine or otherwise change the Shares or its capitalization, (ii) acquire or
otherwise cause a reduction in the number of outstanding Shares or (iii) issue
or sell any additional Shares, shares of any other class or series of capital
stock, other voting securities or any securities convertible into, or options,
rights, or warrants, conditional or otherwise, to acquire, any of the foregoing,
then, without prejudice to Purchaser's rights under Section 14, Purchaser may
(subject to the provisions of the Merger Agreement) make such adjustments to the
purchase price and other terms of the Offer (including the number and type of
securities to be purchased) as it deems appropriate to reflect such split,
combination or other change.
If, on or after March 10, 2000, the Company should declare, set aside, make
or pay any dividend on the Shares or make any other distribution (including the
issuance of additional shares of capital stock pursuant to a stock dividend or
stock split, the issuance of other securities or the issuance of rights for the
purchase of any securities) with respect to the Shares that is payable or
distributable to stockholders of record on a date prior to the transfer to the
name of Purchaser or its nominee or transferee on the Company's stock transfer
records of the Shares purchased pursuant to the Offer, then, without prejudice
to Purchaser's rights under Section 14, (i) the purchase price per Share payable
by Purchaser pursuant to the Offer will be reduced (subject to the
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provisions of the Merger Agreement) to the extent any such dividend or
distribution is payable in cash and (ii) any non-cash dividend, distribution or
right shall be received and held by the tendering stockholder for the account of
Purchaser and will be required to be promptly remitted and transferred by each
tendering stockholder to the Depositary for the account of Purchaser,
accompanied by appropriate documentation of transfer. Pending such remittance
and subject to applicable law, Purchaser will be entitled to all the rights and
privileges as owner of any such non-cash dividend, distribution or right and may
withhold the entire purchase price or deduct from the purchase price the amount
or value thereof, as determined by Purchaser in its sole discretion.
13. POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR SHARES, NASDAQ LISTING,
MARGIN REGULATIONS AND EXCHANGE ACT REGISTRATION.
Possible Effects of the Offer on the Market for the Shares. The purchase
of Shares by Purchaser pursuant to the Offer will reduce the number of Shares
that might otherwise trade publicly and will reduce the number of holders of
Shares, which could adversely affect the liquidity and market value of the
remaining Shares held by the public.
Thomson intends to cause the delisting of the Shares by Nasdaq following
consummation of the Offer.
Nasdaq Listing. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the standards for continued listing on
Nasdaq. According to Nasdaq's published guidelines, the Shares would not be
eligible to be included for listing if, among other things, the number of Shares
publicly held falls below 100,000, the number of holders of Shares falls below
300 or the market value of such publicly held Shares is not at least $200,000.
If, as a result of the purchase of Shares pursuant to the Offer, the Merger or
otherwise, the Shares no longer meet the requirements of Nasdaq for continued
listing, the listing of the Shares will be discontinued. In such event, the
market for the Shares would be adversely affected. In the event the Shares were
no longer eligible for listing on Nasdaq, quotations might still be available
from other sources. The extent of the public market for the Shares and the
availability of such quotations would, however, depend upon the number of
holders of such Shares remaining at such time, the interest in maintaining a
market in such Shares on the part of securities firms, the possible termination
of registration of such Shares under the Exchange Act as described below and
other factors.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Such registration may be terminated upon application by the
Company to the Commission if the Shares are not listed on a "national securities
exchange" and there are fewer than 300 record holders. 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 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) or 14(c) of the Exchange Act and the related requirements of an
annual report, and the requirements of Rule 13e-3 under the Exchange Act with
respect to "going private" transactions, no longer applicable to the Shares. In
addition, "affiliates" of the Company and persons holding "restricted
securities" of the Company may be deprived of the ability to dispose of such
securities pursuant to Rule 144 promulgated under the Securities Act of 1933, as
amended. If registration of the Shares under the Exchange Act were terminated,
the Shares would no longer be eligible for Nasdaq reporting. Purchaser currently
intends to seek to cause the Company to terminate the registration of the Shares
under the Exchange Act as soon after consummation of the Offer as the
requirements for termination of registration are met.
Margin Regulations. The Shares are currently "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 such securities.
Depending upon factors similar to those described above regarding listing and
market quotations, following the Offer it is possible that the Shares might no
longer constitute "margin securities" for purposes of the margin regulations of
the Federal Reserve Board, in which event such Shares could no longer be used as
collateral for loans made
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by brokers. In addition, if registration of the Shares under the Exchange Act
were terminated, the Shares would no longer constitute "margin securities".
14. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, but subject to the terms
of the Merger Agreement, Purchaser shall not be required to accept for payment
any Shares tendered pursuant to the Offer, and may extend, terminate or amend
the Offer if (i) immediately prior to the expiration of the Offer, the Minimum
Condition shall not have been satisfied, (ii) any applicable waiting period
under the HSR Act shall not have expired or been terminated prior to the
expiration of the Offer, or (iii) at any time on or after March 10, 2000 and
prior to the Expiration Date, any of the following conditions shall exist:
(a) there shall have been instituted or be pending any Action before
any Governmental Authority, (i) challenging or seeking to make illegal,
materially delay, or otherwise, directly or indirectly, restrain or
prohibit or make materially more costly, the making of the Offer, the
acceptance for payment of any Shares by Parent, Purchaser or any other
affiliate of Parent, or the purchase of Shares, or the consummation of any
other transaction contemplated by the Merger Agreement, or seeking to
obtain material damages in connection with any transaction contemplated by
the Merger Agreement; (ii) seeking to prohibit or limit materially the
ownership or operation by the Company, Parent or any of their subsidiaries
of all or any of the business or assets of the Company, Parent or any of
their subsidiaries that is material to either Parent and its subsidiaries
or the Company and its subsidiaries, in either case, taken as a whole, or
to compel the Company, Parent or any of their subsidiaries as a result of
the Merger Agreement or any of the transactions contemplated thereby, to
dispose of or to hold separate all or any portion of the business or assets
of the Company, Parent or any of their subsidiaries, that is material to
either Parent and its subsidiaries or the Company and its subsidiaries, in
each case, taken as a whole; (iii) seeking to impose or confirm any
limitation on the ability of Parent, Purchaser or any other affiliate of
Parent to exercise effectively full rights of ownership of any Shares,
including, without limitation, the right to vote any Shares acquired by
Purchaser pursuant to the Offer or any Stockholders Agreement or otherwise
on all matters properly presented to the Company's stockholders including,
without limitation, the approval and adoption of the Merger Agreement or
any of the transactions contemplated thereby; (iv) seeking to require
divestiture by Parent, Purchaser or any other affiliate of Parent of any
Shares; or (v) which otherwise would prevent or materially delay
consummation of the Offer or the Merger or otherwise prevent or materially
delay the Company from performing its obligations under the Merger
Agreement or would have a Material Adverse Effect;
(b) there shall have been any statute, rule, regulation, legislation
or interpretation enacted, promulgated, amended, issued or deemed
applicable to (i) Parent, the Company or any subsidiary or affiliate of
Parent or the Company or (ii) the Merger Agreement or to transactions
contemplated thereby, by any United States or non-United States legislative
body or Governmental Authority with appropriate jurisdiction, other than
the routine application of the waiting period provisions of the HSR Act to
the Offer or the Merger, that is reasonably likely to result, directly or
indirectly, in any of the consequences referred to in clauses (i) through
(v) of paragraph (a) above;
(c) any Material Adverse Effect shall have occurred;
(d) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on the Nasdaq National Market
or the London, Montreal or Toronto Stock Exchanges (other than a shortening
of trading hours or any coordinated trading halt triggered solely as a
result of a specified increase or decrease in a market index), (ii) a
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States or Canada, (iii) any limitation
(whether or not mandatory) by any government or Governmental Authority on
the extension of credit by banks or other lending institutions, (iv) a
commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United States
or Canada or (v) in the case of any of the foregoing existing on March 10,
2000, a material acceleration or worsening thereof;
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(e) (i) it shall have been publicly disclosed, or Purchaser shall have
otherwise learned, that beneficial ownership (determined for the purposes
of this paragraph as set forth in Rule 13d-3 promulgated under the Exchange
Act) of 15% or more of the then outstanding Shares has been acquired by any
person, other than Parent or any of its affiliates, or (ii) (A) the Board,
or any committee thereof, shall have withdrawn or modified, in a manner
adverse to Parent or Purchaser the approval or recommendation of the Offer,
the Merger, the Merger Agreement, or approved or recommended any
Acquisition Proposal or any other acquisition of Shares other than the
Offer, the Merger or (B) the Board, or any committee thereof, shall have
resolved to do any of the foregoing;
(f) any representation or warranty of the Company in the Merger
Agreement that is qualified as to materiality or Material Adverse Effect
shall not be true and correct or any such representation or warranty that
is not so qualified shall not be true and correct in any material respect,
in each case as if such representation or warranty was made as of such time
on or after the date of the Merger Agreement;
(g) the Company shall have failed to perform, in any material respect,
any obligation or to comply, in any material respect, with any agreement or
covenant of the Company to be performed or complied with by it under the
Merger Agreement;
(h) the Merger Agreement shall have been terminated in accordance with
its terms; or
(i) Purchaser and the Company shall have agreed that Purchaser shall
terminate the Offer or postpone the acceptance for payment of Shares
thereunder;
which, in the reasonable judgment of Purchaser in any such case, and regardless
of the circumstances (including any action or inaction by Parent or any of its
affiliates) giving rise to any such condition, makes it inadvisable to proceed
with such acceptance for payment.
The foregoing conditions are for the sole benefit of Purchaser and Parent
and may be asserted by Purchaser or Parent regardless of the circumstances
giving rise to any such condition or, subject to the terms of the Merger
Agreement, may be waived by Purchaser or Parent in whole or in part at any time
and from time to time in their sole discretion. The failure by Parent or
Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right; the waiver of any such right with respect to
particular facts and 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.
15. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS.
General. Based upon its examination of publicly available information with
respect to the Company and the review of certain information furnished by the
Company to Thomson and discussions between representatives of Thomson with
representatives of the Company during Thomson's investigation of the Company
(see Section 10), neither Purchaser nor Thomson is aware of (i) any license or
other regulatory permit that appears to be material to the business of the
Company or any of its subsidiaries, taken as a whole, which might be adversely
affected by the acquisition of Shares by Purchaser pursuant to the Offer or (ii)
except as set forth below, of any approval or other action by any domestic
(federal or state) or foreign Governmental Authority which would be required
prior to the acquisition of Shares by Purchaser pursuant to the Offer. Should
any such approval or other action be required, it is Purchaser's present
intention to seek such approval or action. Purchaser does not currently intend,
however, to delay the purchase of Shares tendered pursuant to the Offer pending
the outcome of any such action or the receipt of any such approval (subject to
Purchaser's right to 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, Purchaser or Thomson or that certain parts of the businesses of the
Company, Purchaser or Thomson 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 obtained or such
other action was not taken. Purchaser's obligation
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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 for certain conditions of the Offer.
State Takeover Laws. The Company is incorporated under the laws of the
State of Missouri. In general, Section 351.459 of Missouri Law prevents an
"interested shareholder" (generally a person who owns or has the right to
acquire 20% 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 Missouri corporation for
a period of five years following the date such person became an interested
shareholder 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 shareholder became an interested
shareholder. On March 10, 2000, prior to the execution of the Merger Agreement ,
the Board by unanimous vote of all directors present at a meeting held on such
date, approved the Merger Agreement , determined that each of the Offer and the
Merger is fair to, and in the best interest of, the stockholders of the Company.
Accordingly, Section 351.459 is inapplicable to the Offer and the Merger.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In Edgar v. MITE Corp., the Supreme Court of
the United States invalidated on constitutional grounds the Illinois Business
Takeover Statute, 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 held that the State of
Indiana may, as a matter of corporate law and, in particular, with respect to
those aspects of corporate law concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without the prior approval of the remaining stockholders. The state
law before the Supreme Court was by its terms applicable only to corporations
that had a substantial number of stockholders in the state and were incorporated
there.
The Company, directly or through its subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws. Purchaser does not know whether any of these laws will, by their
terms, apply to the Offer or the Merger and has not complied with any such laws.
Should any person seek to apply any state takeover law, 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. In the event
it is asserted that one or more state takeover laws is applicable to the Offer
or the Merger, and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer, Purchaser might be required to
file certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, Purchaser might be unable to accept for
payment any Shares tendered pursuant to the Offer, or be delayed in continuing
or consummating the Offer, and the Merger. In such case, Purchaser may not be
obligated to accept for payment any Shares tendered. See Section 14.
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 Purchaser pursuant to the Offer are subject to such requirements.
See Section 2.
Pursuant to the HSR Act, on March 20, 2000, Thomson filed a Premerger
Notification and Report Form in connection with the purchase of Shares pursuant
to the Offer with the Antitrust Division and the FTC. Under the provisions of
the HSR Act applicable to the Offer, the purchase of Shares pursuant to the
Offer may not be consummated until the expiration of a 15-calendar day waiting
period following the filing by Thomson. Accordingly, the waiting period under
the HSR Act applicable to the purchase of Shares pursuant to the Offer will
expire at 11:59 p.m., New York City time, on April 4, 2000, unless such waiting
period is earlier terminated by the FTC and the Antitrust Division or extended
by a request from the FTC or the Antitrust Division for additional information
or documentary material prior to the expiration of the waiting period. Pursuant
to the HSR Act, Thomson has requested 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. If either the FTC or the Antitrust
Division were to request additional information or documentary
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material from Thomson with respect to the Offer, the waiting period with respect
to the Offer would expire at 11:59 p.m., New York City time, on the tenth
calendar day after the date of substantial compliance with such request.
Thereafter, the waiting period could be extended only by court order. If the
acquisition of Shares is delayed pursuant to a request by the FTC or the
Antitrust Division for additional information or documentary material pursuant
to the HSR Act, the Offer may, but need not, be extended and, in any event, the
purchase of and payment for Shares will be deferred until 10 days after the
request is substantially complied with, unless the waiting period is sooner
terminated by the FTC and the Antitrust Division. Only one extension of such
waiting period pursuant to a request for additional information is authorized by
the HSR Act and the rules promulgated thereunder, except by court order. Any
such extension of the waiting period will not give rise to any withdrawal rights
not otherwise provided for by applicable law. See Section 4. It is a condition
to the Offer that the waiting period applicable under the HSR Act to the Offer
expire or be terminated. See Section 2 and Section 14.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
Purchaser pursuant to the Offer. At any time before or after the purchase of
Shares pursuant to the Offer by Purchaser, 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 purchase of
Shares pursuant to the Offer or seeking the divestiture of Shares purchased by
Purchaser or the divestiture of substantial assets of Thomson, the Company or
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 information available to Thomson
relating to the businesses in which Thomson, the Company and their respective
subsidiaries are engaged, Thomson and Purchaser believe that the Offer will not
violate the antitrust laws. Nevertheless, there can be no assurance that a
challenge to the Offer on antitrust grounds will not be made or, if such a
challenge is made, what the result would be. See Section 14 for certain
conditions to the Offer, including conditions with respect to litigation.
16. FEES AND EXPENSES.
Except as set forth below, Purchaser will not pay any fees or commissions
to any broker, dealer or other person for soliciting tenders of Shares pursuant
to the Offer.
Purchaser and Thomson have retained Innisfree M&A Incorporated, as the
Information Agent, and ChaseMellon Shareholder Services L.L.C., as the
Depositary, in connection with the Offer. The Information Agent may contact
holders of Shares by mail, telephone, telex, telecopy, telegraph and personal
interview and may request banks, brokers, dealers and other nominee stockholders
to forward materials relating to the Offer to beneficial owners. As compensation
for acting as Information Agent in connection with the Offer, Innisfree M&A
Incorporated will be paid reasonable and customary compensation for its services
and will also be reimbursed for certain out-of-pocket expenses and may be
indemnified against certain liabilities and expenses in connection with the
Offer, including certain liabilities under the federal securities laws.
Purchaser will pay the Depositary reasonable and customary compensation for
its services in connection with the Offer, plus reimbursement for out-of-pocket
expenses, and will indemnify the Depositary against certain liabilities and
expenses in connection therewith, including under federal securities laws.
Brokers, dealers, commercial banks and trust companies will be reimbursed by
Purchaser for customary handling and mailing expenses incurred by them in
forwarding material to their customers.
17. MISCELLANEOUS.
The Offer is being made solely by this Offer to Purchase and the related
Letter of Transmittal and is being made to holders of Shares. Purchaser is not
aware of any jurisdiction where the making of the Offer is prohibited by any
administrative or judicial action pursuant to any valid state statute. If
Purchaser becomes aware of any valid state statute prohibiting the making of the
Offer or the acceptance of Shares pursuant thereto, Purchaser will make a good
faith effort to comply with any such state statute. If, after such good faith
effort, Purchaser cannot comply with any such state statute, the Offer will not
be made to (nor will tenders be
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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 Purchaser by one or more registered brokers or dealers licensed under
the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER OR THE COMPANY 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.
Pursuant to Rule 14d-3 of the General Rules and Regulations under the
Exchange Act, Thomson and Purchaser have filed with the Commission the Schedule
TO, together with exhibits, furnishing certain additional information with
respect to the Offer. The Schedule TO and any amendments thereto, including
exhibits, may be inspected at, and copies may be obtained from, the same places
and in the same manner as set forth in Section 7 (except that they will not be
available at the regional offices of the Commission).
WTI ACQUISITION CORPORATION
Dated: March 22, 2000
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SCHEDULE I
INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE
OFFICERS OF THOMSON AND PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF THOMSON. The following table sets
forth the name, current business address, citizenship and present principal
occupation or employment, and material occupations, positions, offices or
employments and business addresses thereof for the past five years of each
director and executive officer of Thomson. Except for W. Michael Brown, who is a
citizen of both Great Britain and the United States, Alan M. Lewis, who is a
citizen of Canada, Great Britain and South Africa, Paul Brett, David J. Hulland
and Martin B. Jones who are citizens of Great Britain, Richard J. Harrington,
Vance K. Opperman, Steven A. Denning, David H. Shaffer, Robert Daleo, Theron S.
Hoffman and Brian H. Hall, Patrick J. Tierney, Ronald H. Schlosser and Robert S.
Christie who are citizens of the United States, and Stuart M. Garner who is a
citizen of Great Britain, each such person is a citizen of Canada. Unless
otherwise indicated, each occupation set forth opposite an individual's name
refers to employment with Thomson.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS HELD
NAME, AGE AND DURING THE PAST FIVE YEARS AND
CURRENT BUSINESS ADDRESS BUSINESS ADDRESSES THEREOF
------------------------ -----------------------------------
<S> <C>
Kenneth R. Thomson, 74 Chairman of Thomson since July 1978. Director
The Woodbridge Company Limited of Thomson since July 1976. Chairman of the
65 Queen Street West Woodbridge Company Limited, 65 Queen Street
Toronto, Ontario M5H 2M8 West, Toronto, Ontario, M5H 2M8, Canada, since
Canada March 1979. Director of the Woodbridge Company
Limited since August 1956.
John A. Tory, 67 Deputy Chairman of Thomson from February 1978
The Woodbridge Company Limited to December 31, 1997. Director of Thomson
65 Queen Street West since February 1978. Director of Abitibi
Toronto, Ontario M5H 2M8 Consolidated, Inc., 207 Queens Quay West,
Canada Toronto, Ontario, M5J 2P5, Canada, since
September 1965. Director of Rogers
Communications Inc., 40 King Street West,
Toronto, Ontario, M5H 3Y2, Canada, since
December 1979. Director, Sun Life Insurance
Company of Canada, 150 King Street West,
Toronto, Ontario, M5H 1J9, Canada, from
December 1971 to 1994. Director and President
of the Woodbridge Company Limited, 65 Queen
Street West, Toronto, Ontario, M5H 2M8,
Canada, since October 1967 and March 1979,
respectively. Director of Hudson's Bay
Company, 401 Bay Street, Toronto, Ontario M5H
2Y4, Canada, since May 1979. Deputy Chairman
and Director of Markborough Properties Inc.,
One Dundas Street West, Suite 2800, Toronto,
Ontario M5G 2J2, since September 1989.
Director of The Thomson Corporation PLC, First
Floor, the Quandrangle, 180 Wardour Street,
London W1A 4YG, England, since December 1977.
Director of the Royal Bank of Canada, 200 King
Street West, Toronto, Ontario M5H 1CA, Canada,
since March 1971.
</TABLE>
I-1
<PAGE> 39
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS HELD
NAME, AGE AND DURING THE PAST FIVE YEARS AND
CURRENT BUSINESS ADDRESS BUSINESS ADDRESSES THEREOF
------------------------ -----------------------------------
<S> <C>
Ronald D. Barbaro, 68 Director of Thomson since May 1993. Director,
Clairvest Group Inc. Clairvest Group Inc., Suite 1700 -- 22 St.
Suite 1700 Clair Avenue East, Toronto, Ontario, M4V 2S3,
22 St. Clair Avenue East Canada, since September 1994. Director of
Toronto, Ontario M4V 2S3 Equifax Canada, 7171 Jean Talon East, Anjou,
Quebec, H1M3N2, Canada, since June 1997.
Director of ChoicePoint, Inc., 1000 Alderman
Drive, Alpharetta, Georgia 30005, since July
1997. Director of Prudential of America Life
Insurance Company of Canada ("PALI"), c/o
Prudential of America Insurance Co. (Canada),
200 Consilium Place, Scarborough, Ontario, M1H
3E6, Canada, since January 1991. Chairman of
PALI from 1992 to January 1997. President of
Prudential Insurance Company of America, Inc.,
260 Madison Avenue, Second Floor, New York,
New York 10116, from 1990 to 1993. President
of Worldwide Operations Prudential Insurance
Company of America-Canada, from 1985 to 1990.
Director of Equifax Inc., 1600 Peachtree
Street, N.W., Atlanta, Georgia 30309, from
April 1992 to July 1997. Director, Canbra
Foods Ltd., P.O. Box 99, 2415 2nd Avenue "A"
North, Lethbridge, Alberta, T1J 3Y4, Canada,
since July 1988; interim -- Chairman since
March 1996; Chairman since March 1997.
Director, Consoltex Group Inc., 8555
TransCanada Highway, Ville Saint-Laurent,
Quebec, H4S 1Z6, Canada, since May 1997.
Director, Flow International Corporation,
2300 -- 64th Avenue South, Kent, Washington
98032, since 1995. Chairman, Natraceuticals
Inc., 8290 Woodbine Avenue, Markham, Ontario,
L3R 9W9, Canada, since February 1997.
Director, Signature Security Group Inc., 26-28
Market Street, Sydney, NSW, Australia, since
March 1997. Director, VoxCom Incorporated,
#102,4209 -- 99 Street, Edmonton, Alberta, T6E
5V7, Canada, since December 1996. Director,
O'Donnell Investment Management Corp., 4100
Yonge Street, Suite 601, Toronto, Ontario, M2P
2B5, Canada, since April 1997.
W. Geoffrey Beattie, 40 Director of Thomson since May 1998. President,
Torys The Woodbridge Company Limited since 1998.
Suite 3000, Maritime Life Tower From 1990 to 1998, attorney (partner from
P.O. Box 270, Toronto Dominion Center 1993) at Torys (formerly Tory, Tory,
79 Wellington Street West DesLauriers & Binnington).
Toronto, Canada M5K 1N2
W. Michael Brown, 64 Director of Thomson since July 1978. Deputy
The Thomson Corporation Chairman of Thomson since October 1997.
Metro Center One Station Place President of Thomson from December 1984 to
Stamford, Connecticut 06902 October 1997. Director of Hudson's Bay
Company, 401 Bay Street, Toronto, Ontario, M5H
2Y4, Canada, since 1985. Director of
Southwestern Area Commerce and Industry
Association, One Landmark Square, Stamford,
Connecticut 06901, from November 1994 to July
1997. Director of Markborough Properties Inc.,
One Dundas Street West, Suite 2800, Toronto,
Ontario, M5H 2Y4, Canada, April 1990 to June
1997.
</TABLE>
I-2
<PAGE> 40
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS HELD
NAME, AGE AND DURING THE PAST FIVE YEARS AND
CURRENT BUSINESS ADDRESS BUSINESS ADDRESSES THEREOF
------------------------ -----------------------------------
<S> <C>
V. Maureen Kempston Darkes, 51 Director of Thomson since May 1996. President
General Motors of Canada Limited and General Manager, General Motors of Canada
1908 Colonel Sam Drive Limited ("GMCL"), 1908 Colonel Sam Drive,
Oshawa, Ontario L1H8T7 Oshawa, Ontario L1H8T7. Director of GMCL since
August 1991. Vice President of GMCL from
August 1991 to July 1994. Director, CN Rail,
935 de la Gauchetiere Street West, Montreal,
Quebec, Canada since March 1995. Director of
Noranda, Inc., 181 Bay Street, Suite 1400,
Toronto, Ontario, Canada since January 1998.
Steven A. Denning, 51 Director of Thomson since January 24, 2000.
General Atlantic Partners LLC Mr. Denning is currently a Managing Partner of
3 Pickwick Plaza General Atlantic Partners, a private
Greenwich, CT 06830 investment company. Prior to joining General
Atlantic, Mr. Denning was a consultant with
McKinsey & Co. Mr. Denning is also a director
of Exult, Inc. and GT Interactive Software
Corporation.
William J. DesLauriers, 69 Director of Thomson since July 1978. Partner
Torys in Torys (formerly Tory, Tory, DesLauriers &
Maritime Life Tower, Suite 3000 Binnington), Suite 3000, Aetna Tower, P.O. Box
P.O. Box 270, 270, Toronto-Dominion Centre, Toronto, Ontario
Toronto Dominion Centre M5K 1N2, Canada, since July 1963.
Toronto, Ontario M5K 1N2
Canada
John F. Fraser, 69 Director of Thomson since June 1989. Chairman
Russel Metals, Inc. of Air Canada, 355 Portage Avenue, Room 500,
Suite 600 One Lombard Place Winnipeg, Manitoba, Canada R3B 2C3 since
Winnipeg, Manitoba R3B OX3 August 1996. Director of Air Canada since
Canada 1989. Vice Chairman of Russel Metals, Inc.,
Suite 600, One Lombard Place, Winnipeg,
Manitoba, R3B OX3, Canada, since May 1995.
Chairman of Russel Metals, Inc. from May 1992
to May 1995. Chairman and Chief Executive
Officer of Russel Metals, Inc. from May 1991
to May 1992. President and Chief Executive
Officer of Russel Metals, Inc. from May 1978
to May 1991. Director, America West Airlines,
Inc., 4000 East Sky Harbor Boulevard, Phoenix,
Arizona 85034, since August 1994. Director,
Bank of Montreal, First Bank Tower, First
Canadian Place, Toronto, Ontario, M5X1A1,
Canada, since January 1985. Director, Centra
Gas Manitoba Inc., 444 St. Mary Avenue,
Winnipeg, Manitoba, R3C 3T7, Canada, since
February 1985. Director, International Comfort
Products Corporation, 501 Corporate Centre
Drive, Suite 200, Franklin, TN 37067, from May
1985 to April 1990 and June 1992 to present.
Director, Manitoba Telecom, Services, Inc.,
489 Empress Street, Winnipeg, Manitoba, R3C
3V6, Canada, since May 1997. Director, Shell
Canada Limited, 400 -- 4th Avenue S.W.,
Calgary, Alberta, T2P 0J4, Canada, since April
1990.
</TABLE>
I-3
<PAGE> 41
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS HELD
NAME, AGE AND DURING THE PAST FIVE YEARS AND
CURRENT BUSINESS ADDRESS BUSINESS ADDRESSES THEREOF
------------------------ -----------------------------------
<S> <C>
Richard J. Harrington, 53 Director of Thomson since September 1993.
The Thomson Corporation President and CEO of Thomson since October
Metro Center 1997. Executive Vice-President of Thomson
One Station Place September 1993 to October 1997. President and
Stamford, Connecticut 06902 Chief Executive Officer, Thomson Newspapers
Group, Metro Center, One Station Place,
Stamford, Connecticut 06902, July 1993 to
October 1997. President and Chief Executive
Officer, Thomson Professional Publishing,
Metro Center, One Station Place, Stamford,
Connecticut 06902, from June 1989 to July
1993.
Roger L. Martin, 43 Director of Thomson since September 17, 1999.
Rotman School of Management Dean of the Joseph L. Rotman School of
105 St. George Street Management at the University of Toronto.
Toronto, Ontario Previously a director of Monitor Company since
Canada M5S 3E6 1985. Co-head of the Monitor Company in 1995
and 1996. Founding chair of Monitor
University, the Monitor's educational arm. Mr.
Martin is also director of Celestica Inc.
C. Edward Medland, 71 Director of Thomson since July 1978. President
Beauwood Investments, Inc. of Beauwood Investments, Inc., 121 King Street
121 King Street West, Suite 2525 West, Suite 2525, Toronto, Ontario, M5H 3T9,
Toronto, Ontario Canada, since July 1988. Director of The
M5H 3T9 Seagram Company, 1430 Peel Street, Montreal,
Canada Quebec, H3A 1S9, Canada, since November 1973.
Director of Abitibi Consolidated Inc., 800
Boulevard Rene Levesque West, Montreal,
Quebec, H3B 1Y9, Canada, since April 1978.
Director of Teleglobe, Inc., 1000 de la
Gauchetiere Street West, Suite 1500, Montreal,
Quebec, H3B 4X5, Canada, since May 1992.
Director of Canada Trust Financial Services,
Inc., Canada Trust Tower, 161 Bay Street,
Toronto, Ontario, M5J 2S1, Canada, since March
1989. Director of Premium Income Corporation,
121 King Street West, 26th Floor, Toronto,
Ontario, M5H 3T9, Canada, since October 1996.
Chairman of Ontario Teachers' Pension Plan
Board ("OTPPB"), 5650 Yonge Street, Toronto,
Ontario M2M 4H5, Canada, since January 1996.
Director of OTPPB since January 1990. Director
of Quorum Growth, Inc., Sun Life Tower, 150
King Street West, Toronto, Ontario, M5H 1J9,
Canada, from October 1992 to February 1996.
Director of Canadian Tire Corporation, 2180
Yonge Street, Toronto, Ontario, M3S 2B9,
Canada, from May 1988 to May 1996.
</TABLE>
I-4
<PAGE> 42
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS HELD
NAME, AGE AND DURING THE PAST FIVE YEARS AND
CURRENT BUSINESS ADDRESS BUSINESS ADDRESSES THEREOF
------------------------ -----------------------------------
<S> <C>
Vance K. Opperman, 56 Director of Thomson since September 1996.
Key Investments Inc. President and CEO of Key Investments Inc., 601
601 Second Avenue South Second Avenue South, Suite 5200, Minneapolis,
Suite 5200 MN 55402, since October 1996. Director; Chief
Minneapolis, MN 55402 Executive Officer and General Counsel, MSP
Communications, Inc. (magazine publisher)
since December 1996. President and Chief
Operating Officer of West Publishing Company
("West") between 1993 and 1996. General
Counsel of West prior to 1993. Served on
West's Board of Directors from 1992 to 1996.
David H Shaffer, 57 Director of Thomson since August 6, 1998.
The Thomson Corporation Chief Operating Officer of Thomson. Executive
Metro Center Vice President since May, 1998. Formerly
One Station Place Chairman of the Board and Chief Executive
Stamford, CT 06902 Officer of Jostens Learning Corporation,
President of Dun & Bradstreet's Official
Airline Guides, Inc. (OAG) and Vice Chairman
of Thomas Cook Travel Inc. President and Chief
Executive Officer of Macmillan Inc., and
Chairman of OAG. Member of Maxwell
Communications Corporation PLC (MCC) board of
directors. Currently chairman of the board of
T&S Incorporated. Board member and publisher
of The Black Book Group, member of the
Advisory Board of Kellogg Graduate School of
Management at Northwestern University, and
trustee of the La Jolla Country Day School.
David K.R. Thomson, 42 Director of Thomson since April 1988. Deputy
The Woodbridge Company Limited Chairman of the Woodbridge Company Limited, 65
65 Queen Street West Queen Street West, Toronto, Ontario, M5H 2M8,
Toronto, Ontario M5H 2M8 Canada, since June 1990.
Canada
Richard M. Thomson, 66 Director of Thomson since October 1984.
Toronto-Dominion Bank Chairman and Chief Executive Officer of the
Toronto-Dominion Bank Tower, 11th Floor Toronto Dominion Bank, 11th Floor,
Toronto, Ontario M5K 1A2 Toronto-Dominion Bank Tower, Toronto, Ontario
Canada M5K 1A2, Canada, since May 1978.
Peter J. Thomson, 34 Director of Thomson since January 1995. Deputy
The Woodbridge Company Limited Chairman of The Woodbridge Company Limited, 65
65 Queen Street West Queen Street West, Toronto, M5H 2M8, Canada,
Toronto M5H 2M8 since November 1993.
Canada
David J. Hulland, 49 Vice-President of Thomson since May 1993.
The Thomson Corporation Group Controller of Thomson since December
Metro Center 1984.
One Station Place
Stamford, CT 06902
Martin B. Jones, 48 Vice President of Thomson since May 1993.
The Thomson Corporation Group Treasurer of Thomson since December
The Quadrangle, First Floor 1984.
180 Wardour Street
London WIA 4YG
England
</TABLE>
I-5
<PAGE> 43
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS HELD
NAME, AGE AND DURING THE PAST FIVE YEARS AND
CURRENT BUSINESS ADDRESS BUSINESS ADDRESSES THEREOF
------------------------ -----------------------------------
<S> <C>
Alan M. Lewis, 62 Treasurer of Thomson since May 1979.
The Thomson Corporation
Toronto Dominion Bank Tower
Toronto Dominion Center, Suite 2706
P.O. Box 24
Toronto, Ontario M5K 1A2
Canada
Robert Daleo, 51 Chief Financial Officer of Thomson since May,
The Thomson Corporation 1999. Executive Vice-President; Finance and
Metro Center Business Development of Thomson since November
One Station Place 1997. Senior Vice President, Finance and
Stamford, CT 06902 Business Development of Thomson from January
1997 to October 1997. Senior Vice President
and Chief Operating Officer, Thomson
Newspapers, One Station Place, Metro Center,
Stamford, CT 06902, from January 1996 to
December 1997. Senior Vice President and Chief
Financial Officer, Thomson Newspapers, from
December 1994 to December 1995. Senior Vice
President and General Manager, Sweets Group,
McGraw-Hill Company, 1221 Avenue of the
Americas, New York, New York 10020, until
November 1994.
Michael S. Harris, 50 Senior Vice President, General Counsel and
The Thomson Corporation Secretary of Thomson since May, 1998. Vice
Metro Center President and General Counsel of Thomson
One Station Place Holdings, Inc. ("THI"), Metro Center, One
Stamford, CT 06902 Station Place, Stamford, CT 06902, since June
1993. Assistant Secretary and Assistant
General Counsel of THI from May 1989 to June
1993. Vice President, Secretary and Director
of Purchaser since March 2000.
Theron S. Hoffman, 52 Executive Vice President, Human Resources
The Thomson Corporation since May, 1998. Formerly Senior
Metro Center Vice-President of Human Resources and Services
One Station Place for General Reinsurance Corporation for seven
Stamford, CT 06902 years. Trustee of the Yale-China Association.
Joseph J.G.M. Vermeer, 53 Vice-President; Director of Taxes of Thomson
The Thomson Corporation since January 1995. Partner in Peat Marwick
Metro Center Thorne, 40 King Street West, Toronto, Ontario,
One Station Place Canada, from 1977 to December 31, 1994.
Stamford, CT 06902
Brian H. Hall, 52 President and Chief Executive Officer, West
The Thomson Corporation Group since 1996. President and Chief
Metro Center Executive Officer, Thomson Legal and
One Station Place Regulatory Group since 1996. Formerly
Stamford, CT 06902 President and Chief Executive Officer of
Thomson Legal Publishing 1995-1996.
Patrick J. Tierney, 55 President and Chief Executive Officer of
The Thomson Corporation Thomson Financial. Formerly President and
Metro Center Chief Executive Officer of Thomson's
One Station Place Reference, Scientific and Healthcare group.
Stamford, CT 06902 Prior to joining Thomson, President and Chief
Executive Officer of Knight-Ridder Financial.
</TABLE>
I-6
<PAGE> 44
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS HELD
NAME, AGE AND DURING THE PAST FIVE YEARS AND
CURRENT BUSINESS ADDRESS BUSINESS ADDRESSES THEREOF
------------------------ -----------------------------------
<S> <C>
Ronald H. Schlosser, 51 President and Chief Executive Officer of
The Thomson Corporation Thomson's Reference, Scientific and Healthcare
Metro Center group.
One Station Place
Stamford, CT 06902
Robert S. Christie, 46 President and Chief Executive
The Thomson Corporation Officer -- Thomson Learning Group.
Metro Center
One Station Place
Stamford, CT 06902
Stuart M. Garner, 55 President and Chief Executive
The Thomson Corporation Officer -- Thomson Newspapers since 1994.
Metro Center
One Station Place
Stamford, CT 06902
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER. The following table
sets forth the name, age, current business address, citizenship and present
principal occupation or employment, and material occupations, positions, offices
or employments and business addresses thereof for the past five years of each
director and executive officer of Purchaser. Michael S. Harris and Eric Shuman
are citizens of the United States. Unless otherwise indicated, the current
business address of each person is WTI Acquisition Corporation, Metro Center,
One Station Place, Stamford, Connecticut 06902. Each occupation set forth
opposite an individual's name, refers to employment with Purchaser.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS HELD
NAME, AGE AND DURING THE PAST FIVE YEARS AND
CURRENT BUSINESS ADDRESS BUSINESS ADDRESSES THEREOF
------------------------ -----------------------------------
<S> <C>
Michael S. Harris, 50 Vice President, Secretary and Director of
The Thomson Corporation Purchaser since March 2000. Senior Vice
Metro Center President, General Counsel and Secretary of
One Station Place Thomson since May, 1998. Vice President and
Stamford, CT 06902 General Counsel of Thomson Holdings, Inc.
("THI"), Metro Center, One Station Place,
Stamford, CT 06902, since June 1993. Assistant
Secretary and Assistant General Counsel of THI
from May 1989 to June 1993.
Eric Shuman, 45 President, Treasurer and Director of Purchaser
The Thomson Corporation since March, 2000. Senior Vice President and
Metro Center Chief Financial Officer of Thomson Learning, a
One Station Place division of Thomson. Formerly Senior Vice
Stamford, CT 06902 President and Chief Financial Officer of
Thomson Newspapers from 1995 to 1998. Vice
President and Corporate Controller of Thomson
Newspapers from 1994 to 1995.
</TABLE>
I-7
<PAGE> 45
SCHEDULE II
ADDITIONAL INFORMATION PURSUANT TO SECTION 14(F) OF
THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14F-1 THEREUNDER
This information is being furnished in connection with the possible
designation by Purchaser, pursuant to the Merger Agreement, of persons to be
elected to the Board of Directors of the Company (the "Board") other than at a
meeting of the Company's stockholders.
The Merger Agreement provides that, promptly upon the purchase by Purchaser
of Shares pursuant to the Offer, and from time to time thereafter, Purchaser
shall be entitled to designate up to such number of directors, rounded up to the
next whole number, on the Board as shall give Purchaser representation on the
Board equal to the product of the total number of directors on such Board
(giving effect to the directors elected pursuant to this sentence) multiplied by
the percentage that the aggregate number of Shares beneficially owned by
Purchaser or any affiliate of Purchaser following such purchase bears to the
total number of Shares then outstanding, and the Company shall, at such time,
promptly take all actions necessary to cause Purchaser's designees to be elected
as directors of the Company, including increasing the size of the Board or
securing the resignations of incumbent directors, or both. The Merger Agreement
also provides that, at such times, the Company shall use its reasonable best
efforts to cause persons designated by Purchaser to constitute the same
percentage as persons designated by Purchaser shall constitute of the Board of
(i) each committee of the Board, (ii) each board of directors of each
Subsidiary, and (iii) each committee of each such board, in each case only to
the extent permitted by applicable law. Until the Effective Time, the Company
has agreed to use its reasonable best efforts to ensure that at least two
members of the Board and each committee of the Board and such boards and
committees of the subsidiaries of the Company as of the date of the Merger
Agreement, who are not employees of the Company shall remain members of the
Board and of such boards and committees.
Purchaser currently intends to designate one or more persons listed in
Schedule I to the Offer to Purchase as directors of the Company. The individuals
so designated to serve on the Board shall be referred to hereafter as the
"Purchaser's Designees".
The information concerning the Company contained in this Schedule II has
been furnished by the Company or has been taken from or based upon publicly
available documents and records on file with the Commission and other public
sources including the Company's Proxy Statement dated August 9, 1999 for the
Annual Meeting of Stockholders held on September 8, 1999 (the "Proxy Statement")
and the Company's Annual Report on Form 10-K for the fiscal year ended April 30,
1999. Neither Purchaser nor Thomson takes responsibility for the accuracy or
completeness of the information concerning the Company furnished by the Company
or contained in such documents and records or for any failure by the Company to
disclose events which may have occurred or may affect the significance or
accuracy of any such information.
COMPANY COMMON STOCK
The Company has shares of one class of common stock outstanding, par value
$0.50, and no shares of preferred stock. On March 10, 2000, there were
outstanding and entitled to vote 4,265,845 shares of common stock. Shareholders
are entitled to one vote, exercisable in person or by proxy, for each share of
common stock held on the record date. The holders of a majority of the
outstanding shares of common stock entitled to vote at the meeting constitute a
quorum.
II-1
<PAGE> 46
SECURITY OWNERSHIP BY BENEFICIAL OWNERS OF MORE THAN 5%
The following table sets forth the most recent information with respect to
the shares of Common Stock beneficially owned by the stockholders known to the
Company to own more than 5% of the outstanding shares of such class.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER PERCENT
- ------------------------------------ ------- -------
<S> <C> <C>
Kenneth W. Kousky 386,464(1) 9.0%
10845 Olive Boulevard, Suite 250, St. Louis, MO 63141
Ryback Management Corporation 262,500(2) 6.2%
7711 Carondelet Avenue
Box 16900, St. Louis, MO 63105
</TABLE>
- ---------------
(1) Based on information as of December 31, 1999, furnished to the Company in
Amendment No. 5 to a Schedule 13G filed February 14, 2000. Includes options
to purchase 14,000 shares of common stock and 9,300 shares held in a
charitable foundation over which Mr. Kousky exercises voting and dispositive
control. Does not include 137,500 Shares subject to options, which will not
vest in 60 days.
(2) Based on information furnished to the Company in a Schedule 13G filed
January 23, 1998. Ryback Management did not file a Schedule 13G in 1999.
SECURITY OWNERSHIP BY OFFICERS AND DIRECTORS
The following table sets forth certain information with respect to the
shares of Common Stock beneficially owned by each of the Company's directors and
executive officers.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER PERCENT
- ------------------------------------ ------- -------
<S> <C> <C>
Kenneth W. Kousky 386,464(1) 9.0%
10845 Olive Boulevard, Suite 250, St. Louis, MO 63141
Raymond J. Kalinowski 3,500(3) *
10401 Clayton Road, St. Louis, MO 63131
David W. Kemper 192,500 4.5%
8000 Forsyth, St. Louis, MO 63105
Robert E. Lefton, Ph.D. 3,000(3) *
8112 Maryland Avenue, St. Louis, MO 63105
William Rosenthal 1,000 *
130 Barrow Street, #514, New York, NY 10014
Walter N. Torous 5,500(3) *
Anderson School of Graduate Management
University of California, Los Angeles
Los Angeles, CA 90024
J. Michael Bowles 13,000(2) *
10845 Olive Boulevard, Suite 250, St. Louis, MO 63141
John A. Kirkham 121,600(5) 2.8%
Thames Link House
1 Church Road, Richmond, Surrey TW92QR England
Harvey L. Leemon -- --
10845 Olive Boulevard, Suite 250, St. Louis, MO 63141
All directors and executive officers as a group (9
individuals) 726,564(6) 16.7%
</TABLE>
- ---------------
* Less than 1%
(1) Based on information as of December 31, 1999, furnished to the Company in
Amendment No. 5 to a Schedule 13G filed February 14, 2000. Includes options
to purchase 14,000 shares of common stock and
II-2
<PAGE> 47
9,300 shares held in a charitable foundation over which Mr. Kousky exercises
voting and dispositive control. Does not include 137,500 Shares subject to
options, which will not vest in 60 days.
(2) Represents options to purchase shares of common stock.
(3) Includes options to purchase 2,500 shares of common stock.
(4) Includes options to purchase 2,500 shares of common stock, 20,000 shares
held in a trust of which Mr. Kemper is a co-trustee, and 170,000 shares
owned by Commerce Bancshares, Inc. of which Mr. Kemper is Chairman and Chief
Executive Officer.
(5) Includes options to purchase 55,500 shares of common stock.
(6) Includes options to purchase 55,000 shares of common stock.
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.
The following table sets forth certain information with respect to the
Company's directors and executive officers:
<TABLE>
<CAPTION>
NAME AGE POSITION TERM EXPIRES
- ---- --- ------------------------------------- ------------
<S> <C> <C> <C>
Kenneth W. Kousky......... 45 Chairman of the Board, President and 2000
Chief Executive Officer
Raymond J. Kalinowski..... 70 Director 2002
David W. Kemper........... 48 Director 2000
Robert E. Lefton.......... 67 Director 2001
William Rosenthal......... N/A Director 2002
Walter N. Torous.......... 47 Director 2000
J. Michael Bowles......... 55 Chief Financial Officer N/A
John A. Kirkham........... 55 Executive Vice N/A
President-International Sales and
Operations
Harvey L. Leemon.......... 54 Vice President of Development N/A
</TABLE>
Kenneth W. Kousky is a founder of the Company and has served as Chairman of
the Board of Directors since 1988. In 1991, he became the Company's President
and Chief Executive Officer. Between 1988 and 1990, Mr. Kousky headed the
Washington University Center for Communications and Network Management and its
graduate program in telecommunications.
Raymond J. Kalinowski has served as a director of the Company since
November 1994. He was Vice Chairman of A.G. Edwards & Sons, Incorporated for
forty years. Since 1990, he has been an independent consultant. Mr. Kalinowski
serves as trustee of a number of mutual funds affiliated with the Centennial,
Panorama and Oppenheimer Group Funds. Mr. Kalinowski currently serves on the
Board of Directors for Isto Technologies, Inc, and Catholic Charities -- St.
Louis.
David W. Kemper has served as a director of the Company since November
1994. He is Chief Executive Officer of Commerce Bancshares, Inc. and Commerce
Bank of St. Louis. He has held this position since July 1978. Mr. Kemper serves
as a director of Seafield Capital Corporation, Tower Properties Company and
Ralcorp Holdings, Inc.
Robert E. Lefton has served as a director of the Company since September
1995. He has been President and Chief Executive Officer of Psychological
Associates, Inc., a management and organizational consulting firm, since 1958.
He serves as a director of Stifel Financial Corp. and Allied Health Care
Products.
William Rosenthal has been a co-founder of the global computer publishing
business Logical Operations, which became part of the Ziff-Davis Training and
Support Publishing Group after being purchased in 1991. Rosenthal was named
President of the Group and an officer of Ziff-Davis, Inc. In 1997 he was
appointed President of Ziff-Davis Education. Rosenthal has recently joined
Kaplan Education as President of Kaplan.com, where he will be responsible for
the continued development of Kaplan's Internet products and services.
II-3
<PAGE> 48
Walter N. Torous has served as a director of the Company since May 1994. He
has been a professor of finance at the Anderson Graduate School of Management of
the University of California, Los Angeles since 1985.
J. Michael Bowles joined the Company as Chief Financial Officer in August
1995. Prior to that time, he was associated with Unibased Systems Architecture,
Inc. in St. Louis, Missouri, a software development company where he was Chief
Financial Officer from 1994 to 1995 and Director of Professional Services from
1992 to 1994.
John A. Kirkham has served as the Executive Vice President-International
Operations for the Company since August 1994. Prior to that time, he served as
the Vice President of International Operations for NETG, a technology training
company, in London, from 1987 through 1994. Mr. Kirkham serves as a Director for
West London T.E.C. and Performance Support International (UK) Ltd.
Harvey L. Leemon joined the Company as Vice President of Development in
November of 1998. Prior to that time, he was Software Engineering in Center
Operations, HCIA, Inc., in Ann Arbor, Michigan where he was Associate Vice
President from 1986 through 1998.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
In August of 1995, the Company entered into a loan agreement with Commerce
Bank-St. Louis (the "Bank"), with a current line of credit of $3,500,000. The
borrowings bear interest at the prime rate, and are collateralized by accounts
receivable and property and equipment of the Company. David Kemper, a member of
the Company's Board of Directors, is the president of the Bank and its parent
holding company.
EXECUTIVE COMPENSATION.
Introduction. The Compensation Committee (the "Committee") of the
Company's board of directors is composed of three non-employee directors. The
Committee oversees the Company's executive compensation program and is
specifically responsible for evaluating and approving compensation plans,
payments, and awards for the Company's executive officers. In discharging its
responsibilities in the fiscal year ended April 30, 1999, the Committee used the
services of a compensation consultant (the "Consultant") as a resource in
setting the base and long-term compensation of the chief executive officer and
in an ongoing evaluation of the compensation of the Company's other executive
officers. During the fiscal year ended April 30, 1999, the Committee met three
times.
Executive Compensation Program. The Committee is in the process of
developing an executive compensation program for the Company's executive
officers and other key employees. The Committee believes that the program
should:
- provide competitive compensation opportunities that attract and retain
top performers;
- motivate executives to grow the Company through a balanced commitment to
top line and bottom-line results;
- create a clear link between corporate function and individual performance
and rewards; and
- encourage behaviors that are aligned with Wave's corporate strategy and
values.
While the Committee has not formally adopted these four criteria, it has
begun including them in its consideration of compensation issues. It has done so
in the context of the three existing elements of the Company's approach to
compensating executives and other key employees. Base salary, short-term cash
incentives, and long-term incentives in the form of stock options.
Base salary provides the foundation for executive pay; its purpose is to
compensate the executive for performing his or her basic duties. Short-term cash
incentives are intended to provide rewards for favorable short-term performance.
The purpose of the long-term incentives is to provide incentives and rewards for
long-term performance and to motivate long-term thinking.
II-4
<PAGE> 49
Base Salary. Based upon a February 1999 study by the Consultant (the
"Study"), the Company's base salaries for executive officers are generally below
the median base salaries for similar level officers in a comparison group of
thirteen public technology training companies. The Company has recently used
base salaries closer to the median to recruit qualified officers, but
historically the Company executive officers have had to look to
performance-based bonuses to increase their cash compensation. The Committee is
evaluating the Company's base compensation structure but has not adopted any
modifications of it.
Short Term Cash Incentives. Short term cash incentives are
performance-based cash bonuses. For the fiscal year ended April 30, 1999, and in
previous years, the Company's Chief Executive Officer and the Committee
developed performance goals for each executive officer. Bonus plans for
executives with primary responsibility for sales focused on revenue generation,
while plans for administrative officers often gave the most weight to net income
of the Company. Bonus plans for officers also included other specific job and
financial performance targets for each individual.
The Study indicated that on average the total cash compensation (both base
and bonus) received by Company executives was below the median for the peer
group. The Consultant suggested the Committee consider a bonus program in which
each officer has a target annual bonus. The officer would receive between 0% and
200% of the target bonus depending upon the Company's success in attaining or
surpassing revenue and earnings per share goals. The Committee is considering
the proposal but has taken no action on it.
Long-Term Incentives. The Company uses stock options as its form of
long-term incentive for executives. In recent years, the Company has used
options principally to recruit key employees and, to a lesser extent, to retain
others. There has been no program of annual grants to executive officers as a
group. The Consultant recommended that the Committee initiate a program of
annual grants to provide compensation opportunities that are competitive with
the Company's peer group. The Committee has not acted upon the Consultant's
recommendation.
Chief Executive Officer Compensation. Mr. Kousky founded the Company in
1988 and has served as President and Chief Executive Officer since then. For the
fiscal year ended April 30, 1999, his base compensation was $234,000, compared
to $225,000 in the prior fiscal year. The Study indicated that his base salary
in both years was substantially below the median for presidents and chief
executive officers of the peer group. Mr. Kousky received no bonus in the year
ended April 30, 1999. As a result, his total cash compensation was well below
that of his counterparts in the peer group.
With the exception of options for 1,500 shares, until March 22, 1999, Mr.
Kousky had not received any option grants since the Company's initial public
offering. After evaluating the Study, including information about options held
by presidents and chief executive officers of the peer group, the Committee
adopted the recommendation of the Consultant and effective March 23, 1999,
granted Mr. Kousky options for 110,000 shares exercisable at $3.875, the
then-current market price, and, effective June 2, 1999, options to purchase
40,000 shares at the higher of the market price on June 2, 1999 or the closing
price on March 22, 1999. Options for 50,000 shares vest in equal annual
installments over four years beginning in March 2000. Options for another 50,000
shares vest in four equal annual installments beginning in March 2005, but these
options may vest earlier in four equal annual installments beginning on the date
when the closing price of the Company's common stock for 20 consecutive trading
days is $8.00 or greater. Options for the final 50,000 shares vest on a similar
schedule, but the closing price target for early vesting is $11.00 per share.
All of Mr. Kousky's options granted in March 1999 will be cancelled if the
Company is acquired prior to September 18, 1999. In that case, Mr. Kousky would
receive a cash incentive equal to $1,000 for each $.01 per share by which the
acquisition price exceeds $8.00 per share.
The Committee believes that Mr. Kousky's 1999 option grant made his total
compensation more competitive with his counterparts in the peer group. At the
same time, they provide an incentive for improving the Company's performance and
shareholder value.
During the Company's current fiscal year, the Committee will continue its
evaluation of the Study and the Company's compensation of executive officers.
The Committee's intention is to develop a compensation
II-5
<PAGE> 50
program that ties total compensation to corporate and individual performance in
a way that benefits shareholder value.
STOCK OPTION PLANS.
In 1993, the Company's shareholders adopted a stock option plan for
employees. As amended in 1994, non-qualified options to purchase up to 390,000
shares may be granted under the plan (the "1993 Plan"). As of April 30, 1999,
options for 203,266 shares had been issued and remained outstanding under the
1993 Plan. The 1993 Plan will expire on, and no options may be granted after,
the tenth anniversary of the initial adoption of the 1993 Plan.
The Board of Directors of the Company adopted the Company's 1995 Stock
Option Plan (the "1995 Plan"), and shareholders approved the 1995 Plan at their
1995 Annual Meeting. Pursuant to the 1995 Plan, the Company may grant options
with respect to an aggregate of up to 200,000 shares of common stock. The
maximum number of shares for which options may be granted to a single optionee
under the 1995 Plan is 25,000. Options granted pursuant to the 1995 Plan may be
either incentive stock options or non-qualified stock options. As of April 30,
1999, options for 164,709 shares had been issued and remain outstanding under
the 1995 Plan.
In 1997, the Company's shareholders adopted the Company's 1997 Stock Option
Plan (the "1997 Plan"). Pursuant to the 1997 Plan, the Company may grant options
with respect to an aggregate of up to 400,000 shares of common stock. The
maximum number of shares for which options may be granted to a single optionee
under the 1997 Plan in any calendar year is 50,000. Options granted pursuant to
the 1997 Plan may be either incentive stock options or non-qualified stock
options. As of April 30, 1999, options for 50,000 shares had been issued and
remained outstanding under the 1997 Plan.
In 1993, the Board of Directors and the shareholders of the Company adopted
the Company's Outside Directors Stock Option Plan (the "Directors Plan").
Pursuant to the Directors Plan, each outside director of the Company received an
option to purchase 500 shares of the Company's common stock ("Option") on the
date of the adoption of the Directors Plan. In addition, each new outside
director of the Company receives an Option at the time of his or her appointment
or election to the Board. Outside directors are also granted an Option following
each annual meeting of the Company's shareholders. Each Option becomes fully
vested six months following, and terminates ten years after, the grant date. In
the event an outside director's service on the Board is terminated for any
reason, such director's Options may be exercised, to the extent exercisable at
the time of termination, for a period of ninety days thereafter. The maximum
number of shares which may be issued under the Directors Plan is 40,000.
II-6
<PAGE> 51
SCHEDULE III
MISSOURI GENERAL AND BUSINESS CORPORATION LAW
SECTION 351.455
DISSENTER'S RIGHTS
When shareholder who objects to merger may demand value of shares. If a
shareholder of a corporation which is a party to a merger or consolidation shall
file with such corporation, prior to or at the meeting of shareholders at which
the plan of merger or consolidation is submitted to a vote, a written objection
to such plan of merger or consolidation, and shall not vote in favor thereof,
and such shareholder, within twenty days after the merger or consolidation is
effected, shall make written demand on the surviving or new corporation for
payment of the fair value of his shares as of the day prior to the date on which
the vote was taken approving the merger or consolidation, the surviving or new
corporation shall pay to such shareholder, upon surrender of his certificate or
certificates representing said shares, the fair value thereof. Such demand shall
state the and class of the shares owned by such dissenting shareholder. Any
shareholder failing to make demand within the twenty day period shall be
conclusively presumed to have consented to the merger or consolidation and shall
be bound by the terms thereof.
If within thirty days after the date on which such merger or consolidation
was effected the value of such shares is agreed upon between the dissenting
shareholder and the surviving or new corporation, payment therefor shall be made
within ninety days after the date on which such merger or consolidation was
effected, upon the surrender of his certificate or certificates representing
said shares. Upon payment of the agreed value the dissenting shareholder shall
cease to have any interest in such shares or in the corporation.
If within such period of thirty days the shareholder and the surviving or
new corporation do not so agree, then the dissenting shareholder may, within
sixty days after the expiration of the thirty day period, file a petition in any
court of competent jurisdiction within the county in which the registered office
of the surviving or new corporation is situated, asking for a finding and
determination of the fair value of such shares, and shall be entitled to
judgment against the surviving or new corporation for the amount of such fair
value as of the day prior to the date on which such vote was taken approving
such merger or consolidation, together with interest thereon to the date of such
judgment. The judgment shall be payable only upon and simultaneously with the
surrender to the surviving or new corporations of the certificate or
certificates representing said shares. Upon the payment of the judgment, the
dissenting shareholder shall cease to have any interest in such shares, or in
the surviving or new corporation. Such shares may be held or disposed of by the
surviving or new corporation as it may see fit. Unless the dissenting
shareholder shall file such petition within the time herein limited, such
shareholder and al persons claiming under him shall be conclusively presumed to
have approved and ratified the merger and consolidation, and shall be bound by
the terms thereof.
The right of a dissenting shareholder to be paid the fair value of his
shares as herein provided shall cease if and when the corporation shall abandon
the merger or consolidation.
III-1
<PAGE> 52
SCHEDULE IV
SCHEDULE OF TRANSACTIONS IN SHARES
DURING THE PAST 60 DAYS
The following table sets forth purchases of the Shares within the past 60
days by or on behalf of Thomson.
<TABLE>
<S> <C> <C>
Number of
Date Shares Purchased Price per Share
- ----------------------------- ----------------------------- -----------------------------
N/A None N/A
Total
</TABLE>
IV-1
<PAGE> 53
Manually signed facsimiles of the Letter of Transmittal, properly
completed, will be accepted. The Letter of Transmittal and certificates
evidencing Shares and any other required documents should be sent or delivered
by each stockholder or his broker, dealer, commercial bank, trust company or
other nominee to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<CAPTION>
By Mail: By Overnight Courier: By Hand:
<S> <C> <C>
Post Office Box 3301 85 Challenger Road 120 Broadway, 13th Floor
South Hackensack, NJ 07606 Mail Drop -- Reorg. New York, NY 10271
Attn: Reorganization Dept. Ridgefield Park, NJ 07660 Attn: Reorganization Dept.
</TABLE>
Other Information:
Questions or requests for assistance may be directed to the Information
Agent at its address and telephone number listed below. Additional copies of
this Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may be obtained from the Information Agent. A stockholder may also
contact brokers, dealers, commercial banks or trust companies for assistance
concerning the Offer.
The Information Agent for the Offer is:
INNISFREE M&A INCORPORATED
501 Madison Avenue, 20th floor
New York, New York 10022
(212) 750-5833
Call Toll Free: (888) 750-5834
<PAGE> 1
EXHIBIT (A)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
WAVE TECHNOLOGIES INTERNATIONAL, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED MARCH 22, 2000
OF
WTI ACQUISITION CORPORATION
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
THE THOMSON CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK TIME,
ON TUESDAY, APRIL 18, 2000, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By Facsimile Transmission
(for Eligible Institutions only):
Fax: (201) 296-4293
Confirm by Telephone:
(201) 296-4860
<TABLE>
<S> <C> <C>
By Overnight Courier: By Mail: By Hand:
85 Challenger Road Post Office Box 3301 120 Broadway, 13th Floor
Mail Drop-Reorg. South Hackensack, NJ 07606 New York, NY 10271
Ridgefield Park, NJ 07660 Attn: Reorganization Dept. Attn: Reorganization Dept.
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
APPEAR(S) ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES
SHARE EVIDENCED BY NUMBER
CERTIFICATE SHARE OF SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
<S> <C> <C> <C>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
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>
<PAGE> 2
This Letter of Transmittal is to be completed by stockholders of Wave
Technologies International, Inc. either if certificates evidencing Shares (as
defined below) are to be forwarded herewith or if delivery of Shares is to be
made by book-entry transfer to an account maintained by the Depositary at the
Book-Entry Transfer Facility (as defined in and pursuant to the procedures set
forth in Section 3 of the Offer to Purchase). DELIVERY OF DOCUMENTS TO A
BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
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 prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase) or who cannot complete
the procedure for delivery by book-entry transfer on a timely basis and who wish
to tender their Shares must do so pursuant to the guaranteed delivery procedure
described in Section 3 of the Offer to Purchase. See Instruction 2.
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE
FOLLOWING:
Name of Tendering Institution:
---------------------------------------------------------
Account Number:
-------------------------------------------------------------------
Transaction Code Number:
------------------------------------------------------------
[ ] CHECK HERE IF SHARES ARE BEING TENDERED 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 that Guaranteed Delivery:
----------------------------------------------
If delivery is by book-entry transfer, give the following information:
Account Number:
-------------------------------------------------------------------
Transaction Code Number:
------------------------------------------------------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE,
WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to WTI Acquisition Corporation, a Delaware
corporation ("Purchaser") and an indirect wholly owned subsidiary of The Thomson
Corporation, a corporation organized under the laws of Ontario, Canada, the
above-described shares of common stock, par value $0.50 per share ("Shares"), of
Wave Technologies International, Inc., a Missouri corporation (the "Company"),
pursuant to Purchaser's offer to purchase all Shares at $9.75 per Share, net to
the seller in cash, without interest, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated March 22, 2000 (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, collectively constitute the "Offer"). The
undersigned understands that Purchaser reserves the right to transfer or assign,
in whole or from time to time in part, to one or more of its affiliates the
right to purchase all or any portion of Shares tendered pursuant to the Offer.
Upon the terms and subject to the conditions of the Offer (and if the Offer
is extended or amended, the terms of any such extension or amendment), and
subject to, and effective upon, acceptance for payment of Shares tendered
herewith, in accordance with the terms of the Offer, the undersigned hereby
sells, assigns and transfers to or upon the order of Purchaser all right, title
and interest in and to all Shares that are being tendered hereby and all
dividends, distributions (including, without limitation, distributions of
additional Shares) and rights declared, paid or distributed in respect of such
Shares on or after March 10, 2000 (collectively, "Distributions") and
irrevocably appoints the Depositary the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares (and all
Distributions), with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (i) deliver
Share Certificates evidencing 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 either case, with all
accompanying evidences of transfer and authenticity, to or upon the order of
Purchaser, (ii) present such Shares (and all Distributions) for transfer on the
books of the Company and (iii) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares (and all Distributions), all in
accordance with the terms of the Offer.
By executing this Letter of Transmittal, the undersigned hereby irrevocably
appoints the designees of The Thomson Corporation and each of them, as the
attorneys and proxies of the undersigned, each with full power of substitution,
to vote in such manner as each such attorney and proxy or his substitute shall,
in his sole discretion, deem proper and otherwise act (by written consent or
otherwise) with respect to all Shares tendered hereby which have been accepted
for payment by Purchaser prior to the time of such vote or other action and all
Shares and other securities issued in Distributions in respect of such Shares,
which the undersigned is entitled to vote at any meeting of stockholders of the
Company (whether annual or special and whether or not an adjourned or postponed
meeting) or consent in lieu of any such meeting or otherwise. This proxy and
power of attorney is coupled with an interest in Shares tendered hereby, is
irrevocable and is granted in consideration of, and is effective upon, the
acceptance for payment of such Shares by Purchaser in accordance with other
terms of the Offer. Such acceptance for payment shall revoke all other proxies
and powers of attorney granted by the undersigned at any time with respect to
such Shares (and all Shares and other securities issued in Distributions in
respect of such Shares), and no subsequent proxies, powers of attorney, consents
or revocations may be given by the undersigned with respect thereto (and if
given will not be deemed effective). The undersigned understands that, in order
for Shares or Distributions to be deemed validly tendered, immediately upon
Purchaser's acceptance of such Shares for payment, Purchaser must be able to
exercise full voting and other rights with respect to such Shares (and any and
all Distributions), including, without limitation, voting at any meeting of the
Company's stockholders then scheduled.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer Shares tendered
hereby and all Distributions, that when such Shares are accepted for payment by
Purchaser, Purchaser will acquire good, marketable and unencumbered title
thereto and to all Distributions, free and clear of all liens, restriction,
charges and encumbrances, and that none of such Shares and Distributions will be
subject to any adverse claim. The undersigned, upon request, shall execute and
deliver all additional documents deemed by the Depositary or Purchaser to be
necessary or desirable to complete the sale, assignment and transfer of Shares
tendered hereby and all Distributions. In addition, the undersigned shall remit
and transfer promptly to the Depositary for the
<PAGE> 4
account of Purchaser all Distributions in respect of Shares tendered hereby,
accompanied by appropriate documentation of transfer, and pending such
remittance and transfer or appropriate assurance thereof, Purchaser shall be
entitled to all rights and privileges as owner of each such Distribution and may
withhold the entire purchase price of Shares tendered hereby, or deduct from
such purchase price, the amount or value of such Distribution as determined by
Purchaser in its sole discretion.
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding upon
the heirs, personal representatives, successors and assigns of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned understands that the valid tender of Shares pursuant to any
one of the procedures described in Section 3 of the Offer to Purchase and in the
Instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the Offer. Purchaser's acceptance of such Shares for payment
will constitute a binding agreement between the undersigned and Purchaser upon
the terms and subject to the conditions of the Offer (and if the Offer is
extended or amended, the terms or conditions of any such extension or
amendment).
Unless otherwise indicated below in the box entitled "Special Payment
Instructions", please issue the check for the purchase price of all Shares
purchased and return all Share Certificates evidencing Shares not tendered or
not accepted for payment in the name(s) of the registered holder(s) appearing
above under "Description of Shares Tendered". Similarly, unless otherwise
indicated below in the box entitled "Special Delivery Instructions", please mail
the check for the purchase price of all Shares purchased and return all Share
Certificates evidencing Shares not tendered or not accepted for payment (and
accompanying documents, as appropriate) to the address(es) of the registered
holder(s) appearing above under "Description of Shares Tendered" on the reverse
hereof. In the event that the boxes below entitled "Special Payment
Instructions" and "Special Delivery Instructions" are both completed, please
issue the check for the purchase price of all Shares purchased and return all
Share Certificates evidencing Shares not tendered or not accepted for payment in
the name(s) of, and deliver such check and return such Share Certificates (and
any accompanying documents, as appropriate) to, the person(s) so indicated.
Unless otherwise indicated below in the box entitled "Special Payment
Instructions", please credit any Shares tendered hereby and delivered by
book-entry transfer that are not accepted for payment by crediting the account
at the Book-Entry Transfer Facility designated above. The undersigned recognizes
that Purchaser has no obligation, pursuant to the Special Payment Instructions,
to transfer any Shares from the name of the registered holder(s) thereof if
Purchaser does not accept for payment any Shares tendered hereby.
<PAGE> 5
------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
and 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 Share Certificate(s) to:
Name:
----------------------------------------------------
(PLEASE PRINT)
Address:
--------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
(ZIP CODE)
------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
Account
Number:
- ---------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased and Share Certificates evidencing Shares not tendered or not
purchased are to be mailed to someone other than the undersigned, or
the undersigned at an address other than that shown under "Description
of Shares Tendered".
Mail Check and Share Certificate(s) to:
Name:
-------------------------------------------------------
(PLEASE PRINT)
Address:
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
(ZIP CODE)
---------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
------------------------------------------------------------
<PAGE> 6
IMPORTANT
STOCKHOLDERS: SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURE(S) OF HOLDER(S)
Dated:
- ------------------------,2000
(Must be signed by registered holder(s) exactly as name(s) appear(s) on Share
Certificates or on a security position listing by 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 and see Instruction 5.)
Name(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title):
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Daytime Area Code and Telephone No.:
- ----------------------------------------------------------------------------
Taxpayer Identification or Social Security No.:
- ---------------------------------------------------------------------
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY.
FINANCIAL INSTITUTIONS: PLACE MEDALLION GUARANTEE IN SPACE BELOW
<PAGE> 7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. All signatures on this Letter of Transmittal
must be guaranteed by a firm which is a member of the Security Transfer Agent
Medallion Signature Program, or by any other "eligible guarantor institution",
as such term is defined in Rule 17Ad-15 promulgated under the Securities
Exchange Act of 1934, as amended (each of the foregoing being an "Eligible
Institution") unless (i) this Letter of Transmittal is signed by the registered
holder(s) of Shares (which term, for purposes of this document, shall include
any participant in the Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of Shares) tendered hereby and such
holder(s) has (have) not completed the box entitled "Special Payment
Instructions" or "Special Delivery Instructions" on the reverse hereof or (ii)
such Shares are tendered for the account of an Eligible Institution. See
Instruction 5.
2. Delivery of Letter of Transmittal and Share Certificates. This Letter
of Transmittal is to be used either if Share Certificates are to be forwarded
herewith or if tenders are to be made pursuant to the procedures for tenders by
book-entry transfer pursuant to the procedure set forth in Section 3 of the
Offer to Purchase. Share Certificates evidencing all physically tendered Shares,
or a confirmation of a book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility of all Shares delivered by book-entry transfer, as
well as a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile thereof) and any other documents required by this
Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth below prior to the Expiration Date (as defined in Section 1
of the Offer to Purchase). If Share Certificates are forwarded to the Depositary
in multiple deliveries, a properly completed and duly executed Letter of
Transmittal must accompany each such delivery. Stockholders whose Share
Certificates are not immediately available, who cannot deliver their Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date or who cannot complete the procedure for delivery by book-entry
transfer on a timely basis may tender their Shares pursuant to the guaranteed
delivery procedure described in Section 3 of the Offer to Purchase. Pursuant to
such procedure: (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 made available by Purchaser, must be
received by the Depositary prior to the Expiration Date; and (iii) the Share
Certificates evidencing all physically delivered Shares in proper form for
transfer by delivery, or a confirmation of a book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility of all Shares delivered
by book-entry transfer, in each case together with a 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 (as defined in Section 3 of the Offer to Purchase)) and any other
documents required by this Letter of Transmittal, must be received by the
Depositary within three Nasdaq National Market ("Nasdaq") trading days after the
date of execution of such Notice of Guaranteed Delivery, all as described in
Section 3 of the Offer to Purchase.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND
THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY.
IF 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. By execution of this Letter of Transmittal
(or a manually signed facsimile hereof), all tendering stockholders waive any
right to receive any notice of the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided on the reverse hereof under
"Description of Shares Tendered" is inadequate, the Share Certificate numbers,
the number of Shares evidenced by such Share Certificates and the number of
Shares tendered should be listed on a separate signed schedule and attached
hereto.
4. Partial Tenders (not applicable to stockholders who tender by
book-entry transfer). If fewer than all Shares evidenced by any Share
Certificate delivered to the Depositary herewith are to be tendered hereby,
<PAGE> 8
fill in the number of Shares that are to be tendered in the box entitled "Number
of Shares Tendered". In such cases, new Share Certificate(s) evidencing the
remainder of Shares that were evidenced by the Share Certificates 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
Date or the termination of the Offer. All Shares evidenced 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 Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the Share Certificates evidencing such Shares without alteration,
enlargement or any other change whatsoever.
If any Shares tendered hereby is held of record by two or more persons, all
such persons must sign this Letter of Transmittal.
If any Shares tendered hereby are registered in different names, 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 is signed by the registered holder(s) of
Shares tendered hereby, no endorsements of Share Certificates or separate stock
powers are required, unless payment is to be made to, 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). If the Letter of
Transmittal is signed by a person other than the registered holder(s) of the
Share Certificate(s) evidencing Shares tendered, the Share Certificate(s)
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 Certificate(s). Signatures on such Share Certificate(s) and stock
powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of Shares tendered hereby, the Share Certificate(s)
evidencing 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 Certificate(s). Signatures on such Share
Certificate(s) and stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Purchaser of such person's authority so to act must be
submitted.
6. Stock Transfer Taxes. Except as otherwise provided in this Instruction
6, Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or Share
Certificate(s) evidencing Shares not tendered or not accepted for payment are to
be issued in the name of, any person other than the registered holder(s) or if
tendered certificates are registered in the name of any person other than the
person(s) signing the Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the registered holder(s), or such other person, or
otherwise) payable on account of the transfer to such other person will be
deducted from the purchase price of such Shares purchased, unless evidence
satisfactory to Purchaser of the payment of such taxes, or exemption therefrom,
is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Share Certificates evidencing Shares
tendered hereby.
7. Special Payment and Delivery Instructions. If a check for the purchase
price of any Shares tendered hereby is to be issued in the name of, and/or Share
Certificate(s) evidencing Shares not tendered or not accepted for payment are to
be issued in the name of and/or returned to, a person other than the person(s)
signing this Letter of Transmittal or if such check or any such Share
Certificate is to be sent to a person other than the signor of this Letter of
Transmittal or to the person(s) signing this Letter of Transmittal but at an
<PAGE> 9
address other than that shown in the box entitled "Description of Shares
Tendered" on the reverse hereof, the appropriate boxes herein must be completed.
8. Questions and Requests for Assistance or Additional Copies. Questions
and requests for assistance may be directed to the Information Agent or the
Dealer Manager at their respective addresses or telephone numbers set forth
below. Additional copies of the Offer to Purchase, this Letter of Transmittal,
the Notice of Guaranteed Delivery and the Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 may be obtained from the
Information Agent.
9. Substitute Form W-9. Each tendering stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to certify, under penalty of perjury, that such number is correct and that
such stockholder is not subject to backup withholding of federal income tax. If
a tendering stockholder has been notified by the Internal Revenue Service that
such stockholder is subject to backup withholding, such stockholder must cross
out item (2) of the Certification box of the Substitute Form W-9, unless such
stockholder has since been notified by the Internal Revenue Service that such
stockholder is no longer subject to backup withholding. Failure to provide the
information on the Substitute Form W-9 may subject the tendering stockholder to
31% federal income tax withholding on the payment of the purchase price of all
Shares purchased from such stockholder. If the tendering stockholder has not
been issued a TIN and has applied for one or intends to apply for one in the
near future, such stockholder should write "Applied For" in the space provided
for the TIN in Part I of the Substitute Form W-9, and sign and date the
Substitute Form W-9. If "Applied For" is written in Part I and the Depositary is
not provided with a TIN within 60 days, the Depositary will withhold 31% on all
payments of the purchase price to such stockholder until a TIN is provided to
the Depositary.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR MANUALLY SIGNED FACSIMILE
HEREOF), PROPERLY COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED
SIGNATURE GUARANTEES (OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN AGENT'S
MESSAGE) AND SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL
OTHER REQUIRED DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF
GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION
DATE (AS DEFINED IN THE OFFER TO PURCHASE).
<PAGE> 10
IMPORTANT TAX INFORMATION
Under U.S. federal income tax law, a stockholder whose tendered Shares are
accepted for payment is generally required to provide the Depositary (as payer)
with such stockholder's correct TIN on Substitute Form W-9 provided herewith. If
such stockholder is an individual, the TIN generally is such stockholder's
social security number. If the Depositary is not provided with the correct TIN,
the stockholder may be subject to a $50 penalty imposed by the Internal Revenue
Service and payments that are made to such stockholder with respect to Shares
purchased pursuant to the Offer may be subject to backup withholding of 31%. In
addition, if a stockholder makes a false statement that results in no imposition
of backup withholding, and there was no reasonable basis for making such
statement, a $500 penalty may also be imposed by the Internal Revenue Service.
Certain stockholders (including, among others, corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit a statement (Internal Revenue Service
Form W-8), signed under penalties of perjury, attesting to such individual's
exempt status. Forms of such statements can be obtained from the Depositary. See
the enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for additional instructions. A stockholder should consult
his or her tax advisor as to such stockholder's qualification for exemption from
backup withholding and the procedure for obtaining such exemption.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the stockholder. Backup withholding is not an additional
tax. Rather, the federal income tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained provided that the
required information is furnished to the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of such stockholder's correct TIN by
completing the form below certifying that (a) the TIN provided on Substitute
Form W-9 is correct (or that such stockholder is awaiting a TIN), and (b)(i)
such stockholder has not been notified by the Internal Revenue Service that he
is subject to backup withholding as a result of a failure to report all interest
or dividends or (ii) the Internal Revenue Service has notified such stockholder
that such stockholder is no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record holder of
Shares tendered hereby. If 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, the stockholder should write "Applied For" in the space provided for the
TIN in Part I, and sign and dated the Substitute Form W-9. If "Applied For" is
written in Part I and the Depositary is not provided with a TIN within 60 days,
the Depositary will withhold 31% of all payments of the purchase price to such
stockholder until a TIN is provided to the Depositary.
<PAGE> 11
PAYER'S NAME: CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
SUBSTITUTE PART I -- Taxpayer Identification Number -- For -------------------------------
FORM W-9 all accounts, enter your taxpayer Social security number
DEPARTMENT OF THE identification number in the box at right. (For OR
TREASURY most individuals, this is your social security
INTERNAL REVENUE SERVICE number. If you do not have a number, see -------------------------------
"Obtaining a Number" in the enclosed Employer identification number
PAYER'S REQUEST FOR TAXPAYER Guidelines.) Certify by signing and dating (If awaiting TIN write "Applied For")
IDENTIFICATION NUMBER (TIN) below. Note: If the account is in more than one
name, see the chart in the enclosed Guidelines
to determine which number to give the payer.
----------------------------------------------------------------------------------------
PART II -- For Payees Exempt from Backup Withholding, see the enclosed Guidelines and
complete as instructed therein.
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
CERTIFICATION -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be
issued to me), and
(2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been
notified by the Internal Revenue Service (the "IRS") that I am subject to back-up 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.
CERTIFICATE INSTRUCTIONS -- You must cross out item (2) above if you have been notified by the IRS that you are
currently subject to backup withholding because of underreporting interest or dividends on your tax return. However, if
after being notified by the IRS that you were subject to backup withholding you received another notification from the
IRS that you are no longer subject to backup withholding, do not cross out item (2). (Also see instructions in the
enclosed Guidelines.)
- -------------------------------------------------------------------------------------------------------------------------
Signature
------------------------------------------------------------------------------------------------------------------------ Date
------------------------------------------------------------------------------------------------------------------------------- ,
2000
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THIS OFFER. PLEASE REVIEW
THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
NOTE: YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING A TAXPAYER
IDENTIFICATION NUMBER.
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) 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
(2) I intend to mail or deliver an application in the near future. I
understand that If I do not provide a taxpayer identification number by the
time of payment, 31% of all reportable cash payments made to me thereafter
will be withheld until I provide a taxpayer identification number.
--------------------------------------------------------------
--------------------------------------------------------------
Signature: Date:
- --------------------------------------------------------------------------------
<PAGE> 12
Facsimiles of the Letter of Transmittal, properly completed and duly
signed, will be accepted. The Letter of Transmittal and Share Certificates and
any other required documents should be sent or delivered by each stockholder or
such stockholder's broker, dealer, commercial bank, trust company or other
nominee to the Depositary at one of its addresses or to the facsimile number set
forth below.
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By Facsimile Transmission
(for Eligible Institutions only):
(201) 296-4293
Confirm by Telephone:
(201) 296-4860
<TABLE>
<CAPTION>
By Overnight Courier: By Mail: By Hand:
<S> <C> <C>
85 Challenger Road Post Office Box 3301 120 Broadway, 13th Floor
Mail Drop Reorg. South Hackensack, NJ 07606 New York, NY 10271
Ridgefield Park, NJ 07660 Attn: Reorganization Dept Attn: Reorganization Dept.
</TABLE>
------------------------
Questions or requests for assistance may be directed to the Information Agent at
its address and telephone number listed below. Additional copies of the Offer to
Purchase, this Letter of Transmittal and the Notice of Guaranteed Delivery may
be obtained from the Information Agent. A stockholder may also contact brokers,
dealers, commercial banks or trust companies for assistance concerning the
Offer.
The Information Agent for the Offer is:
INNISFREE M&A INCORPORATED
501 Madison Avenue, 20th Floor
New York, NY 10022
(212) 750-5833
Call Toll Free: (888) 750-5834
<PAGE> 1
EXHIBIT (A)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
WAVE TECHNOLOGIES INTERNATIONAL, INC.
(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) (i) if certificates
("Share Certificates") evidencing shares of Common Stock, par value $0.50 per
share (the "Shares"), of Wave Technologies International, Inc., a Missouri
corporation (the "Company"), are not immediately available, (ii) if Share
Certificates and all other required documents cannot be delivered to ChaseMellon
Shareholder Services L.L.C., as Depositary (the "Depositary"), prior to the
Expiration Date (as defined in "Section 1. Terms of the Offer; Expiration Date"
of the Offer to Purchase) or (iii) if 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 mail or transmitted by telegram telex or
facsimile transmission to the Depositary. See "Section 3. Procedures for
Accepting the Offer and Tendering Shares" of the Offer to Purchase.
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
- ------------------------------ ------------------------------ ------------------------------
Post Office Box 3301 85 Challenger Road-Mail 120 Broadway,
South Hackensack, NJ 07606 Drop-Reorg 13th Floor
Attn: Reorganization Ridgefield Park, NJ 07660 New York, NY 10271
Department Attn: Reorganization
By Facsimile: Department
(201) 296-4293
Confirm by Telephone:
(201) 296-4860
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
<PAGE> 2
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.
Number of Shares:
--------------------------------
Certificate Nos. (If Available):
--------------------------------
--------------------------------
--------------------------------
Check one box if Shares will be delivered by book-entry transfer:
[ ] The Depository Trust Company
Account No.
---------------------------------------
Date:
------------------------------------, 2000
Name(s) of Holders:
--------------------------------
--------------------------------
--------------------------------
(PLEASE TYPE OR PRINT)
--------------------------------
--------------------------------
ADDRESS
--------------------------------
ZIP CODE
--------------------------------
AREA CODE AND TELEPHONE NO.
--------------------------------
--------------------------------
--------------------------------
SIGNATURE(S) OF HOLDER(S)
The undersigned hereby tenders to WTI Acquisition Corporation, a Delaware
corporation and a wholly owned subsidiary of The Thomson Corporation, a
corporation organized under the laws of Ontario, Canada, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated March 22,
2000 (the "Offer to Purchase"), and the related Letter of Transmittal (which,
together with any amendment or supplements thereto, collectively 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. Procedures for Accepting the Offering and Tendering Shares" of the
Offer to Purchase.
2
<PAGE> 3
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.
or which is a commercial bank or trust company having an office or correspondent
in the United States, guarantees to deliver to the Depositary, 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 Depository Trust Company, with delivery of a Letter of
Transmittal (or facsimile thereof) properly completed and duly executed, and any
other required documents, all within three Nasdaq National Market trading days
of the date hereof.
<TABLE>
<S> <C>
- --------------------------------------------------- ---------------------------------------------------
NAME OF FIRM TITLE
- --------------------------------------------------- ---------------------------------------------------
AUTHORIZED SIGNATURE ADDRESS ZIP
CODE
Name: ------------------------------------------- ---------------------------------------------------
PLEASE TYPE OR PRINT AREA CODE AND TELEPHONE NO.
</TABLE>
DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE.
SHARE CERTIFICATES SHOULD BE SENT WITH YOUR
LETTER OF TRANSMITTAL.
Dated: , 2000
3
<PAGE> 1
EXHIBIT (A)(4)
WTI ACQUISITION CORPORATION
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
WAVE TECHNOLOGIES INTERNATIONAL, INC.
AT
$9.75 NET PER SHARE
BY
WTI ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
THE THOMSON CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON TUESDAY, APRIL 18, 2000 UNLESS THE OFFER IS EXTENDED.
March 22, 2000
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
WTI Acquisition Corporation., a Delaware corporation ("Purchaser") and a
wholly owned subsidiary of The Thomson Corporation, a corporation organized
under the laws of Ontario, Canada ("Thomson"), has offered to purchase all
outstanding shares of Common Stock, par value $0.50 per share (the "Shares"), of
Wave Technologies International, Inc., a Missouri corporation (the "Company"),
at a price of $9.75 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in Purchaser's Offer to Purchase, dated
March 22, 2000 (the "Offer to Purchase"), and the related Letter of Transmittal
(which, together with any amendments or supplements thereto, collectively
constitute the "Offer"). Please furnish copies of the enclosed materials to
those of your clients for whose accounts you hold Shares registered in your name
or in the name of your nominee.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST
TWO-THIRDS OF THE SHARES OUTSTANDING ON A FULLY DILUTED BASIS. THE OFFER IS ALSO
CONDITIONED UPON, AMONG OTHER THINGS, THE EXPIRATION OR TERMINATION OF ANY
APPLICABLE ANTITRUST WAITING PERIOD.
Enclosed for your information and use are copies of the following
documents:
1. Offer to Purchase, dated March 22, 2000;
2. Letter of Transmittal to be used by holders of Shares in accepting
the Offer and tendering Shares;
3. Notice of Guaranteed Delivery to be used to accept the Offer if
the Shares and all other required documents are not immediately available
or cannot be delivered to ChaseMellon Shareholder Services, L.L.C. (the
"Depositary") by the Expiration Date (as defined in the Offer to Purchase)
or if the procedure for book-entry transfer cannot be completed by the
Expiration Date;
<PAGE> 2
4. A letter to shareholders of the Company from Kenneth W. Kousky,
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;
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. Return envelope addressed to 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 TUESDAY, APRIL 18, 2000, UNLESS THE OFFER IS EXTENDED.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of certificates
evidencing such Shares (or a confirmation of a book-entry transfer of such
Shares into the Depositary's account at one of the Book-Entry Transfer
Facilities (as defined in the Offer to Purchase)), a Letter of Transmittal (or
facsimile thereof) properly completed and duly executed and any other required
documents.
If holders of Shares wish to tender, but cannot deliver such holder's
certificates or cannot comply with the procedure for book-entry transfer prior
to the expiration of the Offer, a tender of Shares may be effected by following
the guaranteed delivery procedure described in "Section 3. Procedures for
Accepting the Offer and Tendering Shares" of the Offer to Purchase.
Purchaser will not pay any fees or commissions to any broker, dealer or
other person (other than the Depositary and the Information Agent as described
in the Offer) in connection with the solicitation of tenders of Shares pursuant
to the Offer. However, Purchaser will reimburse you for customary mailing and
handling expenses incurred by you in forwarding any of the enclosed materials to
your clients. Purchaser 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 Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to
Innisfree M&A Incorporated (the "Information Agent") at its address and
telephone number 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,
WTI Acquisition Corporation
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON THE AGENT OF THOMSON, PURCHASER, THE COMPANY, 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
EXHIBIT (A)(5)
OFFER TO PURCHASE FOR CASH
ALL SHARES OF COMMON STOCK
OF
WAVE TECHNOLOGIES INTERNATIONAL, INC.
AT
$9.75 NET PER SHARE
BY
WTI ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
THE THOMSON CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, APRIL 18, 2000, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are an Offer to Purchase, dated March 22,
2000 (the "Offer to Purchase"), and a related Letter of Transmittal in
connection with the offer by WTI Acquisition Corporation, a Delaware corporation
("Purchaser") and a wholly owned subsidiary of The Thomson Corporation, a
corporation organized under the laws of Ontario, Canada ("Thomson"), to purchase
all outstanding shares of Common Stock, par value $0.50 per share (the
"Shares"), of Wave Technologies International, Inc., a Missouri corporation (the
"Company"), at a price of $9.75 per Share, net to the seller in cash, 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").
We (or our nominee) are 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.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares held by us for your account, upon the terms and
subject to the conditions set forth in the Offer.
Your attention is invited to the following:
1. The tender price is $9.75 Share, net to the seller in cash.
2. The Offer is being made for any and all outstanding Shares.
3. The Board of Directors of the Company has determined that each of
the Offer and the Merger (as defined in the Offer to Purchase) is fair to,
and in the best interests of, the shareholders of the Company, and
recommends that shareholders accept the Offer and tender their Shares
pursuant to the Offer.
4. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Tuesday, April 18, 2000, unless the Offer is extended.
5. The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the expiration of the Offer at
least two-thirds of the Shares outstanding on a fully diluted basis. The
Offer is also conditioned upon, among other things, the expiration or
termination of any applicable antitrust waiting period.
<PAGE> 2
6. Tendering shareholders will not be obligated to pay brokerage fees
or commissions or, except as otherwise provided in Instruction 6 of the
Letter of Transmittal, stock transfer taxes with respect to the sale and
transfer of any Shares by Purchaser pursuant to the Offer.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form 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 is being made to all holders of Shares. Purchaser is not aware
of any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. If Purchaser becomes aware
of any valid state statute prohibiting the making of the Offer or the acceptance
of Shares pursuant thereto, Purchaser will make a good faith effort to comply
with such state statute. If, after such good faith effort, Purchaser cannot
comply with such state statute, the Offer will not be made to (nor will tenders
be accepted from or on behalf of) 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 Purchaser by 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 WAVE TECHNOLOGIES INTERNATIONAL, INC.
BY WTI ACQUISITION CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated March 22, 2000, and the related Letter of Transmittal
(which together constitute the "Offer") in connection with the offer by WTI
Acquisition Corporation, a Delaware corporation and a wholly owned subsidiary of
Thomson, a corporation organized under the laws of Ontario, Canada, to purchase
any and all outstanding shares of Common Stock, par value $0.50 per share (the
"Shares"), of Wave Technologies International, Inc., a Missouri corporation.
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.
Number of Shares to be Tendered*:
- --------------------------------------------------------------------
SHARES
Date:
- --------------------------------------------------------------------------------
SIGN HERE
- --------------------------------------------------------------------------------
SIGNATURE(S)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE TYPE OR PRINT NAME(S)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE TYPE OR PRINT ADDRESS
- --------------------------------------------------------------------------------
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
EXHIBIT (A)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
- ------------------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ------------------------------------------------------------
<C> <S> <C>
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, the
first individual on
the account(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. a. The usual revocable savings The grantor
trust account (grantor is also trustee(1)
trustee)
b. So-called trust account that is The actual owner(1)
not a legal or valid trust
under State law
- ------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ------------------------------------------------------------
<C> <S> <C>
5. Sole proprietorship account The owner(3)
6. A valid trust, estate, or pension Legal entity (Do
trust not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title.)(4)
7. Corporate account The corporation
8. Partnership account held in the The partnership
name of the business
9. Association, club, or other tax- The organization
exempt organization
10. A broker or registered nominee The broker or
nominee
11. Account with the Department of The public entity
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) Show the name of the owner. The name of the business or the "doing business
as" name may also be entered. Either the social security number or the
employer identification number may be used.
(4) 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
OBTAINING A NUMBER
If you don't have a taxpayer identification number ("TIN") or you don't know
your number, obtain Form SS-5, Application for a Social Security Number Card, or
Form SS-4, Application for Employer Identification Number, at the local office
of the Social Security Administration or the Internal Revenue Service and apply
for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on all dividend and
interest payments and on broker transactions 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
subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
- Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid in
the course of the payer's trade or
business and you have not provided your correct taxpayer identification number
to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file the substitute Form W-9 to avoid
possible erroneous backup withholding. Complete the substitute Form W-9 as
follows:
ENTER YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ACROSS THE FACE OF THE
FORM, SIGN, DATE, AND RETURN THE FORM 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 sections 6041, 6041A(a), 6042, 6044, 6045,
6050A and 6050N and the regulations thereunder.
PRIVACY ACT NOTICE--Section 6109 requires most recipients of dividend, interest
or other payments to give taxpayer identification numbers to payers who must
report the payments to IRS. IRS uses the numbers for identification purposes and
to help verify the accuracy of tax returns. Payers must be given the numbers
whether or not recipients are required to file tax returns. Payers must
generally withhold 31% of taxable interest, dividend, and certain other payments
to a payee who does not furnish a taxpayer identification number to a payer.
Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER--If you fail
to furnish your correct taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING--If you make
a false statement with no reasonable basis which results in no imposition of
backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
(4) MISUSE OF TAXPAYER IDENTIFICATION NUMBERS--If the payer discloses or uses
taxpayer identification numbers in violation of Federal law, the payer may be
subject to civil and criminal penalties.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
<PAGE> 1
EXHIBIT (a)(7)
J. MICHAEL BOWLES
TRUSTEE UNDER THE WAVE TECHNOLOGIES INTERNATIONAL, INC.
PROFIT SHARING AND 401(k) PLAN
NOTICE TO PARTICIPANTS
March 22, 2000
Dear Participants of the Wave Technologies International, Inc. Profit Sharing
and 401(k) Plan:
As a holder of shares of common stock, par value $0.50 per share (the
"Shares") of Wave Technologies International, Inc. (the "Company"), we are
delivering to you with this letter a copy of the Offer to Purchase, dated March
22, 2000 (the "Offer to Purchase"), and the Solicitation/Recommendation
Statement of the Company in connection with the offer by WTI Acquisition
Corporation, a Delaware corporation ("Purchaser") and a wholly owned subsidiary
of The Thomson Corporation, a corporation organized under the laws of Ontario,
Canada ("Thomson"), to purchase all outstanding Shares at a price of $9.75 per
Share, net to the seller in cash, upon the terms and subject to the conditions
set forth in the Offer to Purchase (the "Offer").
Any Shares held by you through the Wave Technologies International, Inc.
Profit Sharing and 401(k) Plan (the "Plan") and held by the undersigned on your
behalf as the Trustee of the Plan (the "Trustee") may be tendered by the Trustee
pursuant to your instructions. The Offer will expire at 12:00 Midnight, New York
City Time, on April 18, 2000 (the "Expiration Date"), unless it is extended
pursuant to the terms of the Offer to Purchase, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer shall
expire.
To instruct the Trustee to tender Shares held by the Trustee in your Plan
account at the time of the Expiration Date and to deliver such Shares to the
depositary for the Offer (the "Depositary"), please complete the attached
instruction form and return it to the Trustee in the envelope provided prior to
6:00 P.M., New York City time (5:00 P.M. St. Louis time) on or before Friday,
April 14, 2000, the date which is two business days prior to the current
Expiration date, so that the Trustee may properly tender such Shares to the
Depositary prior to the Expiration Date. Please note that if the instruction
form is not received on or before 6:00 P.M., New York City time (5:00 P.M St.
Louis time), on Friday, April 14, 2000, there is no assurance that your
instructions will be followed.
In order to ensure that your instructions to the Trustee remain
confidential, please return the instruction form directly to the Trustee. Your
instructions to the Trustee will be kept confidential.
If you previously signed and returned a Letter of Transmittal in connection
with Shares held by you outside your Plan account, you must still complete the
instruction form and return it to the Trustee in order to tender Shares held by
you in your Plan account. The instruction form will serve as confirmation of
your tender of the Shares held by the Trustee in your Plan account and as
authorization for the Trustee to deliver such Shares to the Depositary.
If you have any questions with regard to the Offer to Purchase and
associated tender materials in connection with the Offer, or if you have not
received any of the Offer materials, please call Innisfree M&A Incorporated at
(888) 750-5834.
If you have any questions with regard to your Plan account Shares held by
the Trustee, please call the Trustee's staff at (800) 994-5767.
Sincerely,
J. Michael Bowles
Trustee
<PAGE> 2
THE WAVE TECHNOLOGIES INTERNATIONAL, INC.
PROFIT SHARING AND 401(K) PLAN
INSTRUCTION TO TRUSTEE WHETHER TO TENDER SHARES
The undersigned participant in the Wave Technologies International, Inc.
Profit Sharing and 401(k) Plan (the "Plan") hereby instructs J. Michael Bowles,
as Trustee under the Plan (the "Trustee"), to tender or not to tender, pursuant
to the Offer, the Shares held in his or her account under the Plan (as explained
in the accompanying Notice to Participants) in accordance with the instruction
form on the reverse side of this form.
THIS FORM MUST BE PROPERLY COMPLETED, SIGNED, DATED AND RECEIVED BY THE
TRUSTEE NO LATER THAN 6:00 P.M. NEW YORK CITY TIME (5:00 P.M. ST. LOUIS TIME) ON
FRIDAY, APRIL 14, 2000.
If the expiration of the Offer is extended beyond its scheduled expiration
time, the time by which the Trustee must receive your instructions will be
extended automatically to 6:00 P.M., New York City time (5:00 P.M. St. Louis
time) on the third business days prior to such extended expiration time.
IF THIS FORM IS RECEIVED AFTER 6:00 P.M. NEW YORK CITY TIME (5:00 P.M. ST.
LOUIS TIME) ON FRIDAY, APRIL 14, 1999, THE TRUSTEE CANNOT ENSURE THAT YOUR
INSTRUCTIONS WILL BE FOLLOWED. YOUR INSTRUCTIONS ARE CONFIDENTIAL AS EXPLAINED
IN THE ACCOMPANYING NOTICE TO PARTICIPANTS.
<PAGE> 3
TO BE COMPLETED, SIGNED AND DATED ON THE REVERSE SIDE.
[X] Please mark your choice like this and sign and date below.
THE TRUSTEE MAKES NO RECOMMENDATIONS AS TO YOUR DECISION TO TENDER OR NOT TO
TENDER SHARES HELD IN YOUR ACCOUNT UNDER THE PLAN PURSUANT TO THE OFFER.
[ ] Tender ALL of the Shares held in my account under the Plan.
[ ] Tender the percentage of Shares held in my account under the Plan indicated
below:
Percentage of Shares (in whole numbers): %
[ ] Do not tender any Shares held in my account under the Plan.
As a participant in the Plan, I acknowledge receipt of the Offer to
Purchase, Solicitation/Recommendation Statement and the Notice to Participants
dated March 22, 2000, and I hereby instruct the Trustee of the Plan to tender or
not to tender the Shares held in my account under the Plan as indicated above.
I understand that if I sign, date and return this instruction form but do
not provide the Trustee with Specific instructions, the Trustee will treat this
instruction form as not providing any instruction to the Trustee regarding the
Offer. In accordance with the terms of the trust which is the funding vehicle
for the Plan, the Trustee will not sell any Shares held by the Plan for which no
participant instructions are timely received unless it determines that it is
legally obligated to do so.
<TABLE>
<S> <C>
- ----------------------------------------------------- -----------------------------------------------------
SIGNATURE DATE
</TABLE>
PLEASE SIGN, DATE AND MAIL THIS INSTRUCTION FORM PROMPTLY
IN THE POSTAGE PREPAID ENVELOPE PROVIDED
<PAGE> 1
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 being
made solely by the Offer to Purchase dated March 22, 2000 and the related Letter
of Transmittal, and is being made to holders of Shares. Purchaser (as defined
below) is not aware of any jurisdiction where the making of the Offer is
prohibited by any administrative or judicial action pursuant to any valid state
statute. If Purchaser becomes aware of any valid state statute prohibiting the
making of the Offer or the acceptance of Shares pursuant thereto, Purchaser will
make a good faith effort to comply with such state statute. If, after such good
faith effort, Purchaser cannot comply with such state statute, the Offer will
not be made to (nor will tenders be accepted from or on behalf of) 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 Purchaser by 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
WAVE TECHNOLOGIES INTERNATIONAL, INC.
AT
$9.75 NET PER SHARE
BY
WTI ACQUISITION CORPORATION
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
THE THOMSON CORPORATION
WTI Acquisition Corporation, a Delaware corporation ("Purchaser") and an
indirect wholly owned subsidiary of The Thomson Corporation, a corporation
organized under the laws of Ontario, Canada ("Thomson"), is offering to purchase
all the shares of common stock, par value $0.50 per share (the "Shares"), of
Wave Technologies International, Inc., a Missouri corporation (the "Company"),
that are issued and outstanding for $9.75 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 22, 2000 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which, together with the Offer to Purchase and any amendments or
supplements thereto, collectively constitute the "Offer"). Following the Offer,
Purchaser intends to effect the Merger described below.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, APRIL 18, 2000, UNLESS THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, (i) there having been
validly tendered and not withdrawn prior to the expiration of the Offer at least
the number of Shares that constitutes two-thirds of the then outstanding shares
on a fully diluted basis (including, without limitation, all Shares issuable
upon the conversion of any convertible securities or upon the exercise of any
options, warrants, or rights (other than the rights issued pursuant to the
Rights Agreement, dated as of September 17, 1998 (the "Rights Agreement")
between the Company and ChaseMellon Shareholder Services, L.L.C., as Rights
Agent, and other than any shares issuable upon the exercise of any options in
respect of which the Purchaser has received an agreement from the option holder
not to exercise such option until after the record date for any meeting of the
stockholders of the Company for the purpose of considering and taking action on
the Merger Agreement,
<PAGE> 2
the Offer and the Merger) and (ii) any applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, having expired
or been terminated.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of March 10, 2000 (the "Merger Agreement"), among Thomson US Holdings Inc., a
Delaware Corporation and a wholly owned subsidiary of Thomson ("Parent"),
Purchaser and the Company. The Merger Agreement provides that, among other
things, as promptly as practicable after the purchase of Shares pursuant to the
Offer and the satisfaction or, if permissible, waiver of the other conditions
set forth in the Merger Agreement and in accordance with relevant provisions of
the General Corporation Law of the State of Delaware ("Delaware Law") and the
Missouri General and Business Corporation Law ("Missouri Law"), Purchaser will
be merged with and into the Company (the "Merger"). As a result of the Merger,
the Company will continue as the surviving corporation (the "Surviving
Corporation") and will become an indirect wholly owned subsidiary of Thomson. At
the effective time of the Merger (the "Effective Time"), each Share issued and
outstanding immediately prior to the Effective Time (other than Shares held in
the treasury of the Company and other than Shares held by stockholders who shall
have demanded and perfected appraisal rights under Missouri Law) will be
canceled and converted automatically into the right to receive $9.75 in cash, or
any higher price that may be paid per Share in the Offer, without interest.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT EACH
OF THE OFFER AND THE MERGER IS FAIR TO, AND IN THE BEST INTEREST OF, THE
STOCKHOLDERS OF THE COMPANY, HAS APPROVED, ADOPTED AND DECLARED ADVISABLE THE
MERGER AGREEMENT AND THE MERGER AND HAS RESOLVED TO RECOMMEND THAT STOCKHOLDERS
ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when Purchaser gives oral or written notice to ChaseMellon
Shareholder Services L.L.C. (the "Depositary") of Purchaser's acceptance for
payment of such Shares 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 Purchaser and transmitting such payments to tendering
stockholders whose Shares have been accepted for payment. UNDER NO CIRCUMSTANCES
WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE PAID, REGARDLESS OF ANY DELAY
IN MAKING SUCH PAYMENT. In all cases, payment for Shares tendered and accepted
for payment pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) the certificates evidencing such Shares (the "Share
Certificates") 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
Section 2 of the Offer to Purchase) pursuant to the procedure set forth in
Section 3 of the Offer to Purchase, (ii) the Letter of Transmittal (or a
manually signed facsimile thereof), properly completed and duly executed, with
any required signature guarantees or an Agent's Message (as defined in Section 2
of the Offer to Purchase) and (iii) any other documents required under the
Letter of Transmittal.
Purchaser expressly reserves the right, in its sole discretion (but subject
to the terms and conditions of the Merger Agreement), at any time and from time
to time, to extend for any reason the period of time during which the Offer is
open, including the occurrence of any condition specified in Section 14 of the
Offer to Purchase, by giving oral or written notice of such extension to the
Depositary. Any such extension will be followed as promptly as practicable by
public announcement thereof, such announcement to be made no later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled expiration date of the Offer. During any such extension, all Shares
previously tendered and not withdrawn will remain subject to the Offer and
subject to the right of a tendering stockholder to withdraw such stockholder's
Shares.
Shares may be withdrawn at any time prior to 12:00 Midnight, New York City
time, on Tuesday, April 18, 2000 (or the latest time and date at which the
Offer, if extended by Purchaser, shall expire). For the withdrawal to be
effective, a written or facsimile transmission notice of withdrawal must be
timely received by the Depositary at one of its addresses set forth on the back
cover page of the Offer to Purchase. Any such 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 of such Shares, if
different from that
2
<PAGE> 3
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 (as defined in Section 3 of the Offer to Purchase), 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 of the Offer to Purchase, 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. All questions as to the form and
validity (including the time of receipt) of any notice of withdrawal will be
determined by Purchaser, in its sole discretion, whose determination will be
final and bidding.
The information required to be disclosed by Rule 14d-6(d)(1) of the General
Rules and Regulations 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 Purchaser with the Company's stockholder list and
security position listings, including the most recent list of names, addresses
and security positions of non-objecting beneficial owners in the possession of
the Company, for the purpose of disseminating the Offer to holders of Shares.
The Offer to Purchase and the related Letter of Transmittal will be mailed to
record holders of Shares 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 stockholder
list or, if applicable, who are listed as participants in a clearing agency's
security position listing.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
Questions and requests for assistance or for additional copies of the Offer
to Purchase and the related Letter of Transmittal and other tender offer
materials may be directed to the Information Agent as set forth below, and
copies will be furnished promptly at Purchaser's expense. No fees or commissions
will be paid to brokers, dealers or other persons (other than the Information
Agent) for soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
INNISFREE M&A INCORPORATED
501 Madison Avenue, 20th Floor
New York, NY 10022
(212) 750-5833
Call Toll Free: (888) 750-5834
March 22, 2000
3
<PAGE> 1
Exhibit (a)(9)
NEWS The
RELEASE Thomson
Stock symbol: TOC Corporation
- --------------------------------------------------------------------------------
THE THOMSON CORPORATION TO ACQUIRE WAVE TECHNOLOGIES INTERNATIONAL
TORONTO, ONTARIO and ST. LOUIS, MO, March 10, 2000 The Thomson Corporation (TSE:
TOC), a leading e-information and solutions company in the business and
professional marketplace, and Wave Technologies International, Inc. (NASDAQ:
WAVT), a leading provider of instructional products related to sophisticated
information technologies, today jointly announced a definitive agreement under
which Thomson will acquire Wave Technologies. Under the agreement, a newly
formed Thomson subsidiary will make a tender offer for all of the issued and
outstanding shares of common stock of Wave Technologies, at a price of US$9.75
per share in cash, or a total of approximately US$45 million.
Wave Technologies, with 1999 revenues of US$37 million, is a leader in corporate
IT training and IT certification training. Headquartered in St. Louis, Wave
Technologies designs and develops IT training and instructional products through
multi-dimensional training platforms including instructor-led courses,
informational seminars, published products and the Internet. The company markets
its courses and published products to senior management information
professionals, system integrators, IT system managers, and value-added
resellers.
Richard J. Harrington, President and Chief Executive Officer of The Thomson
Corporation, said, "The acquisition of Wave Technologies demonstrates Thomson's
ongoing commitment to solidifying leading positions in our core, global
information businesses with leading-edge products and technology. Wave
Technologies is a distinguished, well-respected company in the corporate IT
training market and fits well within the strategic framework of Thomson
Learning."
"We are extremely excited by the opportunity to add another outstanding and
highly complementary business to our learning franchise," said Bob Christie,
President and Chief Executive Officer of Thomson Learning. "Given the
accelerating pace of technology change and the growing strategic importance of
information technology as a component for success, corporate information
technology training has significant growth potential. Wave Technologies,
combined with our existing corporate IT division and the assets gained from our
recent Prometric acquisition, will immediately propel Thomson Learning to a
leadership position in the area of corporate IT training. Working with our new
colleagues, we can offer customers a more robust portfolio of products in print
or electronic
<PAGE> 2
formats, a broader array of services and enhanced, world class
customer service."
Kenneth W. Kousky, Chairman, President and Chief Executive Officer of Wave
Technologies stated, "Today's announcement delivers immediate value for our
shareholders, creates important benefits for our customers and provides
significant opportunities for our employees. We are confident that Wave's unique
portfolio of products and services will flourish under Thomson's ownership."
The offer is conditioned upon the tender of two-thirds of the eligible shares,
the expiration or termination of the customary regulatory periods and other
customary conditions. The closing of the tender offer is expected to occur in
April 2000, to be followed by a merger.
Wave Technologies develops, markets and delivers training and instructional
products related to sophisticated information technologies. Wave's web site is
located at www.wavetech.com.
Thomson Learning (www.thomsonlearning.com), a division of The Thomson
Corporation, is one of the world's leading providers of products and services
for education and training. The Thomson Corporation, with 1999 revenues of
US$5.8 billion, is a leading global e-information and solutions company in the
business and professional marketplace. The Corporation's common shares are
listed on the Toronto and London Stock Exchanges. For more information, visit
The Thomson Corporation's Internet address at www.thomson.com.
Contacts:
The Thomson Corporation
Stamford, CT, USA
John Kechejian:
Vice President, Investor Relations, The Thomson Corporation
(US)
203-328-9400
[email protected]
Janey Loyd:
Vice President, Corporate Communications, The Thomson
Corporation (US)
203-328-9400
[email protected]
<PAGE> 1
Exhibit (d)(1)
AGREEMENT AND PLAN OF MERGER
Among
THOMSON US HOLDINGS, INC.
WTI ACQUISITION CORPORATION
and
WAVE TECHNOLOGIES INTERNATIONAL, INC.
Dated as of March 10, 2000
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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PAGE
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ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS.............................................. 1
ARTICLE II
THE OFFER
SECTION 2.01. THE OFFER................................................ 6
SECTION 2.02. COMPANY ACTION........................................... 8
ARTICLE III
THE MERGER
SECTION 3.01. THE MERGER............................................... 9
SECTION 3.02. EFFECTIVE TIME; CLOSING.................................. 9
SECTION 3.03. EFFECT OF THE MERGER..................................... 9
SECTION 3.04. CERTIFICATE OF INCORPORATION; BY-LAWS.................... 10
SECTION 3.05. DIRECTORS AND OFFICERS................................... 10
SECTION 3.06. CONVERSION OF SECURITIES................................. 10
SECTION 3.07. EMPLOYEE STOCK OPTIONS................................... 11
SECTION 3.08. DISSENTING SHARES........................................ 11
SECTION 3.09. SURRENDER OF SHARES; STOCK TRANSFER BOOKS................ 12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.01. ORGANIZATION AND QUALIFICATION; SUBSIDIARY............... 13
SECTION 4.02. ARTICLES OF INCORPORATION AND BY-LAWS.................... 13
SECTION 4.03. CAPITALIZATION........................................... 14
SECTION 4.04. AUTHORITY RELATIVE TO THIS AGREEMENT..................... 14
SECTION 4.05. NO CONFLICT; REQUIRED FILINGS AND CONSENTS............... 15
SECTION 4.06. PERMITS; COMPLIANCE...................................... 15
SECTION 4.07. SEC FILINGS; FINANCIAL STATEMENTS........................ 16
SECTION 4.08. ABSENCE OF CERTAIN CHANGES OR EVENTS..................... 17
SECTION 4.09. ABSENCE OF LITIGATION.................................... 17
SECTION 4.10. EMPLOYEE BENEFIT PLANS................................... 18
SECTION 4.11. LABOR AND EMPLOYMENT MATTERS............................. 20
SECTION 4.12. OFFER DOCUMENTS; SCHEDULE 14D-9; PROXY STATEMENT......... 21
SECTION 4.13. PROPERTY AND LEASES...................................... 22
SECTION 4.14. INTELLECTUAL PROPERTY.................................... 23
SECTION 4.15. YEAR 2000 COMPLIANCE..................................... 23
SECTION 4.16. TAXES.................................................... 23
SECTION 4.17. ENVIRONMENTAL MATTERS.................................... 24
</TABLE>
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ii
<TABLE>
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SECTION 4.18. AMENDMENT TO RIGHTS AGREEMENT............................ 24
SECTION 4.19. MATERIAL CONTRACTS....................................... 25
SECTION 4.20. INSURANCE................................................ 27
SECTION 4.21. BROKERS.................................................. 27
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
SECTION 5.01. CORPORATE ORGANIZATION................................... 28
SECTION 5.02. AUTHORITY RELATIVE TO THIS AGREEMENT..................... 28
SECTION 5.03. NO CONFLICT; REQUIRED FILINGS AND CONSENTS............... 28
SECTION 5.04. FINANCING................................................ 29
SECTION 5.05. OFFER DOCUMENTS; PROXY STATEMENT......................... 29
SECTION 5.06. BROKERS.................................................. 29
SECTION 5.07. ABSENCE OF LITIGATION.................................... 30
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER.... 30
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01. STOCKHOLDERS' MEETING................................... 32
SECTION 7.02. PROXY STATEMENT......................................... 33
SECTION 7.03. COMPANY BOARD REPRESENTATION; SECTION 14(F)............. 33
SECTION 7.04. ACCESS TO INFORMATION; CONFIDENTIALITY.................. 34
SECTION 7.05. NO SOLICITATION OF TRANSACTIONS......................... 34
SECTION 7.06. EMPLOYEE BENEFITS MATTERS............................... 36
SECTION 7.07. DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.. 36
SECTION 7.08. NOTIFICATION OF CERTAIN MATTERS......................... 37
SECTION 7.09. FURTHER ACTION; REASONABLE BEST EFFORTS................. 37
SECTION 7.10. PUBLIC ANNOUNCEMENTS.................................... 38
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.01. CONDITIONS TO THE MERGER................................ 38
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01. TERMINATION............................................. 39
SECTION 9.02. EFFECT OF TERMINATION................................... 40
SECTION 9.03. FEES AND EXPENSES....................................... 40
SECTION 9.04. AMENDMENT............................................... 42
SECTION 9.05. WAIVER.................................................. 42
</TABLE>
<PAGE> 4
<TABLE>
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ARTICLE X
GENERAL PROVISIONS
SECTION 10.01. NOTICES................................................. 42
SECTION 10.02. SEVERABILITY............................................ 43
SECTION 10.03. ENTIRE AGREEMENT; ASSIGNMENT............................ 43
SECTION 10.04. PARTIES IN INTEREST..................................... 44
SECTION 10.05. SPECIFIC PERFORMANCE.................................... 44
SECTION 10.06. GOVERNING LAW........................................... 44
SECTION 10.07. WAIVER OF JURY TRIAL.................................... 44
SECTION 10.08. HEADINGS................................................ 44
SECTION 10.09. COUNTERPARTS............................................ 44
</TABLE>
ANNEX A Conditions to the Offer
<PAGE> 5
AGREEMENT AND PLAN OF MERGER, dated as of March 10, 2000 (this
"Agreement"), among THOMSON US HOLDINGS INC., a Delaware corporation, WTI
ACQUISITION CORPORATION, a Delaware corporation and a wholly owned subsidiary of
Parent ("Purchaser"), and WAVE TECHNOLOGIES INTERNATIONAL, INC., a Missouri
corporation (the "Company").
WHEREAS, the Boards of Directors of Parent, Purchaser and the
Company have each determined that it is in the best interests of their
respective stockholders for Parent to acquire the Company upon the terms and
subject to the conditions set forth herein;
WHEREAS, in furtherance of such acquisition, it is proposed
that Purchaser shall make a cash tender offer (the "Offer") to acquire all the
shares of common stock, par value $0.50 per share, of the Company ("Shares")
that are issued and outstanding for $9.75 per Share (such amount, or any greater
amount per Share paid pursuant to the Offer, being the "Per Share Amount"), net
to the seller in cash, upon the terms and subject to the conditions of this
Agreement and the Offer;
WHEREAS, the Board of Directors of the Company (the "Board")
has [unanimously] approved the making of the Offer and resolved to recommend
that holders of Shares tender their Shares pursuant to the Offer; and
WHEREAS, also in furtherance of such acquisition, the Boards
of Directors of Parent, Purchaser and the Company have each approved this
Agreement and declared its advisability and approved the merger (the "Merger")
of Purchaser with and into the Company in accordance with the General
Corporation Law of the State of Delaware ("Delaware Law") and the Missouri
General and Business Corporation Law ("Missouri Law"), following the
consummation of the Offer and upon the terms and subject to the conditions set
forth herein.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, Parent, Purchaser and the Company hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. (a) For purposes of this Agreement:
"Acquisition Proposal" means (i) any proposal or offer from
any person relating to any direct or indirect acquisition of (A) all or
a substantial part of the assets of the Company or of any Subsidiary or
(B) over 15% of any class of equity securities of the Company or of any
Subsidiary; (ii) any tender offer or exchange offer, as defined
<PAGE> 6
2
pursuant to the Exchange Act, that, if consummated, would result in any
person beneficially owning 15% or more of any class of equity
securities of the Company or any Subsidiary; (iii) any merger,
consolidation, business combination, sale of all or a substantial part
of the assets, recapitalization, liquidation, dissolution or similar
transaction involving the Company or any Subsidiary, other than the
Transactions; or (iv) any other transaction the consummation of which
would reasonably be expected to impede, interfere with, prevent or
materially delay the Transaction.
"affiliate" of a specified person means a person who, directly
or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified person.
"beneficial owner", with respect to any Shares, means a person
who shall be deemed to be the beneficial owner of such Shares (i) which
such person or any of its affiliates or associates (as such term is
defined in Rule 12b-2 promulgated under the Exchange Act) beneficially
owns, directly or indirectly, (ii) which such person or any of its
affiliates or associates has, directly or indirectly, (A) the right to
acquire (whether such right is exercisable immediately or subject to
the passage of time or other conditions), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion rights,
exchange rights, warrants or options, or otherwise, or (B) the right to
vote pursuant to any agreement, arrangement or understanding or (iii)
which are beneficially owned, directly or indirectly, by any other
persons with whom such person or any of its affiliates or associates or
person with whom such person or any of its affiliates or associates has
any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of any Shares.
"business day" means any day on which banks are not required
or authorized to close in The City of New York.
"Company Systems" shall mean all computer, hardware, software,
systems, and equipment (including embedded microcontrollers in
non-computer equipment) embedded within or required to operate the
current products of the Company and the Subsidiaries, and/or material
to or necessary for the Company and the Subsidiaries to carry on their
businesses as currently conducted.
"control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly, or
as trustee or executor, of the power to direct or cause the direction
of the management and policies of a person, whether through the
ownership of voting securities, as trustee or executor, by contract or
credit arrangement or otherwise.
<PAGE> 7
3
"Environmental Laws" means any United States federal, state,
local or non-United States laws relating to (i) releases or threatened
releases of Hazardous Substances or materials containing Hazardous
Substances; (ii) the manufacture, handling, transport, use, treatment,
storage or disposal of Hazardous Substances or materials containing
Hazardous Substances; or (iii) pollution or protection of the
environment, health, safety or natural resources.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Company or any Subsidiary
and which, together with the Company or any Subsidiary, is treated as a
single employer within the meaning of Section 414(b), (c), (m) or (o)
of the Code.
"Hazardous Substances" means (i) those substances defined in
or regulated under the following United States federal statutes and
their state counterparts, as each may be amended from time to time, and
all regulations thereunder: the Hazardous Materials Transportation Act,
the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the Clean Water
Act, the Safe Drinking Water Act, the Atomic Energy Act, the Federal
Insecticide, Fungicide, and Rodenticide Act and the Clean Air Act; (ii)
petroleum and petroleum products, including crude oil and any fractions
thereof; (iii) natural gas, synthetic gas, and any mixtures thereof;
(iv) polychlorinated biphenyls, asbestos and radon; (v) any other
contaminant; and (vi) any substance, material or waste regulated by any
Governmental Authority pursuant to any Environmental Law.
"Intellectual Property" means (i) United States, non-United
States, and international patents, patent applications and statutory
invention registrations, (ii) trademarks, service marks, trade dress,
logos, trade names, corporate names and other source identifiers, and
registrations and applications for registration thereof, (iii)
copyrightable works, copyrights, and registrations and applications for
registration thereof, and (iv) confidential and proprietary
information, including trade secrets and know-how.
"knowledge of the Company" means the actual knowledge of any
executive officer of the Company.
"Material Adverse Effect" means, when used in connection with
the Company or any Subsidiary, any event, circumstance, change or
effect that is or is reasonably likely to be materially adverse to the
business, prospects, financial condition or results of operations of
the Company and the Subsidiaries, taken as a whole.
<PAGE> 8
4
"person" means an individual, corporation, partnership,
limited partnership, limited liability company, syndicate, person
(including, without limitation, a "person" as defined in Section
13(d)(3) of the Exchange Act), trust, association or entity or
government, political subdivision, agency or instrumentality of a
government.
"subsidiary" or "subsidiaries" of the Company, the Surviving
Corporation, Parent or any other person means an affiliate controlled
by such person, directly or indirectly, through one or more
intermediaries.
"Superior Proposal" means any Acquisition Proposal on terms
which the Board determines, in its good faith judgment (after having
received the advice of U.S. Bancorp Piper Jaffray Inc. ("Piper
Jaffray") or another financial advisor of nationally recognized
reputation), to be more favorable to the Company's stockholders than
the Offer and the Merger.
"Taxes" shall mean any and all taxes, fees, levies, duties,
tariffs, imposts and other charges of any kind (together with any and
all interest, penalties, additions to tax and additional amounts
imposed with respect thereto) imposed by any Governmental Authority or
taxing authority, including, without limitation: taxes or other charges
on or with respect to income, franchise, windfall or other profits,
gross receipts, property, sales, use, capital stock, payroll,
employment, social security, workers' compensation, unemployment
compensation or net worth; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value-added or gains
taxes; license, registration and documentation fees; and customers'
duties, tariffs and similar charges.
"Year 2000 Compliant" means that the Company Systems provide
uninterrupted millennium functionality in that the Company Systems
record, store, process and present calendar dates falling on or after
January 1, 2000, in the same manner and with the same functionality as
the Company Systems record, store, process, and present calendar dates
falling on or before December 31, 1999.
(b) The following terms have the meaning set forth in the
Sections set forth below:
<TABLE>
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Defined Term Location of Definition
------------ ----------------------
<S> <C>
Action 4.09
Agreement Preamble
Blue Sky Laws 4.05(b)
Board Recitals
Certificate of Merger 3.02
</TABLE>
<PAGE> 9
5
<TABLE>
<S> <C>
Certificates 3.09(b)
Code 4.10(a)
Company Preamble
Company Licensed Intellectual Property 4.14(b)
Company Owned Intellectual Property 4.14(c)
Company Preferred Stock 4.03
Company Stock Option 3.07
Company Stock Option Plans 3.07
Confidentiality Agreement 7.04(b)
Delaware Law Recitals
Disclosure Schedule 4.01(b)
Dissenting Shares 3.08(a)
Effective Time 3.02
Environmental Permits 4.17
ERISA 4.10(a)
Exchange Act 2.01(a)
Expenses 9.03(a)
Fee 9.03(a)
GAAP 4.07(b)
Governmental Authority 4.05(b)
HSR Act 2.01(a)
IRS 4.10(a)
Law 4.05(a)
Liens 4.13(b)
Material Contracts 4.19(a)
Material Subsidiary 4.01(c)
Merger Recitals
Merger Consideration 2.01(a)
Minimum Condition 2.01(a)
Missouri Law Recitals
Multiemployer Plan 4.10(b)
Multiple Employer Plan 4.10(b)
Non-U.S. Benefit Plan 4.10(g)
Offer Recitals
Offer Documents 2.01(b)
Offer to Purchase 2.01(b)
Parent Preamble
Paying Agent 3.09(a)
Permits 4.06
Permitted Liens 4.13(b)
Per Share Amount Recitals
</TABLE>
<PAGE> 10
6
<TABLE>
<S> <C>
Plans 4.10(a)
Proxy Statement 4.12
Purchaser Preamble
Rights 4.03
Rights Agreement 4.03
Schedule 14D-9 2.02(b)
Schedule TO 2.01(b)
SEC 2.01(a)
SEC Reports 4.07(a)
Securities Act 4.07(a)
Shares Recitals
Stockholders' Meeting 7.01(a)
Subsidiary 4.01(a)
Surviving Corporation 3.03
Transactions 2.02(a)
1998 Balance Sheet 4.07(c)
</TABLE>
ARTICLE II
THE OFFER
SECTION 2.01. The Offer. (a) Provided that none of the events
set forth in Annex A hereto shall have occurred and be continuing, Purchaser
shall commence the Offer as promptly as reasonably practicable after the date
hereof. The obligation of Purchaser to accept for payment Shares tendered
pursuant to the Offer shall be subject to the condition (the "Minimum
Condition") that at least the number of Shares that shall constitute two-thirds
of the then outstanding Shares on a fully diluted basis (including, without
limitation, all Shares issuable upon the conversion of any convertible
securities or upon the exercise of any options, warrants or rights (other than
the Rights (as defined in Section 4.03) and other than any Shares issuable upon
the exercise of any options in respect of which the Purchaser has received an
agreement from the option holder not to exercise such option until after the
record date for any meeting of the stockholders of the Company for the purpose
of considering and taking action on this Agreement and the Transactions) shall
have been validly tendered and not withdrawn prior to the expiration of the
Offer and also shall be subject to the satisfaction of each of the other
conditions set forth in Annex A hereto. Purchaser expressly reserves the right
to waive any such condition, to increase the price per Share payable in the
Offer, and to make any other changes in the terms and conditions of the Offer;
provided, however, that no change may be made which decreases the price per
Share payable in the Offer or which reduces the maximum number of Shares to be
purchased in the Offer or which imposes conditions to the Offer in addition to
those set forth in Annex A hereto. Notwithstanding the foregoing, Purchaser may,
without the consent of the
<PAGE> 11
7
Company, (i) extend the Offer beyond the scheduled expiration date, which shall
be 20 business days following the commencement of the Offer, if, at the
scheduled expiration of the Offer, any of the conditions to Purchaser's
obligation to accept for payment Shares, shall not be satisfied or waived, (ii)
extend the Offer for any period required by any rule, regulation or
interpretation of the Securities and Exchange Commission (the "SEC"), or the
staff thereof, applicable to the Offer, or (iii) extend the Offer for an
aggregate period of not more than 10 business days beyond the latest applicable
date that would otherwise be permitted under clause (i) or (ii) of this
sentence, if, as of such date, all of the conditions to Purchaser's obligations
to accept for payment Shares are satisfied or waived, but the number of Shares
validly tendered and not withdrawn pursuant to the Offer equals 80% or more, but
less than 90%, of outstanding Shares on a fully diluted basis. In addition, if,
on the initial scheduled expiration date of the Offer, the sole condition
remaining unsatisfied is the failure of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), to have expired or been terminated, then, Purchaser shall extend the
Offer from time to time until the earlier to occur of (i) June 30, 2000 and (ii)
the fifth business day after the expiration or termination of the applicable
waiting period under the HSR Act. The Per Share Amount shall, subject to
applicable withholding of taxes, be net to the seller in cash, upon the terms
and subject to the conditions of the Offer. Purchaser shall pay for all Shares
validly tendered and not withdrawn promptly following the acceptance of Shares
for payment pursuant to the Offer. Notwithstanding the immediately preceding
sentence and subject to the applicable rules of the SEC and the terms and
conditions of the Offer, Purchaser expressly reserves the right to delay payment
for Shares in order to comply in whole or in part with applicable laws. Any such
delay shall be effected in compliance with Rule 14e-1(c) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). If the payment equal to
the Per Share Amount in cash (the "Merger Consideration") is to be made to a
person other than the person in whose name the surrendered certificate formerly
evidencing Shares is registered on the stock transfer books of the Company, it
shall be a condition of payment that the certificate so surrendered shall be
endorsed properly or otherwise be in proper form for transfer and that the
person requesting such payment shall have paid all transfer and other taxes
required by reason of the payment of the Merger Consideration to a person other
than the registered holder of the certificate surrendered, or shall have
established to the satisfaction of Purchaser that such taxes either have been
paid or are not applicable.
(b) As promptly as reasonably practicable on the date of
commencement of the Offer, Purchaser shall file with the SEC a Tender Offer
Statement on Schedule TO (together with all amendments and supplements thereto,
the "Schedule TO") with respect to the Offer. The Schedule TO shall contain or
shall incorporate by reference an offer to purchase (the "Offer to Purchase")
and forms of the related letter of transmittal and any related summary
advertisement (the Schedule TO, the Offer to Purchase and such other documents,
together with all supplements and amendments thereto, being referred to herein
collectively as the "Offer Documents"). Parent, Purchaser and the Company agree
to correct promptly any information
<PAGE> 12
8
provided by any of them for use in the Offer Documents that shall have become
false or misleading, and Parent and Purchaser further agree to take all steps
necessary to cause the Schedule TO, as so corrected, to be filed with the SEC,
and the other Offer Documents, as so corrected, to be disseminated to holders of
Shares, in each case as and to the extent required by applicable federal
securities laws.
SECTION 2.02. Company Action. (a) The Company hereby approves
of and consents to the Offer and represents that (i) the Board, at a meeting
duly called and held on March 10, 2000, has unanimously (A) determined that this
Agreement and the transactions contemplated hereby, including each of the Offer
and the Merger, and the transactions (collectively, the "Transactions"), are
fair to, and in the best interests of, the holders of Shares, (B) approved,
adopted and declared advisable this Agreement and the Transactions (such
approval and adoption having been made in accordance with Missouri Law) and (C)
resolved to recommend that the holders of Shares accept the Offer and tender
Shares pursuant to the Offer, and approve and adopt this Agreement and the
Transactions, and (ii) Piper Jaffray has delivered to the Board an opinion,
which will be confirmed promptly in writing, that the consideration to be
received by the holders of Shares pursuant to each of the Offer and the Merger
is fair to the holders of Shares from a financial point of view. The Company
hereby consents to the inclusion in the Offer Documents of the recommendation of
the Board described in the immediately preceding sentence, and the Company shall
not withdraw or modify such recommendation in any manner adverse to Purchaser or
Parent except as provided in Section 7.05(b). The Company has been advised by
its directors and executive officers that they intend either to tender all
Shares beneficially owned by them to Purchaser pursuant to the Offer or to vote
such Shares in favor of the approval and adoption by the stockholders of the
Company of this Agreement and the Transactions.
(b) As promptly as reasonably practicable on the date of
commencement of the Offer, the Company shall file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto, the "Schedule 14D-9") containing, except as
provided in Section 7.05(b), the recommendation of the Board described in
Section 2.02(a), and shall disseminate the Schedule 14D-9 to the extent required
by Rule 14d-9 promulgated under the Exchange Act, and any other applicable
federal securities laws. The Company, Parent and Purchaser agree to 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 further agrees to
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, in each case as and to
the extent required by applicable federal securities laws.
(c) The Company shall promptly furnish Purchaser with mailing
labels containing the names and addresses of all record holders of Shares and
with security position listings of Shares held in stock depositories, each as of
a recent date, together with all other
<PAGE> 13
9
available listings and computer files containing names, addresses and security
position listings of record holders and beneficial owners of Shares. The Company
shall promptly furnish Purchaser with such additional information, including,
without limitation, updated listings and computer files of stockholders, mailing
labels and security position listings, and such other assistance in
disseminating the Offer Documents to holders of Shares as Parent or Purchaser
may reasonably request. Subject to the requirements of applicable law, and
except for such steps as are necessary to disseminate the Offer Documents and
any other documents necessary to consummate the Offer or the Merger, Parent and
Purchaser shall hold in confidence the information contained in such labels,
listings and files, shall use such information only in connection with the
Transactions, and, if this Agreement shall be terminated in accordance with
Section 9.01, shall deliver to the Company all copies of such information then
in their possession.
ARTICLE III
THE MERGER
SECTION 3.01. The Merger. Upon the terms and subject to the
conditions set forth in Article VIII, and in accordance with Delaware Law and
Missouri Law, Purchaser shall be merged with and into the Company.
SECTION 3.02. Effective Time; Closing. As promptly as
practicable after the satisfaction or, if permissible, waiver of the conditions
set forth in Article VIII, the parties hereto shall cause the Merger to be
consummated by filing this Agreement or a certificate of merger or certificate
of ownership and merger with the Secretary of State of the State of Delaware and
articles of merger with the Secretary of State of the State of Missouri
(collectively, the "Certificate of Merger"), in such forms as are required by,
and executed in accordance with, the relevant provisions of Delaware Law and
Missouri Law (the date and time of such filing being the "Effective Time").
Prior to such filing, a closing shall be held at the offices of Shearman &
Sterling, 599 Lexington Avenue, New York, New York 10022, or such other place as
the parties shall agree, for the purpose of confirming the satisfaction or
waiver, as the case may be, of the conditions set forth in Article VIII.
SECTION 3.03. Effect of the Merger. As a result of the Merger,
the separate corporate existence of Purchaser shall cease and the Company shall
continue as the surviving corporation of the Merger (the "Surviving
Corporation"). At the Effective Time, the effect of the Merger shall be as
provided in the applicable provisions of Delaware Law and Missouri Law. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, all the property, rights, privileges, powers and franchises of the Company
and Purchaser shall vest in the Surviving Corporation, and all debts,
liabilities, obligations, restrictions, disabilities and
<PAGE> 14
10
duties of the Company and Purchaser shall become the debts, liabilities,
obligations, restrictions, disabilities and duties of the Surviving Corporation.
SECTION 3.04. Certificate of Incorporation; By-laws. (a) At
the Effective Time, subject to Section 7.07(a), the Certificate of Incorporation
of Purchaser, as in effect immediately prior to the Effective Time, shall be the
Articles of Incorporation of the Surviving Corporation until thereafter amended
as provided by law and such Articles of Incorporation; provided, however, that,
at the Effective Time, Article I of the Articles of Incorporation of the
Surviving Corporation shall be amended to read as follows: "The name of the
corporation is Wave Technologies International, Inc."
(b) Unless otherwise determined by Parent prior to the
Effective Time, and subject to Section 7.07(a), the By-laws of Purchaser, as in
effect immediately prior to the Effective Time, shall be the By-laws of the
Surviving Corporation until thereafter amended as provided by law, the
Certificate of Incorporation of the Surviving Corporation and such By-laws.
SECTION 3.05. Directors and Officers. The directors of
Purchaser immediately prior to the Effective Time shall be the initial directors
of the Surviving Corporation, each to hold office in accordance with the
Certificate of Incorporation and By-laws of the Surviving Corporation, and the
officers of the Company immediately prior to the Effective Time shall be the
initial officers of the Surviving Corporation, in each case until their
respective successors are duly elected or appointed and qualified or until their
earlier death, resignation or approval.
SECTION 3.06. Conversion of Securities. At the Effective Time,
by virtue of the Merger and without any action on the part of Purchaser, the
Company or the holders of any of the following securities:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than any Shares to be canceled pursuant to
Section 3.06(b) and any Dissenting Shares (as hereinafter defined))
shall be canceled and shall be converted automatically into the right
to receive an amount equal to the Merger Consideration payable, without
interest, to the holder of such Share, upon surrender, in the manner
provided in Section 3.09, of the certificate that formerly evidenced
such Share;
(b) Each Share held in the treasury of the Company and each
Share owned by Purchaser, Parent or any direct or indirect wholly owned
subsidiary of Parent or of the Company immediately prior to the
Effective Time shall be canceled without any conversion thereof and no
payment or distribution shall be made with respect thereto; and
(c) Each share of common stock, par value $.01 per share, of
Purchaser issued and outstanding immediately prior to the Effective
Time shall be converted into and
<PAGE> 15
11
exchanged for one validly issued, fully paid and nonassessable share of
common stock, par value $0.50 per share, of the Surviving Corporation.
SECTION 3.07. Employee Stock Options. Effective as of the
Effective Time, the Company shall use reasonable best efforts, including
obtaining the consent of the individual option holders, if necessary, to (i)
terminate the Company's 1993 Stock Option Plan, 1995 Stock Option Plan, the
Company's Outside Directors Stock Option Plan and 1997 Stock Option Plan, each
as amended through the date of this Agreement (the "Company Stock Option
Plans"), and (ii) cancel, at the Effective Time, each outstanding option to
purchase shares of Company Common Stock granted under the Company Stock Option
Plans (each, a "Company Stock Option") that is outstanding and unexercised as of
such date. Each holder of a Company Stock Option that is outstanding and
unexercised at the Effective Time shall be entitled to receive from the
Surviving Corporation immediately after the Effective Time, in exchange for the
cancellation of such Company Stock Option, an amount in cash equal to the
excess, if any, of (x) the Per Share Amount over (y) the per share exercise
price of such Company Stock Option, multiplied by the number of shares of
Company Common Stock subject to such Company Stock Option as of the Effective
Time. Any such payment shall be subject to all applicable federal, state and
local tax withholding requirements. The Company shall take all necessary action
to approve the disposition of the Company Stock Options in connection with the
transactions contemplated by this Agreement to the extent necessary to exempt
such dispositions and acquisitions under Rule 16b-3 of the Exchange Act.
SECTION 3.08. Dissenting Shares. (a) Notwithstanding any
provision of this Agreement to the contrary, Shares that are outstanding
immediately prior to the Effective Time and that are held by stockholders who
shall have neither voted in favor of the Merger nor consented thereto in writing
and who shall have demanded properly in writing appraisal for such Shares in
accordance with Section 351.455 of Missouri Law (collectively, the "Dissenting
Shares") shall not be converted into, or represent the right to receive, the
Merger Consideration. Such stockholders shall be entitled to receive payment of
the appraised value of such Shares held by them in accordance with the
provisions of such Section 351.455, except that all Dissenting Shares held by
stockholders who shall have failed to perfect or who effectively shall have
withdrawn or lost their rights to appraisal of such Shares under such Section
351.455 shall thereupon be deemed to have been converted into, and to have
become exchangeable for, as of the Effective Time, the right to receive the
Merger Consideration, without any interest thereon, upon surrender, in the
manner provided in Section 3.09, of the certificate or certificates that
formerly evidenced such Shares.
(b) The Company shall give Parent (i) prompt notice of any
demands for appraisal received by the Company, withdrawals of such demands, and
any other instruments served pursuant to Missouri Law and received by the
Company and (ii) the opportunity to direct all negotiations and proceedings with
respect to demands for appraisal under Missouri Law. The
<PAGE> 16
12
Company shall not, except with the prior written consent of Parent, make any
payment with respect to any demands for appraisal or offer to settle or settle
any such demands.
SECTION 3.09. Surrender of Shares; Stock Transfer Books. (a)
Prior to the Effective Time, Purchaser shall designate a bank or trust company
to act as agent (the "Paying Agent") for the holders of Shares to receive the
funds to which holders of Shares shall become entitled pursuant to Section
3.06(a). Such funds shall be invested by the Paying Agent as directed by the
Surviving Corporation.
(b) Promptly after the Effective Time, the Surviving
Corporation shall cause to be mailed to each person who was, at the Effective
Time, a holder of record of Shares entitled to receive the Merger Consideration
pursuant to Section 3.06(a) a form of letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the certificates
evidencing such Shares (the "Certificates") shall pass, only upon proper
delivery of the Certificates to the Paying Agent) and instructions for use in
effecting the surrender of the Certificates pursuant to such letter of
transmittal. Upon surrender to the Paying Agent of a Certificate, together with
such letter of transmittal, duly completed and validly executed in accordance
with the instructions thereto, and such other documents as may be required
pursuant to such instructions, the holder of such Certificate shall be entitled
to receive in exchange therefor the Merger Consideration for each Share formerly
evidenced by such Certificate, and such Certificate shall then be canceled. No
interest shall accrue or be paid on the Merger Consideration payable upon the
surrender of any Certificate for the benefit of the holder of such Certificate.
If the payment equal to the Merger Consideration is to be made to a person other
than the person in whose name the surrendered certificate formerly evidencing
Shares is registered on the stock transfer books of the Company, it shall be a
condition of payment that the certificate so surrendered shall be endorsed
properly or otherwise be in proper form for transfer and that the person
requesting such payment shall have paid all transfer and other taxes required by
reason of the payment of the Merger Consideration to a person other than the
registered holder of the certificate surrendered, or shall have established to
the satisfaction of Purchaser that such taxes either have been paid or are not
applicable.
(c) At any time following the sixth month after the Effective
Time, the Surviving Corporation shall be entitled to require the Paying Agent to
deliver to it any funds which had been made available to the Paying Agent and
not disbursed to holders of Shares (including, without limitation, all interest
and other income received by the Paying Agent in respect of all funds made
available to it), and, thereafter, such holders shall be entitled to look to the
Surviving Corporation (subject to abandoned property, escheat and other similar
laws) only as general creditors thereof with respect to any Merger Consideration
that may be payable upon due surrender of the Certificates held by them.
Notwithstanding the foregoing, neither the Surviving Corporation nor the Paying
Agent shall be liable to any holder of a Share for any
<PAGE> 17
13
Merger Consideration delivered in respect of such Share to a public official
pursuant to any abandoned property, escheat or other similar law.
(d) At the close of business on the day of the Effective Time,
the stock transfer books of the Company shall be closed and thereafter there
shall be no further registration of transfers of Shares on the records of the
Company. From and after the Effective Time, the holders of Shares outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such Shares except as otherwise provided herein or by applicable law.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As an inducement to Parent and the Purchaser to enter into
this Agreement, the Company hereby represents and warrants to Parent and
Purchaser that, except as otherwise disclosed in the disclosure schedule
delivered simultaneously herewith:
SECTION 4.01. Organization and Qualification; Subsidiaries.
(a) Each of the Company and each subsidiary of the Company ("Subsidiary") is a
corporation duly organized, validly existing and, to the extent applicable, in
good standing under the laws of the jurisdiction of its incorporation and has
the requisite corporate power and authority and all necessary governmental
approvals to own, lease and operate its properties and to carry on its business
as it is now being conducted. The Company and each Subsidiary is duly qualified
or licensed as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of the properties owned, leased or
operated by it or the nature of its business makes such qualification or
licensing necessary. Section 4.01(a) of the Disclosure Schedule lists
jurisdictions in which the Company is in the process of withdrawing its
qualification as a foreign corporation.
(b) Except as disclosed in Section 4.01(b) of the Disclosure
Schedule (the "Disclosure Schedule"), the Company does not directly or
indirectly own any equity or similar interest in, or any interest convertible
into or exchangeable or exercisable for any equity or similar interest in, any
corporation, partnership, joint venture or other business association or entity.
SECTION 4.02. Articles of Incorporation and By-laws. The
Company has heretofore furnished to Parent a complete and correct copy of the
Articles of Incorporation and the By-laws or equivalent organizational
documents, each as amended to date, of the Company and each Subsidiary. Such
Articles of Incorporation, By-laws or equivalent organizational documents are in
full force and effect. Neither the Company nor any Subsidiary is in violation of
<PAGE> 18
14
any of the provisions of its Articles of Incorporation, By-laws or equivalent
organizational documents.
SECTION 4.03. Capitalization. The authorized capital stock of
the Company consists of 20,000,000 Shares and 1,000,000 shares of preferred
stock, no par value ("Company Preferred Stock"). As of the date hereof, (a)
4,256,555 Shares are issued and outstanding, all of which are validly issued,
fully paid and nonassessable, (b) no Shares are held in the treasury of the
Company, (c) no Shares are held by any Subsidiary, and (d) 606,492 Shares are
reserved for future issuance pursuant to outstanding employee stock options or
stock incentive rights granted pursuant to the Company Stock Option Plans. As of
the date hereof, no shares of Company Preferred Stock are issued and
outstanding. Except as set forth in this Section 4.03 and Section 4.03 of the
Disclosure Schedule, and except for the rights (the "Rights") issued pursuant to
the Rights Agreement, dated as of September 17, 1998 (the "Rights Agreement"),
between the Company and ChaseMellon Shareholder Services, L.L.C., as rights
agent, there are no options, warrants or other rights, agreements, arrangements
or commitments of any character relating to the issued or unissued capital stock
of the Company or any Subsidiary or obligating the Company or any Subsidiary to
issue or sell any shares of capital stock of, or other equity interests in, the
Company or any Subsidiary. All Shares subject to issuance as aforesaid, upon
issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, will be duly authorized, validly issued, fully paid and
nonassessable. There are no outstanding contractual obligations of the Company
or any Subsidiary to repurchase, redeem or otherwise acquire any Shares or any
capital stock of any Subsidiary or to provide funds to, or make any investment
(in the form of a loan, capital contribution or otherwise) in, any Subsidiary or
any other person. Each outstanding share of capital stock of each Subsidiary is
duly authorized, validly issued, fully paid and nonassessable, and each such
share is owned by the Company or another Subsidiary free and clear of all
security interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on the Company's or any Subsidiary's voting rights,
charges and other encumbrances of any nature whatsoever.
SECTION 4.04. Authority Relative to This Agreement. The
Company has all necessary power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
Transactions. The execution and delivery of this Agreement by the Company and
the consummation by the Company of the Transactions have been duly and validly
authorized by all necessary corporate action, and no other corporate proceedings
on the part of the Company are necessary to authorize this Agreement or to
consummate the Transactions (other than, with respect to the Merger, the
approval and adoption of this Agreement by the holders of a majority of the
then-outstanding Shares, if and to the extent required by applicable law, and
the filing and recordation of appropriate merger documents as required by
Delaware Law and Missouri Law). This Agreement has been duly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery by Parent
<PAGE> 19
15
and Purchaser, constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
SECTION 4.05. No Conflict; Required Filings and Consents. (a)
Except as set forth in Section 4.05 of the Disclosure Schedule, 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 or violate the
Articles of Incorporation or By-laws or equivalent organizational documents of
the Company or any Subsidiary, (ii) assuming all consents, approvals,
authorizations and other actions described in Section 4.05(b) have been obtained
or taken, conflict with or violate any United States or non-United States
statute, law, ordinance, regulation, rule, code, executive order, injunction,
judgment, decree or other order ("Law") applicable to the Company or any
Subsidiary or by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) result in any breach of or constitute a default (or
an event which, with notice or lapse of time or both, would become a default)
under, or give to others any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other encumbrance on any
property or asset of the Company or any Subsidiary pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation, except, with respect to clauses (ii) and (iii),
for any such conflicts, violations, breaches, defaults or other occurrences
which would not prevent or materially delay consummation of the Offer or the
Merger or otherwise prevent or materially delay the Company from performing its
obligations under this Agreement and would not have a Material Adverse Effect.
(b) The execution and delivery of this Agreement by the
Company do not, and the performance of this Agreement by the Company will not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any United States federal, state, county or local or United
Kingdom or other non-United States government, governmental, regulatory or
administrative authority, agency, instrumentality or commission or any court,
tribunal, or judicial or arbitral body (a "Governmental Authority"), except (i)
for applicable requirements, if any, of the Exchange Act, state securities or
"blue sky" laws ("Blue Sky Laws") and the pre-merger notification requirements
of the HSR Act, and filing and recordation of appropriate merger documents as
required by Delaware Law and Missouri Law, and (ii) where the failure to obtain
such consents, approvals, authorizations or permits, or to make such filings or
notifications, would not prevent or materially delay consummation of the Offer
or the Merger, or otherwise prevent or materially delay the Company from
performing its obligations under this Agreement, and would not have a Material
Adverse Effect.
SECTION 4.06. Permits; Compliance. Except as set forth in
Section 4.06 of the Disclosure Schedule, each of the Company and the
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Authority necessary for each of the
Company or the
<PAGE> 20
16
Subsidiaries to own, lease and operate its properties or to carry on its
business as it is now being conducted (the "Permits"), except where the failure
to have, or the suspension or cancellation of, any of the Permits would not
prevent or materially delay consummation of the Offer or the Merger or otherwise
prevent or materially delay the Company from performing its obligations under
this Agreement and would not have a Material Adverse Effect. As of the date
hereof, no suspension or cancellation of any of the Permits is pending or, to
the knowledge of the Company, threatened, except where the failure to have, or
the suspension or cancellation of, any of the Permits would not prevent or
materially delay consummation of the Offer or the Merger or otherwise prevent or
materially delay the Company from performing its obligations under this
Agreement and would not have a Material Adverse Effect. Except as set forth in
Section 4.06 of the Disclosure Schedule, neither the Company nor any Subsidiary
is in conflict with, or in default, breach or violation of, (a) any Law
applicable to the Company or any Subsidiary or by which any property or asset of
the Company or any Subsidiary is bound or affected, or (b) any note, bond,
mortgage, indenture, contract, agreement, lease, license, Permit, franchise or
other instrument or obligation to which the Company or any Subsidiary is a party
or by which the Company or any Subsidiary or any property or asset of the
Company or any Subsidiary is bound, except for any such conflicts, defaults,
breaches or violations that would not prevent or materially delay consummation
of the Offer or the Merger or otherwise prevent or materially delay the Company
from performing its obligations under this Agreement and would not have a
Material Adverse Effect.
SECTION 4.07. SEC Filings; Financial Statements. (a) The
Company has filed all forms, reports and documents required to be filed by it
with the SEC since April 30, 1996 and has heretofore delivered to Parent, in the
form filed with the SEC, (i) its Annual Reports on Form 10-KSB for the fiscal
years ended April 30, 1997 and 1998 and on form 10-K for the fiscal year ended
April 30, 1999, respectively, (ii) its Quarterly Reports on Form 10-Q for the
periods ended July 31, 1999 and October 31, 1999, (iii) all proxy statements
relating to the Company's meetings of stockholders (whether annual or special)
held since April 30, 1996 and (iv) all other forms, reports and other
registration statements (other than Quarterly Reports on Form 10-Q not referred
to in clause (ii) above) filed by the Company with the SEC since April 30, 1999
(the forms, reports and other documents referred to in clauses (i), (ii), (iii)
and (iv) above being, collectively, the "SEC Reports"). The SEC Reports (i) were
prepared in accordance with either the requirements of the Securities Act of
1933, as amended (the "Securities Act"), or the Exchange Act, as the case may
be, and the rules and regulations promulgated thereunder, and (ii) did not, at
the time they were filed, or, if amended, as of the date of such amendment,
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 made
therein, in the light of the circumstances under which they were made, not
misleading. No Subsidiary is required to file any form, report or other document
with the SEC.
<PAGE> 21
17
(b) Each of the consolidated financial statements (including,
in each case, any notes thereto) contained in the SEC Reports was prepared in
accordance with United States generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto) and each fairly presents, in all material
respects, the consolidated financial position, results of operations and cash
flows of the Company and its consolidated Subsidiaries as at the respective
dates thereof and for the respective periods indicated therein, except as
otherwise noted therein (subject, in the case of unaudited statements, to normal
and recurring year-end adjustments which would not have had, and would not have,
a Material Adverse Effect).
(c) Except as and to the extent set forth on the consolidated
balance sheet of the Company and the consolidated Subsidiaries as at April 30,
1999, including the notes thereto (the "1999 Balance Sheet"), neither the
Company nor any Subsidiary has any liability or obligation of any nature
(whether accrued, absolute, contingent or otherwise), except for liabilities and
obligations, incurred in the ordinary course of business consistent with past
practice since April 30, 1999, which would not prevent or materially delay
consummation of the Offer or the Merger or otherwise prevent or materially delay
the Company from performing its obligations under this Agreement and would not
have a Material Adverse Effect.
(d) The Company has heretofore furnished to Parent complete
and correct copies of all amendments and modifications that have not been filed
by the Company with the SEC to all agreements, documents and other instruments
that previously had been filed by the Company with the SEC and are currently in
effect.
SECTION 4.08. Absence of Certain Changes or Events. Since
April 30, 1999, except as set forth in Section 4.08 of the Disclosure Schedule,
or as expressly contemplated by this Agreement, (a) the Company and the
Subsidiaries have conducted their businesses only in the ordinary course and in
a manner consistent with past practice, (b) there has not been any Material
Adverse Effect, and (c) none of the Company nor any Subsidiary has taken any
action that, if taken after the date of this Agreement, would constitute a
breach of any of the covenants set forth in Section 6.01.
SECTION 4.09. Absence of Litigation. There is no litigation,
suit, claim, action, proceeding or investigation (an "Action") pending or, to
the knowledge of the Company, threatened against the Company or any Subsidiary,
or any property or asset of the Company or any Subsidiary, before any
Governmental Authority that (a) would have a Material Adverse Effect or (b)
seeks to materially delay or prevent the consummation of any Transaction,.
Neither the Company nor any Subsidiary nor any property or asset of the Company
or any Subsidiary is subject to any continuing order of, consent decree,
settlement agreement or similar written agreement with, or, to the knowledge of
the Company, continuing investigation by, any Governmental Authority, or any
order, writ, judgment, injunction, decree, determination or
<PAGE> 22
18
award of any Governmental Authority that would prevent or materially delay
consummation of the Offer or the Merger or otherwise prevent or materially delay
the Company from performing its obligations under this Agreement or would have a
Material Adverse Effect.
SECTION 4.10. Employee Benefit Plans. (a) Section 4.10(a) of
the Disclosure Schedule lists (i) all employee benefit plans (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) and all bonus, stock option, stock purchase, restricted stock,
incentive, deferred compensation, retiree medical or life insurance,
supplemental retirement, severance or other benefit plans, programs or
arrangements, and all employment, termination, severance or other contracts or
agreements, whether legally enforceable or not, to which the Company or any
Subsidiary is a party, with respect to which the Company or any Subsidiary has
any obligation or which are maintained, contributed to or sponsored by the
Company or any Subsidiary for the benefit of any current or former employee,
officer or director of the Company or any Subsidiary, (ii) each employee benefit
plan for which the Company or any Subsidiary could incur liability under Section
4069 of ERISA in the event such plan has been or were to be terminated, (iii)
any plan in respect of which the Company or any Subsidiary could incur liability
under Section 4212(c) of ERISA, and (iv) any contracts, arrangements or
understandings between the Company or any Subsidiary and any employee of the
Company or any Subsidiary including, without limitation, any contracts,
arrangements or understandings relating in any way to a sale of the Company or
any Subsidiary (collectively, the "Plans"). Each Plan is in writing and the
Company has furnished to Purchaser a true and complete copy of each Plan and has
delivered to Purchaser a true and complete copy of each material document, if
any, prepared in connection with each such Plan, including, without limitation,
(i) a copy of each trust or other funding arrangement, (ii) each summary plan
description and summary of material modifications, (iii) the most recently filed
Internal Revenue Service ("IRS") Form 5500, (iv) the most recently received IRS
determination letter for each such Plan, and (v) the most recently prepared
actuarial report and financial statement in connection with each such Plan.
Neither the Company nor any Subsidiary has any express or implied commitment,
whether legally enforceable or not, (i) to create, incur liability with respect
to or cause to exist any other employee benefit plan, program or arrangement,
(ii) to enter into any contract or agreement to provide compensation or benefits
to any individual, or (iii) to modify, change or terminate any Plan, other than
with respect to a modification, change or termination required by this
Agreement, ERISA or the Internal Revenue Code of 1986, as amended (the "Code").
(b) None of the Plans is a multiemployer plan (within the
meaning of Section 3(37) or 4001(a)(3) of ERISA) (a "Multiemployer Plan") or a
single employer pension plan (within the meaning of Section 4001(a)(15) of
ERISA) for which the Company or any Subsidiary could incur liability under
Section 4063 or 4064 of ERISA (a "Multiple Employer Plan"). Except as set forth
in Section 4.10 of the Disclosure Schedule, none of the Plans (i) provides for
the payment of separation, severance, termination or similar-type benefits to
any person, (ii)
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obligates the Company or any Subsidiary to pay separation, severance,
termination or similar-type benefits solely or partially as a result of any
transaction contemplated by this Agreement, or (iii) obligates the Company or
any Subsidiary to make any payment or provide any benefit as a result of a
"change in control", within the meaning of such term under Section 280G of the
Code. None of the Plans provides for or promises retiree medical, disability or
life insurance benefits to any current or former employee, officer or director
of the Company or any Subsidiary. Each of the Plans other than Non-U.S. Benefit
Plans (defined below) is subject only to the Laws of the United States or a
political subdivision thereof.
(c) Except as set forth in Section 4.10 of the Disclosure
Schedule, each Plan is now and, to the knowledge of the Company, always has been
operated in all material respects in accordance with its terms and the
requirements of all applicable Laws including, without limitation, ERISA and the
Code. Except as set forth in Section 4.10 of the Disclosure Schedule, the
Company and the Subsidiaries have performed all material obligations required to
be performed by them under, are not in any respect in default under or in
violation of, and have no knowledge of any default or violation by any party to,
any Plan. No Action is pending or, to the knowledge of the Company, threatened
with respect to any Plan (other than claims for benefits in the ordinary course)
and no fact or event exists that could give rise to any such Action.
(d) Each Plan that is intended to be qualified under Section
401(a) of the Code or Section 401(k) of the Code has timely received a favorable
determination letter from the IRS covering all of the provisions applicable to
the Plan for which determination letters are currently available that the Plan
is so qualified and each trust established in connection with any Plan which is
intended to be exempt from federal income taxation under Section 501(a) of the
Code has received a determination letter from the IRS that it is so exempt, and
no fact or event has occurred since the date of such determination letter or
letters from the IRS to adversely affect the qualified status of any such Plan
or the exempt status of any such trust.
(e) Except as set forth in Section 4.10 of the Disclosure
Schedule, there has not been any prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) with respect to any Plan.
Neither the Company nor any Subsidiary has incurred any liability under, arising
out of or by operation of Title IV of ERISA (other than liability for premiums
to the Pension Benefit Guaranty Corporation arising in the ordinary course),
including, without limitation, any liability in connection with (i) the
termination or reorganization of any employee benefit plan subject to Title IV
of ERISA, or (ii) the withdrawal from any Multiemployer Plan or Multiple
Employer Plan, and no fact or event exists which could give rise to any such
liability.
(f) Except as set forth in Section 4.10 of the Disclosure
Schedule, all contributions, premiums or payments required to be made with
respect to any Plan have been made on or before their due dates. All such
contributions have been fully deducted for income
<PAGE> 24
20
tax purposes and no such deduction has been challenged or disallowed by any
Governmental Authority and no fact or event exists which could give rise to any
such challenge or disallowance.
(g) In addition to the foregoing, with respect to each Plan
that is not subject to United States law (a "Non-U.S. Benefit Plan"):
(i) all employer and employee contributions to each Non-U.S.
Benefit Plan required by law or by the terms of such Non-U.S. Benefit
Plan have been made, or, if applicable, accrued in accordance with
normal accounting practices, and a pro rata contribution for the period
prior to and including the date of this Agreement has been made or
accrued;
(ii) the fair market value of the assets of each funded
Non-U.S. Benefit Plan, the liability of each insurer for any Non-U.S.
Benefit Plan funded through insurance or the book reserve established
for any Non-U.S. Benefit Plan, together with any accrued contributions,
is sufficient to procure or provide for the benefits determined on any
ongoing basis (actual or contingent) accrued to the date of this
Agreement with respect to all current and former participants under
such Non-U.S. Benefit Plan according to the actuarial assumptions and
valuations most recently used to determine employer contributions to
such Non-U.S. Benefit Plan, and no Transaction shall cause such assets
or insurance obligations to be less than such benefit obligations; and
(iii) each Non-U.S. Benefit Plan required to be registered has
been registered and has been maintained in good standing with
applicable regulatory authorities. Each Non-U.S. Benefit Plan is now
and always has been operated in full compliance with all applicable
non-United States laws.
SECTION 4.11. Labor and Employment Matters. (a) Except as set
forth in Section 4.11 of the Disclosure Schedule, (i) there are no controversies
pending or, to the knowledge of the Company, threatened between the Company or
any Subsidiary and any of their respective employees, which controversies would
prevent or materially delay consummation of the Offer or the Merger or otherwise
prevent or materially delay the Company from performing its obligations under
this Agreement or would have a Material Adverse Effect; (ii) neither the Company
nor any Subsidiary is a party to any collective bargaining agreement or other
labor union contract applicable to persons employed by the Company or any
Subsidiary, nor, to the knowledge of the Company, are there any activities or
proceedings of any labor union to organize any such employees; (iii) neither the
Company nor any Subsidiary has breached or otherwise failed to comply with any
provision of any such agreement or contract, and there are no grievances
outstanding against the Company or any Subsidiary under any such agreement or
contract; (iv) there are no unfair labor practice complaints pending against the
Company or any
<PAGE> 25
21
Subsidiary before the National Labor Relations Board or any current union
representation questions involving employees of the Company or any Subsidiary;
and (v) there is no strike, slowdown, work stoppage or lockout, or, to the
knowledge of the Company, threat thereof, by or with respect to any employees of
the Company or any Subsidiary.
(b) The Company and the Subsidiaries are in compliance with
all applicable laws relating to the employment of labor, including those related
to wages, hours, collective bargaining and the payment and withholding of taxes
and other sums as required by the appropriate Governmental Authority and has
withheld and paid to the appropriate Governmental Authority or are holding for
payment not yet due to such Governmental Authority all amounts required to be
withheld from employees of the Company or any Subsidiary and are not liable for
any arrears of wages, taxes, penalties or other sums for failure to comply with
any of the foregoing. The Company and the Subsidiaries have paid in full to all
employees or adequately accrued for in accordance with GAAP consistently applied
all wages, salaries, commissions, bonuses, benefits and other compensation due
to or on behalf of such employees and there is no claim with respect to payment
of wages, salary or overtime pay that has been asserted or is now pending or
threatened before any Governmental Authority with respect to any persons
currently or formerly employed by the Company or any Subsidiary. Neither the
Company nor any Subsidiary is a party to, or otherwise bound by, any consent
decree with, or citation by, any Governmental Authority relating to employees or
employment practices. There is no charge or proceeding with respect to a
violation of any occupational safety or health standards that has been asserted
or is now pending or threatened with respect to the Company. There is no charge
of discrimination in employment or employment practices, for any reason,
including, without limitation, age, gender, race, religion or other legally
protected category, which has been asserted or is now pending or threatened
before the United States Equal Employment Opportunity Commission, or any other
Governmental Authority in any jurisdiction in which the Company or any
Subsidiary have employed or employ any person.
SECTION 4.12. Offer Documents; Schedule 14D-9; Proxy
Statement. Neither the Schedule 14D-9 nor any information supplied by the
Company for inclusion in the Offer Documents shall, at the times the Schedule
14D-9, the Offer Documents or any amendments or supplements thereto are filed
with the SEC or are first published, sent or given to stockholders of the
Company, as the case may be, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. Neither the proxy statement to be sent to the
stockholders of the Company in connection with the Stockholders' Meeting (as
hereinafter defined) or the information statement to be sent to such
stockholders, as appropriate (such proxy statement or information statement, as
amended or supplemented, being referred to herein as the "Proxy Statement"),
shall, at the date the Proxy Statement (or any amendment or supplement thereto)
is first mailed to stockholders of the Company, at the time of the Stockholders'
Meeting and at the Effective Time, contain any statement which, at the time
<PAGE> 26
22
and in light of the circumstances under which it was made, is false or
misleading with respect to any material fact, or which omits to state any
material fact necessary in order to make the statements therein not false or
misleading or necessary to correct any statement in any earlier communication
with respect to the solicitation of proxies for the Stockholders' Meeting which
shall have become false or misleading. The Schedule 14D-9 and the Proxy
Statement shall comply in all material respects as to form with the requirements
of the Exchange Act and the rules and regulations thereunder.
SECTION 4.13. Property and Leases. (a) The Company and the
Subsidiaries have sufficient title to all their properties and assets to conduct
their respective businesses as currently conducted or as contemplated to be
conducted, with only such exceptions as would not have a Material Adverse
Effect.
(b) Except as set forth in Section 4.13 of the Disclosure
Schedule, each parcel of real property owned or leased by the Company or any
Subsidiary (i) is owned or leased free and clear of all mortgages, pledges,
liens, security interests, conditional and installment sale agreements,
encumbrances, charges or, to the knowledge of the Company, other claims of third
parties of any kind, including, without limitation, any easement, right of way
or other encumbrance to title, or any option, right of first refusal, or right
of first offer (collectively, "Liens"), other than (A) Liens for current taxes
and assessments not yet past due, (B) inchoate mechanics' and materialmen's
Liens for construction in progress, (C) workmen's, repairmen's, warehousemen's
and carriers' Liens arising in the ordinary course of business of the Company or
such Subsidiary consistent with past practice, and (D) all matters of record,
Liens and other imperfections of title and encumbrances that, individually or in
the aggregate, would not have a Material Adverse Effect (collectively,
"Permitted Liens"), and (ii) is neither subject to any governmental decree or
order to be sold nor is being condemned, expropriated or otherwise taken by any
public authority with or without payment of compensation therefor, nor, to the
knowledge of the Company, has any such condemnation, expropriation or taking
been proposed.
(c) All leases of real property leased for the use or benefit
of the Company or any Subsidiary to which the Company or any Subsidiary is a
party, and all amendments and modifications thereto, are in full force and
effect and have not been modified or amended, and there exists no default under
any such lease by the Company or any Subsidiary, nor any event which, with
notice or lapse of time or both, would constitute a default thereunder by the
Company or any Subsidiary, except as would not prevent or materially delay
consummation of the Offer or the Merger or otherwise prevent or materially delay
the Company from performing its obligations under this Agreement and would not
have a Material Adverse Effect.
(d) To the knowledge of the Company, there are no contractual
or legal restrictions that preclude or restrict the ability to use any real
property owned or leased by the Company or any Subsidiary for the purposes for
which it is currently being used. To the
<PAGE> 27
23
knowledge of the Company, there are no material latent defects or material
adverse physical conditions affecting the real property, and improvements
thereon, owned or leased by the Company or any Subsidiary other than those that
would not prevent or materially delay consummation of the Offer or the Merger or
otherwise prevent or materially delay the Company from performing its
obligations under this Agreement and would not have a Material Adverse Effect.
SECTION 4.14. Intellectual Property. Except as would not have
a Material Adverse Effect, (a) the conduct of the business of the Company and
the Subsidiaries as currently conducted does not infringe upon or misappropriate
the Intellectual Property rights of any third party, and no claim has been
asserted to the Company that the conduct of the business of the Company and the
Subsidiaries as currently conducted infringes upon or may infringe upon or
misappropriates the Intellectual Property Rights of any third party; (b) with
respect to each item of Intellectual Property owned by the Company or a
Subsidiary and material to the business, financial condition or results of
operations of the Company and the Subsidiaries taken as a whole ("Company Owned
Intellectual Property"), the Company or a Subsidiary is the owner of the entire
right, title and interest in and to such Company Owned Intellectual Property and
is entitled to use such Company Owned Intellectual Property in the continued
operation of its respective business; (c) with respect to each item of
Intellectual Property licensed to the Company or a Subsidiary that is material
to the business of the Company and the Subsidiaries as currently conducted
("Company Licensed Intellectual Property"), the Company or a Subsidiary has the
right to use such Company Licensed Intellectual Property in the continued
operation of its respective business in accordance with the terms of the license
agreement governing such Company Licensed Intellectual Property; (d) the Company
Owned Intellectual Property is valid and enforceable, and has not been adjudged
invalid or unenforceable in whole or in part; (e) to the knowledge of the
Company, no person is engaging in any activity that infringes upon the Company
Owned Intellectual Property; (f) each license of the Company Licensed
Intellectual Property is valid and enforceable, is binding on all parties to
such license, and is in full force and effect; (g) to the knowledge of the
Company, no party to any license of the Company Licensed Intellectual Property
is in breach thereof or default thereunder; and (h) neither the execution of
this Agreement nor the consummation of any Transaction shall adversely affect
any of the Company's rights with respect to the Company Owned Intellectual
Property or the Company Licensed Intellectual Property.
SECTION 4.15. Year 2000 Compliance. All Company Systems are
Year 2000 Compliant except for systems that are not material to the Company.
SECTION 4.16. Taxes. The Company and the Subsidiaries have
filed all United States federal, state, local and United Kingdom and other
non-United States Tax returns and reports required to be filed by them and have
paid and discharged all Taxes required to be paid or discharged, other than (a)
such payments as are being contested in good faith by appropriate
<PAGE> 28
24
proceedings and (b) such filings, payments or other occurrences that would not
have a Material Adverse Effect. Neither the IRS nor any other United States or
non-United States taxing authority or agency is now asserting or, to the
knowledge of the Company, threatening to assert against the Company or any
Subsidiary any deficiency or claim for any Taxes or interest thereon or
penalties in connection therewith. Neither the Company nor any Subsidiary has
granted any waiver of any statute of limitations with respect to, or any
extension of a period for the assessment of any Tax. The accruals and reserves
for Taxes reflected in the 1999 Balance Sheet are adequate to cover all Taxes
accruable through such date (including interest and penalties, if any, thereon)
in accordance with GAAP. Neither the Company nor any Subsidiary has made an
election under Section 341(f) of the Code. There are no Tax liens upon any
property or assets of the Company or any of the Subsidiaries except liens for
current Taxes not yet due. Neither the Company nor any of the Subsidiaries has
been required to include in income any adjustment pursuant to Section 481 of the
Code by reason of a voluntary change in accounting method initiated by the
Company or any of the Subsidiaries, and the IRS has not initiated or proposed
any such adjustment or change in accounting method, in either case which
adjustment or change would have a Material Adverse Effect. Except as set forth
in the financial statements described in Section 4.07, neither the Company nor
any of the Subsidiaries has entered into a transaction which is being accounted
for under the installment method of Section 453 of the Code, which would prevent
or materially delay consummation of the Offer or the Merger or otherwise prevent
or materially delay the Company from performing its obligations under this
Agreement or would have a Material Adverse Effect.
SECTION 4.17. Environmental Matters. Except as described in
Section 4.17 of the Disclosure Schedule and would not have a Material Adverse
Effect, (a) the Company has not violated and is not in violation of any
Environmental Law; (b) to the knowledge of the Company, none of the properties
currently or formerly owned, leased or operated by the Company (including,
without limitation, soils and surface and ground waters) are contaminated with
any Hazardous Substance; (c) the Company is not actually, or, to the knowledge
of the Company, potentially or allegedly liable for any off-site contamination
by Hazardous Substances; (d) the Company is not actually, potentially or
allegedly liable under any Environmental Law (including, without limitation,
pending or threatened liens); (e) the Company has all permits, licenses and
other authorizations required under any Environmental Law ("Environmental
Permits"); (f) the Company has always been and is in compliance with its
Environmental Permits; and (g) neither the execution of this Agreement nor the
consummation of the Transactions will require any investigation, remediation or
other action with respect to Hazardous Substances, or any notice to or consent
of Governmental Authorities or third parties, pursuant to any applicable
Environmental Law or Environmental Permit.
SECTION 4.18. Amendment to Rights Agreement. The Company has
irrevocably amended, and the Board has taken all necessary action to irrevocably
amend, the Rights Agreement so that (a) none of the execution or delivery of
this Agreement or the
<PAGE> 29
25
Stockholder Agreements, the making of the Offer, the acceptance for payment of
Shares by Purchaser pursuant to the Offer, the consummation of the Merger, the
purchase of Shares or the consummation of any other Transaction will result in
(i) the occurrence of the "flip-in event" described under Section 11 of the
Rights Agreement, (ii) the occurrence of the "flip-over event" described in
Section 13(a) of the Rights Agreement, or (iii) the Rights becoming evidenced
by, and transferable pursuant to, certificates separate from the certificates
representing Shares, and (b) the Rights will expire pursuant to the terms of the
Rights Agreement at the Effective Time.
SECTION 4.19. Material Contracts. (a) Subsections (i) through
(xi) of Section 4.19 of the Disclosure Schedule contain a list of the following
types of contracts and agreements to which the Company or any Subsidiary is a
party (such contracts, agreements and arrangements as are required to be set
forth in Section 4.19(a) of the Disclosure Schedule being the "Material
Contracts"):
(i) each contract and agreement which (A) is likely to
involve consideration of more than $100,000, in the
aggregate, during the calendar year ending December
31, 2000, (B) is likely to involve consideration of
more than $100,000, in the aggregate, over the
remaining term of such contract, and which, in either
case, cannot be canceled by the Company or any
Subsidiary without penalty or further payment and
without more than 90 days' notice;
(ii) all broker, distributor, reseller, dealer,
manufacturer's representative, franchise, agency,
sales promotion, market research, marketing
consulting and advertising contracts and agreements
to which the Company or any Subsidiary is a party and
which (A) is likely to involve consideration of more
than $100,000, in the aggregate, during the calendar
year ending December 31, 2000, (B) is likely to
involve consideration of more than $100,000, in the
aggregate, over the remaining term of such contract,
and which, in either case, cannot be canceled by the
Company or any Subsidiary without penalty or further
payment and without more than 90 days' notice;
(iii) all management contracts (excluding contracts for
employment) and contracts with other consultants,
including any contracts involving the payment of
royalties or other amounts calculated based upon the
revenues or income of the Company or any Subsidiary
or income or revenues related to any product of the
Company or any Subsidiary to which the Company or any
Subsidiary is a party and which (A) is likely to
involve consideration of more than $100,000, in the
aggregate, during the calendar year ending December
31, 2000, (B) is likely to involve consideration of
more than $100,000, in the aggregate, over the
remaining term of such contract, and which, in either
case, cannot be canceled by the Company or any
Subsidiary without penalty or further payment and
without more than 90 days' notice;
<PAGE> 30
26
(iv) all contracts and agreements evidencing indebtedness
for borrowed money which individually are in excess
of $25,000;
(v) all contracts and agreements with any Governmental
Authority to which the Company or any Subsidiary is a
party;
(vi) all contracts and agreements that limit, or purport
to limit, the ability of the Company or any
Subsidiary to compete in any line of business or with
any person or entity or in any geographic area or
during any period of time;
(vii) all material contracts or arrangements that result in
any person or entity holding a power of attorney from
the Company or any Subsidiary that relates to the
Company, any Subsidiary or their respective
businesses;
(viii) all contracts relating in whole or in part to
Intellectual Property pursuant to which the Company
or any Subsidiary obtains from a third party the
right to sell, distribute or otherwise display data
or works owned or controlled by such third party and
that is (I) likely to involve consideration of more
than $100,000 in the aggregate during the calendar
year ending December 31, 2000 or (II) that does not
involve any cash consideration but is otherwise
material to the Company or any Subsidiary;
(ix) all contracts relating in whole or in part to
Intellectual Property pursuant to which the Company
or any Subsidiary grants to a third party the right
to sell, distribute or otherwise display data or
works owned or controlled by the Company or any
Subsidiary and that is (I) likely to involve
consideration of more than $100,000 in the aggregate
during the calendar year ending December 31, 2000 or
(II) that does not involve any cash consideration but
is otherwise material to the Company or any
Subsidiary; and
(x) all contracts for employment required to be listed in
Section 4.10 of the Disclosure Schedule; and
(xi) all other contracts and agreements, whether or not
made in the ordinary course of business, which are
material to the Company , any Subsidiary or the
conduct of their respective businesses, or the
absence of which would prevent or materially delay
consummation of the Offer or the Merger or otherwise
prevent or materially delay the Company from
performing its obligations under this Agreement or
would have a Material Adverse Effect.
(b) Except as would not prevent or materially delay
consummation of the Offer or the Merger or otherwise prevent or materially delay
the Company from performing its obligations under this Agreement and would not
have a Material Adverse Effect and except as
<PAGE> 31
27
set forth in Section 4.19(b) of the Disclosure Schedule, (i) each Material
Contract is a legal, valid and binding agreement, and none of the Material
Contracts is in default by its terms or has been canceled by the other party;
(ii) to the Company's knowledge, no other party is in breach or violation of, or
default under, any Material Contract; (iii) the Company and the Subsidiaries are
not in receipt of any claim of default under any such agreement; and (iv)
neither the execution of this Agreement nor the consummation of any Transaction
shall constitute default, give rise to cancellation rights, or otherwise
adversely affect any of the Company's rights under any Material Contract. The
Company has furnished or made available to Parent true and complete copies of
all Material Contracts, including any amendments thereto.
SECTION 4.20. Insurance. (a) Section 4.20(a) of the Disclosure
Schedule sets forth, with respect to each insurance policy under which the
Company or any Subsidiary is insured, a named insured or otherwise the principal
beneficiary of coverage which is currently in effect, (i) the names of the
insurer, the principal insured and each named insured, (ii) the policy number,
(iii) the period, scope and amount of coverage and (iv) the premium charged.
(b) With respect to each such insurance policy: (i) the policy
is legal, valid, binding and enforceable in accordance with its terms and is in
full force and effect; (ii) neither the Company nor any Subsidiary is in
material breach or default (including any such breach or default with respect to
the payment of premiums or the giving of notice), and, to the knowledge of the
Company, no event has occurred which, with notice or the lapse of time, would
constitute such a breach or default, or permit termination or modification,
under the policy; and (iii) to the knowledge of the Company, no insurer on the
policy has been declared insolvent or placed in receivership, conservatorship or
liquidation.
(c) At no time subsequent to January 1, 1997 has the Company
or any Subsidiary (i) been denied any insurance or indemnity bond coverage which
it has requested, (ii) made any material reduction in the scope or amount of its
insurance coverage, or (iii) received notice from any of its insurance carriers
that any insurance premiums will be subject to increase in an amount materially
disproportionate to the amount of the increases with respect thereto (or with
respect to similar insurance) in prior years or that any insurance coverage
listed in Section 4.20(a) of the Disclosure Schedule will not be available in
the future substantially on the same terms as are now in effect.
SECTION 4.21. Brokers. No broker, finder or investment banker
(other than Piper Jaffray) is entitled to any brokerage, finder's or other fee
or commission in connection with the Transactions based upon arrangements made
by or on behalf of the Company. The Company has heretofore furnished to Parent a
complete and correct copy of all agreements between the Company and Piper
Jaffray pursuant to which such firm would be entitled to any payment relating to
the Transactions.
<PAGE> 32
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
As an inducement to the Company to enter into this Agreement,
Parent and Purchaser hereby, jointly and severally, represent and warrant to the
Company that:
SECTION 5.01. Corporate Organization. Each of Parent and
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has the requisite corporate power
and authority and all necessary governmental approvals to own, lease and operate
its properties and to carry on its business as it is now being conducted.
SECTION 5.02. Authority Relative to This Agreement. Each of
Parent and Purchaser has all necessary corporate power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to
consummate the Transactions. The execution and delivery of this Agreement by
Parent and Purchaser and the consummation by Parent and Purchaser of the
Transactions have been duly and validly authorized by all necessary corporate
action, and no other corporate proceedings on the part of Parent or Purchaser
are necessary to authorize this Agreement or to consummate the Transactions
(other than, with respect to the Merger, the filing and recordation of
appropriate merger documents as required by Delaware Law and Missouri Law). This
Agreement has been duly and validly executed and delivered by Parent and
Purchaser and, assuming due authorization, execution and delivery by the
Company, constitutes a legal, valid and binding obligation of each of Parent and
Purchaser enforceable against each of Parent and Purchaser in accordance with
its terms.
SECTION 5.03. No Conflict; Required Filings and Consents. (a)
The execution and delivery of this Agreement by Parent and Purchaser do not, and
the performance of this Agreement by Parent and Purchaser will not, (i) conflict
with or violate the Certificate of Incorporation or By-laws of either Parent or
Purchaser, (ii) assuming that all consents, approvals, authorizations and other
actions described in Section 5.03(b) have been obtained and all filings and
obligations described in Section 5.03(b) have been made, conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to
Parent or Purchaser or by which any property or asset of either of them is bound
or affected, or (iii) result in any breach of, or constitute a default (or an
event which, with notice or lapse of time or both, would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other encumbrance on any
property or asset of Parent or Purchaser pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Parent or Purchaser is a party or by which
Parent or Purchaser or any property or asset of either of them is bound or
<PAGE> 33
29
affected, except, with respect to clauses (ii) and (iii), for any such
conflicts, violations, breaches, defaults or other occurrences which would not
prevent or materially delay consummation of the Transactions or otherwise
prevent Parent and Purchaser from performing their material obligations under
this Agreement.
(b) The execution and delivery of this Agreement by Parent and
Purchaser do not, and the performance of this Agreement by Parent and Purchaser
will not, require any consent, approval, authorization or permit of, or filing
with, or notification to, any Governmental Authority, except (i) for applicable
requirements, if any, of the Exchange Act, Blue Sky Laws and state takeover
laws, the HSR Act and filing and recordation of appropriate merger documents as
required by Delaware Law and Missouri Law, and (ii) where the failure to obtain
such consents, approvals, authorizations or permits, or to make such filings or
notifications, would not prevent or materially delay consummation of the
Transactions, or otherwise prevent Parent or Purchaser from performing their
material obligations under this Agreement.
SECTION 5.04. Financing. Parent has and will have through the
Effective Time sufficient funds to permit Purchaser to consummate all the
Transactions, including, without limitation, acquiring all the outstanding
Shares in the Offer and the Merger.
SECTION 5.05. Offer Documents; Proxy Statement. The Offer
Documents shall not, at the time the Offer Documents are filed with the SEC or
are first published, sent or given to stockholders of the Company, as the case
may be, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. The information supplied by Parent for inclusion in the
Proxy Statement shall not, at the date the Proxy Statement (or any amendment or
supplement thereto) is first mailed to stockholders of the Company, at the time
of the Stockholders' Meeting or at the Effective Time, contain any untrue
statement of a material fact, or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not false or misleading, or
necessary to correct any statement in any earlier communication with respect to
the solicitation of proxies for the Stockholders' Meeting which shall have
become false or misleading. Notwithstanding the foregoing, Parent and Purchaser
make no representation or warranty with respect to any information supplied by
the Company or any of its representatives for inclusion in any of the foregoing
documents or the Offer Documents. The Offer Documents shall comply in all
material respects as to form with the requirements of the Exchange Act and the
rules and regulations thereunder.
SECTION 5.06. Brokers. No broker, finder or investment banker
(other than Scott-Macon Ltd., whose fees shall be paid by Parent) is entitled to
any brokerage, finder's or other fee or commission in connection with the
Transactions based upon arrangements made by or on behalf of Parent or
Purchaser.
<PAGE> 34
30
SECTION 5.07. Absence of Litigation. There is no Action
pending or, to the knowledge of Parent and the Purchaser, threatened against
Parent or the Purchaser, or any property or asset of Parent or the Purchaser,
before any Governmental Authority that seeks to materially delay or prevent the
consummation of any Transaction. Neither Parent nor the Purchaser nor any
property or asset of Parent or the Purchaser is subject to any continuing order
of, consent decree, settlement agreement or similar written agreement with, or,
to the knowledge of Parent or the Purchaser, continuing investigation by, any
Governmental Authority, or any order, writ, judgment, injunction, decree,
determination or award of any Governmental Authority that would prevent or
materially delay consummation of the Offer or the Merger or otherwise prevent or
materially delay Parent or the Purchaser from performing its obligations under
this Agreement.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 6.01. Conduct of Business by the Company Pending the
Merger. The Company agrees that, between the date of this Agreement and the
Effective Time, unless Parent shall otherwise agree in writing, which consent
will not be unreasonably withheld, the businesses of the Company and the
Subsidiary shall be conducted only in, and the Company and the Subsidiaries
shall not take any action except in, the ordinary course of business and in a
manner consistent with past practice; and the Company shall use its reasonable
best efforts to preserve substantially intact the business organization of the
Company and the Subsidiaries, to keep available the services of the current
officers, employees and consultants of the Company and the Subsidiaries and to
preserve the current relationships of the Company and the Subsidiaries with
customers, suppliers and other persons with which the Company or any Subsidiary
has significant business relations. By way of amplification and not limitation,
except as expressly contemplated by this Agreement and Section 6.01 of the
Disclosure Schedule, neither the Company nor any Subsidiary shall, between the
date of this Agreement and the Effective Time, directly or indirectly, do, or
propose to do, any of the following without the prior written consent of Parent,
which consent will not be unreasonably withheld:
(a) amend or otherwise change its Articles of Incorporation or
By-laws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, encumber, or
authorize the issuance, sale, pledge, disposition, grant or encumbrance
of, (i) any shares of any class of capital stock of the Company or any
Subsidiary, or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of such capital stock, or any
other
<PAGE> 35
31
ownership interest (including, without limitation, any phantom
interest), of the Company or any Subsidiary (except for the issuance of
a maximum of 631,660 Shares issuable pursuant to (A) options
outstanding on the date hereof under the Company Stock Option Plans and
other agreements, (B) the Wave Technologies, Inc, Employee Stock
Purchase Plan and (C) the Wave Technologies, Inc. Profit Sharing and
401(k) Plan) or (ii) any assets of the Company or any Subsidiary,
except in the ordinary course of business and in a manner consistent
with past practice;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, or
purchase or otherwise acquire, directly or indirectly, any of its
capital stock;
(e) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets or any other business
combination) any corporation, partnership, other business organization
or any division thereof or any material amount of assets; (ii) incur
any indebtedness for borrowed money or issue any debt securities or
assume, guarantee or endorse, or otherwise become responsible for, the
obligations of any person, or make any loans or advances, except in the
ordinary course of business and consistent with past practice; (iii)
enter into any contract or agreement other than in the ordinary course
of business and consistent with past practice; (iv) authorize, or make
any commitment with respect to, any single capital expenditure which is
in excess of $50,000 or capital expenditures which are, in the
aggregate, in excess of $100,000 for the Company and the Subsidiaries
taken as a whole; or (v) enter into or amend any contract, agreement,
commitment or arrangement with respect to any matter set forth in this
Section 6.01(e), except in the ordinary course of business and
consistent with past practice;
(f) increase the compensation payable or to become payable or
the benefits provided to its directors, officers or employees, except
for increases in the ordinary course of business and consistent with
past practice in salaries or wages of employees of the Company or any
Subsidiary who are not directors or officers of the Company, or grant
any severance or termination pay to, or enter into any employment or
severance agreement with, any director, officer or other employee of
the Company or of any Subsidiary, or establish, adopt, enter into or
amend any collective bargaining, bonus, profit-sharing, thrift,
compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment, termination, severance or other
plan, agreement, trust, fund, policy or arrangement for the benefit of
any director, officer or employee;
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32
(g) take any action, other than reasonable and usual actions
in the ordinary course of business and consistent with past practice,
with respect to accounting policies or procedures;
(h) make any tax election or settle or compromise any material
United States federal, state, local or United Kingdom or other
non-United States income tax liability;
(i) pay, discharge or satisfy any claim, liability or
obligation (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the
ordinary course of business and consistent with past practice, of
liabilities reflected or reserved against in the 1999 Balance Sheet or
subsequently incurred in the ordinary course of business and consistent
with past practice;
(j) amend, modify or consent to the termination of any
Material Contract, or amend, waive, modify or consent to the
termination of the Company's or any Subsidiary's rights thereunder,
other than in the ordinary course of business and consistent with past
practice;
(k) commence or settle any Action; or
(l) announce an intention, enter into any formal or informal
agreement or otherwise make a commitment, to do any of the foregoing.
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01. Stockholders' Meeting. (a) If required by
applicable law in order to consummate the Merger, the Company, acting through
the Board, shall, in accordance with applicable law and the Company's Articles
of Incorporation and By-laws, (i) duly call, give notice of, convene and hold an
annual or special meeting of its stockholders as promptly as practicable
following consummation of the Offer for the purpose of considering and taking
action on this Agreement and the Transactions (the "Stockholders' Meeting") and
(ii) (A) except as provided in Section 7.05(b), include in the Proxy Statement,
and not subsequently withdraw or modify in any manner adverse to Purchaser or
Parent, the unanimous recommendation of the Board that the stockholders of the
Company approve and adopt this Agreement and the Transactions and (B) use its
best efforts to obtain such approval and adoption. At the Stockholders' Meeting,
Parent and Purchaser shall cause all Shares then owned by them and their
<PAGE> 37
33
subsidiaries to be voted in favor of the approval and adoption of this Agreement
and the Transactions.
(b) Notwithstanding the foregoing, in the event that Purchaser
shall acquire at least 90% of the then outstanding Shares, the parties shall
take all necessary and appropriate action to cause the Merger to become
effective, in accordance with Section 351.447 of Missouri Law, as promptly as
reasonably practicable after such acquisition, without a meeting of the
stockholders of the Company.
SECTION 7.02. Proxy Statement. If approval of the Company's
shareholders is required by applicable law to consummate the Merger, promptly
following consummation of the Offer, the Company shall file the Proxy Statement
with the SEC under the Exchange Act, and shall use its best efforts to have the
Proxy Statement cleared by the SEC. Parent, Purchaser 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. The Company shall give Parent and its counsel the
opportunity to review the Proxy Statement, including all amendments and
supplements thereto, prior to its being filed with the SEC and shall give Parent
and its counsel the opportunity to review all responses to requests for
additional information and replies to comments prior to their being filed with,
or sent to, the SEC. Each of the Company, Parent and Purchaser agrees to use its
reasonable 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 and all required amendments and supplements thereto to be
mailed to the holders of Shares entitled to vote at the Stockholders' Meeting at
the earliest practicable time.
SECTION 7.03. Company Board Representation; Section 14(f). (a)
Promptly upon the purchase by Purchaser of Shares pursuant to the Offer and from
time to time thereafter, Purchaser shall be entitled to designate up to such
number of directors, rounded up to the next whole number, on the Board as shall
give Purchaser representation on the Board equal to the product of the total
number of directors on the Board (giving effect to the directors elected
pursuant to this sentence) multiplied by the percentage that the aggregate
number of Shares beneficially owned by Purchaser or any affiliate of Purchaser
following such purchase bears to the total number of Shares then outstanding,
and the Company shall, at such time, promptly take all actions necessary to
cause Purchaser's designees to be elected as directors of the Company, including
increasing the size of the Board or securing the resignations of incumbent
directors, or both. At such times, the Company shall use its reasonable best
efforts to cause persons designated by Purchaser to constitute the same
percentage as persons designated by Purchaser shall constitute of the Board of
(i) each committee of the Board, (ii) each board of directors of each
Subsidiary, and (iii) each committee of each such board, in each case only to
the extent
<PAGE> 38
34
permitted by applicable law. Notwithstanding the foregoing, until the Effective
Time, the Company shall use its reasonable best efforts to ensure that at least
two members of the Board and each committee of the Board and such boards and
committees of the Subsidiaries, as of the date hereof, who are not employees of
the Company shall remain members of the Board and of such boards and committees.
(b) The Company shall promptly take all actions required
pursuant to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder to fulfill its obligations under this Section 7.03, 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. Parent or Purchaser shall supply to the Company, 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) Following the election of designees of Purchaser pursuant
to this Section 7.03, prior to the Effective Time, any amendment of this
Agreement or the Certificate of Incorporation or By-laws of the Company, any
termination of this Agreement by the Company, any extension by the Company of
the time for the performance of any of the obligations or other acts of Parent
or Purchaser, or waiver of any of the Company's rights hereunder, shall require
the concurrence of a majority of the directors of the Company then in office who
neither were designated by Purchaser nor are employees of the Company or any
Subsidiary.
SECTION 7.04. Access to Information; Confidentiality. (a) From
the date hereof until the Effective Time, the Company shall, and shall cause the
Subsidiaries and the officers, directors, employees, auditors and agents of the
Company and the Subsidiaries to, afford the officers, employees and agents of
Parent and Purchaser complete access at all reasonable times to the officers,
employees, agents, properties, offices, plants and other facilities, books and
records of the Company and each Subsidiary, and shall furnish Parent and
Purchaser with such financial, operating and other data and information as
Parent or Purchaser, through its officers, employees or agents, may reasonably
request.
(b) All information obtained by Parent or Purchaser pursuant
to this Section 7.04 shall be kept confidential in accordance with the
confidentiality agreement, dated January 13, 2000, as subsequently amended (the
"Confidentiality Agreement"), between Parent and the Company.
(c) No investigation pursuant to this Section 7.04 shall
affect any representation or warranty in this Agreement of any party hereto or
any condition to the obligations of the parties hereto or any condition to the
Offer.
SECTION 7.05. No Solicitation of Transactions. (a) Neither the
Company nor any Subsidiary shall, directly or indirectly, through any officer,
director, agent or otherwise,
<PAGE> 39
35
(i) solicit, initiate or encourage the submission of, any Acquisition Proposal
(as defined below) or (ii) except as required by the fiduciary duties of the
Board under applicable law after having received advice from outside legal
counsel (x) participate in any discussions or negotiations regarding or (y)
after also entering into a customary confidentiality agreement on terms no less
favorable to the Company than those contained in the Confidentiality Agreement,
furnish to any person, any information with respect to, or otherwise cooperate
in any way with respect to, or assist or participate in, facilitate or
encourage, any unsolicited proposal that constitutes, or may reasonably be
expected to lead to, a Superior Proposal.
(b) Except as set forth in this Section 7.05(b), neither the
Board nor any committee thereof shall (i) withdraw or modify, or propose to
withdraw or modify, in a manner adverse to Parent or Purchaser, the approval or
recommendation by the Board or any such committee of this Agreement, the Offer,
the Merger or any other Transaction, (ii) approve or recommend, or propose to
approve or recommend, any Acquisition Proposal or (iii) enter into any agreement
with respect to any Acquisition Proposal. Notwithstanding the foregoing, in the
event that, prior to the time of acceptance for payment of Shares pursuant to
the Offer, the Board determines in good faith that it is required to do so by
its fiduciary duties under applicable law after having received advice from
outside legal counsel, the Board may withdraw or modify its approval or
recommendation of the Offer and the Merger, but only to terminate this Agreement
in accordance with Section 9.01(d)(ii) (and, concurrently with such termination,
cause the Company to enter into an agreement with respect to a Superior
Proposal).
(c) The Company shall, and shall direct or cause its
directors, officers, employees, representatives and agents to, immediately cease
and cause to be terminated any discussions or negotiations with any parties that
may be ongoing with respect to any Acquisition Proposal.
(d) The Company shall promptly advise Parent orally (to be
confirmed as soon as reasonably practicable in writing) of (i) any Acquisition
Proposal or any request for information with respect to any Acquisition
Proposal, the material terms and conditions of such Acquisition Proposal or
request and the identity of the person making such Acquisition Proposal or
request and (ii) any changes in any such Acquisition Proposal or request.
(e) Nothing contained in this Section 7.05 shall prohibit the
Company from taking and disclosing to its stockholders a position contemplated
by Rule 14e-2(a) promulgated under the Exchange Act or from making any
disclosure to the Company's stockholders, if the Board determines in good faith
that it is required to do so by its fiduciary duties under applicable law after
having received advice from outside legal counsel; provided, however, that
neither the Company nor the Board nor any committee thereof shall, except as
permitted by Section 7.05(b), withdraw or modify, or propose publicly to
withdraw or modify, its position with respect to this
<PAGE> 40
36
Agreement, the Offer, the Merger or any other Transaction or to approve or
recommend, or propose publicly to approve or recommend, an Acquisition Proposal.
(f) The Company agrees, except as required by the Board's
fiduciary duties under applicable law after having received advice from outside
legal counsel, not to release any third party from, or waive any provision of,
any confidentiality or standstill agreement to which the Company is a party.
SECTION 7.06. Employee Benefits Matters. From and after the
Effective Time, Parent shall cause the Surviving Corporation and its
subsidiaries to honor in accordance with their terms, all contracts, agreements,
arrangements, policies, plans and commitments of the Company and the
Subsidiaries as in effect immediately prior to the Effective Time that are
applicable to any current or former employees or directors of the Company or any
Subsidiary. Employees of the Company or any Subsidiary shall receive credit for
purposes of eligibility to participate and vesting (but not for benefit
accruals) under any employee benefit plan, program or arrangement established or
maintained by the Surviving Corporation or any of its subsidiaries for service
accrued or deemed accrued prior to the Effective Time with the Company or any
Subsidiary; provided, however, that such crediting of service shall not operate
to duplicate any benefit or the funding of any such benefit.
SECTION 7.07. Directors' and Officers' Indemnification and
Insurance. (a) The By-laws of the Surviving Corporation shall contain provisions
no less favorable with respect to indemnification than are set forth in Article
VII of the By-laws of the Company, which provisions shall not be amended,
repealed or otherwise modified for a period of six years from the Effective Time
in any manner that would affect adversely the rights thereunder of individuals
who, at or prior to the Effective Time, were directors, officers, employees,
fiduciaries or agents of the Company, unless such modification shall be required
by law.
(b) The Surviving Corporation shall use its reasonable best
efforts to maintain in effect for three years from the Effective Time, if
available, the current directors' and officers' liability insurance policies
maintained by the Company (provided that the Surviving Corporation may
substitute therefor policies of at least the same coverage containing terms and
conditions that are not materially less favorable) with respect to matters
occurring prior to the Effective Time; provided, however, that in no event shall
the Surviving Corporation be required to expend pursuant to this Section 7.07(b)
more than an amount per year equal to 200% of current annual premiums paid by
the Company for such insurance (which premiums the Company represents and
warrants to be $35,000 in the aggregate).
(c) In the event 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 or
<PAGE> 41
37
(ii) transfers all or substantially all of its properties and assets to any
person, then, and in each such case, proper provision shall be made so that the
successors and assigns of the Company or the Surviving Corporation, as the case
may be, or at Parent's option, Parent, shall assume the obligations set forth in
this Section 7.07.
SECTION 7.08. Notification of Certain Matters. The Company
shall give prompt notice to Parent, and Parent shall give prompt notice to the
Company, of (a) the occurrence, or non-occurrence, of any event the occurrence,
or non-occurrence, of which reasonably could be expected to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect and (b) any failure of the Company, Parent or
Purchaser, as the case may be, to comply with or satisfy any covenant or
agreement to be complied with or satisfied by it hereunder; provided, however,
that the delivery of any notice pursuant to this Section 7.08 shall not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice.
SECTION 7.09. Further Action; Reasonable Best Efforts. (a)
Upon the terms and subject to the conditions hereof, each of the parties hereto
shall (i) make promptly its respective filings, and thereafter make any other
required submissions, under the HSR Act with respect to the Transactions and
(ii) use its reasonable best efforts to take, or cause to be taken, all
appropriate action, 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, including, without limitation, using its reasonable
best efforts to obtain all Permits, consents, approvals, authorizations,
qualifications and orders of Governmental Authorities and parties to contracts
with the Company and the Subsidiaries as are necessary for the consummation of
the Transactions and to fulfill the conditions to the Offer and the Merger;
provided that neither the Company, Purchaser nor Parent will be required by this
Section 7.09 to take any action, including entering into any consent decree,
hold separate orders or other arrangements, that (A) requires the divestiture of
any assets of any of the Purchaser, Parent, Company or any of their respective
subsidiaries or (B) limits Parent's freedom of action with respect to, or its
ability to retain, the Company and the Subsidiaries or any portion thereof or
any of Parent's or its affiliates' other assets or businesses. In case, at any
time after the Effective Time, any further action is necessary or desirable to
carry out the purposes of this Agreement, the proper officers and directors of
each party to this Agreement shall use their reasonable best efforts to take all
such action. Parent or the Purchaser will pay all fees associated with the HSR
submission.
(b) Each of the parties hereto agrees to cooperate and use its
reasonable best efforts vigorously to contest and resist any Action, including
administrative or judicial Action, and to have vacated, lifted, reversed or
overturned any decree, judgment, injunction or other order (whether temporary,
preliminary or permanent) that is in effect and that restricts, prevents or
prohibits consummation of the Transactions, including, without limitation, by
vigorously pursuing all available avenues of administrative and judicial appeal.
<PAGE> 42
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SECTION 7.10. Public Announcements. Parent, the Purchaser and
the Company agree that no public release or announcement concerning the
Transactions, the Offer or the Merger shall be issued by any party without the
prior consent of the other party (which consent shall not be unreasonably
withheld), except as such release or announcement may be required by Law or the
rules or regulations of any United States or non-United States securities
exchange, in which case the party required to make the release or announcement
shall use its best efforts to allow the other party reasonable time to comment
on such release or announcement in advance of such issuance.
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.01. Conditions to the Merger. The obligations of
each party to effect the Merger shall be subject to the satisfaction, at or
prior to the Effective Time, of the following conditions:
(a) Stockholder Approval. If and to the extent required by
Missouri Law, this Agreement and the Transactions shall have been
approved and adopted by the affirmative vote of the stockholders of the
Company;
(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 Order. No Governmental Authority shall have enacted,
issued, promulgated, enforced or entered any Law (whether temporary,
preliminary or permanent) which is then in effect and has the effect of
making the acquisition of Shares by Parent or Purchaser or any
affiliate of either of them illegal or otherwise restricting,
preventing or prohibiting consummation of the Transactions; and
(d) Offer. Purchaser or its permitted assignee shall have
purchased all Shares validly tendered and not withdrawn pursuant to the
Offer.
<PAGE> 43
39
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01. Termination. This Agreement may be terminated
and the Merger and the other Transactions may be abandoned at any time prior to
the Effective Time, notwithstanding any requisite approval and adoption of this
Agreement and the Transactions by the stockholders of the Company:
(a) By mutual written consent of each of Parent, Purchaser and
the Company duly authorized by the Boards of Directors of Parent,
Purchaser and the Company; or
(b) By either Parent, Purchaser or the Company if (i) the
Effective Time shall not have occurred on or before June 30, 2000;
provided, however, that the right to terminate this Agreement under
this Section 9.01(b) shall not be available to any party whose failure
to fulfill any obligation under this Agreement has been the cause of,
or resulted in, the failure of the Effective Time to occur on or before
such date or (ii) any Governmental Authority shall have enacted,
issued, promulgated, enforced or entered any injunction, order, decree
or ruling (whether temporary, preliminary or permanent) which has
become final and nonappealable and has the effect of making
consummation of the Offer or the Merger illegal or otherwise preventing
or prohibiting consummation of the Offer or the Merger; or
(c) By Parent if (i) due to an occurrence or circumstance that
would result in a failure to satisfy any condition set forth in Annex A
hereto, Purchaser shall have (A) failed to commence the Offer within 10
business days following the date of this Agreement, (B) terminated the
Offer without having accepted any Shares for payment thereunder or (C)
failed to accept Shares for payment pursuant to the Offer within 90
days following the commencement of the Offer (provided, however, that
the applicable time period specified in (A) and (C) above shall be
extended until the earlier to occur of (x) the fifth business day
following expiration or termination of any applicable waiting period
under the HSR Act and (y) June 30, 2000, unless such action or inaction
under (A), (B) or (C) shall have been caused by or resulted from the
failure of Parent or Purchaser to perform, in any material respect, any
of their material covenants or agreements contained in this Agreement,
or the material breach by Parent or Purchaser of any of their material
representations or warranties contained in this Agreement or (ii) prior
to the purchase of Shares pursuant to the Offer, the Board or any
committee thereof shall have withdrawn or modified in a manner adverse
to Purchaser or Parent its approval or recommendation of this
Agreement, the Offer, the Merger or any other Transaction, or shall
have recommended or approved any Acquisition Proposal, or shall have
resolved to do any of the foregoing; or
<PAGE> 44
40
(d) By the Company, upon approval of the Board, if (i)
Purchaser shall have (A) failed to commence the Offer within 10
business days following the date of this Agreement, (B) terminated the
Offer without having accepted any Shares for payment thereunder or (C)
failed to accept Shares for payment pursuant to the Offer within 90
days following the commencement of the Offer (provided, however, that
the applicable time period specified in (A) and (C) above shall be
extended until the earlier to occur of (x) the fifth business day
following expiration or termination of any applicable waiting period
under the HSR Act and (y) June 30, 2000, unless such action or inaction
under (A), (B) or (C) shall have been caused by or resulted from the
failure of the Company to perform, in any material respect, any of its
material covenants or agreements contained in this Agreement or the
material breach by the Company of any of its material representations
or warranties contained in this Agreement or (ii) prior to the purchase
of Shares pursuant to the Offer, the Board determines in good faith
that it is required to do so by its fiduciary duties under applicable
law after having received advice from outside legal counsel in order to
enter into a definitive agreement with respect to a Superior Proposal,
upon three business days' prior written notice to Parent, setting forth
in reasonable detail the identity of the person making, and the final
terms and conditions of, the Superior Proposal and after duly
considering any proposals that may be made by Parent during such three
business day period; provided, however, that any termination of this
Agreement pursuant to this Section 9.01(d)(ii) shall not be effective
until the Company has made full payment of all amounts provided under
Section 9.03.
SECTION 9.02. Effect of Termination. In the event of the
termination of this Agreement pursuant to Section 9.01, this Agreement shall
forthwith become void, and there shall be no liability on the part of any party
hereto, except (a) as set forth in Section 9.03 and (b) nothing herein shall
relieve any party from liability for any breach hereof prior to the date of such
termination; provided, however, that the Confidentiality Agreement shall survive
any termination of this Agreement.
SECTION 9.03. Fees and Expenses. (a) In the event that
(i) any person (including, without limitation, the Company or
any affiliate thereof), other than Parent or any affiliate of Parent,
shall have become the beneficial owner of more than 15% of the
then-outstanding Shares, and this Agreement shall have been terminated
pursuant to Section 9.01(b)(i), 9.01(c) or 9.01(d); or
(ii) any person shall have commenced, publicly proposed or
communicated to the Company an Acquisition Proposal that is publicly
disclosed and (A) the Offer shall have remained open for at least 20
business days, (B) the Minimum Condition shall not have been satisfied,
(C) this Agreement shall have been terminated pursuant to
<PAGE> 45
41
Section 9.01 and (D) the Company enters into an agreement with respect
to an Acquisition Proposal, or an Acquisition Proposal is consummated,
in each case within 12 months after such termination of this Agreement;
or
(iii) this Agreement is terminated (A) pursuant to (x) Section
9.01(c)(ii) or 9.01(d)(ii) or (y) Section 9.01(c)(i) or 9.01(d)(i), to
the extent that the failure to commence, the termination or the failure
to accept any Shares for payment, as set forth in Section 9.01(c)(i) or
9.01(d)(i), as the case may be, shall relate to the failure of the
Company to perform, in any material respect, any of its material
covenants or agreements contained in this Agreement or the knowing or
intentional breach by the Company of any of its material
representations or warranties contained in this Agreement and (B) the
Company enters into an agreement with respect to an Acquisition
Proposal or an Acquisition Proposal is consummated, in each case within
12 months after such termination of this Agreement; or
(iv) the Company enters into an agreement with respect to an
Acquisition Proposal that was commenced, publicly proposed or
communicated to the Company prior to the termination of this Agreement
pursuant to Section 9.01, or such an Acquisition Proposal is
consummated, in each case within 12 months after the termination of
this Agreement pursuant to Section 9.01, and the Company shall not
therefore have been required to pay the Fee to Parent pursuant to
Section 9.03(a)(i), 9.03(a)(ii) or 9.03(a)(iii);
then, in any such event, the Company shall pay Parent promptly
(but in no event later than one business day after the first of such events
shall have occurred) a fee of $1.5 million (the "Fee"), which amount shall be
payable in immediately available funds, plus all out-of-pocket expenses and fees
up to $250,000, in the aggregate (including, without limitation, all fees of
counsel, accountants, experts and consultants to Parent and Purchaser, the fees
associated with the HSR submission, and all printing and advertising expenses
and filing fees) actually incurred or accrued by either of them or on their
behalf in connection with the Transactions (all the foregoing being referred to
herein collectively as the "Expenses").
(b) Except as set forth in Section 7.09(a) and this Section
9.03, all costs and expenses incurred in connection with this Agreement and the
Transactions shall be paid by the party incurring such expenses, whether or not
any Transaction is consummated.
(c) In the event that the Company shall fail to pay the Fee or
any Expenses when due, the term "Expenses" shall be deemed to include the costs
and expenses actually incurred or accrued by Parent and Purchaser (including,
without limitation, fees and expenses of counsel) in connection with the
collection under and enforcement of this Section 9.03, together with interest on
such unpaid Fee and Expenses, commencing on the date that the Fee or such
<PAGE> 46
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Expenses became due, at a rate equal to the rate of interest publicly announced
by Citibank, N.A., from time to time, in the City of New York, as such bank's
Base Rate plus 1%.
SECTION 9.04. Amendment. Subject to Section 7.03, this
Agreement may be amended by the parties hereto by action taken by or on behalf
of their respective Boards of Directors at any time prior to the Effective Time;
provided, however, that, after the approval and adoption of this Agreement and
the Transactions by the stockholders of the Company, no amendment may be made
that would reduce the amount or change the type of consideration into which each
Share shall be converted upon consummation of the Merger. This Agreement may not
be amended except by an instrument in writing signed by each of the parties
hereto.
SECTION 9.05. Waiver. Subject to Section 7.03, at any time
prior to the Effective Time, any party hereto may (a) extend the time for the
performance of any obligation or other act of any other party hereto, (b) waive
any inaccuracy in the representations and warranties of any other party
contained herein or in any document delivered pursuant hereto and (c) waive
compliance with any agreement of any other party or any condition to its own
obligations contained herein. Any such extension or waiver shall be valid if set
forth in an instrument in writing signed by the party or parties to be bound
thereby.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person, by
telecopy or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice given in accordance
with this Section 10.01):
if to Parent or Purchaser:
Thomson US Holdings, Inc.
Metro Center
One Station Plaza
Stamford, Connecticut 06902
Telecopier No: (203) 348-5718
Attention: General Counsel
<PAGE> 47
43
with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Telecopier No: (212) 848-7179
Attention: David W. Heleniak, Esq.
Email: [email protected]
if to the Company:
Wave Technologies International, Inc.
10845 Olive Boulevard, Suite 250
St. Louis, Missouri 63141
Telecopier No: (314) 621-5065
Attention:
with a copy to:
Armstrong Teasdale LLP
One Metropolitan Square, Suite 2600
St. Louis, Missouri 63102
Telecopier No: (314) 621-5065
Attention: John L. Gillis, Jr., Esq.
E-mail: [email protected]
SECTION 10.02. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the Transactions is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the Transactions be consummated as originally contemplated to the
fullest extent possible.
SECTION 10.03. Entire Agreement; Assignment. This Agreement
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and undertakings, both written
and oral, among the parties, or any of them, with
<PAGE> 48
44
respect to the subject matter hereof. This Agreement shall not be assigned
(whether pursuant to a merger, by operation of law or otherwise), except that
Parent and Purchaser may assign all or any of their rights and obligations
hereunder to any affiliate of Parent, provided that no such assignment shall
relieve the assigning party of its obligations hereunder if such assignee does
not perform such obligations.
SECTION 10.04. Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto, and nothing
in this Agreement, express or implied, is intended to or shall confer upon any
other person any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement, other than Section 7.07 (which is intended to be for
the benefit of the persons covered thereby and may be enforced by such persons).
SECTION 10.05. Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
were not performed in accordance with the terms hereof and that the parties
shall be entitled to specific performance of the terms hereof, in addition to
any other remedy at law or equity.
SECTION 10.06. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York
applicable to contracts executed in and to be performed in that State (other
than those provisions set forth herein that are required to be governed by
Missouri Law).
SECTION 10.07. Waiver of Jury Trial. Each of the parties
hereto hereby waives to the fullest extent permitted by applicable law any right
it may have to a trial by jury with respect to any litigation directly or
indirectly arising out of, under or in connection with this Agreement or the
Transactions. Each of the parties hereto (a) certifies that no representative,
agent or attorney of any other party has represented, expressly or otherwise,
that such other party would not, in the event of litigation, seek to enforce
that foregoing waiver and (b) acknowledges that it and the other hereto have
been induced to enter into this Agreement and the Transactions, as applicable,
by, among other things, the mutual waivers and certifications in this Section
10.07.
SECTION 10.08. Headings. The descriptive headings contained in
this Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
SECTION 10.09. Counterparts. This Agreement may be executed
and delivered (including by facsimile transmission) in one or more counterparts,
and by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
<PAGE> 49
IN WITNESS WHEREOF, Parent, Purchaser and the Company have
caused this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
THOMSON US HOLDINGS, INC.
By:
--------------------------------------
Title:
WTI ACQUISITION CORPORATION
Attest:
By:
--------------------------------------
Title:
WAVE TECHNOLOGIES INTERNATIONAL, INC.
Attest:
By:
--------------------------------------
Title:
<PAGE> 50
ANNEX A
Conditions to the Offer
Notwithstanding any other provision of the Offer, Purchaser
shall not be required to accept for payment any Shares tendered pursuant to the
Offer, and may extend, terminate or amend the Offer, if (i) immediately prior to
the expiration of the Offer, the Minimum Condition shall not have been
satisfied, (ii) any applicable waiting period under the HSR Act shall not have
expired or been terminated prior to the expiration of the Offer, or (iii) at any
time on or after the date of this Agreement and prior to the expiration of the
Offer, any of the following conditions shall exist:
(a) there shall have been instituted or be pending any Action
before any Governmental Authority (i) challenging or seeking to make
illegal, materially delay, or otherwise, directly or indirectly,
restrain or prohibit or make materially more costly, the making of the
Offer, the acceptance for payment of any Shares by Parent, Purchaser or
any other affiliate of Parent, or the purchase of Shares, or the
consummation of any other Transaction, or seeking to obtain material
damages in connection with any Transaction; (ii) seeking to prohibit or
limit materially the ownership or operation by the Company, Parent or
any of their subsidiaries of all or any of the business or assets of
the Company, Parent or any of their subsidiaries that is material to
either Parent and its subsidiaries or the Company and the Subsidiaries,
in either case, taken as a whole, or to compel the Company, Parent or
any of their subsidiaries, as a result of the Transactions, to dispose
of or to hold separate all or any portion of the business or assets of
the Company, Parent or any of their subsidiaries that is material to
either Parent and its subsidiaries or the Company and the Subsidiaries,
in each case, taken as a whole; (iii) seeking to impose or confirm any
limitation on the ability of Parent, Purchaser or any other affiliate
of Parent to exercise effectively full rights of ownership of any
Shares, including, without limitation, the right to vote any Shares
acquired by Purchaser pursuant to the Offer or any Stockholder
Agreement or otherwise on all matters properly presented to the
Company's stockholders, including, without limitation, the approval and
adoption of this Agreement and the Transactions; (iv) seeking to
require divestiture by Parent, Purchaser or any other affiliate of
Parent of any Shares; or (v) which otherwise would prevent or
materially delay consummation of the Offer or the Merger or otherwise
prevent or materially delay the Company from performing its obligations
under this Agreement or would have a Material Adverse Effect;
(b) there shall have been any statute, rule, regulation,
legislation or interpretation enacted, promulgated, amended, issued or
deemed applicable to (i) Parent, the Company or any subsidiary or
affiliate of Parent or the Company or (ii) any Transaction, by any
United States or non-United States legislative body or Governmental
<PAGE> 51
A-2
Authority with appropriate jurisdiction, other than the routine
application of the waiting period provisions of the HSR Act to the
Offer or the Merger, that is reasonably likely to result, directly or
indirectly, in any of the consequences referred to in clauses (i)
through (v) of paragraph (a) above;
(c) any Material Adverse Effect shall have occurred;
(d) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on the NASDAQ
National Market or the London, Montreal or Toronto Stock Exchanges
(other than a shortening of trading hours or any coordinated trading
halt triggered solely as a result of a specified increase or decrease
in a market index), (ii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States or
Canada, (iii) any limitation (whether or not mandatory) by any
government or Governmental Authority, on the extension of credit by
banks or other lending institutions, (iv) a commencement of a war or
armed hostilities or other national or international calamity directly
or indirectly involving the United States or Canada or (v) in the case
of any of the foregoing existing on the date hereof, a material
acceleration or worsening thereof;
(e) (i) it shall have been publicly disclosed, or Purchaser
shall have otherwise learned, that beneficial ownership (determined for
the purposes of this paragraph as set forth in Rule 13d-3 promulgated
under the Exchange Act) of 15% or more of the then-outstanding Shares
has been acquired by any person, other than Parent or any of its
affiliates, or (ii) (A) the Board, or any committee thereof, shall have
withdrawn or modified, in a manner adverse to Parent or Purchaser, the
approval or recommendation of the Offer, the Merger Agreement or
approved or recommended any Acquisition Proposal or any other
acquisition of Shares other than the Offer, the Merger or (B) the
Board, or any committee thereof, shall have resolved to do any of the
foregoing;
(f) any representation or warranty of the Company in the
Agreement that is qualified as to materiality or Material Adverse
Effect shall not be true and correct or any such representation or
warranty that is not so qualified shall not be true and correct in any
material respect, in each case as if such representation or warranty
was made as of such time on or after the date of this Agreement;
(g) the Company shall have failed to perform, in any material
respect, any obligation or to comply, in any material respect, with any
agreement or covenant of the Company to be performed or complied with
by it under the Agreement;
(h) the Agreement shall have been terminated in accordance
with its terms; or
<PAGE> 52
A-3
(i) Purchaser and the Company shall have agreed that Purchaser
shall terminate the Offer or postpone the acceptance for payment of
Shares thereunder;
which, in the reasonable judgment of Purchaser in any such case, and regardless
of the circumstances (including any action or inaction by Parent or any of its
affiliates) giving rise to any such condition, makes it inadvisable to proceed
with such acceptance for payment.
The foregoing conditions are for the sole benefit of Purchaser
and Parent and may be asserted by Purchaser or Parent regardless of the
circumstances giving rise to any such condition or may be waived by Purchaser or
Parent in whole or in part at any time and from time to time in their sole
discretion. The failure by Parent or Purchaser at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right; the waiver
of any such right with respect to particular facts and 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.
<PAGE> 1
EXHIBIT (d)(2)
CONFIDENTIALITY AGREEMENT
January 13, 1999
Mr. David R. West
Course Technology
One Main Street
Cambridge, MA 02142
PRIVATE
AND
CONFIDENTIAL
Dear Mr. West:
In connection with the consideration by Course Technology or an affiliate
(collectively, the "Buyer") of the possible purchase (the "Acquisition
Transaction") of Wave Technologies International, Inc. (together with its
subsidiaries, the "Company"), the Buyer has requested access to certain
information, properties and personnel of the Company.
In consideration for and as a condition to the Company's furnishing access
to such information, properties and personnel of the Company as the Company, in
its sole discretion, agrees to make available to the Buyer, the Buyer agrees as
follows:
1. Confidential and Proprietary Nature of the Information. The Buyer
acknowledges the confidential and proprietary nature of the Confidential
Information (as defined below), agrees to hold and keep the same as provided in
this letter agreement, and otherwise agrees to each and every restriction and
obligation in this letter agreement.
2. Confidential Information. As used in this letter agreement, the term
"Confidential Information" means and includes any and all of the following
information, whether provided prior to or after the date of this letter
agreement:
(a) trade secrets concerning the business and affairs of the Company,
which includes product specifications, data, know-how, processes, designs,
sketches, photographs, graphs, drawings, samples, inventions and ideas,
past current and planned research and development, current and planned
manufacturing, sales or distribution methods and processes, customer lists,
current and anticipated customer requirements, price lists, market studies,
business plans, and any other information, however documented, that is a
trade secret within the meaning of applicable state trade secret law, and
(b) confidential information concerning the business and affairs of
the Company, (which includes historical financial statements, financial
projections and budgets, historical and projected sales, capital spending
budgets and plans, the names and backgrounds of key personnel, and
personnel training techniques and materials that has been or may hereafter
be provided or shown to the Buyer by the Company or its employees, agents,
advisors or other representatives (the "Company Representatives") or is
otherwise obtained from review of Company documents or property or
discussions with Company Representatives by the Buyer or the Buyer's
employees, officers, directors, representatives, agents or advisors
(including current or prospective financing sources) or representatives of
the Buyer's agents and advisors (collectively, "the Buyer's
Representatives"), irrespective of the form of the communication, and also
includes all notes, analyses, compilations, studies, summaries or other
material prepared by the Buyer or the Buyer's Representatives containing or
based, in whole or in part, on any information included in the foregoing.
Any trade secrets of the Company shall also be entitled to all of the
protections and benefits under applicable state trade secret law and any other
applicable law. If any information which the Company deems to be a trade secret
is found by a court of competent jurisdiction not to be a trade secret for
purposes of this letter agreement, then such information shall be eligible to be
considered confidential information in accordance with section 2(b) of this
letter agreement. In the case of trade secrets, the Buyer hereby waives
<PAGE> 2
any requirement that the Company submit proof of the economic value of any trade
secret or post a bond or other security.
3. Restricted Use of Confidential Information. The Buyer agrees that the
Confidential Information (a) will be kept confidential by the Buyer and the
Buyer's Representatives and (b) without limiting the foregoing, will not be
disclosed by the Buyer or the Buyer's Representatives to any person whomsoever
(including current or prospective financing sources) except with the specific
prior written consent of the Company's chief executive officer or chief
financial officer (the "Company Contact") or except as expressly otherwise
permitted by the terms of this letter agreement. It is understood that the Buyer
may disclose Confidential Information to only those of the Buyer's
Representatives who (i) require such material for the purpose of evaluating a
possible Acquisition Transaction (but to the extent practicable, only such part
that is so required), (ii) are approved in writing by the Company Contact prior
to any disclosure to them (which approval shall not be unreasonably withheld),
(iii) are informed by the Buyer of the confidential nature of the Confidential
Material and the obligations of this letter agreement, and (iv) execute a
counterpart of this letter agreement, which shall be delivered to the Company,
thereby evidencing their agreement to be bound by the terms and conditions of
this letter agreement as if they were a party to it. The following Buyer's
Representatives that will be involved in the evaluation of any proposed
transaction are to be considered to be approved by the Company and not required
to execute a counterpart of this agreement:
<TABLE>
<S> <C> <C>
(i) COURSE TECHNOLOGY
Mr. Joe Dougherty President & Chief Executive Officer
Mr. David West Executive Vice President & Chief Financial Officer
Mr. Jay McNamara Vice President of Business & Operations
Mr. Ted Purcell General Manager, Corporate Learning Division
Ms. Marybeth LaFauci Manager, Financial Planning
(ii) INTERNATIONAL THOMSON PUBLISHING
Mr. Robert Christie President & Chief Executive Officer
Mr. Gene Gage Senior Vice President, Finance & Operations
Mr. Mark L. Wilson Vice President, Finance & Business Development
Mr. Rene Mathis Vice President, Controller
Ms. Bowie Choy Director, Finance & Business Development
Mr. Carl Urbania Vice President, Chief Information Officer
Mr. Steve Mower Senior Vice President, Human Resources
(iii) THE THOMSON CORPORATION
Mr. Richard Harrington President & Chief Executive Officer
Mr. Dave Shaffer Chief Operating Officer
Mr. Robert Daleo Chief Financial Officer
Mr. Andrew Perrin Vice President, Business Analysis & Planning
Mr. John Carey Manager of Business Analysis & Planning
Mr. Sam Evans Tax Director
Mr. David Hulland Vice President, Controller
Mr. Edward Friedland Deputy General Counsel
Ms. Amy Meltzer Hughson Assistant General Counsel
(iv) Derek Goodman and the related support staff of Scott-Macon;
(v) Executives and the related support staff of PricewaterhouseCoopers;
(vi) Executives and the related support staff of The Parthenon Group; and
(vii) any outside counsel deemed necessary by the Buyer.
</TABLE>
The Buyer further agrees that the Buyer and the Buyer's Representatives
will not use any of the Confidential Information for any reason or purpose other
than to evaluate a possible Acquisition Transaction and that the Confidential
Information will not be used by the Buyer or the Buyer's Representatives in any
way
<PAGE> 3
detrimental to the Company (it being acknowledged that any use other than
evaluation of and negotiating the possible Acquisition Transaction shall be
deemed detrimental). The Buyer also agrees to be responsible for enforcing the
terms of this letter agreement as to the Buyer's Representatives and the
confidentiality of the Confidential Information and to take such action, legal
or otherwise, to the extent necessary to cause them to comply with the terms and
conditions of this letter agreement and thereby prevent any disclosure of the
Confidential Information by any of the Buyer's Representatives (including to
take all actions that the Buyer would take to protect its own trade secrets and
confidential information).
4. Nondisclosure of Possible Acquisition Transaction. Except as permitted
by the foregoing paragraph and except as expressly permitted by a definitive
agreement, if any, entered into by the Buyer for an Acquisition Transaction,
neither the Buyer nor the Buyer's Representatives will disclose to any person
(including one who has been provided Confidential Information) the fact that the
Confidential Information has been made available to the Buyer or the Buyer's
Representatives or that the Buyer or the Buyer's Representatives have inspected
any portion of the Confidential Information. Except with the prior written
consent of the other party and except as expressly permitted by a definitive
agreement, if any, entered into by the Buyer for an Acquisition Transaction,
neither the Buyer nor the Buyer's Representatives will disclose the fact that
any discussions or negotiations are taking place concerning a possible
Acquisition Transaction, including the status of them.
5. Company Contact. All requests by the Buyer or the Buyer's
Representatives for Confidential Information, meetings with Company personnel or
Company Representatives, or inspection of the Company's properties shall be made
to the Company Contact.
6. Exceptions. The foregoing obligations and restrictions do not apply to
that part of the Confidential Information that the Buyer demonstrates (a) was or
becomes generally available to the public other than as a result of a disclosure
by the Buyer or the Buyer's Representatives or (b) was available, or becomes
available, to the Buyer on a non-confidential basis prior to its disclosure to
the Buyer by the Company or a Company Representative, but only if (i) the source
of such information is not bound by a confidentiality agreement with the Company
or is not otherwise prohibited from transmitting the information to the Buyer or
the Buyer's Representatives by a contractual, legal, fiduciary or other
obligation and (ii) the Buyer provides the Company with written notice of such
prior possession either (A) prior to the execution and delivery of this letter
agreement or (B) if the Buyer later becomes aware (through disclosure to the
Buyer or otherwise through the Buyer's work on the proposed acquisition) of any
aspect of the Confidential Information as to which the Buyer had prior
possession, promptly upon the Buyer so becoming aware.
7. Legal Proceedings. In the event that the Buyer or any of the Buyer's
Representative are requested or become legally compelled (by oral questions,
interrogatories, requests for information or documents, subpoena, civil or
criminal investigative demand or similar process) or are required by a
regulatory body to make any disclosure which is prohibited or otherwise
constrained by this letter agreement, the Buyer or such Representative, as the
case may be, will provide the Company with prompt notice of such request(s) so
that it may seek an appropriate protective order or other appropriate remedy. If
such protective order or other remedy is not obtained or the Company grants a
waiver hereunder, then the Buyer or such Representative may furnish that portion
(and only that portion) of the Confidential Information which, in the written
opinion of counsel reasonably acceptable to the Company, the Buyer is legally
compelled or are otherwise required to disclose; provided, however, that the
Buyer and the Buyer's Representatives shall use reasonable efforts to obtain
reliable assurance that confidential treatment will be accorded any Confidential
Information so disclosed.
8. Contact With Employees. Without the prior written consent of the Company
Contact (a) neither the Buyer nor those of the Buyer's Representatives will
initiate or cause to be initiated (other than through the Company) any
communication with any employee of the Company concerning the Confidential
Information or any possible Acquisition Transaction, and (b) the Buyer and the
Buyer's Representatives will not, for a period of two (2) years after the date
of this letter agreement, solicit or cause to be solicited the employment of or,
within one (1) year after the date of this letter agreement, employ any person
who is now employed by the Company.
<PAGE> 4
9. Insider Trading. The Buyer hereby acknowledges that it is aware and that
its Representatives have been advised that the United States securities laws
prohibit any person who has material non-public information about a company from
purchasing or selling securities of such company.
10. Hostile Transactions. Buyer agrees that, for a period of one year after
the date of this letter agreement, unless such shall have been specifically
invited in writing by the Company, neither Buyer nor any of its affiliates (as
such term is defined under the Securities Exchange Act of 1934, as amended (the
"1934 Act")) or Representatives will in any manner, directly or indirectly, (a)
effect or seek, offer or propose (whether publicly or otherwise) to effect, or
cause or participate in or in any way assist any other person to effect or seek,
offer or propose (whether publicly or otherwise) to effect or participate in,
(i) any acquisition of any securities (or beneficial ownership thereof) or
assets of the Company or any of its subsidiaries; (ii) any tender or exchange
offer, merger or other business combination involving the Company or any of its
subsidiaries; (iii) any recapitalization, restructuring, liquidation,
dissolution or other extraordinary transaction with respect to the Company or
any of its subsidiaries; or (iv) any "solicitation" of proxies" (as such terms
are used in the proxy rules of the Securities and Exchange Commission) or
consents to vote any voting securities of the Company; (b) form, join or in any
way participate in a "group" (as defined under the 1934 Act); (c) otherwise act,
along or in concert with others, to seek to control or influence the management,
board of directors or policies of the Company; (d) take any action which might
force the Company to make a public announcement regarding any of the types of
matters set forth in (a) above; or (e) enter into any discussions or
arrangements with any third party with respect to any of the foregoing. The
Buyer also agrees during such period not to request the Company (or its
directors, officers, employees or agents), directly or indirectly, to amend or
waive any provision of this paragraph (including this sentence).
11. Return of Confidential Information. If the Buyer determines that it
does not wish to proceed with an Acquisition Transaction (and the Buyer shall
promptly notify the Company Contact of such decision) or if the Company notifies
the Buyer that it does not wish the Buyer to consider the Acquisition
Transaction any further, then (a) the Buyer shall promptly deliver to the
Company Contact all documents or other materials furnished by the Company or any
Company Representative to the Buyer or the Buyer's Representatives constituting
Confidential Information, together with all copies thereof in the possession or
under the control of the Buyer or the Buyer's Representatives and (b) the Buyer
shall destroy all documents or other matters that constitute, include or refer
to Confidential Information in the possession or under the control of the Buyer
or the Buyer's Representatives, including any summaries or other materials
generated by the Buyer or the Buyer's Representatives that include or refer to
any part of the Confidential Information without retaining a copy of any such
material, with any such destruction confirmed by the Buyer in writing to the
Company (and such confirmation shall include a list of the destroyed materials).
12. No Obligation to Negotiate a Definitive Agreement. The Company reserves
the right, in its sole discretion, to reject any and all proposals made by the
Buyer or the Buyer's Representatives with regard to an Acquisition Transaction
and to terminate discussions and negotiations with the Buyer and the Buyer's
Representatives at any time. Without limiting the foregoing, nothing in this
letter agreement requires either the Buyer or the Company or its shareholders to
enter into an Acquisition Transaction or to negotiate such transaction for any
specified period of time.
13. No Representations or Warranties. The Company retains the right to
determine, in its sole discretion, what information, properties and personnel it
wishes to make available to the Buyer, and neither the Company nor its
Representatives make any representation or warranty (express or implied) as to
the completeness or accuracy of the Confidential Information, except pursuant to
representations and warranties that may be made to the Buyer in a definitive
agreement for an Acquisition Transaction when, as and if executed and subject to
such limitations and restrictions as may be specified therein. The Buyer also
agrees that if the Buyer determines to engage in an Acquisition Transaction, the
Buyer's determination will be based solely on the terms of such definitive
agreement and on the Buyer's own investigation, analysis and assessment of the
business to be acquired. Moreover, unless and until such a definitive written
agreement is entered into, neither the Company nor the Buyer will be under any
legal obligation of any kind whatsoever with respect to such an Acquisition
Transaction except for the matters specifically agreed to in this letter
agreement or in another written agreement.
<PAGE> 5
14. Remedies. The Buyer hereby agrees to indemnify and hold the Company and
its officers, directors, shareholders and agents harmless from any damages,
loss, cost or liability (including legal fees and the cost of enforcing this
indemnity) arising out of or resulting from any unauthorized use or disclosure
by the Buyer or the Buyer's Representatives of the Confidential Information or
other violation of this letter agreement. In addition, because an award of money
damages (whether pursuant to the foregoing sentence or otherwise) would be
inadequate for any breach of this letter agreement by the Buyer or the Buyer's
Representatives and any such breach would cause the Company irreparable harm,
the Buyer also agrees that in the event of any breach or threatened breach of
this letter agreement, the Company shall also be entitled, without the
requirement of posting a bond or other security, to equitable relief, including
injunctive relief and specific performance. Such remedies shall not be the
exclusive remedies for any breach of this letter agreement but shall be in
addition to all other remedies available at law or equity to the Company.
15. Miscellaneous.
(a) Modification and Waiver. The agreements set forth in this letter
agreement may be modified or waived only by a separate writing signed by the
Company and the Buyer expressly modifying or waiving such agreements. No failure
or delay by the Company in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
right, power or privilege hereunder.
(b) Person. The term "person" includes any corporation, company,
partnership, limited liability company, individual or other entity.
(c) Severability. The invalidity or unenforceability of any provision of
this letter agreement shall not affect the validity or enforceability of any
other provisions of this letter agreement, which shall remain in full force and
effect. If any of the covenants or provisions of this letter agreement are
determined to be unenforceable by reason of its extent, duration, scope or
otherwise, then the parties contemplate that the court making such determination
shall reduce such extent, duration, scope or other provision and enforce them in
their reduced form for all purposes contemplated by this letter agreement.
(d) Costs. The Buyer agrees that if it is held by any court of competent
jurisdiction to be in violation, breach or nonperformance of any of the terms of
this letter agreement, then it shall pay all costs of such action or suit,
including reasonable attorneys' fees.
(e) Assignment. The Company reserves the right to assign all rights under
this letter agreement, including the right to enforce all of its terms, to any
successor corporation. In the event of an Acquisition Transaction that involves
a sale of assets, the Company currently intends to assign to the Buyer rights to
enforce the restrictions and other obligations of this letter agreement,
including the right to enforce all of its terms.
(f) Headings. Headings in this letter agreement are inserted only as a
matter of convenience and for reference and in no way define, limit, extend or
describe the scope of this letter agreement for the intent of any of its
provisions.
(g) Jurisdiction and Governing Law. The Buyer agrees and consents to
personal jurisdiction and service and venue in any federal or state court within
the State of Missouri having subject matter jurisdiction, for the purposes of
any action, suit or proceeding arising out of or relating to this letter
agreement. The venue of the court shall be within or, as close as possible to,
the St. Louis Metropolitan area. This letter agreement is governed by, and shall
be construed in accordance with, the laws of the State of Missouri (except the
laws of that jurisdiction that would render such choice of laws ineffective).
<PAGE> 6
Please sign and return one copy of this letter agreement, which will
constitute our agreement with respect to its subject matter.
Very truly yours,
WAVE TECHNOLOGIES INTERNATIONAL, INC.
By: /s/ KENNETH W. KOUSKY
------------------------------------
Kenneth W. Kousky, President
DULY EXECUTED and agreed to on January 15, 1999.
INTERNATIONAL THOMSON PUBLISHING, INC.
d/b/a COURSE TECHNOLOGIES
By: /s/ MARK L. WILSON
------------------------------------
Name: Mark L. Wilson
----------------------------------
Its: Vice President
------------------------------------
<PAGE> 7
CONFIDENTIAL
January 22, 1999
VIA FAX:
Mr. Kenneth W. Kousky
President
Wave Technologies International, Inc.
10845 Olive Boulevard, Ste. 250
St. Louis, MO
Dear Mr. Kousky:
First, I would like to thank you for sending back to me a countersigned
confidentiality agreement ("Confidentiality Agreement") so speedily.
Unfortunately, however, Course Technology cannot go forward and review any
information of Wave Technologies International, Inc. ("Company") without
amending Section 8 of the Confidentiality Agreement.
Upon further review, we realized that this provision should only apply to
the ITP Group, Course Technology and TTC Corporate in Stamford, CT who will have
access to the information. Since Thomson is a $6 billion corporation consisting
of in excess of 86 independent companies, we cannot bind all of these companies
without disclosing the details of this transaction to such companies. Other than
Course Technology, the ITP Group and TTC Corporate, no other Thomson company
has, or will have, knowledge of the proposed acquisition. We recognize we are
bound to not disclose information regarding this transaction to any third party
including affiliated Thomson companies. We intend to use the information
provided ONLY to determine if a proposed transaction would benefit our
companies.
Accordingly, Section 8 shall only apply to Course Technology, other
companies of the ITP Group, TTC Corporate and such other Thomson company or
individual that receives information pursuant to the Confidentiality Agreement,
or that receives encouragement or influence by one or more of such companies, in
connection with the hiring of a Company employee, as well as their respective
successors, assigns and agents.
Until we confirm our agreement, please do not send us, or our
representatives, any Confidential Information.
Very truly yours,
By: /s/ EDWARD A. FRIEDLAND
Edward A. Friedland
Vice President
ACCEPTED AND AGREED:
/s/ KENNETH W. KOUSKY
Kenneth W Kousky
