<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1),
AND
AMENDMENT NO. 1
TO SCHEDULE 13D PURSUANT TO SECTION 13(d),
OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
SYMETRICS INDUSTRIES, INC.
(NAME OF SUBJECT COMPANY)
TSHCO, INC.
A WHOLLY OWNED SUBSIDIARY OF
TEL-SAVE HOLDINGS, INC.
(BIDDERS)
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COMMON STOCK, $0.25 PAR VALUE PER SHARE 871 52 1100
(TITLE OF CLASS OF SECURITIES) (CUSIP NUMBER OF CLASS OF SECURITIES)
</TABLE>
------------------------
ALOYSIUS T. LAWN, IV
GENERAL COUNSEL AND SECRETARY
TEL-SAVE HOLDINGS, INC.
6805 ROUTE 202
NEW HOPE, PA 18938
(215) 862-1500
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS
ON BEHALF OF BIDDERS)
COPIES TO:
JONATHAN C. STAPLETON, ESQ.
ARNOLD & PORTER
399 PARK AVENUE
NEW YORK, NEW YORK 10022
(212) 715-1111
------------------------
CALCULATION OF FILING FEE
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TRANSACTION VALUATION*.................................................... $ 22,240,695
- --------------------------------------------------------------------------------------------
AMOUNT OF FILING FEE...................................................... $ 4,448.14
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* For the purpose of calculating the fee only, this amount assumes the purchase
in cash of 1,482,713 shares of Common Stock of Symetrics Industries, Inc. (the
"Company") at $15.00 per share. As of the date hereof, the Bidders are deemed
to own beneficially 145,000 shares, or approximately 8.9%, of the 1,627,713
shares of Company Common Stock issued and outstanding as of October 31, 1997,
according to the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
AMOUNT PREVIOUSLY PAID: Not Applicable FILING PARTY: Not Applicable
FORM OR REGISTRATION NO.: Not Applicable DATE FILED: Not Applicable
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CUSIP NO. 8715211 14D-1/13D AMENDMENT NO. 1
- --------------------------
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NAME OF REPORTING PERSONS Tel-Sav Holdings, Inc.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS 23-2827736
1
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(A) [ ]
2 (B) [ ]
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SEC USE ONLY
3
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SOURCE OF FUNDS WC
4
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
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CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
6
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 145,000
7
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
8 CERTAIN SHARES [ ]
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.9%
9
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TYPE OF REPORTING PERSON HC
10
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</TABLE>
<PAGE> 3
This Statement relates to a tender offer by TSHCo, Inc., a Delaware
corporation ("Purchaser"), which is a wholly owned subsidiary of Tel-Save
Holdings, Inc., a Delaware corporation ("Parent"), to purchase all outstanding
shares of Common Stock, par value $0.25 per share (the "Shares"), of Symetrics
Industries, Inc., a Florida corporation (the "Company"), upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated December 22,
1997 (the "Offer to Purchase"), and in the related Letter of Transmittal (which
together constitute the "Offer"), copies of which are filed as Exhibits (a)(1)
and (a)(2) hereto, respectively, and which are incorporated herein by reference.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Symetrics Industries, Inc. The
address of the principal executive offices of the Company is set forth in
Section 8 ("Certain Information Concerning the Company") of the Offer to
Purchase and is incorporated herein by reference.
(b) The exact title of the classes of equity securities being sought in the
Offer is the Common Stock, par value $0.25 per share. The information set forth
in the Introduction to the Offer to Purchase is incorporated herein by
reference.
(c) The information set forth in Section 6 ("Price Range of Shares;
Dividends") of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a) through (d) and (g): The information set forth in the Introduction and
Section 9 ("Certain Information Concerning Purchaser and Parent") of the Offer
to Purchase, and in Annex I thereto, is incorporated herein by reference.
(e) and (f): None of Purchaser or Parent, or, to the best of their
knowledge, any of the persons listed in Annex I of the Offer to Purchase, has
during the last five years (i) been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors); or (ii) been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting activities
subject to, federal or state securities laws or finding any violation of such
laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) None.
(b) The information set forth in the Introduction and Section 11
("Background of the Offer; Past Contacts, Transactions or Negotiations with the
Company") and Section 12 ("Purpose of the Offer and the Merger; Appraisal
Rights; Plans for the Company") of the Offer to Purchase is incorporated herein
by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a), (b) and (c): The information set forth in Section 10 ("Source and
Amount of Funds") of the Offer to Purchase is incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a) through (e): The information set forth in the Introduction, Section 11
("Background of the Offer; Past Contacts, Transactions or Negotiations with the
Company"), Section 12 ("Purpose of the Offer and the Merger; Appraisal Rights;
Plans for the Company") and Section 13 ("The Merger Agreement") of the Offer to
Purchase is incorporated herein by reference. Except as set forth in the
Introduction and Section 12 of the Offer to Purchase, none of Purchaser or
Parent have any present plans or proposals that would result in an extraordinary
corporate transaction, such as a merger, reorganization, liquidation or sale or
transfer of a material amount of assets involving the Company, or any other
material changes in the Company's
<PAGE> 4
capitalization, dividend policy, corporate structure or business or composition
of its board of directors or management.
(f) and (g): The information set forth in Section 7 ("Effect of the Offer
on the Market for Shares, Nasdaq Listing, Stock Quotation, and Registration
under the Exchange Act") of the Offer to Purchase is incorporated herein by
reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) Except as described in Section 11 of the Offer to Purchase (which
Section is hereby incorporated by reference) neither Purchaser nor Parent (nor
any of their respective subsidiaries) beneficially owns any Shares and, to the
best knowledge of the Company, none of the persons listed on Annex I to the
Offer to Purchase beneficially owns any Shares.
(b) Except as described in Section 11 of the Offer to Purchase (which
Section is hereby incorporated by reference) no transactions in the Shares have
been effected during the past sixty days by the Purchaser or Parent (or their
respective subsidiaries) or, to the best knowledge of the Parent, any of the
persons listed on Annex I to the Offer to Purchase.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, Section 9 ("Certain
Information Concerning Purchaser and Parent"), Section 11 ("Background of the
Offer; Past Contacts, Transactions or Negotiations with the Company"), Section
12 ("Purpose of the Offer and the Merger; Appraisal Rights; Plans for the
Company"); and Section 13 ("The Merger Agreement") of the Offer to Purchase is
incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and in Section 17 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9 ("Certain Information Concerning
Purchaser and Parent") of the Offer to Purchase is incorporated herein by
reference.
The incorporation by reference herein of the above-mentioned financial
information does not constitute an admission that such information is material
to a decision by a stockholder of the Company whether to sell, tender or hold
Shares being sought in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in the Introduction, Section 9 ("Certain
Information Concerning Purchaser and Parent"), Section 11 ("Background of the
Offer; Past Contacts, Transactions or Negotiations with the Company"), Section
12 ("Purpose of the Offer and the Merger; Appraisal Rights; Plans for the
Company") and Section 13 ("The Merger Agreement") of the Offer to Purchase is
incorporated herein by reference.
(b) and (c) The information set forth in Section 10 ("Source and Amount of
Funds"), Section 12 ("Purpose of the Offer and the Merger; Appraisal Rights;
Plans for the Company") and Section 16 ("Certain Regulatory and Legal Matters")
of the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 7 ("Effect of the Offer on the
Market for Shares, Nasdaq Listing, Stock Quotation, and Registration under the
Exchange Act") of the Offer to Purchase is incorporated herein by reference.
(e) None.
2
<PAGE> 5
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal is incorporated herein by reference in its entirety.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated December 22, 1997.
(a)(2) Letter of Transmittal.
(a)(3) Form of Letter from Gerard Klauer Mattison & Co., Inc., as Dealer
Manager, to Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees.
(a)(4) Form of Letter from Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees to Clients.
(a)(5) Notice of Guaranteed Delivery.
(a)(6) IRS Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
(a)(7) Summary Newspaper Advertisement, dated December 22, 1997.
(a)(8) Parent's Financial Statements, Financial Statement Schedules and
Exhibits, included as pages 30 to 46 of Parent's Annual Report on Form 10-K for
the year ended December 31, 1996 and as pages 2 to 12 of Parent's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1997 (filed by Parent
with the Commission on March 18, 1997, and November 14, 1997, respectively, and
incorporated herein by reference).
(b) Not applicable.
(c)(1) Agreement and Plan of Merger, dated as of December 18, 1997, among
Purchaser, Parent and the Company.
(c)(2) Form of Tender and Option Agreement, dated as of December 18, 1997,
between Parent and certain officers and directors of the Company.
(c)(3) Stock Option Agreement, dated as of December 18, 1997, between
Parent and the Company.
(c)(4) Letter Agreement, dated as of December 18, 1997, between the Company
and Parent.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
3
<PAGE> 6
SIGNATURE
After due inquiry and to the best of its knowledge and belief, each of the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: December 22, 1997
TEL-SAVE HOLDINGS, INC.
By: /s/ ALOYSIUS T. LAWN, IV
------------------------------------
Name: Aloysius T. Lawn, IV
Title: General Counsel and
Secretary
TSHCo, INC.
By: /s/ ALOYSIUS T. LAWN, IV
------------------------------------
Name: Aloysius T. Lawn, IV
Title: Vice President and
Secretary
4
<PAGE> 7
EXHIBIT INDEX
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EXHIBIT
NO. DESCRIPTION PAGE
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(a)(1) Offer to Purchase, dated December 22, 1997.
(a)(2) Letter of Transmittal.
(a)(3) Form of Letter from Gerard Klauer Mattison & Co., Inc., as Dealer Manager,
to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(4) Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees to Clients.
(a)(5) Notice of Guaranteed Delivery.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Summary Newspaper Advertisement, dated December 22, 1997.
(a)(8) Parent's Financial Statements, Financial Statement Schedules and Exhibits,
included as pages 30 to 46 of Parent's Annual Report on Form 10-K for the
year ended December 31, 1996 and as pages 2 to 12 of Parent's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1997 (filed by
Parent with the Commission on March 18, 1997 and November 14, 1997,
respectively, and incorporated herein by reference).
(b) Not applicable.
(c)(1) Agreement and Plan of Merger, dated as of December 18, 1997, among
Purchaser, Parent and the Company.
(c)(2) Form of Tender and Option Agreement, dated as of December 18, 1997,
between the Parent and certain officers and directors of the Company.
(c)(3) Stock Option Agreement, dated as of December 18, 1997, between Parent and
the Company.
(c)(4) Letter Agreement, dated as of December 18, 1997, between the Company and
Parent.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
</TABLE>
<PAGE> 1
EXHIBIT (a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
AT A PRICE OF $15.00 NET PER SHARE
OF
SYMETRICS INDUSTRIES, INC.
BY
TSHCo, INC.
A WHOLLY OWNED SUBSIDIARY
OF
TEL-SAVE HOLDINGS, INC.
------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON JANUARY 21, 1998, UNLESS THE OFFER IS EXTENDED.
------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE HAVING
BEEN VALIDLY TENDERED PRIOR TO THE EXPIRATION DATE AND NOT WITHDRAWN THAT NUMBER
OF SHARES (AS HEREIN DEFINED) REPRESENTING, TOGETHER WITH SHARES OF SYMETRICS
INDUSTRIES, INC. ALREADY OWNED BY TEL-SAVE HOLDINGS, INC., AT LEAST A MAJORITY
OF ALL OUTSTANDING COMMON SHARES OF SYMETRICS INDUSTRIES, INC. ON A FULLY
DILUTED BASIS ON THE DATE OF PURCHASE AND (2) SATISFACTION OF CERTAIN OTHER
TERMS AND CONDITIONS. SEE SECTION 15.
------------------------
THE OFFER IS BEING MADE PURSUANT TO THE AGREEMENT AND PLAN OF MERGER, DATED
AS OF DECEMBER 18, 1997, BY AND AMONG TSHCo, INC., TEL-SAVE HOLDINGS INC. AND
SYMETRICS INDUSTRIES, INC. THE BOARD OF DIRECTORS OF SYMETRICS INDUSTRIES, INC.
HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT, THE OFFER AND THE MERGER, HAS
DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO AND IN THE
BEST INTERESTS OF THE COMPANY'S STOCKHOLDERS, AND RECOMMENDS THAT THE COMPANY'S
STOCKHOLDERS ACCEPT THE OFFER AND TENDER ALL OF THEIR SHARES PURSUANT TO THE
OFFER.
------------------------
IMPORTANT
Any stockholder wishing to tender all or any portion of such stockholders'
Shares in the Offer must either (i) complete and sign the Letter of Transmittal
or a facsimile thereof in accordance with the instructions in the Letter of
Transmittal and mail or deliver the Letter of Transmittal and all other required
documents to the Depositary together with certificates representing the Shares
tendered or follow 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. A stockholder having Shares
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee must contact such person if such stockholder wishes to tender such
Shares.
Any stockholder who wishes to tender Shares and cannot deliver such Shares
and all other required documents to the Depositary on or prior to the Expiration
Date or who cannot comply with the procedures for book-entry transfer on a
timely basis may tender such Shares pursuant to the guaranteed delivery
procedure set forth in Section 3.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
set forth on the back cover of this Offer to Purchase. Additional copies of this
Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery
and other related materials may be obtained from the Information Agent.
Stockholders may also contact their broker, dealer, commercial bank, trust
company or other nominee for assistance concerning the Offer.
------------------------
The Dealer Manager for the Offer is:
GERARD KLAUER MATTISON & CO., INC.
December 22, 1997
<PAGE> 2
TABLE OF CONTENTS
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PAGE
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Introduction.............................................................. 1
1. Terms of the Offer.................................................. 3
2. Acceptance for Payment and Payment for Shares....................... 4
3. Procedure for Tendering Shares...................................... 5
4. Withdrawal Rights................................................... 7
5. Certain Federal Income Tax Consequences............................. 8
6. Price Range of Shares; Dividends.................................... 9
7. Effect of the Offer on the Market for Shares, NASDAQ Listing, Stock
Quotation and Registration Under the Exchange Act................. 10
8. Certain Information Concerning the Company.......................... 10
9. Certain Information Concerning Purchaser and Parent................. 12
10. Source and Amount of Funds.......................................... 13
11. Background of the Offer; Past Contacts, Transactions or Negotiations
with the Company.................................................. 13
12. Purpose of the Offer and the Merger; Appraisal Rights; Plans for the
Company........................................................... 15
13. The Merger Agreement................................................ 17
14. Dividends and Distributions......................................... 20
15. Certain Conditions to Purchaser's Obligations....................... 20
16. Certain Regulatory and Legal Matters................................ 21
17. Fees and Expenses................................................... 23
18. Miscellaneous....................................................... 24
ANNEX I -- Certain Information Concerning the Directors and Executive
Officers of Purchaser and Parent........................... I-1
</TABLE>
<PAGE> 3
TO: ALL HOLDERS OF COMMON STOCK OF SYMETRICS INDUSTRIES, INC.
INTRODUCTION
TSHCo, Inc., a Delaware corporation ("Purchaser") and a wholly owned
subsidiary of Tel-Save Holdings Inc., a Delaware corporation ("Parent"), hereby
offers to purchase all outstanding shares of common stock, par value $0.25 per
share (the "Shares"), of Symetrics Industries Inc., a Florida corporation (the
"Company"), at a price of $15.00 per Share net to the seller in cash, all upon
the terms and subject to the conditions set forth in this Offer to Purchase and
in the related Letter of Transmittal (which together constitute the "Offer").
Tendering holders of Shares will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 to the Letter of
Transmittal, transfer taxes on the purchase of Shares by Purchaser pursuant to
the Offer. Purchaser will pay all charges and expenses of Gerard Klauer Mattison
& Co., Inc., which is acting as Dealer Manager for the Offer, (in such capacity,
the "Dealer Manager"), First Union National Bank (the "Depositary") and Morrow &
Co., Inc. (the "Information Agent") incurred in connection with the Offer.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN
VALIDLY TENDERED PRIOR TO THE EXPIRATION DATE (AS HEREIN DEFINED) AND NOT
WITHDRAWN THAT NUMBER OF SHARES REPRESENTING, TOGETHER WITH SHARES CURRENTLY
OWNED BY PARENT, AT LEAST A MAJORITY OF ALL OUTSTANDING SHARES OF COMMON STOCK
OF THE COMPANY ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE ASSUMING
CONVERSION OF ALL OUTSTANDING OPTIONS OR OTHER SECURITIES CONVERTIBLE INTO
SHARES OF COMMON STOCK (THE "MINIMUM CONDITION"). THE OFFER IS ALSO SUBJECT TO
CERTAIN OTHER TERMS AND CONDITIONS. SEE SECTION 15.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT (AS HEREIN DEFINED), THE OFFER AND THE MERGER (AS HEREIN DEFINED)AND
THE TRANSACTIONS CONTEMPLATED THEREBY, HAS DETERMINED THAT THE TERMS OF THE
OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTEREST OF THE COMPANY'S
STOCKHOLDERS, AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER
AND TENDER ALL THEIR SHARES TO THE PURCHASER.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of December 18, 1997 (the "Merger Agreement"), by and among Purchaser, Parent
and the Company. The Merger Agreement provides, among other things, that as soon
as practicable after the purchase of Shares pursuant to the Offer and the
satisfaction 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 (the "DGCL") and the Florida Business Corporation Act (the
"FBCA"), Purchaser will be merged with and into the Company (the "Merger"). See
Section 12. Following consummation of the Merger, the Company will continue as
the surviving corporation (the "Surviving Corporation") and as a wholly owned
subsidiary of Parent. At the effective time of the Merger (the "Effective
Time"), each issued and outstanding Share (other than Shares owned by the
Company as treasury stock, Shares owned by Purchaser and Shares with respect to
which appraisal rights, if applicable, are properly exercised under the FBCA
("Dissenting Shares")), will be converted into and represent solely a right to
receive $15.00 in cash (adjusted for stock splits and other similar events),
without interest thereon. See Section 5 for a description of certain federal
income tax consequences of the Offer and the Merger. All Shares held as treasury
shares and Shares held by the Purchaser or any of its affiliates immediately
prior to the Merger will be cancelled at the Effective Time. All shares of
capital stock of Purchaser issued and outstanding immediately prior to the
Effective Time will be changed into an equal number of shares of capital stock
of the Surviving Corporation. The cash considerations described in this
paragraph is referred to in this Offer to Purchase as the "Merger
Consideration."
The Merger Agreement provides that, promptly upon the purchase of Shares
pursuant to the Offer, Purchaser will be entitled to designate for election to
the Board of Directors of the Company such number of
<PAGE> 4
directors (rounded up to the next whole number) as will give Purchaser, subject
to compliance with Section 14(f) of the Exchange Act of 1934, as amended (the
"Exchange Act"), representation on such Board of Directors equal to the product
of (i) the total number of directors on such Board of Directors (after giving
effect to the appointment of such directors) and (ii) the percentage that the
number of Shares purchased by Purchaser bears to the number of Shares
outstanding, and requires the Company to take such action (including increasing
the size of its Board of Directors and/or securing the resignations of existing
directors of the Company), as may be necessary to enable Purchaser's nominees to
be so elected. See Section 12 "-- Board Representation."
The Company has represented to Parent and Purchaser that, as of December
17, 1997, there were (a) 1,627,713 Shares issued and outstanding, and (b)
outstanding warrants and outstanding employee and director stock options to
purchase an aggregate of 178,768 Shares. As of the date hereof, Parent
beneficially owns 145,000 Shares, representing 8.9% of the outstanding Shares.
See Section 11. Based upon such information, and assuming exercise of all
outstanding warrants and stock options, if Shares representing at least 758,241
Shares in the aggregate are validly tendered and not withdrawn prior to the
expiration of the Offer, the Minimum Condition would be satisfied. Following the
purchase of such number of Shares, under the Company's Articles of Incorporation
and the FBCA, Parent and Purchaser would have sufficient voting power to approve
the Merger without the affirmative vote of any other stockholder. If Parent and
Purchaser acquire 80% or more of the outstanding Shares in the Offer or
otherwise, Parent and Purchaser would be able to effect the Merger pursuant to
the short-form merger provisions of Section 607.1104 of the FBCA, without prior
notice to, or any action by, any other stockholder of the Company.
In connection with the transactions contemplated by the Merger Agreement,
Parent has entered into Tender and Option Agreements, dated as of December 18,
1997 (the "Tender and Option Agreements"), with certain of the directors and
executive officers of the Company (the "Management"), pursuant to which, among
other things, the Management has agreed to tender validly in the Offer, and not
withdraw, all of the Shares that they now own or subsequently may acquire (the
"Management Shares") (which, based on representations from the Company, amounted
to 329,699 Shares beneficially owned (including options currently exercisable
for Shares) as of December 18, 1997, and which constitute approximately 18.25%
of the Shares on a fully diluted basis). In addition, the Management agreed in
the Tender and Option Agreements that, at any meeting of the Company's
stockholders (however called), it would (i) vote the Management Shares in favor
of the Merger, (ii) vote the Management Shares against any action or agreement
that would result in a breach in any material respect of any covenant,
representation or warranty or any other obligation of the Company under the
Merger Agreement, and (iii) vote the Management Shares against any action or
agreement that would impede, interfere with, delay, postpone or attempt to
discourage the Merger or the Offer. The Tender and Option Agreements provide
that for a period of six months from the date thereof Parent shall have (i) the
Option to purchase the Management Shares if a third party makes an Acquisition
Proposal (as defined in the Merger Agreement) and (ii) a right of first refusal
if any Management holder intends to sell his or her Shares to a third party. The
Tender and Option Agreements shall terminate on the first to occur of (a) the
Effective Time and (b) the termination of the Merger Agreement. See Section 11.
The Company, Parent and Purchaser have entered into a Stock Option
Agreement, dated as of December 18, 1997 (the "Stock Option Agreement"),
pursuant to which, in the event the Merger Agreement is terminated under certain
circumstances, including the acquisition by a person other than Parent or
Purchaser of 20% or more of the Shares, the Company shall grant to Purchaser an
option to purchase at a price of $15.00 per Share that number of Shares which
would equal 19.9% of the aggregate number of Shares outstanding after giving
effect to the exercise of such option.
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.
2
<PAGE> 5
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension or
amendment), Purchaser will accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 4. The term "Expiration Date" means 12:00 midnight, New
York City time, on January 21, 1998, unless Purchaser shall have extended the
period of time for which the Offer is open as may be required by the terms of
the Merger Agreement, or applicable law, in which event the term "Expiration
Date" shall mean the latest time and date at which the Offer, as so extended by
Purchaser, shall expire. See Sections 13 and 15.
If Purchaser shall decide, in its sole discretion (exercised in accordance
with the terms of the Merger Agreement), to increase the consideration offered
in the Offer to holders of Shares and if, at the time that notice of such
increase is first published, sent or given to holders of Shares in the manner
specified below, the Offer is scheduled to expire at any time earlier than the
expiration of a period ending on the tenth business day from, and including, the
date that such notice is first so published, sent or given, then the Offer will
be extended until the expiration of such period of ten business days. For
purposes of the Offer, a "business day" shall have the meaning set forth in Rule
14d-1 under the Exchange Act (means any day other than a Saturday, Sunday or a
federal holiday, and consists of the time period from 12:01 a.m. through 12:00
midnight, New York City time.)
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, SATISFACTION OF THE
MINIMUM CONDITION. THE OFFER IS ALSO SUBJECT TO SATISFACTION OR WAIVER OF OTHER
TERMS AND CONDITIONS. SEE SECTION 15. Purchaser reserves the right (but shall
not be obligated), in accordance with applicable rules and regulations of the
Securities and Exchange Commission (the "Commission"), in its sole discretion,
to waive any of the conditions to the Offer. If the Minimum Condition or any of
the other conditions set forth in Section 15 have not been satisfied by 12:00
midnight, New York City time, on January 21, 1998 (or any other time then set as
the Expiration Date), Purchaser may, subject to the terms of the Merger
Agreement as described below, elect to (1) extend the Offer and, subject to
applicable withdrawal rights, retain all tendered Shares until the Expiration
Date, as extended, (2) not extend the Offer and, subject to complying with
applicable rules and regulations of the Commission, accept for payment all
Shares so tendered, or (3) terminate the Offer and not accept for payment any
Shares and return all tendered Shares to tendering stockholders. Under the terms
of the Merger Agreement, Purchaser may not, without the consent of the Company's
Board of Directors, decrease or change the amount or form of consideration
payable in the Offer. If all the conditions to consummation of the Offer are
satisfied, Parent and Purchaser shall consummate the Offer as promptly as
possible. Notwithstanding the foregoing and subject to the immediately preceding
sentence, Purchaser may at any time, in its sole discretion, extend the Offer.
See Section 15. Subject to the terms of the Merger Agreement described above,
Purchaser reserves the right (but will not be obligated), at any time and from
time to time in its sole discretion, to extend the period during which the Offer
is open by giving oral or written notice of such extension to the Depositary and
by making a public announcement of such extension promptly thereafter. During
any such extension, all Shares previously tendered and not withdrawn will remain
subject to the Offer, subject to the rights of a tendering stockholder to
withdraw its Shares. There can be no assurance that Purchaser will exercise its
right to extend the Offer.
Subject to the applicable rules and regulations of the Commission and
subject to the terms of the Merger Agreement described above, Purchaser also
expressly reserves the right, in its sole discretion at any time and from time
to time, upon the occurrence of any of the Events set forth in Section 15, to
delay payment for any Shares regardless of whether such Shares were theretofore
accepted for payment, or to terminate the Offer and not to accept for payment or
pay for any Shares not theretofore accepted for payment or paid for, by giving
oral or written notice of such delay, termination or amendment to the Depositary
and by making a public announcement thereof. Purchaser's right to delay payment
for any Shares or not to pay for any Shares theretofore accepted for payment is
subject to the applicable rules and regulations of the Commission, including
Rule 14e-1(c) under the Exchange Act, relating to Purchaser's obligation to pay
for or return tendered Shares promptly after the termination or withdrawal of
the Offer.
3
<PAGE> 6
Any extension of the period during which the Offer is open, delay in
acceptance for payment or payment, termination or amendment of the Offer will be
followed, as promptly as practicable, by public announcement thereof, such
announcement in the case of an extension to be issued not later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date in accordance with the requirements of Rules 14d-4(c), 14d-6(d)
and 14e-1(d) under the Exchange Act. Without limiting the obligation of
Purchaser under such rule or the manner in which Purchaser may choose to make
any public announcement, Purchaser currently intends to make announcements by
issuing a press release to the Dow Jones News Service and making any appropriate
filing with the Commission.
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 disseminate additional tender offer materials and extend
the Offer if and to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1
under the Exchange Act. The minimum period during which a tender offer must
remain open following material changes in the terms of the Offer or the
information concerning the Offer, other than a change in price or a change in
percentage of securities sought, will depend upon the relevant facts and
circumstances, including the relative materiality of the changes to such terms
or information. With respect to a change in price or a change in percentage of
securities sought, a minimum ten business day period is generally required to
allow for adequate dissemination to stockholders and investor response.
The Company has provided Purchaser with the Company's list of stockholders
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the Letter of Transmittal will be
mailed to record holders of the Shares and will be furnished to brokers,
dealers, commercial banks, trust companies and similar persons whose names, or
the names of whose nominees, appear on the list of stockholders or, if
applicable, who are listed as participants in a clearing agency's security
position listing for subsequent transmittal to beneficial owners of Shares.
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 and will pay for all Shares
validly tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 4 promptly after the later to occur of (a) the
Expiration Date and (b) subject to compliance with Rule 14e-1(c) under the
Exchange Act, the satisfaction or waiver of the conditions set forth in Section
15. Subject to compliance with Rule 14e-1(c) under the Exchange Act, Purchaser
expressly reserves the right to delay payment for Shares in order to comply in
whole or in part with any applicable law. See Sections 1 and 16. In all cases,
payment for Shares accepted for payment pursuant to the Offer will be made only
after timely receipt by the Depositary of (i) certificates for such Shares or
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
Midwest Securities Trust Company, the Pacific Securities Depository Trust
Company or the Philadelphia Depository Trust Company (collectively, the
"Book-Entry Transfer Facilities"), pursuant to the procedures set forth in
Section 3, (ii) a properly completed and duly executed Letter of Transmittal (or
a manually signed facsimile thereof) with all required signature guarantees or,
in the case of a book-entry transfer, an Agent's Message (as defined below) and
(iii) all other documents required by the Letter of Transmittal.
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that Purchaser
may enforce such agreement against the participant.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered on or prior to the
Expiration Date and not properly withdrawn if, as and when Purchaser gives oral
or written notice to the Depositary of Purchaser's acceptance of such Shares for
payment pursuant to the Offer. In all cases, payment for Shares purchased
pursuant to the Offer will be made
4
<PAGE> 7
by deposit of the purchase price with the Depositary, which will act as agent
for tendering stockholders for the purpose of receiving payment from Purchaser
and transmitting such payment to tendering stockholders. If, for any reason
whatsoever, acceptance for payment of any Shares tendered pursuant to the Offer
is delayed, or Purchaser is unable to accept for payment Shares tendered
pursuant to the Offer, then, without prejudice to Purchaser's rights under
Section 1, the Depositary may, nevertheless, on behalf of Purchaser, retain
tendered Shares and such Shares may not be withdrawn, except to the extent that
the tendering stockholders are entitled to withdrawal rights as described in
Section 4 and as otherwise required by Rule 14e-1(c) under the Exchange Act.
Under no circumstances will interest be paid by Purchaser because of any delay
in making such payment.
If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason, or if certificates are submitted for
more Shares than are tendered, certificates for such unpurchased or untendered
Shares will be returned, without expense to the tendering stockholder (or, in
the case of Shares delivered by book-entry transfer to a Book-Entry Transfer
Facility, such Shares will be credited to an account maintained within such
Book-Entry Transfer Facility), as promptly as practicable after the expiration,
termination or withdrawal of the Offer.
If, prior to the Expiration Date, Purchaser increases the price being paid
for Shares accepted for payment pursuant to the Offer, such increased
consideration will be paid to all stockholders whose Shares are purchased
pursuant to the Offer.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to one or more direct or indirect subsidiaries of Parent
the right to purchase all or any portion of the Shares tendered pursuant to the
Offer, but no such transfer or assignment shall relieve Purchaser of its
obligations under the Offer or prejudice any rights of tendering stockholders to
receive payment for Shares validly tendered and accepted for payment pursuant to
the Offer.
3. PROCEDURE FOR TENDERING SHARES
VALID TENDERS. For Shares to be validly tendered pursuant to the Offer, a
properly completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof), with all required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message, and all other required documents, must
be received by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase on or prior to the Expiration Date, and either
(i) certificates representing such Shares must be received by the Depositary or
such Shares must be tendered pursuant to the procedure for book-entry transfer
set forth below, and a Book-Entry Confirmation must be received by the
Depositary, in each case on or prior to the Expiration Date, or (ii) the
guaranteed delivery procedure set forth below must be complied with. No
alternative, conditional or contingent tenders will be accepted. DELIVERY OF
DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY
TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
BOOK-ENTRY TRANSFER. The Depositary will make a request to establish an
account with respect to the Shares at each 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 a Book-Entry
Transfer Facility's system may make book-entry delivery of Shares by causing a
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at such Book-Entry Transfer Facility in accordance with such Book-Entry
Transfer Facility's procedures for transfer. Although delivery of Shares may be
effected through book-entry at a Book-Entry Transfer Facility prior to the
Expiration Date, for Shares to be validly tendered (i) the Letter of Transmittal
(or a manually signed facsimile thereof), properly completed and duly executed,
with all required signature guarantees, or an Agent's Message in connection with
a book-entry transfer, and all other required documents, must, in any case, be
transmitted to and received by the Depositary at one of its addresses set forth
on the back cover of this Offer to Purchase on or prior to the Expiration Date
or (ii) the tendering stockholder (or his or her nominee) must comply with the
guaranteed delivery procedures described below.
SIGNATURE GUARANTEE. Signatures on the Letter of Transmittal must be
guaranteed by a member in good standing of the Securities Transfer Agents
Medallion Program, the Stock Exchange Medallion Program or the
5
<PAGE> 8
New York Stock Exchange, Inc. Medallion Signature Program (each of the foregoing
being referred to as an "Eligible Institution" and, collectively, as "Eligible
Institutions"), unless the Shares tendered thereby are tendered (i) by a
registered holder of Shares who has not completed either the box labeled
"Special Delivery Instructions" or the box labeled "Special Payment
Instructions" on the Letter of Transmittal or (ii) for the account of any
Eligible Institution. If the certificates evidencing tendered Shares are
registered in the name of a person or persons other than the signer of the
Letter of Transmittal, or if payment is to be made, or delivered to, or
certificates for unpurchased Shares are to be issued or returned to, a person
other than the registered owner or owners, then the tendered certificates must
be endorsed or accompanied by duly executed stock powers, in either case signed
exactly as the name or names of the registered owner or owners appear on the
certificates, with the signatures on the certificates or stock powers guaranteed
by an Eligible Institution as provided in the Letter of Transmittal. See
Instructions 1 and 5 to the Letter of Transmittal.
GUARANTEED DELIVERY. If a stockholder wishes to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or time will not permit certificates and all required documents to
reach the Depositary on or prior to the Expiration Date or the procedure for
book-entry transfer cannot be completed on a timely basis, such Shares may
nevertheless be tendered validly upon compliance with all of the following
guaranteed delivery procedures:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by Purchaser herewith, is
received by the Depositary, as provided below, on or prior to the
Expiration Date; and
(iii) the certificates for all physically tendered Shares in proper
form for transfer (and/or a Book-Entry Confirmation for all such Shares),
together with a properly completed and duly executed Letter of Transmittal
(or a manually signed facsimile thereof), and all required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message,
and all other documents required by the Letter of Transmittal are received
by the Depositary within three Nasdaq Stock Market, Inc. trading days after
the date of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, mail or facsimile transmission to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY,
IS AT THE OPTION AND SOLE RISK OF THE TENDERING STOCKHOLDER AND, EXCEPT AS
OTHERWISE PROVIDED IN THE LETTER OF TRANSMITTAL, 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.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for such Shares or a Book-Entry
Confirmation, (ii) a properly completed and duly executed Letter of Transmittal
(or a manually signed facsimile thereof), with all required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message, and
(iii) all other documents required by the Letter of Transmittal.
BACK-UP FEDERAL INCOME TAX WITHHOLDING. TO PREVENT BACK-UP FEDERAL INCOME
TAX WITHHOLDING WITH RESPECT TO PAYMENT OF THE PURCHASE PRICE OF SHARES
PURCHASED PURSUANT TO THE OFFER, EACH STOCKHOLDER MUST PROVIDE THE DEPOSITARY
WITH HIS OR HER CORRECT TAXPAYER IDENTIFICATION NUMBER ("TIN") AND CERTIFY THAT
HE OR SHE IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY COMPLETING
THE SUBSTITUTE FORM W-9 INCLUDED IN THE
6
<PAGE> 9
LETTER OF TRANSMITTAL. SEE INSTRUCTION 9 SET FORTH IN THE LETTER OF TRANSMITTAL.
DETERMINATION OF VALIDITY. All questions as to the form of documents and
the validity, eligibility (including time of receipt) and acceptance for payment
of any tender of Shares will be determined by Purchaser in its sole discretion,
and its determination will be final and binding on all parties. Purchaser
reserves the absolute right to reject any or all tenders of any Shares that are
determined by it not to be in proper form or the acceptance of or payment for
which may, in the opinion of Purchaser, be unlawful. Purchaser also reserves the
absolute right to waive any of the conditions of the Offer, subject to the
limitations set forth in the Merger Agreement, or any defect or irregularity in
the tender of any Shares. In all cases, Purchaser's interpretation of the
Instructions to the Letter of Transmittal will be final and binding on all
parties. 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, Parent,
any of their affiliates, the Dealer Manager, the Depositary, the Information
Agent or any other person will be under any duty to give notification of any
defects or irregularities in tenders or incur any liability to any tendering
stockholder for failure to give any such notification.
OTHER REQUIREMENTS. By executing the Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of Purchaser as
such stockholder's attorneys-in-fact and proxies, each with full power of
substitution, in the manner set forth in the Letter of Transmittal, to the full
extent of such stockholder's rights with respect to (i) the Shares tendered by
such stockholder and accepted for payment by Purchaser and (ii) all dividends,
distributions (including, without limitation, distributions of additional
Shares) and rights declared, issued, paid or distributed in respect of any such
Shares on or after December 18, 1997 and payable or distributable to such
stockholder on a date prior to the transfer to the name of Purchaser (or a
nominee or transferee of Purchaser) on the Company's stock transfer record of
such Shares (collectively, "Distributions"). All such powers of attorney and
proxies are irrevocable and shall be considered coupled with an interest in the
tendered Shares. This appointment is effective when, and only to the extent
that, Purchaser accepts for payment the Shares deposited with the Depositary.
Upon acceptance for payment, all prior powers of attorney and proxies given by
the stockholder with respect to the Shares and all Distributions will, without
further action, be revoked and no subsequent powers of attorney and proxies may
be given or written consent executed (and, if given or executed, will not be
deemed effective). The designees of Purchaser will, with respect to the Shares
and all Distributions, be empowered to exercise all voting and other rights of
such stockholder as they in their sole discretion deem proper in respect of any
annual or special meeting of the Company's stockholders, or any adjournment or
postponement thereof or in connection with any action that may be taken by
consent in lieu of any 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 and other rights of record or beneficial holder with respect to such
Shares and all Distributions, including voting at any meeting of stockholders
(whether annual or special or whether or not adjourned) or acting by written
consent.
A tender of Shares pursuant to any one of the procedures described above
will constitute the tendering stockholder's acceptance of the terms and
conditions of the Offer. Purchaser's acceptance of payment of Shares tendered
pursuant to the Offer will constitute the tendering stockholder's acceptance of
the terms and conditions of the Offer.
4. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 4, tenders of Shares made
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date (other than the Management
Shares, which may only be withdrawn as provided in the Tender and Option
Agreements) and, unless theretofore accepted for payment pursuant to the Offer,
may also be withdrawn at any time after February 19, 1998 (or such later date as
may apply if the Offer is extended). If purchase of or payment for Shares is
delayed for any reason or if Purchaser is unable to purchase or pay for Shares
for any reason, then, without prejudice to Purchaser's rights under the Offer,
tendered Shares may be retained by the Depositary on behalf of Purchaser and may
not be withdrawn except to the extent that tendering stockholders
7
<PAGE> 10
are entitled to withdrawal rights as set forth in this Section 4, subject to
Rule 14e-1(c) under the Exchange Act, which provides that no person who makes a
tender offer shall fail to pay the consideration offered or return the
securities deposited by or on behalf of security holders promptly after the
termination or withdrawal of the tender offer.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
notice of withdrawal must, to be valid, specify the name of the person who
tendered the Shares to be withdrawn, the class and number of Shares to be
withdrawn and the name in which the certificates representing such Shares are
registered, if different from that of the person who tendered the Shares. If
certificates for Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
certificates, the serial numbers shown on such certificates must be submitted to
the Depositary and, unless such Shares have been tendered by an Eligible
Institution, the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution. If Shares have been tendered pursuant to the procedure for
book-entry transfer set forth in Section 3, any notice of withdrawal must, to be
valid, also specify the name and number of the account at the applicable
Book-Entry Transfer Facility to be credited with the withdrawn Shares. All
questions as to the form and validity (including time of receipt) of notices of
withdrawal will be determined by Purchaser, in its sole discretion, and its
determination will be final and binding on all parties. None of Purchaser,
Parent, any of their affiliates or assigns, the Dealer Manager, the Depositary,
the Information Agent nor any other person will be under any duty to give
notification of any defects or irregularities in any notice of withdrawal or
incur any liability to any tendering stockholder for failure to give any such
notification.
A withdrawal of tenders of Shares may not be rescinded and any Shares
properly withdrawn will be deemed not validly tendered for purposes of the
Offer. However, withdrawn Shares may be retendered at any subsequent time prior
to the Expiration Date by following any of the procedures described in Section
3.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the anticipated material federal income tax
consequences to holders whose Shares are purchased pursuant to the Offer or
whose Shares are converted to cash in the Merger (including Dissenting Shares).
This discussion is based on laws, regulations, rulings and judicial decisions as
they exist on the date of this Offer to Purchase. These authorities are all
subject to change and such change may be made with retroactive effect. This
discussion applies only to a holder of Shares who is holding the shares as a
capital asset and who is a U.S. person (as defined in Section 7701(a)(30) of the
Internal Revenue Code of 1986, as amended (the "Code")). This discussion is not
a complete description of the federal income tax consequences of the Offer and
the Merger and may not apply to a holder of Shares subject to special treatment
under the Code, such as a holder that is a non-U.S. Person, a financial
institution, an insurance company, a tax-exempt organization or a person who
acquired the Shares pursuant to the exercise of an employee stock option or
otherwise as compensation. In addition, this discussion does not address the
state, local or foreign tax consequences of the Offer and the Merger.
BECAUSE OF THE COMPLEXITIES OF THE TAX LAWS AND 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 BELOW TO SUCH
STOCKHOLDER AND THE PARTICULAR TAX EFFECTS OF THE OFFER AND THE MERGER TO SUCH
STOCKHOLDER, INCLUDING THE APPLICATION AND EFFECT OF FEDERAL, STATE, LOCAL AND
FOREIGN TAX LAWS.
The receipt of cash for Shares pursuant to the Offer or the Merger
(including Dissenting Shares) will be a taxable transaction for federal income
tax purposes. In general, for federal income tax purposes, a holder of Shares
will recognize gain or loss equal to the difference between (a) such holder's
adjusted tax basis for the Shares sold pursuant to the Offer or converted to
cash in the Merger (including conversion pursuant to the exercise of dissenters
rights), and (b) the amount of cash received therefor (which amount does not
include any interest paid to a holder of Dissenting Shares). Gain or loss must
be determined separately for each block
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<PAGE> 11
of Shares (e.g., 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
generally will be capital gain or loss and will be long-term capital gain or
loss if, on the date of sale (or, if applicable, the date of the Merger), the
Shares were held for more than one year. The amount of any interest paid to a
holder of Dissenting Shares will be treated for federal income tax purposes as
ordinary interest income.
Federal income tax rates on long-term capital gain received by an
individual vary based on the individual's income and the holding period for the
asset. In particular, different maximum federal income tax rates will apply to
gains recognized by an individual from the sale of or exchange of Shares (i)
held for more than one year but not more than 18 months (presently 28 percent)
and (ii) held for more than 18 months (presently 20 percent). In addition, net
long-term capital losses may be subject to limits on deductibility.
Payments in connection with the Offer or the Merger may be subject to
"backup withholding" at a rate of 31% unless the holder complies with certain
identification or exemption requirements. Any amounts so withheld will be
allowed as a credit against the holder's income tax liability, or refunded,
provided certain information is provided to the IRS. A tendering stockholder may
be able to prevent backup withholding by completing the Substitute Form W-9
included in the Letter of Transmittal. See Section 3. Similarly, a stockholder
who receives cash in exchange for Shares pursuant to the Merger or upon exercise
of dissenters rights should be able to prevent backup withholding by completing
a Form W-9 or an acceptable substitute therefor. Each stockholder should consult
with such stockholder's own tax advisor as to such stockholder's qualification
for exemption from backup withholding and the procedure for obtaining such
exemption.
6. PRICE RANGE OF SHARES; DIVIDENDS
The Shares are listed and traded on the NASDAQ National Market ("NASDAQ")
under the trading symbol "SYMT." The following tables set forth for the periods
indicated the high and low prices per Share. Share prices are as reported in the
Company's Annual Report on Form 10-K for the year ended March 31, 1997 (the
"Company Form 10-K") and, in the case of the period from April 1, 1997 and
later, as reported on the NASDAQ based on published financial sources. The
following quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission and may not necessarily represent actual transactions.
<TABLE>
<CAPTION>
FISCAL YEAR FISCAL YEAR FISCAL YEAR
1996 1997 1998(a)
--------------- --------------- --------------
LOW HIGH LOW HIGH LOW HIGH
---- ----- ---- ----- ---- ----
<S> <C> <C> <C> <C> <C> <C>
QUARTER ENDED
June 30........................ 8 1/4 13 1/2 7 5/8 16 5/8 7 3/4 9 7/
September 30................... 7 7/8 11 1/4 7 3/4 12 5 7/8 9 5/
December 31.................... 6 3/4 10 1/4 7 8 3/4 5 1/4 12
March 31....................... 6 1/2 8 1/4 7 10 1/4
</TABLE>
- ---------------
Note (a): Fiscal year 1998 3rd Quarter date reflects prices up to December 18,
1997.
On December 18, 1997, the last full day of trading prior to the date of the
public announcement of the execution of the Merger Agreement and the
announcement that Parent had submitted to the Company a proposal to acquire all
outstanding Shares for $15.00 cash per share (see Section 11), the closing price
per share for the Shares as reported on the NASDAQ was $10.00.
On December 19, 1997, the last full day of trading prior to the
commencement of the Offer, the closing price per share for the Shares as
reported on the NASDAQ was $14.56. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT
MARKET QUOTATIONS FOR THE SHARES.
The Company has not declared or paid any dividends on the Shares during its
last three fiscal years.
The Offer will expire at 12:00 midnight, New York City time, on January 21,
1998 unless extended as described elsewhere in this Offer to Purchase.
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<PAGE> 12
7. EFFECT OF THE OFFER ON THE MARKET FOR SHARES,
NASDAQ LISTING, STOCK QUOTATION, AND
REGISTRATION UNDER THE EXCHANGE ACT
The purchase of the 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. The purchase of Shares
pursuant to the Offer also can be expected to reduce the numbers of holders
thereof.
NASDAQ LISTING. Depending on the number of Shares acquired pursuant to the
Offer, the Shares may no longer meet the requirements for continued listing on
NASDAQ. According to NASDAQ's published guidelines, NASDAQ would consider
delisting Shares if, as a result of the Offer, the number of round lot holders
of Shares were reduced to less than 400, the number of Shares publicly held
(excluding those held by officers and directors of the Company, members of their
immediate families and persons owning 10% or more of the Shares outstanding)
were reduced to less than 750,000, or the aggregate market value of the
publicly-held shares of any such class of Shares were reduced to less than
$5,000,000. In addition, if registration of the Shares under the Exchange Act
were terminated, the Shares would no longer be eligible for listing on NASDAQ.
If, as a result of the purchase of Shares pursuant to the Offer, the Shares no
longer meet the requirements of NASDAQ for continued listing, the market for
Shares could be adversely affected.
REGISTRATION UNDER THE EXCHANGE ACT. The Shares currently are registered
under the Exchange Act. Such registrations may be terminated upon application by
the Company to the Commission if there are fewer than 300 record holders of
Shares. It is the intention of Purchaser to seek to cause application for such
termination to be made as soon after consummation of the Offer as the
requirements for termination of registration of the Shares are met. Termination
of registration of the Shares under the Exchange Act would make certain
provisions of the Exchange Act no longer applicable to the Company, such as the
short-swing profit recovery provisions of Section 16(b) of the Exchange Act, the
requirement of furnishing a proxy statement or information statement pursuant to
Sections 14(a)or 14(c) of the Exchange Act in connection with stockholders'
meetings or action by written consent and the related requirement of furnishing
an annual report to stockholders and the requirements of Rule 13e-3 under the
Exchange Act with respect to "going private" transactions. Furthermore, the
ability of "affiliates" of the Company and persons holding "restricted
securities" of the Company to dispose of such securities pursuant to Rule 144 or
144A promulgated under the Securities Act of 1933, as amended (the "Securities
Act"), may be impaired or eliminated.
The Shares currently are "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board"),
which has the effect, among other things, of allowing brokers to extend credit
on the collateral of the Shares. Depending upon factors similar to those
described above regarding listing and market quotations, it is possible that,
following the Offer, the Shares would no longer constitute "margin securities"
for the purposes of the margin regulations of the Federal Reserve Board and
therefore could no longer be used as collateral for loans made by brokers. If
registration of Shares under the Exchange Act were terminated, the Shares would
no longer be "margin securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY
The Company is a Florida corporation with its principal executive offices
located at 1615 W. NASA Boulevard, Melbourne, Florida 32901. Except as otherwise
set forth herein, 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. Although neither Purchaser
nor Parent has any knowledge that would indicate that statements contained
herein based upon such documents are untrue, none of Purchaser, Parent, any of
their affiliates, or the Dealer Manager 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 and Parent.
10
<PAGE> 13
According to the Company's filings with the Commission, the Company
designs, develops and manufactures electronic systems and system components and
related computer software for defense-related products and for
telecommunications applications.
Set forth below is certain selected historical consolidated financial
information with respect to the Company excerpted or derived from financial
information contained in the audited financial statements contained in the
Company Form 10-K, and certain unaudited consolidated summary information with
respect to the six months ended September 30, 1997 and September 30, 1996 which
is excerpted or derived from the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997 filed November 6, 1997. More comprehensive
financial information is included in (i) the Company Form 10-K for the fiscal
year ended March 31, 1997, and (ii) other reports and documents filed by the
Company with the Commission, and the following summary is qualified in its
entirety by reference to such reports and such other documents and all the
financial information (including any related notes) contained therein. The
reports and other documents filed with the Commission should be available for
inspection and copies thereof should be obtainable in the manner set forth
below.
SYMETRICS INDUSTRIES, INC. AND SUBSIDIARY
SELECTED CONSOLIDATED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED SEPTEMBER 30,
(UNAUDITED) FOR THE YEAR ENDED MARCH 31,
--------------------------- -------------------------------------------
1997 1996 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Contract revenues....... $13,063,293 $12,733,986 $23,174,328 $22,096,589 $26,698,111
Net income.............. 206,836 768,161 1,756,469 1,051,385 2,545,364(1)
Earnings per share...... $ 0.13 $ 0.48 $ 1.09 $ 0.66 $ 1.78
</TABLE>
<TABLE>
<CAPTION>
AS OF
AS OF MARCH 31,
SEPTEMBER 30, ---------------------------
1997 1997 1996
------------- ----------- -----------
(UNAUDITED)
-------------
<S> <C> <C> <C>
BALANCE SHEET DATA
Current assets...................................... $ 11,755,710 $ 9,644,746 $ 7,322,193
Total assets........................................ 20,634,679 16,854,250 10,086,498
Long-term debt less current maturities.............. 4,233,894 1,838,446 568,363
Shareholders' equity................................ 8,516,356 8,306,708 6,418,364
</TABLE>
- ---------------
(1) Includes loss on a discontinued business of $49,138.
The Company is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith files periodic reports, proxy
statements and other information with the Commission relating to its business,
financial condition and other matters. The Company is required to disclose in
such proxy statements certain information, as of particular dates, concerning
the Company's directors and officers, their remuneration, stock options granted
to them, the principal holders of the Company's securities and any material
interests of such persons in transactions with the Company. Such reports, proxy
statements and other information may be inspected at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and may be inspected and copied at prescribed rates at
the regional offices of the Commission located at Seven World Trade Center, 13th
Floor, New York, New York 10048 and Citicorp Center, 500 West Madison Street
(Suite 1400), Chicago, Illinois 60661. Copies of this material may also be
obtained by mail, upon payment of the Commission's customary fees, from the
Commission's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549.
Such materials should also be available on-line through EDGAR at a Web site
(http://www.sec.gov) maintained by the Commission. In
11
<PAGE> 14
addition, material filed by the Company can be inspected at the offices of the
National Association of Securities Dealers, Inc., Market Listing Section, 1735 K
Street, N.W., Washington, D.C. 20006.
9. CERTAIN INFORMATION CONCERNING PURCHASER AND PARENT
Parent's predecessor and principal operating subsidiary, Tel-Save, Inc., a
Pennsylvania corporation, was incorporated in 1989. Parent, a Delaware
corporation, was incorporated in 1995. Purchaser, a Delaware corporation, was
incorporated in 1997. The name, business address, citizenship and principal
occupation or employment of each of the executive officers of Parent and
Purchaser are set forth in Annex I hereto. The principal executive office of
Parent and Purchaser is located at 6805 Route 202, New Hope, PA 18938.
Parent (which term includes Parent's operating subsidiaries where
appropriate) is a provider of long distance telecommunications services
primarily to small and medium-sized businesses located throughout the United
States. Parent's long distance service offerings include outbound service,
inbound toll-free 800 service and dedicated private line services for data.
Until 1997, Parent operated solely as a switchless, non-facilities-based
reseller of AT&T long distance services, purchasing large usage volumes from
AT&T pursuant to contract tariffs.
In early 1997, Parent deployed its own nationwide telecommunications
network, One Better Net, or OBN, consisting of five Parent-owned, AT&T (now
Lucent) manufactured 5ESS-2000 switches connected with AT&T digital transmission
facilities. Of the over 500,000 current users of Parent's services, OBN
currently provides services to approximately 150,000 end users and most of
Parent's new outbound end users are now being provisioned to OBN.
In February 1997, as part of its efforts to expand its business into the
residential market, Parent and America Online, Inc. ("AOL") entered into an
agreement (the "AOL Agreement"), under which Parent will provide long-distance
telecommunications services to be marketed by AOL under a distinctive brand name
to be used exclusively for Parent's services. The services will include
provision for online sign-up, call detail and reports and credit card payment.
AOL subscribers who sign up for the telecommunications services will be
customers of Parent, as the carrier providing such services. Parent's services
under this AOL Agreement were launched on the AOL online network on October 9,
1997. The AOL Agreement has an initial term of three years and can be extended
by AOL on an annual basis thereafter.
Historically, Parent has marketed its services primarily through
independent carriers and marketing companies ("partitions"). While Parent
explored the use of direct telemarketing in 1997, it has determined to continued
to market its services primarily through partitions and such opportunities as
the AOL arrangement.
Purchaser is a subsidiary which was formed as a vehicle for possible
acquisitions to be made by Parent. Purchaser is not expected to conduct any
business other than incident to the formation, execution and delivery of the
Merger Agreement and the commencement of the Offer and Merger. Accordingly, no
meaningful financial information with respect to Purchaser is available.
Parent files periodic reports and other information with the Commission
relating to its business, financial condition and other matters. Such reports
and other information may be inspected, and copies may be obtained, at the
offices of the Commission and of the National Association of Securities Dealers,
Inc. in the same manner as set forth with respect to the Company in Section 8.
Set forth below is certain selected historical consolidated financial
information with respect to Parent excerpted or derived from financial
information contained at pages 30 to 46 of Parent's Annual Report on Form 10-K
for the year ended December 31, 1996, and pages 2 through 12 of Parent's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1997 (which
pages are hereby incorporated by reference herein). More comprehensive financial
information is included in such report and other documents filed by Parent with
the Commission, and the following summary is qualified in its entirety by
reference to such reports and such other documents and all the financial
information (including any related notes) contained therein. Such reports and
other documents should be available for inspection and copies thereof should be
obtainable from the Commission in the manner set forth in Section 8.
12
<PAGE> 15
TEL-SAVE HOLDINGS, INC.
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPTEMBER 30, YEAR ENDED DECEMBER
(UNAUDITED) 31,
--------------------- ---------------------
1997 1996 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA
Sales........................................... $226,506 $168,159 $232.424 $180,102
Net income...................................... 286 14,467 20,160 9,035
Net income per share -- Fully Diluted........... $ -- $ .26 $ .35 $ .32
</TABLE>
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, AS OF DECEMBER 31,
1997 ---------------------
(UNAUDITED) 1996 1995
------------------- -------- -------
<S> <C> <C> <C>
BALANCE SHEET DATA
Total assets.......................................... $ 606,817 $257,008 $71,388
Total liabilities..................................... 338,405 26,288 30,074
Total stockholders' equity............................ 268,412 230,720 41,314
</TABLE>
Except as set forth in the Merger Agreement or as otherwise described in
this Offer to Purchase, to the best knowledge of Purchaser and Parent, none of
the persons listed in Annex I to this Offer to Purchase, owns any Shares and
none of them has effected any transaction in the Shares during the past 60 days.
Except as set forth in the Merger Agreement or as otherwise described in
this Offer to Purchase, none of Purchaser or Parent, or, to the best knowledge
of Purchaser or Parent, any of the persons listed in Annex I to this Offer to
Purchase, has any contract, arrangement, understanding or relationship with any
other person with respect to any securities of the Company, including, without
limitation, any contract, arrangement, understanding or relationship concerning
the transfer or the voting of any securities of the Company, joint ventures,
loan or option arrangements, puts or calls, guaranties of loans, guaranties
against loss or the giving or withholding of proxies. None of Purchaser or
Parent, or, to the best knowledge of Purchaser or Parent, any of the persons
listed in Annex I to this Offer to Purchase has had any transactions with the
Company, or any of its executive officers, directors or affiliates that would
require reporting, under the rules of the Commission.
Except as set forth in this Offer to Purchase, there have been no contacts,
negotiations or transactions between Purchaser or Parent, nor their respective
subsidiaries, or, to the best knowledge of Purchaser or Parent, any of the
persons listed in Annex I to this Offer to Purchase, on the one hand, and the
Company or its executive officers, directors or affiliates, on the other hand,
concerning a merger, consolidation or acquisition, tender offer or other
acquisition of securities, election of directors, or a sale or other transfer of
a material amount of assets that would require reporting under the rules of the
Commission.
10. SOURCE AND AMOUNT OF FUNDS
If all outstanding Shares not already owned by Parent are tendered to and
purchased by Purchaser, the aggregate purchase price for such Shares and all
estimated commissions, fees and expenses relating to the Offer will be
approximately $25.5 million. The Offer is not subject to a financing
contingency. Parent has sufficient cash to pay all such amounts.
11. BACKGROUND OF THE OFFER; PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH
THE COMPANY
In mid-November 1997, certain operations personnel of Parent were contacted
by sales representatives of the Company, in the ordinary course of business,
seeking to market certain services and products offered by the Company to its
customers. Parent was particularly interested in the Company's switching
products and began a review of publicly available information about the products
offered by the Company. On the basis of publicly available information about the
Company, members of management of Parent had concluded, by late
13
<PAGE> 16
November 1997, that acquisition of all or a part of the business of the Company
would provide an important opportunity for strategic expansion of Parent's
telecommunication business into new markets. On December 2, 1997, Mr. Edward B.
Meyercord, III, Executive Vice President, Marketing and Corporate Development of
Parent, first contacted Mr. Dudley E. Garner, Jr., the Chairman of the Board and
President of the Company, to discuss Parent's interest in a possible transaction
with the Company. Mr. Garner referred Mr. Meyercord to Vista Quest, Inc., an
investor relations firm which represents the Company. On such date, Parent
purchased 21,500 Shares at $5.60 per Share in brokerage transactions.
On December 3 and 4, 1997, Mr. Meyercord and Mr. Garner had further
telephonic discussions, including the possibility of a transaction involving the
Company's subsidiary, American Digital Switching, Inc., a manufacturer of
telephone switching equipment. On December 3, 1997, Parent purchased an
additional 23,200 Shares at $6.95 per Share in brokerage transactions.
On December 5, 1997, Mr. Daniel Borislow, the Chairman of the Board of
Parent, contacted Mr. Garner by telephone. Mr. Garner and Mr. Borislow discussed
possible valuations of the Company and possible forms a transaction might take.
No understanding was reached and no commitments were made by either party. On
that date, Parent purchased an additional 26,900 Shares at $8.21 per Share in
brokerage transactions. Later that evening Mr. Garner contacted Mr. Borislow at
home to confirm that Mr. Garner would inform the members of the Board of
Directors of the Company of Parent's interest in a possible transaction with the
Company.
On December 8 and 9, Mr. Meyercord and Mr. Garner discussed the progress of
the Company's internal discussions concerning a potential transaction with
Parent. Mr. Garner informed Mr. Meyercord of the Company's intention to hire
financial advisors. Parent purchased an additional 73,400 Shares at $10.37 per
Share on December 8, which, together with previous purchases by Parent, resulted
in Parent's aggregate ownership of 145,000 Shares, representing 8.9% of the
outstanding Shares.
On December 10, 1997, Mr. Garner confirmed to Mr. Meyercord that a
financial advisor had been hired by the Company to assist the Company's Board of
Directors in evaluating any potential transactions. On December 11, 1997, to
assist the Company in evaluating the structure of a possible transaction with
Parent, Mr. Meyercord instructed Parent's legal counsel to circulate a
preliminary form of the Merger Agreement to the Company's counsel.
Between December 12 and December 14, 1997, Mr. Borislow continued
discussions with the Company through the Company's financial advisor, Raymond
James & Associates, Inc. ("Raymond James"). On December 15, 1997, Mr. Borislow,
Mr. Garner and a representative of Raymond James had various conversations
relating to the possible structures and the range of prices at which Parent
would be interested in acquiring the Company.
On December 16, 17 and 18, 1997, the Company's counsel and Parent's counsel
negotiated terms of the Merger Agreement.
On December 17, 1997, the Board of Directors of the Company met to consider
the proposed Merger Agreement and the transactions contemplated thereby. The
Board agreed in principle with the proposal, subject to negotiation of final
terms of the Merger Agreement, the Stock Option Agreement and related agreements
by the directors and officers authorized by the Board of Directors to do so.
On the evening of December 18, 1997, Mr. Garner, pursuant to the authority
delegated to him by the Board of Directors, finalized all aspects of the
agreements between the Company and Parent, and the parties executed the Merger
Agreement and the Stock Option Agreement.
On December 19, 1997, Parent and the Company each issued press releases
announcing the Offer and related transactions.
14
<PAGE> 17
12. PURPOSE OF THE OFFER AND THE MERGER; APPRAISAL RIGHTS; PLANS FOR THE
COMPANY
The purpose of the Offer, the Merger and the Merger Agreement is to enable
Parent to acquire control of, and the entire equity interest in, the Company.
Upon consummation of the Merger, Purchaser will become a wholly owned subsidiary
of the Company. The Offer is being made pursuant to the Merger Agreement.
Under the FBCA and the Company's Articles of Incorporation, the approval of
the Board of Directors of the Company and the affirmative vote of the holders of
a majority of the outstanding voting stock of the Company are required to
approve and adopt the Merger Agreement and the Merger. The Company's Board of
Directors unanimously has approved the Offer, the Merger and the Merger
Agreement and the transactions contemplated thereby, and, unless the Merger is
consummated pursuant to the short-form merger provisions under Section 607.1104
of the FBCA 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 majority of the outstanding voting
stock. 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.
The Merger Agreement provides that, if approval or action in respect of the
Merger by the stockholders of the Company is required by the FBCA or its
Articles of Incorporation, the Company will (i) take all action necessary to
convene a meeting of its stockholders (the "Stockholder Meeting") promptly after
the Expiration Date for the purpose of voting upon the Merger, (ii) use all
reasonable efforts to solicit from stockholders of the Company proxies in favor
of the adoption of the Merger Agreement and (iii) if the Stockholder Meeting is
to be called, and if requested by Purchaser, take all other action reasonably
necessary to secure the vote of stockholders in favor of adoption of the Merger
Agreement, subject to the fiduciary duties of its Board of Directors.
SHORT FORM MERGER. Under the FBCA, if Purchaser acquires at least 80% of
the outstanding shares of each class of stock of the Company, Purchaser will be
able to approve the Merger without a vote of the Company's other stockholders.
The only class of stock of the Company outstanding is the Shares. The Merger
Agreement provides that if Purchaser acquires at least 80% of the outstanding
Shares, Purchaser, Parent and the Company will take all necessary and
appropriate action to cause the Merger to become effective as soon as
practicable after the expiration of the Offer without a meeting of stockholders
of the Company in accordance with Section 607.1104 of the FBCA. If Purchaser
does not acquire at least 80% of the outstanding Shares, a significantly longer
period of time may be required to effect the Merger than would be the case if
the Purchaser were to acquire at least 80% of the outstanding Shares, because a
vote of the Company's stockholders would be required under the FBCA.
APPRAISAL RIGHTS. Holders of Shares do not have dissenters' rights as a
result of the Offer. If the Merger is effected with a vote of the Company's
stockholders and if on the record date fixed to determine the stockholders
entitled to vote, the Shares are listed on NASDAQ or on a national securities
exchange or are held of record by 2,000 or more of such stockholders, then
holders of Shares will not have dissenters' rights under the FBCA. If, however,
the Merger is consummated with or without the vote of the Company's shareholders
but the Shares are not so listed or designated or are not held of record by at
least 2,000 shareholders, holders of Shares will have certain rights pursuant to
the provisions of Sections 607.1301, 607.1302 and 607.1320 of the FBCA to
dissent and demand determination of, and to receive payment in cash of the fair
value of, their Shares. If the statutory procedures were complied with, such
rights could lead to a judicial determination of the fair value required to be
paid in cash to such dissenting holders for their Shares. Any such judicial
determination of the fair value of Shares or the market value of the Shares
could be more or less than the Offer Price or the price provided for in the
Merger Agreement. Section 607.1301(2) of FBCA defines "fair value" as the value
of the shares excluding any appreciation or depreciation in anticipation of the
transaction unless such exclusion would be inequitable.
If any holder of Shares who asserts dissenters' rights under the FBCA fails
to perfect, or effectively withdraws or loses his dissenters' rights, as
provided in the FBCA, the Shares of such stockholder will be converted into the
right to receive the price provided for in the Merger Agreement in accordance
with the
15
<PAGE> 18
Merger Agreement. A stockholder may withdraw his notice of election to dissent
by delivery to Parent of a written withdrawal of his notice of election to
dissent and acceptance of the Merger.
THE FOREGOING SUMMARY OF THE RIGHTS OF OBJECTING STOCKHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
STOCKHOLDERS DESIRING TO EXERCISE ANY AVAILABLE DISSENTERS' RIGHTS. THE
PRESERVATION AND EXERCISE OF DISSENTERS' RIGHTS REQUIRES STRICT ADHERENCE TO THE
APPLICABLE PROVISIONS OF SECTION 607.1302 OF THE FBCA, AND WILL ONLY BE
AVAILABLE IN CONNECTION WITH THE CONSUMMATION OF THE MERGER.
RULE 13e-3. 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 or otherwise
in which Purchaser seeks to acquire the remaining Shares not held by it.
Purchaser believes, however, that Rule 13e-3 will not be applicable to the
Merger if the Merger is consummated within one year after the termination of the
Offer at the same per share price as paid in the Offer. If applicable,
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.
BOARD REPRESENTATION. The Merger Agreement provides that, promptly upon
the purchase of such number of Shares as satisfies the Minimum Condition and
from time to time thereafter, Purchaser will be entitled to designate such
number of directors, rounded up to the next whole number, on the Board of
Directors of the Company as will give Purchaser, subject to compliance with
Section 14(f) of the Exchange Act, representation on the Board of Directors of
the Company equal to the product of (a) the number of directors on the Board of
Directors of the Company (after giving effect to the appointment of such
directors) and (b) the percentage that the number of Shares purchased by
Purchaser bears to the number of Common Shares outstanding. The Company has
agreed that, upon request of Purchaser, it will promptly (i) increase the size
of the Company's Board of Directors to the extent permitted by its Articles of
Incorporation and By-Laws (and amend the Articles of Incorporation and By-Laws,
if so required, to increase the size of the Board of Directors to allow for such
additional directors) and/or (ii) take all steps necessary and appropriate to
secure the resignations of such number of directors as is necessary to enable
Purchaser's designees to be elected to the Board of Directors (and hold a
meeting for such purpose); and (iii) cause Purchaser's designees to be so
elected. At the request of Purchaser, the Company has agreed to promptly take,
at its expense, all action required by Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder and necessary to effect any such election,
including the mailing to its stockholders of the information required to be
disclosed pursuant thereto. Purchaser and Parent will supply to the Company in
writing and be solely responsible for any information with respect to themselves
and their nominees, officers, directors and affiliates required by Section 14(f)
and Rule 14f-1.
PLANS FOR THE COMPANY. Except as otherwise set forth in this Offer to
Purchase, it is expected that, initially following the Merger, the business and
operations of the Company will be continued by the Surviving Corporation
substantially as they are currently being conducted. Certain contracts between
the Company and the United States government may require certain notices,
approvals, consents or security clearances in connection with the Offer and the
Merger. Parent expects to take such action as may be required in accordance with
applicable law and the terms of such government contracts. There can be no
assurance that the Company will be able to retain the benefits of any government
contracts with respect to which such notices, approvals, consents or security
clearances may be required.
Parent intends to operate the Company as a subsidiary of Parent. The
directors of Purchaser will be the initial directors of the Surviving
Corporation and the then officers of the Company, other than the Chairman of the
Board and such other persons as are designated by Parent, shall be the initial
officers of the Surviving Corporation. After the purchase of Shares pursuant to
the Offer and prior to the Effective Time, it is anticipated that the Company
will not declare any dividends on the Shares. See Section 14.
16
<PAGE> 19
Parent will evaluate the business, operations, capitalization and
management of the Company during the pendency of, and after the consummation of,
the Offer, and will take such actions as it deems appropriate under the
circumstances then existing with a view to optimizing the Company's potential in
conjunction with Parent's business.
Except as indicated in this Offer to Purchase, Parent does not have any
present plans or proposals which relate to or would result in an extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
involving the Company or any of its subsidiaries, a sale or transfer of a
material amount of assets of the Company or any of its subsidiaries or any
material change in the Company's capitalization or dividend policy or any other
material changes in the Company's corporate structure or business, or the
composition of the Company's management.
13. THE MERGER AGREEMENT
The following summary of certain provisions of the Merger Agreement, a copy
of which is filed as an exhibit to the Schedule 14D-1, is qualified in its
entirety by reference to the text of the Merger Agreement.
THE OFFER. Purchaser commenced the Offer in accordance with the terms of
the Merger Agreement.
THE MERGER. The Merger Agreement provides that, upon the terms and subject
to the conditions of the Merger Agreement, and in accordance with the DGCL and
the FBCA, Purchaser shall be merged with and into the Company. Following the
Effective Time, the separate corporate existence of Purchaser will cease and the
Company will continue as the Surviving Corporation and will succeed to and
assume all the rights and obligations of the Company in accordance with the
FBCA. The Articles of Incorporation of the Company shall become the Articles of
Incorporation of the Surviving Corporation and the By-Laws of Purchaser shall
become the By-Laws of the Surviving Corporation.
CONVERSION OF SHARES. At the Effective Time, each Share issued and
outstanding immediately prior thereto will be canceled and extinguished and each
Share (other than Shares held by the Company as treasury Shares and Shares owned
by Purchaser or Parent) will be converted into and become solely the right to
receive $15.00 net in cash (adjusted for stock splits or other similar events)
per share without interest upon the surrender of the certificate formerly
representing such Share. All Shares held as treasury shares and shares held by
the Purchaser or any of its affiliates will be cancelled at the Effective Time.
All shares of capital stock of Purchaser issued and outstanding immediately
prior to the Effective Time shall be converted and changed into an equal number
of shares of capital stock of the Surviving Corporation.
COMPANY STOCK OPTIONS. Pursuant to the Merger Agreement, at the Effective
Time, each option to purchase Shares issued by the Company (the "Company Stock
Options") which is outstanding at the Effective Time shall be cancelled by
virtue of the Merger. Purchaser has agreed to pay to each holder thereof cash in
an amount per Share subject to such cancelled Company Stock Option equal to the
excess of $15.00 over the exercise price per Share of such Company Stock Option.
REPRESENTATIONS AND WARRANTIES. Pursuant to the Merger Agreement, the
Company has made customary representations and warranties to Purchaser and
Parent, including, but not limited to, representations and warranties relating
to the Company's organization and qualification, its subsidiaries, its
capitalization, its authority to enter into the Merger Agreement and carry out
the transactions contemplated thereby, filings made by the Company with the
Commission under the Securities Act and the Exchange Act (including financial
statements included in the documents filed by the Company under these acts for
the fiscal year ended March 31, 1997), its litigation, and compliance with the
Company's government contracts.
Purchaser and Parent have also made customary representations and
warranties to the Company, including, but not limited to, representations and
warranties relating to Purchaser's and Parent's organization and authority to
enter into the Merger Agreement, that Purchaser will have sufficient funds
available to it to purchase the Shares and that none of Purchaser or Parent owns
(other than possibly through their employee benefit plans) any Shares, other
than as disclosed in filings with the Commission.
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<PAGE> 20
COVENANTS RELATING TO THE CONDUCT OF BUSINESS. Pursuant to the Merger
Agreement, the Company has agreed that it will, and will cause its subsidiaries
to, carry on in all material respects, their respective businesses in the
ordinary course, not issue any capital stock, except as specified in the Merger
Agreement, or take any other action with respect to its capital stock, not take
any action to sell or encumber in any manner their capital stock or material
assets other than in the ordinary course of business, not amend or propose to
amend their certificates of incorporation or by-laws or similar governing
instruments, not incur any indebtedness other than in the ordinary course of
business, not enter into any agreement to change any of their existing
contracts, not enter into or change any employment agreements, not amend or
adopt any employee benefit plans and, to the extent consistent therewith, use
their reasonable best efforts to keep intact their insurance policies, preserve
intact their current business organizations, keep available the services of
their current officers and employees and preserve their relationships with
customers, suppliers and others having business dealings with them.
ACQUISITION PROPOSALS. The Company has agreed in the Merger Agreement that
from the date of the Merger Agreement until the termination of the Merger
Agreement, (a) it and its subsidiaries will not directly or indirectly make,
solicit, initiate or encourage submission of proposals or offers from any
persons (including any of its officers or employees) with respect to an
Acquisition Proposal, and (b) subject to the fiduciary duties of the Company's
Board of Directors, it will immediately cease and cause to be terminated all
discussions or negotiations with third parties with respect to any Acquisition
Proposal and promptly notify Purchaser after receipt of any bona fide
Acquisition Proposal or any inquiry from any person relating thereto and
promptly provide Purchaser with a reasonable summary of the financial and other
material terms of such Acquisition Proposal. An "Acquisition Proposal" is
defined in the Merger Agreement as any proposal or offer involving liquidation,
dissolution, recapitalization, merger, consolidation or acquisition or purchase
of all or substantially all of the assets of, or equity interest in, the Company
or other similar transaction or business combination involving the Company or
its subsidiaries. The Merger Agreement also provides that to the extent that the
Company's Board of Directors, acting in good faith, after receiving advice from
outside legal counsel or its financial advisors that the following action is
necessary or appropriate in order to act in a manner which is consistent with
its fiduciary duties under applicable law, may furnish or cause to be furnished
information to third parties concerning itself and its businesses, properties or
assets, engage in discussions or negotiations with a third party regarding an
Acquisition Proposal initiated by a third party, or, following receipt of an
Acquisition Proposal, take or disclose to its stockholders a position
contemplated by Rule 14e-2(a) under the Exchange Act or otherwise make
disclosure to the Company's stockholders or withdraw, modify or amend its
recommendation of the transactions contemplated by the Merger Agreement and/or
enter into an agreement providing for the consummation of such Acquisition
Proposal.
INDEMNIFICATION. The Merger Agreement provides that, from and after the
Effective Time, Purchaser will indemnify, defend and hold harmless all officers,
directors and employees of the Company or any of its subsidiaries against all
losses, expenses, claims, damages or liabilities arising out of claims brought
or made by third parties including, without limitation, derivative claims in
connection with the transactions contemplated by the Merger Agreement to the
fullest extent permitted or required under applicable law and shall advance
expenses prior to the final disposition of these claims and liabilities.
Purchaser has also agreed to continue to keep in effect all rights to
indemnification now existing in favor of the directors, officers or employees of
the Company or any of its subsidiaries (including, without limitation, any
person who was or becomes a director, officer or employee prior to the Effective
Time (the "Indemnified Parties")) under the FBCA or as provided in the Company's
Articles of Incorporation or By-Laws with respect to matters occurring on or
prior to the Effective Time and for a period of not less than six years after
the Effective Time (or, in the case of claims or other matters occurring on or
prior to the expiration of such six year period, which have not been resolved
prior to the expiration of such six year period, until such matters are finally
resolved) and Purchaser shall honor, and shall cause the Surviving Corporation
to honor, all such rights. Purchaser shall cause to be maintained in effect for
not less than six years from the Effective Time, an insurance and
indemnification policy for the Company's current directors, officers and
employees that covers events occurring at or prior to the Effective Time (the
"D&O Insurance") that is no less favorable than the existing policy of the
Company or, if substantially equivalent insurance coverage is unavailable, the
best available coverage. Purchaser and the Surviving Corporation will not be
required, however, to pay an annual premium for the D&O Insurance in
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<PAGE> 21
excess of 150% of the amount that the Company spent for these purposes in the
last fiscal year. Parent may also substitute therefor policies of at least the
same coverage containing terms and conditions which are no less advantageous.
EMPLOYEE MATTERS. Purchaser has agreed in the Merger Agreement that the
employer-provided benefits and compensation for nonunion employees under the
Company's employee benefit plans and payroll which are in effect as of the
Effective Time (other than any feature of any such plan that relates to the
Shares) will not be reduced after the Effective Time (except to the extent
consistent with the terms of the Merger Agreement and except to the extent
necessary to comply with applicable law) at least until the second anniversary
of the Effective Time. In addition, in connection with the Merger Agreement
Parent has agreed in a letter agreement with the Company to permit certain key
employees of the Company to remain in their current (or comparable) positions
for a period of two years from the Effective Time at compensation levels at
least comparable to their current levels.
ADDITIONAL EFFORTS. Upon the terms and subject to the conditions set forth
in the Merger Agreement, the Company, Purchaser and Parent agree to use all
reasonable efforts to take all actions and to do all things necessary, proper or
advisable to consummate and make effective, as promptly as practicable, the
transactions contemplated by the Offer and the Merger Agreement.
CONDITIONS PRECEDENT TO MERGER. The respective obligations of the Company,
Purchaser and Parent to effect the Merger are subject to the fulfillment at or
prior to the Effective Time of the following conditions: (a) the Offer shall
have been consummated in accordance with its terms; provided, however, that this
condition shall be considered satisfied if Purchaser fails to accept for payment
and pay for Shares pursuant to the Offer other than as a result of a failure of
the conditions to the Offer set forth in Section 15; (b) the waiting period
applicable to the consummation of the Merger under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act") shall have
expired or been terminated; (c) no law, statute, rule or regulation, domestic or
foreign, shall have been enacted or promulgated or is in effect which has the
effect of making the acquisition of Shares illegal or otherwise prohibits
consummation of the Merger; and (d) no preliminary or final injunction or
temporary restraining order or other order or decree has been issued by any
foreign or United States federal or state court or foreign or United States
federal or administrative agency enjoining, restraining or otherwise prohibiting
the Offer, the Merger or the acquisition by Purchaser of Shares.
TERMINATION. The Merger Agreement may be terminated at any time prior to
the Effective Time, whether prior to or after approval by the stockholders of
the Company: (a) by mutual written consent of Purchaser and the Company; (b) by
either Purchaser or the Company if: (i) the Offer shall not have been
consummated by March 1, 1998; or (ii) at any time after June 30, 1998, if any of
the conditions set forth in the immediately preceding paragraph "Conditions
Precedent to Merger" have not been satisfied or waived; (c) by Purchaser: (i) if
the Board of Directors of the Company shall have failed to recommend, or shall
have withdrawn, its approval or recommendation of the Offer or the Merger or
shall have resolved to do any of the foregoing or if the Company shall have
entered into a definitive agreement to accept an Acquisition Proposal (as the
term is defined in Section 13 "--Acquisition Proposals"); (ii) if the Company's
Board of Directors modifies its approval of the Offer or the Merger in a manner
adverse to Purchaser and the Minimum Condition shall not have been met on the
Expiration Date; (iii) if as a result of the failure of any conditions set forth
in Section 15, the Offer shall have terminated or expired without Purchaser or a
subsidiary of Parent having purchased any Shares in the Offer; or (d) by the
Company, if the Company's Board of Directors, acting in good faith, after
receiving advice from outside counsel or its financial advisors that the
following action is necessary or appropriate in order for it to act in a manner
which is consistent with its fiduciary duties under applicable law,
(1) following receipt of an Acquisition Proposal from a third party, withdraws,
modifies or amends its recommendations of the Offer or the Merger or (2) enters
into an agreement providing for the consummation of an Acquisition Proposal
following receipt of an Acquisition Proposal from a third party. Notwithstanding
the foregoing, the Merger Agreement provides that the right to terminate the
Merger Agreement pursuant to any of the events set forth above will not be
available to any party if the event which gave rise to such termination right is
a result of or arose in connection with any action or inaction of the party
seeking to terminate taken or not taken in breach of the terms of the Merger
Agreement.
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<PAGE> 22
FEES AND EXPENSES. Except as described in the next sentence, pursuant to
the Merger Agreement, each of the Company and Purchaser agreed to pay its own
respective costs and expenses incurred in connection with the Merger Agreement
and the transactions contemplated thereby. The Company also agreed in the Merger
Agreement that, if the Merger Agreement is terminated pursuant to: (1) clause
(b)(ii) (set forth above in "Termination") and at the time of such termination
any person, entity or group (as defined in Section 13(d)(3) of the Exchange Act)
(other than Purchaser or Parent) shall have become the beneficial owner of more
than 20% of the outstanding Shares (with appropriate adjustments for
reclassifications of capital stock, stock dividends, stock splits, reverse stock
splits and similar events) and such person, entity or group (or any subsidiary
of such person, entity or group) thereafter enters into a definitive agreement
with the Company to accept an Acquisition Proposal at any time on or prior to
the date which is six months after the termination of the Merger Agreement and
such transaction is thereafter consummated; (2) clause (c)(ii) (set forth above
in "Termination") and at the time of termination of the Merger Agreement, the
Company shall enter into a definitive agreement to accept an Acquisition
Proposal at any time on or prior to the date which is six months after the
termination of the Merger Agreement; (3) clause (c)(iii) (set forth above in
"Termination") and such failure was the result of any action taken by or on
behalf of the Company giving rise to an Event specified in clause (a), (b), (c),
(d), (f), (g) or (i) of Section 15 and such action was in breach of the
Company's obligations under the Merger Agreement and, with respect to an Event
specified in clause (g), if such action was taken by the Company for the purpose
of causing Purchaser to terminate the Merger Agreement; or (4) clause (d) or
clause (c)(i) (each as set forth above under "Termination"); then the Company
shall grant to Purchaser an option, pursuant to the Stock Option Agreement, to
purchase that number of Shares which would equal 19.9% of the aggregate number
of Shares outstanding after giving effect to the exercise of such option.
14. DIVIDENDS AND DISTRIBUTIONS
The Merger Agreement provides that neither the Company nor any of its
subsidiaries will, among other things, prior to the Effective Time declare, set
aside or pay any dividends, or make other distributions payable in cash, stock,
property or otherwise with respect to the Common Shares except as expressly
permitted therein.
15. CERTAIN CONDITIONS TO PURCHASER'S OBLIGATIONS
Purchaser will not be required to continue the Offer or to accept for
payment or pay for any Shares tendered, may postpone the acceptance for payment,
purchase of and/or payment for Shares, may amend or terminate the Offer, and may
extend the Offer beyond January 21, 1998 (the "Initial Expiration Date," in
which event the expiration date ("Expiration Date") shall mean the latest time
and date which the Offer as so extended by Purchaser shall expire) whether or
not any Shares have theretofore been purchased or paid for, (i) if the Minimum
Condition shall not have been satisfied or (ii) if, at any time on or after
December 22, 1997 and prior to the time of payment for any such Shares any of
following events (each referred to as an "Event") have occurred (each of
paragraphs (a) through (j) providing a separate and independent condition to
Purchaser's obligations pursuant to the Offer); provided, however, that
Purchaser may waive any Event at any time:
(a) there shall be in effect any preliminary or final injunction or
temporary restraining order or other order or decree issued by any foreign
or United States federal or state court or foreign or United States federal
or administrative agency or authority, enjoining, restraining or otherwise
prohibiting the Offer, the Merger or the acquisition by Parent or Purchaser
of Shares;
(b) an action or a proceeding shall have been commenced by any
governmental agency under federal or state antitrust laws or any other
applicable law before any court or any governmental or other administrative
or regulatory authority or agency, domestic or foreign, or there shall be
an imminent threat which would reasonably be expected to result in the
foregoing, or any of the authorizations required to be obtained pursuant to
the provisions of the Merger Agreement shall have been conditioned in such
a manner, that would reasonably be expected to (i) materially restrict or
prohibit consummation of the Offer or the Merger or any other merger or
business combination between the Company, Parent and Purchaser, (ii) impose
material limitations on the ability of Parent or Purchaser effectively to
acquire or
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<PAGE> 23
hold or to exercise full rights of ownership of the Shares acquired by it,
including, but not limited to, the right to vote the Shares purchased by it
on all matters properly presented to the stockholders of the Company, or
(iii) impose material limitations on the ability of either Purchaser or the
Company to continue effectively to conduct all or any material portion of
its respective business as heretofore conducted or to continue to own or
operate effectively all or any material portion of its respective assets as
heretofore owned or operated;
(c) there shall have been any law, statute, rule or regulation,
domestic or foreign, enacted, promulgated or proposed that, directly or
indirectly, would reasonably be expected to result in any of the
consequences referred to in paragraph (b) above;
(d) a material adverse change in the business, property, financial
condition or results of operations of the Company and its subsidiaries
taken as a whole shall have occurred;
(e) there shall have occurred (i) any general suspension of trading in
securities on the New York Stock Exchange, (ii) a declaration of a banking
moratorium or any suspension of payments by United States authorities on
the extension of credit by lending institutions, or (iii) a commencement of
a war, armed hostilities or other international or national calamity
directly or indirectly involving the United States which would reasonably
be expected to have a material adverse effect on the business, property,
financial condition or results of operations of the Company and its
subsidiaries taken as a whole;
(f) any representation or warranty of the Company in the Merger
Agreement shall at any time prove to have been incorrect in any material
respect at the time made;
(g) the Company shall fail to perform or comply in any material
respect with any covenant or agreement to be performed or complied with by
the Company under the Merger Agreement;
(h) the Company and Purchaser shall have agreed to terminate the Offer
or the Merger Agreement or the Tender and Option Agreements is no longer in
full force and effect;
(i) the Board of Directors of the Company or the Company, as the case
may be, shall have (i) publicly (including by amendment of the Schedule
14D-9) withdrawn its recommendation to stockholders of acceptance of the
Offer and adoption of the Merger Agreement, or shall have resolved to do
so; or (ii) entered into an agreement with a third party providing for the
acquisition or purchase of all or substantially all of the assets of, or
equity interest in, the Company by such third party; and
(j) the Offer shall not have been consummated by March 1, 1998.
The foregoing conditions are for the sole benefit of Parent and Purchaser
and may be asserted by Parent and Purchaser regardless of the circumstances
giving rise to such condition or may be waived by Parent or Purchaser in whole
at any time or in part from time to time in its reasonable 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 and each such right shall
be deemed an ongoing right and may be asserted at any time and from time to
time. If the Offer is terminated pursuant to the foregoing provisions, all
tendered Shares not theretofore accepted for payment shall forthwith be returned
by the Depositary to the tendering stockholders.
16. CERTAIN REGULATORY AND LEGAL MATTERS
Except as set forth in this Section 16, neither Parent nor Purchaser is
aware of any approval or other action by any governmental or administrative
agency which would be required for the acquisition or ownership of Shares by
Purchaser as contemplated herein. Should any such approval or other action be
required, it will be sought, but Purchaser has no current intention to delay the
purchase of Shares tendered pursuant to the Offer pending the outcome of any
such matter, subject, however, to Purchaser's right to decline to purchase
Shares if the Minimum Condition has not been satisfied or if any of the Events
specified in Section 15 shall have occurred. There can be no assurance that any
such approval or other action, if needed, would be obtained or would be obtained
without conditions that Purchaser is not required to accept.
ANTITRUST. Under the provisions of the HSR Act applicable to the Offer,
the acquisition of Shares under the Offer may be consummated following the
expiration of a 15 calendar-day waiting period following the filing by Parent of
a Notification and Report Form with respect to the Offer, unless Parent receives
a request for additional information or documentary material from the Department
of Justice, Antitrust Division (the
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<PAGE> 24
"Antitrust Division") or the Federal Trade Commission ("FTC") or unless early
termination of the waiting period is granted. Purchaser made such a filing on
December 19, 1997. If, within the initial 15-day waiting period, either the
Antitrust Division or the FTC requests additional information or material from
Parent concerning the Offer, the waiting period will be extended to the tenth
calendar day after the date of substantial compliance by Parent with such
request. Complying with a request for additional information or material can
take a significant amount of time.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as Purchaser's proposed acquisition of
Shares pursuant to the Offer or the consummation of the Merger or seeking the
divestiture of Shares acquired by Purchaser or the divestiture of substantial
assets of the Company or its subsidiaries or Parent or its subsidiaries. Private
parties may also bring legal action under the antitrust laws under certain
circumstances. There can be no assurance that a challenge to the Offer on
antitrust grounds will not be made, or, if such a challenge is made, of the
result thereof.
If any applicable waiting period under the HSR Act has not expired or been
terminated prior to the Expiration Date, Purchaser will not be obligated to
proceed with the Offer or the purchase of any Shares not theretofore purchased
pursuant to the Offer. See Section 15.
STATE TAKEOVER LAWS. The Company is incorporated under the laws of the
State of Florida. The FBCA contains certain provisions relating to "affiliated
transactions" which purport to regulate, among other things, certain business
combinations, including mergers and consolidations, involving a Florida
corporation with any person who is the beneficial owner of more than 10 percent
of the outstanding voting shares of such corporation (an "Interested
Shareholder"). Under Section 607.0901 of the FBCA (the "Affiliated Transactions
Statute"), with certain exceptions, a Florida corporation shall not engage in
such a transaction with an Interested Shareholder unless the transaction is
approved by the holders of two-thirds of the voting shares other than the shares
owned by the Interested Shareholder. Such exceptions include transactions
approved by a majority of the corporation's directors who are not affiliated or
associated with the Interested Shareholder. At a special meeting held on
December 17, 1997, the Company's Board of Directors, none of whom are affiliated
or associated with the Purchaser or Parent, has unanimously approved the Merger
Agreement and the transactions contemplated thereby, including the Merger, and
determined that each of the Offer and Merger are fair to and in the best
interests of the holders of the Company's Shares. Accordingly, the Affiliated
Transaction Statute has been satisfied and is therefore inapplicable with
respect to the Parent and the Purchaser in connection with the Merger and the
transactions contemplated thereby, including the Offer.
The FBCA also contains provisions relating to acquisitions of "control
shares," which is defined as shares that entitle a person to exercise more than
specified proportions of the voting power of a Florida public corporation
(commencing with the acquisition of 20% or more of the voting shares of such
corporation). Section 607.0902 of the FBCA (the "Control Share Acquisitions
Statute") purports to limit the voting rights of control shares acquired in
certain types of acquisitions (a "control-share acquisition") unless the
acquisition of the control shares has been approved by the board of directors of
such corporation or certain other statutory conditions have been met. At a
special meeting held on December 17, 1997, the Company's Board of Directors has
unanimously approved the acquisition of the Shares pursuant to the Merger
Agreement (including the Offer and the Merger) the Tender and Option Agreements
and the Stock Option Agreement and, accordingly, the Control Share Acquisitions
Statute is inapplicable with respect to any such acquisition by the Parent and
Purchaser.
A number of other states throughout the United States have enacted takeover
statutes that purport, in varying degrees, to be applicable to attempts to
acquire securities of corporations that are incorporated or have assets,
shareholders, executive offices or places of business in such states. In Edgar
v. MITE Corp., the Supreme Court of the United States held that the Illinois
Business Takeover Act, which involved state securities laws that made the
takeover of certain corporations more difficult, imposed a substantial burden on
interstate commerce and therefor was unconstitutional. In CTS Corp. v. Dynamics
Corp. of America, however, the Supreme Court of the United States held that a
state may, as a matter of corporate law and, in particular, those laws
concerning corporate governance, constitutionality disqualify a potential
acquiror from voting on the affairs of a target corporation without prior
approval of the remaining shareholders, provided that such laws were applicable
only under certain conditions.
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<PAGE> 25
Based on information supplied by the Company and the Company's
representations and warranties contained in the Merger Agreement, the Purchaser
does not believe that, other than as set out above, any state takeover statutes
purport to apply to the offer or the Merger. Neither Purchaser nor Parent has
currently complied with any state takeover statute or regulation. Purchaser
reserves the right to challenge the applicability or validity of any state law
purportedly applicable to the Offer or the Merger and nothing in this Offer to
Purchase or any action taken in connection with the Offer or the Merger is
intended as a waiver of such right. If it is asserted that any state takeover
statute applicable to the Offer or the Merger and an appropriate court does not
determine that it is inapplicable or invalid as applies to the Offer or the
Merger, Purchaser might be required to file certain information with, or to
receive approvals from, the relevant state authorities, and Purchaser might be
unable to accept for payment for pay for Shares tendered pursuant to the Offer,
or be delayed in consummating the Offer or the Merger. In such case, the
Purchaser may not be obliged to accept payment or pay for any Shares tendered
pursuant to the Offer.
GOVERNMENT CONTRACTS. Certain contracts between the Company and the United
States government may require certain notices, approvals, consents or security
clearances in connection with the Offer and the Merger. Parent expects to take
such action as may be required in accordance with applicable law and the terms
of such government contracts. There can be no assurance that the Company will be
able to retain the benefits of any government contracts with respect to which
such notices, approvals, consents or security clearances may be required.
FOREIGN APPROVALS. Based on information supplied by the Company, Purchaser
does not believe that any foreign takeover statutes or similar regulatory
provisions apply to the Offer or the Merger and, therefore, neither Purchaser
nor Parent currently has complied with any such foreign takeover statute or
regulation. Purchaser reserves the right to challenge the applicability or
validity of any foreign law or regulation purportedly applicable to the Offer or
the Merger and nothing in this Offer to Purchase or any action taken in
connection with the Offer or the Merger is intended as a waiver of such right.
If it is asserted that any foreign takeover statute or regulation is applicable
to the Offer or the Merger and an appropriate court or other body does not
determine that it is inapplicable or invalid as applied to the Offer or the
Merger, Purchaser might be required to file certain information with, or to
receive approvals from, the relevant foreign authorities, and Purchaser might
not be able to accept for payment or pay for Shares tendered in the Offer, or be
delayed in consummating the Offer or the Merger. In such case, Purchaser may not
be obligated to accept for payment or pay for any Shares tendered pursuant to
the Offer.
17. FEES AND EXPENSES
Gerard Klauer Mattison & Co., Inc. is acting as the Dealer Manager in
connection with the Offer and is acting as exclusive financial advisor to Parent
with respect to Parent's proposed acquisition of the Company. Parent and
Purchaser have agreed to pay the Dealer Manager customary fees for such
services. Parent and Purchaser have also agreed to reimburse the Dealer Manager
for its reasonable out-of-pocket expenses, including the fees and expenses of
its counsel, in connection with its engagement, and have agreed to indemnify the
Dealer Manager against certain liabilities and expenses in connection with its
engagement, including liabilities under the federal securities laws.
Purchaser has retained Morrow & Co., Inc. as Information Agent, and First
Union National Bank as Depositary, in connection with the Offer. The Information
Agent and the Depositary each will receive reasonable and customary compensation
for their services hereunder and reimbursement for their reasonable
out-of-pocket expenses. The Information Agent may contact holders of Shares by
mail, telephone, facsimile, telegraph and personal interviews and may request
brokers, dealers, commercial banks, trust companies and other nominees to
forward materials relating to the Offer to beneficial owners of Shares. The
Information Agent and the Depositary will also be indemnified by Purchaser
against certain liabilities in connection with the Offer, including certain
liabilities under the federal securities laws. Neither the Information Agent nor
the Depositary has been retained to make solicitations or recommendations in
connection with the Offer.
Except as described herein, none of Purchaser or Parent or any officer,
director, stockholder, agent or other representative of Purchaser or Parent will
pay any fees or commissions to any broker, dealer or other person for soliciting
tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks,
trust
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companies and other nominees will, upon request, be reimbursed by Purchaser for
customary mailing and handling expenses incurred by them in forwarding offering
materials to their customers.
18. MISCELLANEOUS
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares residing in any jurisdiction in which the making or
acceptance thereof would not be in compliance with the securities, blue sky or
other laws of such jurisdiction. Purchaser is not aware of any jurisdiction in
which the making of the Offer is not in compliance with applicable law. If
Purchaser becomes aware of any jurisdiction in which the making of the Offer
would not be in compliance with applicable law, Purchaser will make a good faith
effort to comply with such law. If, after such good faith effort, Purchaser
cannot comply with such law, the Offer will not be made to, nor will tenders be
accepted from or on behalf of, holders of Shares residing in any such
jurisdiction. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of Purchaser by the Dealer Manager or 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 Parent other than as contained in this
offer to purchase or in the letter of transmittal and, if any such information
or representation is given or made, it should not be relied upon as having been
authorized.
Purchaser and Parent have filed with the Commission a Statement on Schedule
14D-1 pursuant to Section 14(d)(1) of the Exchange Act and Rule 14d-3
promulgated thereunder, furnishing certain additional information with respect
to the Offer, and may file amendments thereto. In addition, the Company has
filed with the Commission a Solicitation/Recommendation Statement on Schedule
14D-9 pursuant to Rule 14d-9 under the Exchange Act, setting forth the
recommendation of the Board with respect to the Offer and the reasons for such
recommendation and furnishing certain additional related information. The
Schedule 14D-9 is being mailed to stockholders of the Company herewith. The
Schedule 14D-1 and Schedule 14D-9 and any amendments thereto, including
exhibits, may be examined and copies may be obtained at the same places and in
the same manner as set forth with respect to the Company in Section 8 (except
that they will not be available at the regional offices of the Commission).
TEL-SAVE HOLDINGS, INC.
TSHCo, Inc.
December 22, 1997
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ANNEX I
DIRECTORS AND EXECUTIVE OFFICERS
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT.
The following table sets forth the name, business address and present
principal occupation or employment, and material occupations, positions, offices
or employments for the past five years, of each director and executive officer
of Parent. Each such person is a citizen of the United States of America and,
unless otherwise indicated below, the business address of each such person is
6805 Route 202, New Hope, Pennsylvania, 18938.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------------- --- --------------------------------------------------
<S> <C> <C>
Daniel Borislow.................... 36 Chairman of the Board, Chief Executive Officer and
Director
Gary W. McCulla.................... 38 President and Director of Sales and Marketing and
Director
Emanuel J. DeMaio.................. 38 Chief Operations Officer and Director
George Farley...................... 59 Chief Financial Officer, Treasurer and Director
Edward B. Meyercord, III........... 32 Executive Vice President, Marketing and Corporate
Development
Mary Kennon........................ 38 Director of Customer Care and Human Relations
Aloysius T. Lawn, IV............... 38 General Counsel and Secretary
Kevin R. Kelly..................... 32 Controller
Harold First....................... 61 Director
Ronald R. Thomas................... 61 Director
</TABLE>
Daniel Borislow. Mr. Borislow founded Parent's predecessor in 1989 and has
served as a director and as Chief Executive Officer of Parent since its
inception in 1995. Prior to founding Parent's predecessor, Mr. Borislow formed
and managed a cable construction company.
Gary W. McCulla. Mr. McCulla joined Parent's predecessor in March 1994 and
currently serves as Parent's President and Director of Sales and Marketing. In
1991, Mr. McCulla founded GNC and was its President until March 1994. GNC was a
privately-held independent marketing company and a partition of Parent's
predecessor. In March 1994, Parent's predecessor acquired certain assets of GNC.
Emanuel J. DeMaio. Mr. DeMaio joined Parent's predecessor in February 1992
and currently serves as Parent's Chief Operations Officer. From 1981 through
1992, Mr. DeMaio held various technical and managerial positions with AT&T.
George Farley. Mr. Farley became Chief Financial Officer and Treasurer of
Parent effective October 29, 1997. Mr. Farley is formerly Group Vice President
of Finance/Chief Financial Officer of Twin County Grocers, Inc. ("Twin County"),
a food distribution company. Prior to joining Twin County in September 1995, Mr.
Farley was a partner of BDO Seidman, LLP, an accounting firm, where he had
served as a partner since 1974.
Edward B. Meyercord, III. Mr. Meyercord joined Parent in September 1996 and
currently serves as Executive Vice President, Marketing and Corporate
Development. From 1993 until joining Parent, Mr. Meyercord worked in the
corporate finance department of Salomon Brothers, where he held various
positions, the most recent of which was Vice President. Prior to joining Salomon
Brothers, Mr. Meyercord worked in the corporate finance department at Paine
Webber Incorporated.
Mary Kennon. Ms. Kennon joined Parent's predecessor in October 1994 and
currently serves as Parent's Director of Customer Care and Human Resources. From
1984 through 1994, Ms. Kennon held various managerial positions with AT&T.
I-1
<PAGE> 28
Aloysius T. Lawn, IV. Mr. Lawn joined Parent in January 1996 and currently
serves as General Counsel and Secretary. From 1985 through 1995, Mr. Lawn was an
attorney in private practice.
Kevin R. Kelly. Mr. Kelly joined Parent's predecessor in April 1994 and
currently serves as Parent's Controller. From 1987 to 1994, Mr. Kelly held
various managerial positions with a major public accounting firm. Mr. Kelly is a
certified public accountant.
Harold First. Mr. First is a certified public accountant and is currently a
Financial Consultant. Mr. First served as Chief Financial Officer of Icahn
Holdings Corporation and related entities from December 1990 through December
1992. Mr. First currently serves as a director of Cadus Pharmaceutical
Corporation, Marvel Entertainment Group, Inc., Pansaco, Inc. and Toy Biz Inc.
Mr. First has served as a director of Parent since 1995. Mr. First's business
address is 345 Park Avenue, 35th Floor, New York, New York, 10150.
Ronald R. Thomas. Mr. Thomas currently serves as Executive Vice President
of Crown Cork and Seal Company, Inc., a manufacturer of packaging products,
where he has been employed since 1955. Mr. Thomas has served as a director of
Parent since 1995. Mr. Thomas' business address is 9300 Ashton Road,
Philadelphia, Pennsylvania 19136.
2. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER.
The following table sets forth the name, business address and present
principal occupation or employment, and material occupations, positions, offices
or employments for the past five years, of each director and executive officer
of Purchaser. Each such person is a citizen of the United States of America, and
the business address of each such person is 6805 Route 202, New Hope,
Pennsylvania 18938.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------------- --- --------------------------------------------------
<S> <C> <C>
Daniel Borislow.................... 36 Chairman, Chief Executive Officer and Director
Gary W. McCulla.................... 38 President and Director
Emanual J. DeMaio.................. 38 Chief Operations Officer and Director
Edward B. Meyercord, III........... 32 Vice President
Aloysius T. Lawn, IV............... 38 Vice President and Secretary
</TABLE>
Daniel Borislow. Mr. Borislow founded Parent's predecessor in 1989 and has
served as a director and as Chief Executive Officer of Parent since its
inception in 1995. Prior to founding Parent's predecessor, Mr. Borislow formed
and managed a cable construction company.
Gary W. McCulla. Mr. McCulla joined Parent's predecessor in March 1994 and
currently serves as Parent's President and Director of Sales and Marketing. In
1991, Mr. McCulla founded GNC and was its President until March 1994. GNC was a
privately-held independent marketing company and a partition of Parent's
predecessor. In March 1994, Parent's predecessor acquired certain assets of GNC.
Emanuel J. DeMaio. Mr. DeMaio joined Parent's predecessor in February 1992
and currently serves as Parent's Chief Operations Officer. From 1981 through
1992, Mr. DeMaio held various technical and managerial positions with AT&T.
Edward B. Meyercord, III. Mr. Meyercord joined Parent in September 1996 and
currently serves as Executive Vice President, Marketing and Corporate
Development. From 1993 until joining Parent, Mr. Meyercord worked in the
corporate finance department of Salomon Brothers, where he held various
positions, the most recent of which was Vice President. Prior to joining Salomon
Brothers, Mr. Meyercord worked in the corporate finance department at
PaineWebber Incorporated.
Aloysius T. Lawn, IV. Mr. Lawn joined Parent in January 1996 and currently
serves as General Counsel and Secretary. From 1985 through 1995 Mr. Lawn was an
attorney in private practice.
I-2
<PAGE> 29
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by each stockholder of the
Company or such stockholder's broker, dealer, bank, trust company or other
nominee to the Depositary at its address set forth below.
The Depositary for the Offer is:
FIRST UNION NATIONAL BANK
<TABLE>
<CAPTION>
By Facsimile:
By Hand, Mail By Overnight Courier 704-590-7628
<S> <C> <C>
1525 W.T. Harris Blvd. 1525 W.T. Harris Blvd. To Confirm:
Charlotte, NC 28288-1153 Charlotte, NC 28262 704-590-7408
Attn: Reorg Dept. Attn: Reorg Dept. Toll Free:
3C3-1153 3C3-1152 1-800-829-8432
</TABLE>
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may be directed to the Information Agent at its telephone number and
location listed below. You may also contact your broker, dealer, bank, trust
company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
MORROW & CO., INC.
909 THIRD AVENUE
NEW YORK, NEW YORK 10019
TOLL FREE: (800) 566-9061
Banks and Brokerage Firms Please Call:
(800) 662-5200
The Dealer Manager for the Offer is:
GERARD KLAUER MATTISON & CO., INC.
529 Fifth Avenue
New York, New York 10017
(212) 885-4143
<PAGE> 1
EXHIBIT (a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
SYMETRICS INDUSTRIES, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED DECEMBER 22, 1997
BY
TSHCo, INC.
A WHOLLY OWNED SUBSIDIARY
OF
TEL-SAVE HOLDINGS, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY,
JANUARY 21, 1998, UNLESS THE OFFER IS EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
FIRST UNION NATIONAL BANK
By Hand, By Mail: 1525 W.T. Harris Blvd., Charlotte, NC 28288-1153
By Overnight Courier: 1525 W.T. Harris Blvd., Charlotte NC 28262
By Facsimile: 704-590-7628
Toll Free: (800) 829-8432
DELIVERY OF THIS LETTER OF TRANSMITTAL 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.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL
SHOULD BE READ CAREFULLY BEFORE THIS LETTER
OF TRANSMITTAL IS COMPLETED.
<PAGE> 2
This Letter of Transmittal is to be used by stockholders of Symetrics
Industries, Inc. either if certificates for tendered 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 First Union National Bank, (the
"Depositary") at The Depository Trust Company ("DTC"), the Midwest Securities
Trust Company ("MSTC"), the Pacific Securities Depository Trust Company
("PSDTC") or the Philadelphia Depository Trust Company ("PDTC," and together
with DTC, MSTC and PSDTC, collectively, the "Book-Entry Transfer Facilities,"
and individually, a "Book-Entry Transfer Facility") pursuant to the procedure
set forth in Section 3 of the Offer to Purchase (as defined below). DELIVERY OF
DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
Stockholders who deliver Shares by book-entry transfer are referred to
herein as "Book-Entry Stockholders" and other stockholders are referred to
herein as "Certificate Stockholders." If a stockholder wishes to tender Shares
pursuant to the Offer (as defined below) and such stockholder's certificates for
Shares are not immediately available or time will not permit certificates and
all required documents to reach the Depositary on or prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase) or the procedure for
book-entry transfer cannot be completed on a timely basis, such Shares may
nevertheless be tendered by complying with the guaranteed delivery procedure set
forth in Section 3 of the Offer to Purchase. See Instruction 2.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN A BOOK-ENTRY TRANSFER
FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution:
Check Box of Book-Entry Transfer Facility:
(CHECK ONE)
[ ] DTC
[ ] MSTC
[ ] PSDTC
[ ] PDTC
Account Number:
Transaction Code Number:
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING
(PLEASE INCLUDE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY):
Name(s) of Registered Holder(s):
Window Ticket Number (if any):
Date of Execution of Notice of Guaranteed Delivery:
Name of Institution which Guaranteed Delivery:
If Delivered by Book-Entry Transfer, Check Box of Book-Entry Transfer Facility
and Provide the Account Number and Transaction Code Number:
(CHECK ONE)
[ ] DTC
[ ] MSTC
[ ] PSDTC
[ ] PDTC
Account Number:
Transaction Code Number:
<PAGE> 3
- --------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- --------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES)
OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK,
EXACTLY AS NAMES(S) APPEAR(S)
ON THE CERTIFICATE(S))
================================================================================
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
(ATTACH ADDITIONAL LIST IF NECESSARY)
------------------------------------------------------------------------------------------------------------------
CLASS AND TOTAL NUMBER
SERIES OF OF SHARES NUMBER
CERTIFICATE SHARES REPRESENTED REPRESENTED BY OF SHARES
NUMBER(S)* BY CERTIFICATE(S) CERTIFICATE(S)* TENDERED
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
==================================================================================================================
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented by any certificates delivered to the
Depositary are being tendered. See Instruction 4.
------------------------------------------------------------------------------------------------------------------
</TABLE>
The names and addresses of the registered holders should be printed, if not
already printed above, exactly as they appear on the certificate(s) representing
Shares tendered hereby. The class and series of Shares tendered, the
certificates and the number of Shares that the undersigned wishes to tender
should be indicated in the appropriate boxes.
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
<PAGE> 4
LADIES AND GENTLEMEN:
The undersigned hereby tenders to TSHCo, Inc., a Delaware corporation
("Purchaser") and a wholly owned subsidiary of Tel-Save Holdings, Inc., a
Delaware corporation, the above-described outstanding shares of Symetrics
Industries, Inc., a Florida corporation (the "Company"), pursuant to Purchaser's
offer to purchase all outstanding shares of Common Stock, par value $0.25 per
share (the "Shares"), at a price of $15.00 per share net to the seller in cash,
upon the terms and subject to the conditions of the Offer to Purchase dated
December 22, 1997 (the "Offer to Purchase"), and this Letter of Transmittal
(which together constitute the "Offer"), receipt of which is hereby
acknowledged. The consideration to be paid by Purchaser pursuant to the Offer to
a stockholder tendering the above-referenced Shares is hereinafter referred to
as the "Purchase Price." 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 direct or indirect subsidiaries of Parent, the right to purchase all or any
portion of the Shares tendered pursuant to the Offer, but any such transfer or
assignment will not relieve Purchaser of its obligations under the Offer or
prejudice the rights of tendering stockholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Offer.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of such extension or
amendment), and subject to, and effective upon, acceptance for payment of the
Shares tendered herewith by Purchaser, the undersigned hereby sells, assigns and
transfers to, or upon the order of, Purchaser all right, title and interest in
and to all the Shares that are being tendered hereby and all dividends,
distributions (including, without limitation, distributions of additional
Shares) and rights declared, issued, paid or distributed in respect of any such
Shares on or after December 18, 1997 and payable or distributable to the
undersigned on a date prior to the transfer to the name of Purchaser (or nominee
or transferee of Purchaser) on the Company's stock transfer records of the
Shares tendered herewith (collectively, "Distributions") and irrevocably
constitutes and appoints the Depositary the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares and all
Distributions, with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest) to (i) deliver
certificates for such Shares and all Distributions or transfer ownership of such
Shares and all Distributions on the account books maintained by a Book-Entry
Transfer Facility, together, in either such case, with all accompanying
evidences of transfer and authenticity, to or upon the order of Purchaser, upon
receipt by the Depositary, as the undersigned's agent, of the Purchase Price,
(ii) present such Shares and all Distributions for transfer on the Company's
books 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 and subject to the conditions of the Offer.
The undersigned hereby irrevocably appoints the designees of Purchaser, and
each of them, as the undersigned's attorneys-in-fact and proxies, each with full
power of substitution, in the manner set forth herein, to the full extent of the
undersigned's rights with respect to the Shares tendered by the undersigned and
accepted by Purchaser and all Distributions. All such powers of attorney and
proxies are irrevocable and coupled with an interest in the Shares tendered
herewith and are granted in consideration of, and effective upon, Purchaser's
oral or written notice to the Depositary of its acceptance for payment of such
Shares in accordance with the terms of the Offer. Upon such acceptance for
payment, all prior powers of attorney and proxies given by the undersigned with
respect to such Shares (and all Distributions) will, without further action, be
revoked and no subsequent powers of attorney and proxies may be given or written
consent executed by the undersigned and if given or executed will not be deemed
effective. The designees of Purchaser will be empowered, among other things, to
exercise all voting and other rights with respect to such Shares (and all
Distributions) of the undersigned for which such appointment is effective as
they, in their sole discretion, may deem proper at any annual or special meeting
of the stockholders of the Company, or any adjournment or postponement thereof,
or by written consent in lieu of any such meeting, or otherwise. The undersigned
acknowledges and understands that in order for Shares to be deemed validly
tendered, immediately upon Purchaser's acceptance for payment of such Shares,
Purchaser must be able to exercise full voting rights and other rights of a
record and beneficial holder with respect to such Shares (and all
Distributions), including, without limitation, voting at any meeting of
stockholders then or thereafter scheduled or acting by written consent (whether
annual or special or whether or not adjourned).
<PAGE> 5
The undersigned hereby represents and warrants that: (i) the undersigned
has full power and authority to tender, sell, assign and transfer the Shares
tendered hereby (and all Distributions) and (ii) when the same are accepted for
payment by Purchaser, Purchaser will acquire good, marketable and unencumbered
title thereto, free and clear of all liens, restrictions, charges, claims and
encumbrances, and none of such Shares and Distributions will be subject to any
adverse claim. The undersigned shall, upon request, 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 the Shares tendered
hereby (and all Distributions). In addition, the undersigned shall promptly
remit and transfer to the Depositary for the 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, subject to applicable law, be
entitled to all rights and privileges as owner of such Distributions and may
withhold the entire Purchase Price, or deduct from the Purchase Price, the
amount or value of such Distributions as determined by Purchaser in its sole
discretion.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall survive, and remain unaffected by, the death, dissolution,
insolvency, bankruptcy or incapacity of the undersigned, and all obligations of
the undersigned hereunder shall be binding upon the successors, assigns, heirs,
executors, administrators, receivers, trustees in bankruptcy and legal and
personal representatives of the undersigned. Except as stated in Section 4 of
the Offer to Purchase, this tender is irrevocable.
The undersigned understands that the valid tender of Shares and acceptance
for payment of such Shares pursuant to any of the procedures described in
Section 2 of the Offer to Purchase and in the Instructions hereto will
constitute the undersigned's acceptance of the terms and conditions of the
Offer. The undersigned recognizes that under certain circumstances set forth in
the Offer to Purchase, Purchaser may not be required to accept for payment any
of the Shares tendered hereby.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the Purchase Price for all Shares purchased and/or
return any certificates for Shares not tendered or not accepted for payment in
the name(s) of the registered holder(s) appearing under "Description of Shares
Tendered." Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the Purchase Price for all Shares
purchased and/or return any certificates for Shares not tendered or not accepted
for payment (and accompanying documents, as appropriate) to the address(es) of
the registered holder(s) appearing under "Description of Shares Tendered." If
either or both of the boxes entitled "Special Payment Instructions" and "Special
Delivery Instructions" are completed, please issue the check for the Purchase
Price for all Shares purchased and/or return any certificates for Shares not
tendered or not accepted for payment in the name(s) of, and deliver said check
and/or return such certificates (and accompanying documents, as appropriate) to,
the person(s) and/or address(es) so indicated. Unless otherwise indicated under
"Special Payment Instructions," in the case of a book-entry delivery of Shares,
please credit the account maintained at the Book-Entry Facility indicated above
with any Shares not purchased. The undersigned recognizes that Purchaser has no
obligation pursuant to the Special Payment Instructions to transfer any Shares
from the name(s) of the registered holder(s) thereof if Purchaser does not
accept for payment any of the Shares so tendered.
<PAGE> 6
------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates for Shares not tendered or not
accepted for payment and/or the check for the Purchase Price of Shares
accepted for payment are to be issued in the name of someone other than
the undersigned, or if Shares tendered hereby and delivered by book-entry
transfer that are not accepted for payment are to be returned by credit to
an account maintained at a Book-Entry Transfer Facility other than the
account indicated above.
Issue: [ ] Check [ ] Certificate(s) to:
Name
------------------------------------------------------
(PLEASE PRINT)
Address
------------------------------------------------------
------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
[ ] Credit unpurchased Shares delivered by book-entry transfer to the
Book-Entry Transfer Facility account set forth below:
Check appropriate Box:
[ ] DTC
[ ] MSTC
[ ] PSDTC
[ ] PDTC
------------------------------------------------------
(ACCOUNT NUMBER)
======================================================
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates for Shares not tendered or not
accepted for payment and/or the check for the Purchase Price of Shares
accepted for payment are to be sent to someone other than the undersigned
or to the undersigned at an address other than that provided above under
"Description of Shares Tendered."
Mail: [ ] Check [ ] Certificate(s) to:
Name
------------------------------------------------------
(PLEASE PRINT)
Address
------------------------------------------------------
------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------
(TAX IDENTIFICATION OR
SOCIAL SECURITY NO.)
------------------------------------------------------
<PAGE> 7
IMPORTANT
STOCKHOLDER SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURE(S) OF STOCKHOLDER(S)
(Must be signed by registered holder(s) exactly as name(s) appear(s) on Share
certificate(s) or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by trustee(s), executor(s), administrator(s), guardian(s),
attorney(s)-in-fact, officer(s) of a corporation or other(s) acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 5.)
Date:
---------------------
Name(s):
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (Full Title):
---------------------------------------------------------
(SEE INSTRUCTION 5)
Address:
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Codes and Tel. Nos.:
------------------------------------------------------
(HOME)
- --------------------------------------------------------------------------------
(BUSINESS)
Tax Identification or Social Security No.:
-------------------------------------
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY.
PLACE MEDALLION GUARANTEE IN SPACE BELOW.
Authorized Signature(s):
-------------------------------------------------------
Name:
--------------------------------------------------------------------------
(PLEASE PRINT)
Name of Firm:
------------------------------------------------------------------
Address:
-----------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Tel. No.:
--------------------------------------------------------
Date:
--------------------------------------------------------------------------
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Signature Guarantees. Signatures on this Letter of Transmittal must be
guaranteed by an Eligible Institution (as defined below), unless the Shares
tendered hereby are tendered (i) by a registered holder (which term, for
purposes of this document, shall include any participant in a Book-Entry
Transfer Facility whose name appears on a security position listing as the owner
of Shares) of Shares who has not completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" or
(ii) for the account of an Eligible Institution. For purposes of this Letter of
Transmittal, "Eligible Institution" means a member in good standing of the
Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program.
In all other cases, all signatures on this Letter of Transmittal must be
guaranteed by an Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Certificates. This Letter of
Transmittal is to be used either if certificates for tendered Shares are to be
forwarded herewith or, unless an Agent's Message (as defined in Section 2 of the
Offer to Purchase) is utilized, if tender of Shares is to be made pursuant to
the procedure for tender by book-entry transfer set forth in Section 3 the Offer
to Purchase. Certificates for all physically delivered Shares, or timely
confirmation of any book-entry transfer (a "Book-Entry Confirmation") into the
Depositary's account at a Book-Entry Transfer Facility of Shares delivered by
book-entry transfer, as well as this Letter of Transmittal (or a manually signed
facsimile hereof), properly completed and duly executed, with all required
signature guarantees and all other documents required by this Letter of
Transmittal, must be received by the Depositary at one of its respective
addresses set forth herein on or prior to the Expiration Date (as defined in
Section 1 of the Offer to Purchase), or the tendering stockholder must comply
with the guaranteed delivery procedures set forth below. If certificates are
forwarded to the Depositary in multiple deliveries, a Letter of Transmittal (or
a manually signed facsimile hereof) properly completed and duly executed with
all required signature guarantees must accompany each such delivery.
Stockholders whose certificates for Shares are not immediately available or
who lack sufficient time to permit certificates and all required documents to
reach the Depositary on or prior to the Expiration Date or for whom the
procedure for book-entry transfer cannot be completed on a timely basis may
nevertheless tender their Shares pursuant to the guaranteed delivery procedure
set forth 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 provided by the Purchaser must be received by the Depositary, either by
hand delivery, or transmitted by telegram, mail or facsimile transmission, on or
prior to the Expiration Date and (iii) the certificates for all physically
tendered Shares in proper form for transfer (and/or Book-Entry Confirmation for
all tendered Shares), together with this Letter of Transmittal (or a manually
signed facsimile hereof), properly completed and duly executed with all required
signature guarantees or, in the case of a book-entry transfer, an Agent's
Message, and all other documents required by this Letter of Transmittal, must be
received by the Depositary within three Nasdaq Stock Market, Inc. trading days
after receipt by the Depositary of such Notice of Guaranteed Delivery, all as
provided in Section 3 of the Offer to Purchase.
THE METHOD OF DELIVERY OF CERTIFICATES FOR SHARES, THIS LETTER OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY
BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND SOLE RISK OF THE TENDERING
STOCKHOLDER. 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. EXCEPT AS OTHERWISE PROVIDED IN
THIS INSTRUCTION 2, DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY
THE DEPOSITARY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or a manually signed facsimile hereof), waive any
right to receive any notice of the acceptance of their Shares for payment.
<PAGE> 9
3. Inadequate Space. If the space provided herein is inadequate,
class(es) and series of Shares, the certificate numbers and/or the number of
Shares evidenced by such certificates and the number of Shares tendered should
be listed on a separate schedule which should be signed and attached hereto.
4. Partial Tender (Applicable to Certificate Stockholders only). If fewer
than all the Shares of any class or series evidenced by any certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
which are to be tendered in the box entitled "Number of Shares Tendered." In
such case, new certificate(s) for the untendered Shares that were evidenced by
the old certificate(s) will be sent to the person(s) signing this Letter of
Transmittal, unless otherwise provided in the box entitled "Special Delivery
Instructions" on this Letter of Transmittal, as soon as practicable after the
Expiration Date.
If the Merger (as defined in the Offer to Purchase) is to be consummated
promptly after the Expiration Date pursuant to the short form merger provisions
of applicable Florida law (see Section 12 of the Offer to Purchase "-- Short
Form Merger"), certificates representing Shares cancelled in the Merger will not
be returned. All Shares represented by certificates delivered to the Depositary
will be deemed to have been tendered unless otherwise indicated.
5. Signature on Letter of Transmittal, Certificates, Stock Powers and
Endorsements. If this Letter of Transmittal is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond
exactly with the name(s) as written on the face of the certificate(s) without
alteration, enlargement or any other change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in names of different holders, it
will be necessary to complete, sign and submit as many separate Letters of
Transmittal (or facsimiles thereof) as there are different registrations of
certificates.
If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to Purchaser of their authority to so act must be submitted.
When this Letter of Transmittal is signed by the registered holder(s) of
the Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made or
certificate(s) for Shares not tendered or not accepted for payment are to be
issued to person(s) other than the registered holder(s). In such case, the
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 certificate(s), and all such stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the 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 the
certificate(s). Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution.
6. Stock Transfer Taxes. Except as otherwise specified herein, Purchaser
will pay or cause to be paid all stock transfer taxes with respect to the
transfer and sale of Shares to it or its order pursuant to the Offer. If,
however, payment of the Purchase Price of any Shares is to be made to, or if
certificate(s) for Shares not tendered or not accepted for payment are to be
registered in the name(s) of, any person(s) other than the registered holder(s),
or if tendered certificate(s) are registered in the name of any person(s) other
than the person(s) signing this Letter of Transmittal, in each case in the
circumstances permitted hereby the amount of any stock transfer taxes (whether
imposed on the registered holder(s), or such other person(s) or otherwise)
payable on account of the transfer to such other person(s) will be deducted from
the Purchase Price of such Shares unless evidence satisfactory to Purchaser of
the payment of such taxes or exemption therefrom is submitted.
<PAGE> 10
7. Special Payment and Delivery Instructions. If certificate(s) for
Shares not tendered or not accepted for payment and/or the check for the
Purchase Price of Shares accepted for payment are to be issued or returned in
the name(s) of person(s) other than the signatory of this Letter of Transmittal
or if such certificate(s) and/or such check are to be sent to person(s) other
than the signatory of this Letter of Transmittal or to an address other than
that shown above, the appropriate box(es) on this Letter of Transmittal should
be completed. Stockholders tendering Shares by book-entry transfer may request
that Shares not purchased be credited to such account maintained at a Book-Entry
Facility as such stockholder may designate in the box entitled "Special Payment
Instructions" herein. Certificates representing Shares to be cancelled in the
Merger will not be returned. If no such instructions are given, all such Shares
not purchased will be returned by crediting the account at the Book-Entry
Transfer Facility designated above.
8. Waiver of Conditions. Purchaser reserves the absolute right in its
sole discretion to waive any of the specific conditions of the Offer (other than
the Minimum Condition (as defined in the Offer), which may only be waived with
the consent of the Board of Directors of the Company), in whole or in part, at
any time and from time to time in the case of any Shares tendered.
9. Federal Income Tax Withholding. Under Federal income tax backup
withholding rules, unless an exemption applies, the Depositary will be required
to withhold, and will withhold, 31% of the gross proceeds otherwise payable to a
tendering stockholder or other payee pursuant to the Offer unless the tendering
stockholder or other payee provides the Depositary with his correct taxpayer
identification number ("TIN") (employer identification number or social security
number) on Substitute Form W-9, provided below. See "Important Tax Information"
below.
10. Lost, Destroyed or Stolen Certificates. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary. The stockholder will then be instructed as to
the steps that must be taken in order to replace the certificate(s). This Letter
of Transmittal and related documents cannot be processed until the procedures
for replacing lost or destroyed certificates have been followed.
11. Requests for Assistance or Additional Copies. Any questions or
requests for assistance may be directed to the Information Agent or the Dealer
Manager at their respective addresses and telephone numbers set forth below.
Requests for additional copies of the Offer to Purchase, the Letter of
Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
made to the Information Agent. You may also contact your local broker, dealer,
commercial bank, trust company or other nominee for assistance concerning the
Offer.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE COPY
HEREOF PROPERLY COMPLETED AND DULY EXECUTED (TOGETHER WITH ALL REQUIRED
SIGNATURE GUARANTEES AND CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND
ALL OTHER REQUIRED DOCUMENTS) OR THE NOTICE OF GUARANTEED DELIVERY PROPERLY
COMPLETED AND DULY EXECUTED MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO
THE EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under Federal income tax backup withholding rules, unless an exemption
applies, the Depositary will be required to withhold, and will withhold, 31% of
the gross proceeds otherwise payable to a tendering stockholder or other payee
pursuant to the Offer unless the tendering stockholder or other payee provides
the Depositary with his correct TIN on Substitute Form W-9, provided below. If
the Depositary is not provided with the correct taxpayer identification number,
the tendering stockholder or other payee may be subject to a $50 penalty imposed
by the Internal Revenue Service.
The TIN that must be provided is that of the registered holder(s) of the
Shares or of the last transferee appearing on the transfers attached to or
endorsed on the Shares (or, if the check is made payable to another person(s) as
provided in Instruction 7, then of such person(s)). The TIN for an individual is
his social security number. For additional guidance, see the enclosed Guidelines
for Certification of Taxpayer
<PAGE> 11
Identification Number on Substitute Form W-9. If the tendering stockholder or
other payee has not been issued a TIN, but has applied for a TIN, or intends to
apply for one in the near future, such holder should check the box provided in
Part IV of the Substitute Form W-9, sign and date the Substitute Form W-9 and
sign the Certificate of Payee Awaiting Taxpayer Identification Number. If the
box in Part IV is checked the Depositary shall retain 31% of payments to be made
to the tendering stockholder or other payee during the sixty (60) day period
following the date of the Substitute Form W-9. If the tendering stockholder or
other payee furnishes the Depositary with his TIN within sixty (60) days of the
date of the Substitute Form W-9, the Depositary shall remit such amounts
retained during such period to such stockholder or other payee. If, however, the
tendering stockholder or other payee has not provided the Depositary with his
TIN within the sixty (60) day period, the Depositary shall remit such previously
retained amounts to the Internal Revenue Service as backup withholding.
Certain stockholders (including, among others, domestic and foreign
corporations and certain foreign individuals) are not subject to backup
withholding and reporting requirements. Exempt recipients should indicate their
exempt status on Substitute Form W-9. In order to satisfy the Depositary that a
foreign individual qualifies as an exempt recipient, such holder must submit a
statement (generally, Internal Revenue Service Form W-8), signed under penalties
of perjury, attesting to that individual's exempt status. Such statements can be
obtained from the Depositary.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the tendering stockholder or other payee pursuant to the
Offer. Backup withholding is not an additional tax. Rather, the tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a tendering
stockholder or other payee with respect to Shares purchased pursuant to the
Offer, the tendering stockholder or other payee should complete and sign the
Substitute Form W-9 provided below and either: (a) provide the correct TIN and
certify, under penalties of perjury, that (i) such tendering stockholder or
other payee has not been notified by the Internal Revenue Service that he is
subject to backup withholding as a result of failure to report all interest or
dividends or (ii) the Internal Revenue Service has notified such tendering
stockholder or other payee that he is no longer subject to backup withholding;
or (b) provide an adequate basis for exemption.
WHAT NUMBER TO GIVE THE DEPOSITARY
The TIN that must be provided is that of the registered holder(s) of the
Shares or of the last transferee appearing on the transfers attached to or
endorsed on the Shares (or, if the check is made payable to another person(s) as
provided in Instruction 7, then of such person(s)). The TIN for an individual is
his social security number. For additional guidance, see the enclosed Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9.
<PAGE> 12
<TABLE>
<CAPTION>
<S> <C> <C>
PAYER'S NAME: FIRST UNION NATIONAL BANK
- ------------------------------------------------------------------------------------------------
SUBSTITUTE PART I: TAXPAYER IDENTIFICATION NUMBER ----------------------------
FORM W-9 (TIN)Enter your TIN in the appropriate Social Security SUBSTITUTE
box. Number FORM W-9
For individuals, this is your social OR
security number (SSN). For other ----------------------------
entities, it is your employer Employer Identification
identification number (EIN). If you do Number
not have a number, see the attached
instructions.
---------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PART II: FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING FOR TAXPAYER
(SEE INSTRUCTIONS) IDENTIFICATION NUMBER AND CERTIFICATION
-------------------------------------------------------------------
<S> <C>
REQUEST FOR TAXPAYER PART III: CERTIFICATION
IDENTIFICATION NUMBER Under penalties of perjury, I certify that:
AND CERTIFICATION 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 that I am subject to backup
withholding as a result of a failure to report all interest or
dividends, or (c) the IRS has notified me that I am no longer
subject to backup withholding.
------------------------------------------------------------------
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. For real estate transactions, item
2 does not apply. For mortgage interest paid, the acquisition or
abandonment of secured property, cancellation of debt,
contributions to an individual retirement account (IRA), and
generally payments other than interest and dividends, you are not
required to sign the Certification, but you must provide your
correct TIN.
Part IV: Awaiting TIN [ ]
SIGN HERE
Signature: ---------------------------------- Date: --------------
- ---------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART IV OF THE SUBSTITUTE FORM W-9.
<PAGE> 13
- --------------------------------------------------------------------------------
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, 31% of
all reportable payments made to me will be withheld, but that such amounts
will be refunded to me if I check the box in Part IV above and then provide a
taxpayer identification number within 60 days.
- --------------------------------------------------------------------------------
Signature Date
- --------------------------------------------------------------------------------
QUESTIONS AND REQUESTS FOR ASSISTANCE MAY BE DIRECTED TO THE INFORMATION AGENT
OR THE DEALER MANAGER. REQUESTS FOR ADDITIONAL COPIES OF THE OFFER TO PURCHASE,
THE LETTER OF TRANSMITTAL, THE NOTICE OF GUARANTEED DELIVERY AND OTHER TENDER
OFFER MATERIALS MAY BE DIRECTED TO THE INFORMATION AGENT.
The Information Agent for the Offer is:
MORROW & CO., INC.
909 Third Avenue
New York, New York 10019
Toll Free: (800)566-9061
Banks and Brokerage Firms please call 1-800-662-5200
The Dealer Manager for the Offer is:
GERARD KLAUER MATTISON & CO., INC.
529 Fifth Avenue
New York, New York 10017
(212) 885-4143
December 22, 1997
<PAGE> 1
EXHIBIT (a)(3)
[LOGO OF GKM APPEARS HERE] GERARD KLAUER MATTISON & CO., INC.
529 FIFTH AVENUE
NEW YORK, NEW YORK 10017
(212) 885-4143
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
AT A PRICE OF $15.00 NET PER SHARE,
OF
SYMETRICS INDUSTRIES, INC.
BY
TSHCo, INC
A WHOLLY OWNED SUBSIDIARY
OF
TEL-SAVE HOLDINGS, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON WEDNESDAY, JANUARY 21, 1998, UNLESS THE OFFER IS EXTENDED.
December 22, 1997
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by TSHCo, Inc., a Delaware corporation ("Purchaser")
and a wholly owned subsidiary of Tel-Save Holdings, Inc., a Delaware corporation
("Parent"), to act as Dealer Manager in connection with Purchaser's offer to
purchase all outstanding shares of Common Stock, par value $0.25 per share (the
"Shares"), of Symetrics Industries, Inc., a Florida corporation (the "Company"),
at a price of $15.00 per share net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated December 22,
1997 (the "Offer to Purchase"), and in the related Letter of Transmittal (which
together constitute the "Offer"). The detailed terms and conditions of the Offer
are set forth in the enclosed Offer to Purchase and Letter of Transmittal. The
Offer is being made pursuant to the Agreement and Plan of Merger, dated as of
December 18, 1997, by and among Purchaser, Parent and the Company.
The Offer is conditioned upon, among other things, (i) there having been
validly tendered prior to the Expiration Date (as defined in the Offer to
Purchase) and not withdrawn that number of Shares representing (together with
Shares owned by Parent), on a fully diluted basis, at least a majority of all
outstanding Shares on the date of purchase and (ii) satisfaction of certain
other terms and conditions as described in the Offer to Purchase.
For your information and forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, or who hold
Shares registered in their own names, we are enclosing the following documents:
(1) The Offer to Purchase;
<PAGE> 2
(2) The blue Letter of Transmittal for Shares for your use and for the
information of your clients. Manually signed facsimile copies of the Letter of
Transmittal may be used to tender Shares;
(3) The gray Notice of Guaranteed Delivery to be used to accept the Offer
(i) if Share certificates are not available immediately or if time will not
permit such certificates and all other required documents to be delivered to
First Union National Bank (the "Depositary") on or prior to the Expiration Date
or (ii) if the procedure for book-entry transfer cannot be completed on a timely
basis;
(4) A letter from Dudley E. Garner, Jr., President and Chief Executive
Officer of the Company, and the Company's Solicitation/Recommendation Statement
on Schedule 14D-9 as filed with the Securities and Exchange Commission;
(5) A printed form of letter which may be sent to your clients for whose
account you hold Shares registered in your name or the name of your nominee,
with space provided for obtaining such clients' instructions with respect to the
Offer;
(6) Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9; and
(7) A return envelope addressed to the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, JANUARY 21, 1998, UNLESS THE OFFER
IS EXTENDED.
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
extensions or amendments), Purchaser will be deemed to have accepted for payment
(and thereby purchased), all Shares validly tendered on or prior to the
Expiration Date and not properly withdrawn if, as and when Purchaser gives oral
or written notice to the Depositary of Purchaser's acceptance of such Shares for
payment pursuant to the Offer. Payment for Shares purchased pursuant to the
Offer will in all cases be made only after timely receipt by the Depositary of
(i) certificates for such Shares, or timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at The Depository Trust
Company, the Midwest Securities Trust Company, the Pacific Securities Depositary
Trust Company or the Philadelphia Depository Trust Company, pursuant to the
procedures described in Section 3 of the Offer to Purchase and (ii) the Letter
of Transmittal (or a manually signed facsimile thereof), properly completed and
duly executed with all required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase) in connection with a book-entry transfer of
Shares, together with all other documents required by such Letter of
Transmittal.
In order to take advantage of the Offer, the Letter of Transmittal (or a
manually signed facsimile thereof), duly executed and properly completed with
all required signature guarantees, or an Agent's Message in connection with a
book-entry transfer of Shares, and all other required documents, must be
received by the Depositary, and certificates (or Book-Entry Confirmation (as
defined in the Offer to Purchase)) representing the tendered Shares must be
delivered, all in accordance with the instructions set forth in the Letter of
Transmittal and the Offer to Purchase.
If holders of Shares wish to tender their Shares, but it is impracticable
for them to tender their certificates on or prior to the Expiration Date or to
comply with the book-entry transfer procedures on a timely basis, a tender may
be effected by following the guaranteed delivery procedures set forth in Section
3 of the Offer to Purchase.
Neither Parent nor Purchaser will pay any fees or commissions to any broker
or dealer or any other person (other than the Dealer Manager as described in the
Offer to Purchase) in connection with the solicitation of tenders of Shares
pursuant to the Offer. Purchaser will, however, upon request, reimburse brokers,
dealers, commercial banks and trust companies for their reasonable costs and
expenses incurred in forwarding the Offer to Purchase and the related documents
to the beneficial owners of Shares held by them as nominee or in a fiduciary
capacity. Purchaser will pay or cause to be paid any stock transfer taxes
applicable
2
<PAGE> 3
to a purchase of Shares pursuant to the Offer, except as otherwise provided in
Instruction 6 of the enclosed Letter of Transmittal.
Any inquiries you have with respect to the Offer should be addressed to the
Dealer Manager or the Information Agent, at their addresses and telephone
numbers set forth on the back cover of the Offer to Purchase. Additional copies
of the enclosed materials may be obtained from the Information Agent.
Very truly yours,
GERARD KLAUER MATTISON & CO., INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF PURCHASER, PURCHASER, ANY AFFILIATE OF
PURCHASER OR PARENT, THE DEALER MANAGER, THE DEPOSITARY OR THE INFORMATION
AGENT, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER OTHER THAN THE
STATEMENTS EXPRESSLY MADE IN THE OFFER TO PURCHASE OR THE LETTER OF TRANSMITTAL.
3
<PAGE> 1
EXHIBIT (a)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SYMETRICS INDUSTRIES, INC.
AT A PRICE OF $15.00 NET PER SHARE,
BY
TSHCo, INC.
A WHOLLY OWNED SUBSIDIARY OF
TEL-SAVE HOLDINGS, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
WEDNESDAY, JANUARY 21, 1998 UNLESS THE OFFER IS EXTENDED.
DECEMBER 22, 1997
TO OUR CLIENTS:
Enclosed for your consideration are the Offer to Purchase, dated December
22, 1997 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer"), relating to the offer by TSHCo, Inc., a
Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Tel-Save
Holdings, Inc., a Delaware corporation ("Parent"), to purchase all outstanding
shares of Common Stock, par value $0.25 per share (the "Common Shares" or the
"Shares"), of Symetrics Industries, Inc., a Florida corporation (the "Company"),
at a price of $15.00 per share net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer.
THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL ARE BEING FORWARDED TO
YOU AS THE BENEFICIAL OWNER OF SHARES HELD BY US IN YOUR ACCOUNT BUT NOT
REGISTERED IN YOUR NAME. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE
HOLDER OF RECORD AND ONLY PURSUANT TO YOUR INSTRUCTIONS. THE ENCLOSED LETTER OF
TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY
YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish to have us
tender on your behalf any or all Shares held by us for your account pursuant to
the terms and conditions set forth in the Offer.
Your attention is called to the following:
(1) The offer price for each Common Share is $15.00 net to you in cash
upon the terms and subject to the conditions of the Offer.
(2) The Offer is being made pursuant to the Agreement and Plan of
Merger, dated as of December 18, 1997 (the "Merger Agreement"), by and
among Purchaser, Parent and the Company.
<PAGE> 2
(3) The Offer is being made for all outstanding Shares.
(4) The Offer is conditioned upon, among other things, (i) there
having been validly tendered prior to the Expiration Date (as defined in
the Offer to Purchase) and not withdrawn that number of Shares representing
(together with Shares owned by Parent), on a fully diluted basis, at least
a majority of all outstanding Common Shares of the Company on the date of
purchase and (ii) satisfaction of certain other terms and conditions as
described in the Offer to Purchase.
(5) The Board of Directors of the Company has unanimously approved the
Merger Agreement, the Offer and the Merger (as defined in the Offer to
Purchase), has unanimously determined that the Merger is advisable and that
the terms of the Offer and the Merger are fair to, and in the best
interests of, the Company's stockholders and recommends that stockholders
accept the Offer and tender their Shares.
(6) Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by Purchaser
pursuant to the Offer. However, federal income tax backup withholding at a
rate of 31% may be required, unless an exemption is provided or unless the
required taxpayer identification information is provided (see Instruction 9
of the Letter of Transmittal).
(7) The Offer and withdrawal rights expire at 12:00 midnight, New York
City time, on Wednesday, January 21, 1998 unless extended as provided in
the Offer to Purchase.
(8) Notwithstanding any other provision of the Offer, payment for
Shares accepted for payment pursuant to the Offer will in all cases be made
only after timely receipt by the Depositary of (i) certificates for Shares
or timely Book-Entry Confirmation (as defined in the Offer to Purchase)
with respect to such Shares pursuant to the procedures described in Section
3 of the Offer to Purchase and (ii) the Letter of Transmittal (or a
manually signed facsimile thereof) properly completed and duly executed
with all required signature guarantees, or an Agent's Message (as defined
in the Offer to Purchase) in connection with a book-entry transfer of
Shares, together with all other documents required by the Letter of
Transmittal.
Accordingly, payment may not be made to all tendering stockholders at the
same time depending upon when certificates representing Shares or confirmations
for book-entry transfer of such Shares into the Depositary's account are
actually received by the Depositary.
If you wish to have us tender any or all of your Shares, kindly so instruct
us by completing, executing and returning to us the instruction form set forth
on the reverse side hereof. An envelope to return your instructions to us is
enclosed. If you authorize tender of your Shares, all such Shares will be
tendered unless otherwise specified on the reverse side hereof. YOUR
INSTRUCTIONS TO US SHOULD BE FORWARDED IN AMPLE TIME TO PERMIT US TO SUBMIT A
TENDER ON YOUR BEHALF.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares residing in any jurisdiction in which the making or
acceptance thereof would not be in compliance with the securities, blue sky or
other laws of such jurisdiction. Purchaser is not aware of any jurisdiction in
which the making of the Offer is not in compliance with applicable law. If
Purchaser becomes aware of any jurisdiction in which the making of the Offer
would not be in compliance with applicable law, Purchaser will make a good faith
effort to comply with such law. If, after such good faith effort, Purchaser
cannot comply with such law, the Offer will not be made to, nor will tenders be
accepted from or on behalf of, holders of Shares residing in any such
jurisdiction. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of Purchaser by the Dealer Manager or one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL
OUTSTANDING COMMON SHARES OF SYMETRICS INDUSTRIES, INC.:
The undersigned acknowledge(s) receipt of your letter enclosing the Offer
to Purchase, dated December 22, 1997, and the related Letter of Transmittal
(which together constitute the "Offer") relating to the offer by TSHCo, Inc., a
Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Tel-Save
Holdings, Inc, a Delaware corporation, to purchase all outstanding shares of
Common Stock, par value $0.25 per share (the "Common Shares" or the "Shares"),
of Tel-Save Industries, Inc., a Florida corporation (the "Company"), at a price
of $15.00 per share net to the seller in cash, upon the terms and subject to the
conditions of the Offer.
This will instruct you to tender to Purchaser the number of Shares
indicated below (or, if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated December 22, 1997 and in the
related Letter of Transmittal that you have furnished to the undersigned.
Dated:
-----------------------, 199-
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
NUMBER OF SHARES
CLASS TO BE TENDERED(1)
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock ------------------Shares
SIGN HERE
-------------------------------------------
-------------------------------------------
SIGNATURE(S)
-------------------------------------------
-------------------------------------------
NAME(S) AND ADDRESS
-------------------------------------------
AREA CODE AND TELEPHONE NUMBER
-------------------------------------------
TAXPAYER IDENTIFICATION OR SOCIAL
SECURITY NUMBER
- ----------------------------------------------------------------------------------------------
(1) Unless otherwise indicated, it will be assumed that all of your Shares held by us
for your account are to be tendered.
- ----------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE> 1
EXHIBIT (a)(5)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
SYMETRICS INDUSTRIES, INC.
TO
TSHCo, INC.
A WHOLLY OWNED SUBSIDIARY
OF
TEL-SAVE HOLDINGS, INC.
This Notice of Guaranteed Delivery, or one substantially equivalent hereto,
must be used to accept the Offer (as defined below) if certificates representing
shares of Common Stock, par value $0.25 per share (the "Common Shares" or the
"Shares"), of Symetrics Industries, Inc., a Florida corporation (the "Company"),
are not immediately available or time will not permit certificates and all
required documents to be delivered to First Union National Bank (the
"Depositary") on or prior to the Expiration Date (as defined in Section 1 of the
Offer to Purchase (as defined below)), or the procedure for delivery by
book-entry transfer cannot be completed on a timely basis. This Notice of
Guaranteed Delivery may be delivered by hand or transmitted by telegram,
facsimile transmission or mail to the Depositary. See Section 3 of the Offer to
Purchase.
THE DEPOSITARY FOR THE OFFER IS:
FIRST UNION NATIONAL BANK
<TABLE>
<S> <C> <C>
By Hand, Mail: By Overnight Courier: By Facsimile:
1525 W.T. Harris Blvd. 1525 W.T. Harris Blvd. 704-590-7628
Charlotte, NC 28288-1153 Charlotte, NC 28262 To Confirm:
Attn: Reorg Dept. Attn: Reorg Dept. 704-590-7408
3C3-1153 3C3-1153 Toll Free:
1-800-829-8432
</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.
THIS NOTICE OF GUARANTEED DELIVERY 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" (AS DEFINED BELOW), UNDER THE
INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE
SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE> 2
LADIES AND GENTLEMEN:
The undersigned hereby tenders to TSHCo, Inc., a Delaware corporation
("Purchaser") and a wholly owned subsidiary of Tel-Save Holdings, Inc., a
Delaware corporation, upon the terms and subject to the conditions set forth in
the Offer to Purchase, dated December 22, 1997 (the "Offer to Purchase"), and in
the related Letter of Transmittal (which together constitute the "Offer"),
receipt of each of which is hereby acknowledged, the number of Common Shares
indicated below pursuant to the guaranteed delivery procedures set forth in
Section 3 of the Offer to Purchase.
Number of Common Shares: Name(s) of Record Holder(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Certificate No(s). (if available):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
If Share(s) will be tendered by book-entry transfer, check ONE box and provide
account number:
<TABLE>
<S> <C>
[ ] The Depository Trust Company [ ] Pacific Securities Depository Trust
Company
[ ] Midwest Securities Trust Company [ ] Philadelphia Depository Trust Company
</TABLE>
Account Number:
THE ATTACHED GUARANTEE MUST BE COMPLETED
2
<PAGE> 3
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange, Inc. Medallion Signature Program or the
Stock Exchange Medallion Program (each, an "Eligible Institution"), hereby
guarantees to deliver to the Depositary, at one of its addresses set forth
above, either the certificates representing all tendered Shares, in proper form
for transfer, or a Book-Entry Confirmation (as defined in Section 2 of the Offer
to Purchase), together with a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof), with all required
signature guarantees, or an Agent's Message (as defined in the Offer to
Purchase) in connection with a book-entry transfer of Shares, and all other
documents required by the Letter of Transmittal within three Nasdaq Stock
Market, Inc. trading days after the date of execution of this Notice of
Guaranteed Delivery.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
Name of Firm:
(AUTHORIZED SIGNATURE)
Address:
Title:
ZIP CODE
Name:
(PLEASE TYPE OR PRINT)
Area Code and Telephone Number:
Date:
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES
FOR SHARES SHOULD BE SENT ONLY WITH YOUR LETTER OF TRANSMITTAL.
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., 000-000-0000. 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 --
- ------------------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of the
account) account or, if combined
funds, the first
individual on the
account(1)
3. Husband and wife (joint account) The actual owner of the
account or, if joint
funds, either person(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if the
minor is the only
contributor, the minor(1)
6. Account in the name of guardian The ward, minor, or
or committee for a designated incompetent person(3)
ward, minor, or incompetent
person
7. a. The usual revocable savings The grantor-trustee(1)
trust account (grantor is
also trustee)
b. So-called trust account that The actual owner(1)
is not a legal or valid trust
under State law
8. Sole proprietorship account The owner(4)
- ------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
- ------------------------------------------------------------
<S> <C>
9. A valid trust, estate, or The legal entity (Do not
pension trust furnish the identifying
number of the personal
representative or trustee
unless the legal entity
itself is not designated
in the account title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization
account
12. Partnership account held in the The partnership
name of the business
13. Association, club or other tax- The organization
exempt organization
14. A broker or registered nominee The broker or nominee
15. 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) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show your individual name. You may also enter your business name. You may
use either your Social Security number or your Employer Identification number.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE:If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer identification Number (for
businesses and all other entities), at the local office of the Social Security
Administration or the internal Revenue Service (the "IRS") and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the investment Company Act of
1940.
- A foreign central bank of issue.
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 non-resident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND DATE THE
FORM AND RETURN IT TO THE PAYER. IF YOU ARE A NON-RESIDENT ALIEN OR A FOREIGN
ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER A COMPLETED INTERNAL
REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see sections 6041, 6041A(a), 6042, 6044, 6045, 6049,
6050A, and 6050N, and the regulations promulgated 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. The 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.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE. Unless otherwise noted herein, all references to section numbers or
regulations are reference to the Internal Revenue Code of 1986, as amended, and
the regulations promulgated thereunder.
<PAGE> 1
Exhibit(a)(7)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase dated December
22, 1997 and the related Letter of Transmittal and is not being made to
stockholders of Symetrics Industries, Inc. in any jurisdiction where the
making of the Offer is not in compliance with the laws of such jurisdiction.
In those jurisdictions where securities, blue sky or other laws require the
Offer to be made by a licensed broker or dealer, the Offer shall be deemed
to be made on behalf of Purchaser by Gerard Klauer Mattison & Co., Inc.
("GKM")or one or more registered brokers or dealers licensed under the
laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SYMETRICS INDUSTRIES, INC.
AT
$15.00 NET PER SHARE
BY
TSHCO, INC.
A WHOLLY OWNED SUBSIDIARY OF
TEL-SAVE HOLDINGS, INC.
TSHCo, Inc., a Delaware corporation ("Purchaser") and a wholly owned
subsidiary of Tel-Save Holdings, Inc., a corporation organized under the laws of
Delaware ("Parent"), is offering to purchase all outstanding shares of common
stock, par value $0.25 per share (the "Shares"), of Symetrics Industries, Inc.,
a Florida corporation (the "Company"), at a price of $15.00 per share net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated December 22, 1997 (the "Offer to Purchase"), and in the
related Letter of Transmittal (which together, as amended from time to time,
constitute the "Offer").
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON WEDNESDAY, JANUARY 21, 1998, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT (AS DEFINED BELOW), THE OFFER AND THE MERGER (AS DEFINED BELOW), HAS
UNANIMOUSLY DETERMINED THAT THE MERGER IS ADVISABLE AND THAT THE TERMS OF THE
OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY'S
STOCKHOLDERS AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND
TENDER ALL THEIR SHARES.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE) AND
NOT WITHDRAWN SUCH NUMBER OF SHARES AS REPRESENTS, TOGETHER WITH SHARES OWNED BY
PARENT, AT LEAST A MAJORITY OF ALL OUTSTANDING SHARES ON A FULLY DILUTED BASIS
ASSUMING CONVERSION OF ALL OUTSTANDING OPTIONS AND SECURITIES CONVERTIBLE INTO
SHARES.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of December 18, 1997 (the "Merger Agreement"), by and among Purchaser,
Parent, and the Company. The Merger Agreement provides that, among other things,
as soon as practicable following the expiration of the Offer and the
satisfaction or waiver of certain conditions, Purchaser will be merged with and
into the Company (the "Merger"). At the effective time of the Merger, each Share
issued and outstanding (other than Shares held in the treasury of the Company or
owned by Purchaser, or Shares which are held by stockholders, if any, who
properly exercise their appraisal rights under Florida law) will be converted
into the right to receive $15.00 net in cash, without interest thereon.
Certain directors and executive officers of the Company (the
"Management"), beneficially owning 329,699 Shares (including options currently
exercisable for Shares), representing approximately 18.25% of the outstanding
Shares on a fully diluted basis on December 18, 1997 (the "Management Shares"),
have entered into the Tender and Option Agreement, dated as of December 18, 1997
(the "Tender and Option Agreement"), with Parent pursuant to which the
Management has agreed, among other things, (a) to tender in the Offer and not
withdraw all of the Management Shares and any additional Shares which may be
<PAGE> 2
acquired by the Management prior to the expiration date of the Tender and Option
Agreement and (b) that, at any meeting of the Company's stockholders (however
called), they will (i) vote their Shares in favor of the Merger, (ii) vote their
Shares against any action or agreement that would result in a breach in any
material respect of any covenant, representation or warranty or any other
obligation of the Company under the Merger Agreement, and (iii) vote their
Shares against any action or agreement that would impede, interfere with, delay,
postpone or attempt to discourage the Merger or the Offer. In addition, if the
purchase of Management Shares is not consummated for any reason in the Offer,
Purchaser has the option to purchase the Management Shares under certain
circumstances.
The Company, Parent and Purchaser have entered into the Stock Option
Agreement dated as of December 18, 1997 (the "Stock Option Agreement") pursuant
to which, in the event the Merger Agreement is terminated under certain
circumstances, including the acquisition by a person other than Parent or
Purchaser of 20% or more of the Shares, the Company shall grant to Purchaser,
for a period of six months from the date of the Merger Agreement, the option to
purchase that number of Shares which would equal 19.9% of the aggregate number
of Shares outstanding after giving effect to the exercise of such option.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn if, as
and when Purchaser gives oral or written notice to the Depositary (as defined in
the Offer to Purchase) of Purchaser's acceptance of such Shares for payment
pursuant to the Offer. In all cases, payment for Shares purchased pursuant to
the Offer will be made by deposit of the purchase price therefor with the
Depositary, which shall act as agent for tendering stockholders for the purpose
of receiving payment from Purchaser and transmitting payment to tendering
stockholders. Under no circumstances will interest on the purchase price of the
Shares be paid by Purchaser by reason of any delay in making payment. Payment
for Shares purchased pursuant to the Offer will in all cases be made only after
timely receipt by the Depositary of (a) certificates for such Shares or timely
confirmation of a book-entry transfer of such Shares into the Depositary's
account at a Book-Entry Transfer Facility (as defined in the Offer to Purchase)
pursuant to the procedures set forth in the Offer to Purchase and (b) a properly
completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof), with all required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message (as defined in the Offer to Purchase),
together with all other documents required by the Letter of Transmittal.
Purchaser expressly reserves the right at any time or from time to time, subject
to the terms of the Merger Agreement and regardless of whether any of the events
set forth in Section 15 of the Offer to Purchase shall have occurred, to extend
the period of time during which the Offer is open and thereby delay acceptance
for payment of, and the payment for, any Shares by giving oral or written notice
of such extension to the Depositary. Any such extension will be followed as
promptly as practicable by public announcement thereof no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date.
Tenders of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn (other than the
Management Shares as provided in the Tender and Option Agreement) at any time
prior to the Expiration Date (or, if Purchaser shall have extended the period of
time for which the Offer is open, at the latest time and date by which the
Offer, as so extended by Purchaser, shall expire) and, unless theretofore
accepted for payment by Purchaser pursuant to the Offer, may also be withdrawn
at any time after February 19, 1998. 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 of the Offer to
Purchase and must specify the name of the person who tendered the Shares to be
withdrawn, the number and class of Shares to be withdrawn and the name of the
registered broker, if different from the name of the person who tendered the
Shares. If certificates for Shares to be withdrawn have been delivered or
otherwise identified to the Depositary then, prior to the release of such
certificates, the serial numbers shown on such certificates must be submitted to
the Depositary by the tendering stockholder and, unless such Shares have been
tendered for the account of an Eligible Institution (as defined in the Offer to
Purchase), the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution. If Shares have been tendered pursuant to the procedures
for book-entry transfer set forth in the Offer to Purchase, the notice of
withdrawal must also 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 timeliness and receipt) of a
notice of withdrawal will be determined by Purchaser, in its sole discretion,
whose determination shall be final and binding. None of Purchaser, Parent, the
Dealer Manager, the Depositary, the Information Agent or any other person will
be under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability to any tendering shareholder for
failure to give any such notification.
The information required to be disclosed by paragraph (e) (1) (vii) of
Rule 14d-6 of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended, is contained in the Offer to Purchase and is
incorporated herein by reference.
The Company has provided Purchaser its lists of stockholders and security
position listings for the purpose of disseminating the Offer to holders of
Shares. The Offer to Purchase, the related Letter of Transmittal and other
related materials will be mailed to record holders of Shares and furnished to
brokers, dealers, commercial banks, trust companies and similar persons whose
names or the names of whose nominees appear on the stockholder lists or, if
applicable, who are listed as participants in a clearing agency's security
position listing for subsequent transmittal to beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
Requests for copies of the Offer to Purchase, 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 payable by Purchaser or Parent to
brokers, dealers or other persons other than the Dealer Manager for soliciting
tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
MORROW & CO., INC
909 Third Avenue
20th Floor
New York, New York 10022
(212) 754-8000
Toll Free (800) 566-9061
Banks and Brokerage Firms Please Call:
(800) 662-5200
The Dealer Manager for the Offer is:
GERARD KLAUER MATTISON & CO., INC.
529 Fifth Avenue
New York, NY 10017
(212) 885-4143
December 22, 1997
<PAGE> 1
Exhibit (c)(1)
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
AMONG
TEL-SAVE HOLDINGS, INC.
TSHCo, Inc.
AND
SYMETRICS INDUSTRIES, INC.
Dated as of
December 18, 1997
<PAGE> 2
TABLE OF CONTENTS
Page
----
I. ARTICLE I
The Offer
1.1 The Offer................................................ 1
1.2 Company Action........................................... 3
1.3 Directors................................................ 3
II. ARTICLE II
The Merger
2.1 The Merger............................................... 4
2.2 Effect of the Merger..................................... 5
2.3 Consummation of the Merger............................... 5
2.4 Certificate of Incorporation and
By-Laws; Directors and Officers........................ 6
2.5 Conversion of Securities................................. 6
2.6 Stock Options............................................ 6
2.7 Closing of Company Transfer Books........................ 7
2.8 Exchange of Certificates................................. 7
2.9 Funding of Paying Agent.................................. 8
2.10 Taking of Necessary Action;
Further Action......................................... 9
2.11 Merger Without Meeting of
Stockholders........................................... 9
2.12 No Further Ownership Rights
in Common Stock........................................ 9
III. ARTICLE III
Representations and Warranties of
Parent and Purchaser
3.1 Organization and Qualification........................... 10
3.2 Authority Relative to this Agreement..................... 10
3.3 Financing Arrangements................................... 11
3.4 Ownership of Shares...................................... 11
IV. ARTICLE IV
Representations and Warranties of
the Company
4.1 Organization and Qualification........................... 11
4.2 Subsidiaries............................................. 12
4.3 Capitalization........................................... 12
4.4 Authority Relative to this Agreement..................... 13
4.5 Commission Filings....................................... 14
<PAGE> 3
4.6 Liabilities.............................................. 15
4.7 Litigation............................................... 15
4.8 Government Contracts..................................... 16
V. ARTICLE V
Conduct of Business Pending the Merger
5.1 Conduct of Business by the Company
Pending the Merger..................................... 16
VI. ARTICLE VI
Additional Agreements
6.1 Action of Stockholders................................... 18
6.2 Proxy Statement.......................................... 18
6.3 Expenses................................................. 19
6.4 Additional Agreements.................................... 19
6.5 Limitation on Negotiations............................... 19
6.6 Notification of Certain Matters.......................... 21
6.7 Access to Information.................................... 21
6.8 Stockholder Claims....................................... 22
6.9 Treatment of Employee Compensation
and Benefits........................................... 22
6.10 Indemnification Rights................................... 22
6.11 Takeover Law Exemption................................... 24
VII. ARTICLE VII
Conditions
7.1 Conditions to Obligations of Each
Party to Effect the Merger............................. 24
VIII. ARTICLE VIII
Termination, Amendment and Waiver
8.1 Termination.............................................. 25
8.2 Amendment................................................ 26
8.3 Grant of Stock Option
Upon Termination....................................... 27
8.4 Effect of Termination.................................... 27
8.5 Waiver................................................... 28
IX. ARTICLE IX
General Provisions
9.1 Brokers.................................................. 28
9.2 Public Statements........................................ 28
- ii -
<PAGE> 4
9.3 Notices.................................................. 29
9.4 Interpretation........................................... 29
9.5 Severability............................................. 30
9.6 Miscellaneous............................................ 30
9.7 Counterparts............................................. 30
9.8 Survival................................................. 30
9.9 Third Party Beneficiaries................................ 31
Annex I
CONDITIONS TO THE OFFER
EXHIBITS
- --------
Exhibit A Form of Tender and Option Agreement
Exhibit B Form of Stock Option Agreement
- iii -
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of December 18, 1997 (the
"Agreement"), by and among Tel-Save Holdings, Inc., a Delaware corporation
("Parent"), TSHCo, Inc., a Delaware corporation and a subsidiary of Parent
("Purchaser"), and Symetrics Industries, Inc., a
Florida corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Parent, Purchaser
and the Company have approved the acquisition of the Company by Purchaser
pursuant to a tender offer (the "Offer") by Purchaser for all of the outstanding
shares of Common Stock, par value $0.25, of the Company, (the "Shares") at a
price of $15.00 in cash per Share followed by a merger (the "Merger") of
Purchaser with and into the Company, all upon the terms and subject to the
conditions set forth herein.
WHEREAS, contemporaneously with the execution and delivery of this
Agreement and as a condition to Parent's willingness to enter this Agreement,
(i) the Company, Parent and certain officers and directors of the Company are
entering into the Tender and Option Agreement in substantially the form of
Exhibit A hereto (the "Tender and Option Agreement"), and (ii) the Company and
Parent are entering into the Stock Option Agreement in substantially the form of
Exhibit B hereto (the "Stock Option Agreement").
NOW THEREFORE, in consideration of the premises and the mutual
agreements, provisions and covenants herein contained, the parties hereby agree
as follows:
1
ARTICLE I
THE OFFER
1.1 The Offer.
(a) Purchaser shall commence within the meaning of Rule 14d-2
under the Securities Exchange Act of 1934, as amended, including the rules and
regulations promulgated thereunder (the "Exchange Act"), the Offer within five
business days (as such term is defined in Rule 14e-1 under the Exchange Act (a
<PAGE> 6
"Business Day")) after the date of this Agreement. The Offer, for all of the
outstanding Shares, will be subject only to a number of Shares being validly
tendered prior to the expiration of the Offer and not withdrawn which would
result in Purchaser's ownership of such number of Shares as represents at least
a majority of the outstanding Shares of the Company on a fully diluted basis
assuming exercise of all outstanding Options (as defined in Section 2.6), if
any, of the Company (the "Minimum Condition") and satisfaction or waiver of the
further conditions set forth in Annex I, any of which conditions (including the
Minimum Condition) may be waived in the sole discretion of Purchaser.
(b) Upon the terms and subject to the conditions of the Offer,
Purchaser shall purchase all Shares which are validly tendered on or prior to
the expiration of the Offer and not timely withdrawn. Purchaser may, at any
time, transfer or assign to one or more corporations, which are direct or
indirect subsidiaries of Parent, the right to purchase all or any portion of the
Shares tendered pursuant to the Offer, but any such transfer or assignment shall
not relieve Purchaser of its obligations under the Offer or prejudice the rights
of tendering stockholders to receive payment for Shares properly tendered and
accepted for payment.
(c) The Offer shall remain open (except upon the occurrence of
the events specified in Section 8.1(a), 8.1(c)(i), and 8.1(d)) until January 21,
1998 (the "Expiration Date"), unless Purchaser shall have extended the period of
time for which the Offer is open as may be required by this Agreement, or
applicable law, in which event the term "Expiration Date" shall mean the latest
time and date at which the Offer, as so extended by Purchaser, shall expire. On
or prior to the date the Offer is commenced, Purchaser shall file with the
Securities and Exchange Commission (the "Commission") a Tender Offer Statement
on Schedule 14D-1 (together with all amendments and supplements thereto, the
"Schedule 14D-1") with respect to the Offer, that shall comply in all material
respects with the provisions of such Schedule and all applicable Federal
securities laws, and shall contain (including as an exhibit) or incorporate by
reference the Offer (or portions thereof) and forms of the related letter
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<PAGE> 7
of transmittal and summary advertisement (the "Tender Offer Documents").
Purchaser shall not, without the prior written consent of the Board of Directors
of the Company, decrease or change the amount or form of the consideration
payable in the Offer, or impose additional conditions to the Offer. Subject to
the last sentence of paragraph (a), Purchaser may at any time, in its sole
discretion, extend the Offer.
(d) As a condition to the Offer, each of the executive
officers and directors of the Company shall have agreed with Purchaser (i) to
tender in the Offer all of the Shares (and all securities convertible into or
exchangeable for Shares) beneficially owned by them and (ii) to grant to
Purchaser the option, exercisable within 180 days of the date hereof, to
purchase any and all such Shares and other securities (assuming conversion of
such securities in accordance with their terms into Shares) for the per share
price that would have been payable in the Offer, in the event the Offer is not
consummated for any reason and (A) a third party has made an Acquisition
Proposal (as such term is defined in Section 6.5 hereof), or (B) such officers
and directors intend to sell their Shares to a third party, in which case such
Shares will first be offered to Purchaser.
1.2 Company Action. The Company hereby consents to the Offer and
represents that its Board of Directors (i) has determined by a unanimous vote
that the Offer and the Merger are fair to, and in the best interests of, the
Company and its stockholders, (ii) has approved the Offer and the Merger, (iii)
has approved and adopted this Agreement, the Stock Option Agreement and the
Tender and Option Agreement and (iv) has resolved to recommend acceptance of the
Offer to, and adoption of this Agreement by, the Company's stockholders. As soon
as practicable after the date hereof, the Company shall file with the Commission
but in no event prior to such date as the Purchaser has filed the Tender Offer
Documents with the Commission and mail to holders of record and beneficial
owners of Shares a Solicitation/Recommendation Statement on Schedule 14D-9 with
respect to the Offer (such Schedule 14D-9, as amended from time to time, the
"Schedule 14D- 9"), which shall reflect such determination and recommendation.
The Company shall from time to time furnish Purchaser with such additional
information, if
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<PAGE> 8
any, including updated or additional lists of stockholders, mailing labels and
lists of securities positions, and other assistance as the Purchaser may
reasonably request in order to be able to communicate the Offer to the
stockholders of the Company.
1.3 Directors. Promptly upon the purchase by Purchaser of such
number of Shares as represents at least a majority of the outstanding Shares (on
a fully diluted basis assuming conversion of all outstanding Options) and from
time to time thereafter, Purchaser shall be entitled to designate such number of
directors, rounded up to the next whole number, on the Board of Directors of the
Company as will give Purchaser, subject to compliance with Section 14(f) of the
Exchange Act, representation on the Board of Directors of the Company equal to
the product of (a) the number of directors on the Board of Directors of the
Company (after giving effect to the appointment of such directors) and (b) the
percentage that such number of Shares so purchased bears to the number of Shares
outstanding, and the Company shall, upon request by Purchaser, promptly (i)
increase the size of the Board of Directors of the Company to the extent
permitted by its Articles of Incorporation and By-Laws (and amend the Articles
of Incorporation and By-Laws, if so required, to increase the size of the Board
of Directors to allow for such additional directors); and/or (ii) take all steps
necessary and appropriate to secure the resignations of such number of directors
as is necessary to enable Purchaser's designees to be elected to the Board of
Directors of the Company (and shall hold a Board meeting for such purpose); and
(iii) shall cause Purchaser's designees to be so elected. At any time after the
execution hereof, at the request of Purchaser, the Company shall promptly take,
at its expense, all action necessary to effect any such election, including
mailing to its stockholders the information required by Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder in form and substance
reasonably satisfactory to Purchaser and its counsel. Purchaser shall supply the
Company and be solely responsible for any information included in the filings
with the Commission with respect to itself and its nominees, officers, directors
and affiliates required by said Section 14(f) and Rule 14f-1. Prior to the
Effective Time (as defined in Section 2.3 hereof) the Board of Directors shall
at all times have
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<PAGE> 9
at least one "Disinterested Director" (as such term is defined in Section
607.0901 of the Florida Business Corporation Act (the "Florida Law")).
2
ARTICLE II
THE MERGER
2.1 The Merger. At the Effective Time (as defined in Section 2.3),
in accordance with this Agreement, the Florida Law and the General Corporation
Law of the State of Delaware, as amended (the "Delaware Law"), Purchaser shall
be merged with and into the Company, the separate existence of Purchaser (except
as may be continued by operation of law) shall cease, and the Company shall
continue as the surviving corporation. The Company in its capacity as the
corporation surviving the Merger, sometimes is referred to herein as the
"Surviving Corporation."
2.2 Effect of the Merger. The Surviving Corporation shall possess
all the rights, privileges, powers and franchises, of a public as well as a
private nature, and be subject to all the restrictions, disabilities and duties,
of each of Purchaser and the Company (collectively, the "Constituent
Corporations"); the Surviving Corporation shall be vested with the rights,
privileges, powers and franchises, all properties and assets and all debts due
on whatever account, and all other things in action or belonging to, and all and
every other interest of, each of the Constituent Corporations; and all debts,
liabilities and duties of each of the Constituent Corporations shall thenceforth
attach to the Surviving Corporation and may be enforced against it to the same
extent as if such debts, liabilities and duties had been incurred or contracted
by it, all with the effect set forth in Section 607.1106 of the Florida Law.
2.3 Consummation of the Merger. As soon as is practicable after the
satisfaction or waiver of the conditions set forth in Article VII, and in no
event later than five business days after such satisfaction or waiver, the
parties to this Agreement will cause a Certificate of Merger to be filed with
the Secretary of State of the State of Delaware, in such form as
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<PAGE> 10
required by, and executed in accordance with, the relevant provisions of the
Delaware Law, including, if applicable, the procedures permitted by Section 253
of the Delaware Law (in which case references herein to the "Certificate of
Merger" shall refer instead to the "Certificate of Ownership and Merger"), and
the parties to this Agreement will cause Articles of Merger to be filed with the
Department of State of Florida, in such form as required by, and executed in
accordance with, the relevant provisions of the Florida Law, including, without
limitation, the relevant procedures set forth in Section 607.1105 and Section
607.1107 of the Florida Law. The Merger shall be effective at such time as the
Certificate of Merger is duly filed with the Secretary of State of the State of
Delaware and the Articles of Merger are duly filed with the Department of State
of Florida, or at such later time as specified in the Certificate of Merger (the
"Effective Time").
2.4 Articles of Incorporation and By-Laws; Directors and Officers. The
Articles of Incorporation of the Company shall be the Articles of Incorporation
of the Surviving Corporation immediately after the Effective Time. The By-Laws
of Purchaser, as in effect immediately prior to the Effective Time, shall be the
By-Laws of the Surviving Corporation immediately after the Effective Time and
the directors of the Company shall submit their resignations at the Effective
Time. The directors of Purchaser holding office immediately prior to the
Effective Time shall be the directors of the Surviving Corporation immediately
after the Effective Time. The officers of the Company, other than the Chairman
of the Board, the Secretary and the Treasurer, holding office immediately prior
to the Effective Time shall be the officers (holding the same offices as they
held with the Company) of the Surviving Corporation immediately after the
Effective Time.
2.5 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
holder of any of the following securities:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than Shares to be cancelled pursuant to Section 2.5(b)) is
applicable) shall automatically be cancelled and extinguished and be converted
into and become solely a
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<PAGE> 11
right to receive $15.00 in cash (adjusted for stock splits or other similar
events) without interest (the "Common Stock Consideration").
(b) Each Share issued and outstanding immediately prior to the
Effective Time and held in the treasury of the Company or owned by Purchaser or
Parent shall automatically be cancelled and no payment shall be made with
respect thereto.
(c) Each share of capital stock of Purchaser issued and outstanding
immediately prior to the Effective Time shall be converted and changed into one
validly issued, fully paid and nonassessable share of such capital stock of the
Surviving Corporation.
2.6 Stock Options. Each option (an "Option") to purchase Shares issued
by the Company which is outstanding at, and has vested by, the Effective Time
shall be cancelled by virtue of the Merger, without consideration except as
provided in this Section 2.6, and shall cease to exist. Each holder of an
Option, whether or not immediately exercisable, shall be entitled to receive,
for each Share issuable on exercise of such Option, an amount in cash equal to
the excess of (x) the Common Stock Consideration over (y) the per Share exercise
price of the Option as in effect immediately prior to the Effective Time. The
consideration due under this Section 2.6 shall be payable without interest after
(a) verification by the Paying Agent (as defined in Section 2.8) of the
ownership and terms of the particular Option by reference to the Company's
records, and (b) delivery in the manner provided in Section 2.8 of a written
instrument duly executed by the owner of the applicable Option, in a form
provided by the Paying Agent and setting forth (i) the aggregate number of
Options owned by that person and their respective issue dates and exercise
prices; (ii) a representation by the person that he or she is the owner of all
Options described pursuant to clause (i), and that none of those Options has
expired or ceased to be exercisable; and (iii) a confirmation of and consent to
the cancellation of all of the Options described pursuant to clause (i).
- 7 -
<PAGE> 12
2.7 Closing of Company Transfer Books. At the Effective Time, the
stock transfer books of the Company shall be closed with respect to Shares
issued and outstanding immediately prior to the Effective Time and no further
transfer of such Shares shall thereafter be made on such stock transfer books.
If, after the Effective Time, valid certificates previously representing such
Shares are presented to the Surviving Corporation or the Paying Agent (as
defined in Section 2.8), they shall be exchanged as provided in Section 2.8.
2.8 Exchange of Certificates. 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 necessary to effect the
exchange for cash of certificates which, immediately prior to the Effective
Time, represented Shares entitled to payment pursuant to Section 2.5(a). As soon
as practicable after the Effective Time, the Paying Agent shall mail a
transmittal form (the "Letter of Transmittal") to each holder of record of
certificates theretofore representing such Shares advising such holder of the
procedure for surrendering to the Paying Agent such certificates. If a check for
the Common Stock Consideration is to be issued in the name of a person other
than the person in whose name the certificates for Shares surrendered for
exchange are registered on the books of the Company, it shall be a condition of
the exchange that the person requesting such exchange shall pay to the Paying
Agent all transfer or other taxes required by reason of the issuance of such
check in the name of a person other than the registered owner of the
certificates surrendered, or shall establish to the satisfaction of the Paying
Agent that such taxes have been paid or are not applicable. Notwithstanding the
foregoing, neither the Paying Agent nor any party hereto shall be liable to a
holder of certificates theretofore representing Shares for any amount paid to a
public official pursuant to any applicable abandoned property, escheat or
similar laws. Upon the surrender and exchange of a certificate theretofore
representing Shares, the holder shall be paid by check, without interest
thereon, the Common Stock Consideration to which he or she is entitled
hereunder, less only such amount required to be withheld under applicable backup
withholding federal income tax regulations, and such certificate shall
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<PAGE> 13
forthwith be cancelled. Until so surrendered and exchanged, each such
certificate shall represent solely the right to receive the Common Stock
Consideration into which the Shares it theretofore represented shall have been
converted pursuant to Sections 2.5(a), without interest, and the Surviving
Corporation shall not be required to pay the holder thereof the Common Stock
Consideration to which such holder otherwise would be entitled; provided that
customary and appropriate certifications and indemnities allowing for payment
against lost or destroyed certificates shall be permitted. If any certificates
representing any Shares shall not have been surrendered prior to five years
after the Effective Time (or immediately prior to such earlier date on which any
payment in respect thereof would otherwise escheat to or become the property of
any governmental unit or agency), the payment in respect of such certificates
shall, to the extent permitted by applicable law, become the property of the
Surviving Corporation, free and clear of all claims or interest of any person
previously entitled thereto.
2.9 Funding of Paying Agent. Purchaser shall transmit by wire, or other
acceptable means, to the Paying Agent prior to the Effective Time funds required
for the exchange of all Shares and cancellation of all Options in accordance
with this Agreement. The Paying Agent shall agree to hold such funds in trust
and deliver such funds (in the form of checks of the Paying Agent) in accordance
with this Section and Section 2.8. Any portion of such funds which has not been
paid to holders of the Shares or Options pursuant to Section 2.8 within six
months after the Effective Time shall promptly be paid to the party which
provided such funds, and thereafter holders of certificates representing the
right to receive the cash into which Shares or Options formerly represented by
such certificates shall have been converted pursuant to Section 2.5(a) or 2.6
who have not theretofore complied with Section 2.8 shall look solely to the
Surviving Corporation or the Paying Agent for payment of the amount of cash to
which they are entitled pursuant to this Agreement.
2.10 Taking of Necessary Action; Further Action. Purchaser and the
Company shall use all reasonable efforts to take all such actions as may be
necessary or appropriate in order to effectuate the
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<PAGE> 14
Offer and the Merger as promptly as possible. If, at any time after the
Effective Time, any further actions are necessary or desirable to carry out the
purposes of this Agreement or to vest the Surviving Corporation with full right,
title and possession to all assets, property, rights, privileges, immunities,
powers and franchises of either or both of the Constituent Corporations, the
officers and directors of the Surviving Corporation are fully authorized in the
name of either or both of the Constituent Corporations or otherwise to take, and
shall take, all such actions.
2.11 Merger Without Meeting of Stockholders. Notwithstanding the
foregoing in this Article II, in the event that Purchaser shall acquire at least
80 percent of the shares of each class of stock of the Company, the parties
hereto agree to take all necessary and appropriate action, to cause the Merger
to become effective as soon as practicable after the expiration of the Offer
without a meeting of stockholders of the Company in accordance with Section
607.1104 of the Florida Law.
2.12 No Further Ownership Rights in Common Stock. From and after the
Effective Time, the holders of Shares which were outstanding immediately prior
to the Effective Time shall cease to have any rights with respect to such Shares
except as otherwise provided in this Agreement or by applicable law. All cash
paid upon the surrender of Certificates in accordance with the terms hereof
shall be deemed to have been issued in full satisfaction of all rights
pertaining to the Shares.
3
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT
AND PURCHASER
Parent and Purchaser hereby jointly and severally represent and warrant
to the Company as follows:
3.1 Organization and Qualification. Each of Parent and Purchaser has
been duly incorporated and is validly existing as a corporation and in good
standing
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<PAGE> 15
under the laws of the State of Delaware and has the requisite corporate power to
carry on its respective business as now conducted.
3.2 Authority Relative to this Agreement. Each of Parent and Purchaser
has the requisite corporate power and authority to enter into this Agreement and
to carry out its respective obligations hereunder. The execution and delivery of
this Agreement by Parent and Purchaser and the consummation by Parent and
Purchaser of the transactions contemplated hereby have been duly authorized by
the Boards of Directors of Parent and Purchaser, and no other corporate
proceedings on the part of Parent or Purchaser are necessary to authorize this
Agreement and the transactions contemplated hereby. This Agreement has been duly
executed and delivered by Parent and Purchaser and constitutes a valid and
binding obligation of each such company, enforceable in accordance with its
terms, except to the extent that enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the enforcement of creditors rights generally or
by equitable principles. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein by each
of Parent and Purchaser do not and will not conflict with or result in a breach
of or default under (a) its respective Certificate of Incorporation or By-Laws,
(b) any contract to which it is a party, or (d) any law, regulation, order,
judgment or decree, other than any such breaches or violations which will not,
individually or in the aggregate, have a material adverse effect on the ability
of Parent and Purchaser to consummate the transactions contemplated by this
Agreement. Other than in connection with or in compliance with the provisions of
the Delaware Law, Florida Law, the Exchange Act, the securities or blue-sky laws
of the various states of the United States and the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, (the "H-S-R Act"), no authorization,
consent or approval of or filing with, any public body, court or authority is
necessary on the part of Parent or Purchaser for the consummation by Parent and
Purchaser of the transactions contemplated by this Agreement, except for such
authorizations, consents, approvals and filings as to which the failure to
obtain or make would not, individually or in the
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<PAGE> 16
aggregate, have a material adverse effect on the ability of Parent or Purchaser
to perform their respective obligations hereunder.
3.3 Financing Arrangements. Parent shall cause Purchaser to have funds
available to it on the Expiration Date sufficient to purchase the Shares
(including Shares issuable upon exercise of the Options) and to pay fees and
expenses related to the transactions contemplated hereby in accordance with the
terms of this Agreement.
3.4 Ownership of Shares. As of the date hereof, and except as disclosed
on the latest Schedule 13D as filed by Parent with the Commission with respect
to the Common Stock, none of Parent, Purchaser or any of their subsidiaries owns
(beneficially or otherwise) any Shares (except for Shares that may be held in
any of their pension or employee benefit plans).
4
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Purchaser
that:
4.1 Organization and Qualification. The Company has been duly
incorporated and is validly existing as a corporation and in active status under
the laws of the State of Florida and has full corporate power and authority to
own its properties and conduct its business as presently owned and conducted.
The Company is duly qualified as a foreign corporation and in good standing in
each jurisdiction in which the character of its properties owned or leased or
the nature of its activities makes such qualification necessary except where the
failure to be so qualified, individually or in the aggregate, would not
reasonably be expected to have a material adverse effect on the business,
property, financial condition or results of operations of the Company and its
Subsidiary taken as a whole (a "Material Adverse Effect").
4.2 Subsidiaries. The Company has listed all subsidiaries required to
be so listed on Exhibit 21 to
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<PAGE> 17
the Company's Annual Report on Form 10-K for the year ended March 31, 1997 (the
"Subsidiary"). The Subsidiary has been duly incorporated and is validly existing
as a corporation and is in good standing in its respective jurisdictions and has
full corporate power and authority to own its properties and conduct its
businesses as presently owned and conducted. Each Subsidiary is duly qualified
as a foreign corporation and in good standing in each jurisdiction in which the
character of its properties owned or leased or the nature of its activities
makes such qualification necessary except where the failure to be so qualified,
would not reasonably be expected to have a Material Adverse Effect.
4.3 Capitalization.
(a) As of December 17, 1997, the authorized equity capitalization
of the Company consists of 5,000,000 Shares, par value $.25 per share, of which
1,627,713 are outstanding. All of the outstanding shares of the Company's
capital stock are validly issued, fully paid and nonassessable. The aggregate
number of Shares subject to (i) outstanding warrants and (ii) outstanding
options that have been issued pursuant to the Company's 1983 and 1994 Stock
Option Plans as of December 17, 1997 is 178,768.
(b) Except as described in paragraph (a) above or in the Company's
Articles of Incorporation, there are no options, warrants, conversion privileges
or other rights, agreements, arrangements or commitments obligating the Company
or any of its subsidiaries to issue or sell any shares of capital stock of the
Company or of any of its subsidiaries or securities or obligations of any kind
convertible into or exchangeable for any shares of capital stock of the Company
or any of its subsidiaries. The holders of the outstanding Shares are not
entitled to any preemptive or other similar rights, except as set forth above.
Upon consummation of the Merger in accordance with the terms of this Agreement,
Purchaser will own the entire equity interest in the Company, and there will be
no options, warrants, conversion privileges or other rights, agreements,
arrangements or commitments obligating the Company or any of its subsidiaries to
issue or sell any shares of capital stock of the Company or any of its
subsidiaries other than such
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<PAGE> 18
rights, options, warrants, conversion privileges or other agreements,
arrangements or commitments, that are the result of actions taken or caused to
be taken by or on behalf of Purchaser.
4.4 Authority Relative to this Agreement.
(a) The Company has the requisite corporate power and authority to
enter into this Agreement and, subject to adoption of this Agreement by its
stockholders as set forth in Section 6.1, to perform its obligations hereunder.
The Company and the Board of Directors has duly and validly taken all necessary
action required to be taken in order for this Agreement, the Tender and Option
Agreement, the Stock Option Agreement and all the transactions contemplated
hereby and thereby not to be subject to the requirements of the provisions of
Sections 607.0901 through 607.0903, inclusive, of the Florida Law, and the
Company is not aware of any other anti-takeover statutes or similar laws and
regulations which apply or purport to apply hereto or thereto (collectively, the
"Takeover Laws"). Except for adoption of this Agreement by its stockholders as
set forth in Section 6.1, no other corporate proceedings on the part of the
Company are necessary to authorize or consummate this Agreement and the
transactions contemplated hereby. The Board of Directors of the Company has
approved Parent and Purchaser and any other direct or indirect wholly-owned
subsidiary of Parent to which Parent may assign its rights hereunder, acquiring
a "control share" (as defined in Section 607.0902 of the Florida Law) pursuant
to the terms of this Agreement.
(b) This Agreement has been duly executed and delivered by the
Company and, assuming the due authorization, execution and delivery thereof by
Parent and Purchaser, constitutes a valid and binding obligation of the Company,
enforceable in accordance with its terms except to the extent that
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
enforcement of creditors rights' generally or by equitable principles. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated herein do not and will not conflict with or result
in a breach of or default under (i) the
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<PAGE> 19
Company's Articles of Incorporation or by-laws, (ii) any contract or agreement
to which it is a party or by which the Company or any of its property is bound,
or (iii) any law, regulation, permit, order, judgment or decree, other than any
such breaches or defaults which will not, and would not reasonably be expected
to individually or in the aggregate, have a Material Adverse Effect. Other than
in connection with or in compliance with the provisions of the Delaware Law,
Florida Law, the Exchange Act, the securities or blue-sky laws of the various
states of the United States and the H-S-R Act, no authorization, consent or
approval of, or filing with, any public body, court or authority is necessary
for the consummation by the Company of the transactions contemplated by this
Agreement, other than such authorizations, consents, approvals, permits, filings
or notifications which, if not obtained or made, will not have a Material
Adverse Effect.
4.5 Commission Filings. Since January 1, 1995, the Company has filed
all reports, registration statements and other documents required to be filed
under the Exchange Act and the rules and regulations thereunder, and all such
reports, registration statements and other documents complied, in all material
respects, with the requirements of the Exchange Act, such compliance to be
determined, to the extent applicable, in accordance with the standards applied
to the Company Reports in the following two sentences. As of their respective
dates, the Company's Annual Report on Form 10-K for 1997, the Company's
Quarterly Reports on Form 10-Q in 1997, the Company's Current Report on Form 8-K
with respect to events which occurred in 1997 and the Company's 1997 Proxy
Statement (together, the "Company Reports") did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The audited
consolidated financial statements and unaudited consolidated interim financial
statements of the Company (including any related notes and schedules) included
in the reports referred to in clauses (i) and (ii) of the first sentence of this
paragraph have been prepared in accordance with United States generally accepted
accounting principles ("GAAP") applied on a consistent basis during the
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<PAGE> 20
periods involved (except as may be indicated in the notes thereto) and fairly
present the consolidated financial position of the Company and its consolidated
subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended, subject, in the case of
the unaudited consolidated interim financial statements, to normal year-end
adjustments and any other adjustments described therein, and the fact that the
interim financial statements were prepared in accordance with the rules and
regulations of the Commission and, therefore, certain information required by
GAAP may have been omitted. Except as set forth in the Company Reports since
March 31, 1997, (i) there has not been a Material Adverse Effect, (ii) no events
have occurred other than events that affect the general economy or the Company's
industry generally which have had or which reasonably would be expected to have
a Material Adverse Effect, and (iii) except as permitted by this Agreement,
there has been (1) no direct or indirect redemption, purchase or other
acquisition of any shares of the Company's capital stock by the Company or any
subsidiary, (2) no declaration, setting aside or payment of any dividend or
other distribution by the Company in respect of the Company's Common Stock, (3)
no issuance of any shares of capital stock of the Company (except in connection
with the exercise of Options or grants of restricted stock, each in accordance
with its respective terms), (4) except as permitted by Section 5.1 or with
respect to any grants under the stock option and stock award plans referred to
in Section 4.3, no granting to any person of any option to purchase or other
right to acquire shares of capital stock of the Company, (5) no stock split or
other reclassification of the Company's capital stock, and (6) no change in the
accounting principles as reflected in the first footnote of the audited
financial statements of the Company for the fiscal year ending March 31, 1997.
4.6 Liabilities. The Company is not aware of any undisclosed
liabilities that could reasonably be expected to have a Material Adverse Effect
and the Company is not aware of any material liabilities that have been incurred
since the date of the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997.
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<PAGE> 21
4.7 Litigation. Except as disclosed in the Company Reports, there are
no claims, actions, proceedings, or investigations pending or, to the knowledge
of the Company, threatened in writing against the Company or any of its
subsidiaries or any of their officers or directors (in their capacity as such)
before any court or governmental or regulatory authority or body which would
reasonably be expected to result in a Material Adverse Effect and neither the
Company nor any of its subsidiaries or any of their officers or directors (in
their capacity as such) are subject to any writs, injunctions or decrees which
would reasonably be expected to result in a Material Adverse Effect.
4.8 Government Contracts. (a) The Company is in substantial compliance
with the Government Contracts to which it is a party. (The term "Government
Contract" means any prime contract with the U.S. Government and any subcontract
with a prime contractor or higher-tier subcontractor under a prime contract with
the U.S. Government.)
5
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
5.1 Conduct of Business by the Company Pending the Merger. The Company
covenants and agrees that, prior to the Effective Time, unless Purchaser shall
otherwise agree in writing or as otherwise expressly contemplated or permitted
by this Agreement:
(a) the businesses and affairs of the Company and its subsidiaries
shall be conducted only in the ordinary course of business and consistent with
past practice;
(b) except in connection with the adoption by the Company of a
shareholder rights plan that would not be applicable to, or adversely affect the
transactions contemplated hereby among the parties to this Agreement, neither
the Company nor any of its subsidiaries shall: (i) issue (except pursuant to
employee and non-employee director stock options outstanding on the date hereof
in accordance with their
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<PAGE> 22
terms), sell, pledge, dispose of or encumber (or permit any of its subsidiaries
to issue, sell, pledge, dispose of or encumber): (A) any additional shares of,
or any options, warrants, conversion privileges or rights of any kind to acquire
any shares of, any capital stock of the Company or any of its subsidiaries, or
(B) any material assets of the Company or any of its subsidiaries except in the
ordinary course of business; (ii) amend or propose to amend the certificate or
articles of incorporation or bylaws or similar governing instruments of the
Company or any of its subsidiaries; (iii) split, combine or reclassify any
outstanding Shares, or declare, set aside or pay any dividend or other
distribution, payable in cash, stock, property or otherwise with respect to the
Shares; (iv) redeem, purchase or acquire, or offer to acquire (or permit any of
its subsidiaries to redeem, purchase or acquire or offer to acquire) any Shares
or other securities of the Company; or (v) enter into or modify any contract,
agreement, commitment or arrangement with respect to any of the matters set
forth in this Section 5.1(b);
(c) neither the Company nor any of its subsidiaries shall (i)
acquire (by merger, consolidation, acquisition of stock or assets or otherwise)
any corporation, partnership or other business organization or division or
material assets thereof for aggregate consideration in excess of $250,000; (ii)
incur any indebtedness for borrowed money or issue any debt securities except
the borrowing of working capital in the ordinary course of business and
consistent with past practice; or (iii) enter into or materially modify any
contract, agreement, commitment or arrangement with respect to any of the
foregoing;
(d) neither the Company nor any of its subsidiaries shall enter
into or modify any employment, severance or similar agreements or arrangements
with, or grant any bonuses, salary increases, severance or termination pay to,
any officers, directors or employees;
(e) neither the Company nor any of its subsidiaries shall adopt or
amend any bonus, profit sharing, compensation, stock option, pension,
retirement, deferred compensation, employment or other
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<PAGE> 23
employee benefit plan, agreement, trust, fund or arrangement for the benefit or
welfare of any officer, director or employee, other than (i) in the ordinary
course of business consistent with past practice for the benefit or welfare of
any employee, (ii) for the purpose of accelerating the vesting of stock options
that were granted on or before December 16, 1997 or (iii) to the extent required
by law;
(f) the Company shall use reasonable efforts (i) to cause its
current insurance (or reinsurance) policies not to be cancelled or terminated;
and (ii) to not permit any of the coverage thereunder to lapse, in any such case
unless prior to or promptly after such termination, cancellation or lapse,
replacement policies underwritten by insurance and reinsurance companies of
nationally recognized standing and with Best ratings no less favorable than
those of the insurance company providing the coverage which is being replaced
are obtained;
(g) the Company (i) shall use reasonable efforts, and cause each of
its subsidiaries to use reasonable efforts, to keep intact their respective
business organizations and good will, keep available the services of their
officers and employees as a group and maintain satisfactory relationships with
suppliers and customers and others having business relationships with them.
6
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Action of Stockholders. If required by law to approve the Merger,
the Company shall take all action necessary in accordance with the Florida Law
and its Articles of Incorporation and By-Laws to convene a meeting of its
stockholders promptly after the Expiration Date to consider and vote upon this
Agreement. If a meeting of the Company's stockholders is to be called, the
Company shall, if and to the extent requested by Purchaser, use all reasonable
efforts to solicit from stockholders of the Company proxies in favor of the
adoption of this Agreement and shall take all other action reasonably necessary,
or
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<PAGE> 24
which otherwise may be reasonably requested by Purchaser, to secure a vote of
stockholders in favor of adoption of this Agreement, subject to the exercise of
fiduciary duties by the Board of Directors under applicable law. At any such
meeting, Purchaser shall vote or cause to be voted all of the Shares then owned
by Purchaser or its subsidiaries in favor of adoption of this Agreement and the
Company shall vote or cause to be voted all Shares with respect to which proxies
in the form distributed by the Company have been given, and not voted against
the adoption of this Agreement, in favor of adoption of this Agreement.
6.2 Proxy Statement. If necessary, the Company shall file with the
Commission under the Exchange Act, and shall use all reasonable efforts to have
processed to completion by the Commission, in each case at the earliest
practicable date, a proxy statement or information statement, as Purchaser shall
designate (the "Proxy Statement"), with respect to the adoption by the Company's
stockholders of this Agreement in form and substance reasonably satisfactory to
Purchaser and its counsel. The information provided by Purchaser and the
Company, respectively, for use in the Proxy Statement, the Schedule 14D-9 and
the Schedule 14D-1 shall be true and correct in all material respects and shall
not omit to state any material fact necessary in order to make such information
and the Proxy Statement, the Schedule 14D-1 and the Schedule 14D-9 not
misleading as of the date of the Proxy Statement, the Schedule 14D-1 and the
Schedule 14D-9, as appropriate. The Proxy Statement shall, subject to the
exercise of fiduciary duties by the Board of Directors under applicable law,
contain the determination and recommendation of the Board of Directors of the
Company referred to in Section 1.2. If no meeting of stockholders is required to
approve the adoption of this Agreement, the Company shall, promptly after the
Expiration Date, take all actions required in connection with the consummation
of the Merger pursuant to Section 253 of the Delaware Law and Section 607.1104
of the Florida Law.
6.3 Expenses. All costs and expenses incurred in connection with the
Offer, this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such expenses, except as set forth in Section 8.3.
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<PAGE> 25
6.4 Additional Agreements. Subject to the conditions herein provided,
each of the parties hereto agrees to use all reasonable efforts to take, or
cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by the Offer and this Agreement,
including, without limitation, cooperating with Parent and Purchaser, using
reasonable efforts to obtain all necessary waivers, consents and approvals and
effecting all necessary registrations and filings, including, without
limitation, submissions of information requested by governmental authorities.
6.5 Limitation on Negotiations.
(a) From the date hereof until the termination hereof, the Company
and its subsidiaries will not, directly or indirectly, make, solicit, initiate
or encourage submission of proposals or offers from any persons (including any
of its officers or employees) relating to an Acquisition Proposal. As used
herein, the term "Acquisition Proposal" means any proposal or offer involving a
liquidation, dissolution, recapitalization, merger, consolidation or acquisition
or purchase of all or substantially all of the assets of, or a controlling
equity interest in, the Company or other similar transaction or business
combination involving the Company or its subsidiaries.
(b) Subject to the fiduciary duty of the Board of Directors, the
Company shall:
(i) immediately cease and cause to be terminated all
discussions or negotiations with third parties with respect to any Acquisition
Proposal, if any, existing on the date hereof; and
(ii) promptly notify Purchaser after receipt of any bona fide
Acquisition Proposal or any inquiry from any person relating to an Acquisition
Proposal and promptly provide Purchaser with a reasonable summary of the
financial and other material terms of such Acquisition Proposal.
(c) To the extent that the Board of Directors of the Company shall
conclude, acting in good faith, after receiving advice from outside counsel or
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<PAGE> 26
its financial advisor, that the following action is necessary or appropriate in
order for the Board of Directors to act in a manner which is consistent with its
fiduciary duties under applicable law, the Company may:
(i) furnish or cause to be furnished information concerning
the Company and its businesses, properties or assets to a third party;
(ii) engage in discussions or negotiations with a third party
concerning an Acquisition Proposal initiated by such third party;
(iii) following receipt of an Acquisition Proposal, take and
disclose to its stockholders a position contemplated by Rule 14e-2(a) under the
Exchange Act or otherwise make disclosure to the Company's stockholders; and
(iv) following receipt of an Acquisition Proposal, (1) through
the Board of Directors, withdraw, modify or amend its recommendation referred
to in Section 1.2, and/or (2) enter into an agreement providing for the
consummation of such Acquisition Proposal.
(d) The Company will direct its financial
and other advisors and representatives to comply with each of the covenants
contained in this Section 6.5.
6.6 Notification of Certain Matters. Each party shall give prompt
notice to the others of (i) the occurrence or failure to occur of any event,
which occurrence or failure would cause or may cause any representation or
warranty on its part contained in this Agreement to be untrue or inaccurate in
any material respect; and (ii) any failure of such party, or any officer,
director, employee or agent thereof, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder.
6.7 Access to Information.(a) From the date hereof to the Effective
Time, the Company shall, and shall cause its subsidiaries, officers, directors,
employees and agents to, afford the officers, employees and agents of Parent and
Purchaser reasonable access at all reasonable times to its officers, employees,
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<PAGE> 27
agents, premises, books and records, and properties and shall furnish Purchaser
all financial, operating, personal, compensation, tax and other data and
information, Purchaser, through its officers, employees or agents, may
reasonably request.
(b) Parent and Purchaser, on the one hand, and the Company on the
other hand will hold, and each will use its best efforts to cause its
consultants, advisors, counsel and agents to hold, in confidence, unless
compelled to disclose by judicial or administrative process or by other
requirements of law, all confidential documents and information concerning the
other party furnished to it in connection with the transactions contemplated by
this Agreement, except to the extent that such information can be shown to have
been (i) previously known on a nonconfidential basis by the other party, (ii) in
the public domain through no fault of the disclosing party or (iii) later
lawfully acquired from sources other than the Other party; provided that each
party may disclose such information to its officers, directors, employees,
consultants, advisors and agents in connection with the transactions
contemplated by this Agreement so long as such persons are informed of the
confidential nature of such information and are directed to treat such
information confidentially. Each party's obligation to hold such information in
confidence shall be satisfied if such party exercises the same care with respect
to such information as it would exercise to preserve the confidentiality of its
own similar information. If this Agreement is terminated, such confidence shall
be maintained and each party will, and will use its best efforts to cause its
respective officers, directors, employees, consultants, advisors, counsel and
agents to, destroy or deliver to the other party, upon request, all documents
and other materials, and all copies thereof, obtained by or on behalf of any
such person from the other party in connection with this Agreement that are
subject to such confidence.
6.8 Stockholder Claims. The Company shall not settle or compromise any
claim brought by any present, former or purported holder of any securities of
the Company in connection with the Offer or the Merger prior to the Effective
Time, without the prior written consent of Purchaser, which consent may not be
unreasonably withheld, and shall notify Purchaser
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<PAGE> 28
promptly upon receipt of all written demands for appraisal rights. None of the
parties to this Agreement shall take any action to deprive any employee or
director of the Company of the benefits of the consideration payable with
respect to Options in accordance with Section 2.6.
6.9 Treatment of Employee Compensation and Benefits. The Company
and Purchaser agree that the employer-provided benefits and compensation for
nonunion employees under the Company's and the Subsidiary's employee benefit
plans and payroll as in effect as of the Effective Time (other than any feature
of any such plan that relates to the Shares) shall not be reduced after the
Effective Time (except to the extent consistent with the terms of this Agreement
and except to the extent necessary to comply with applicable law) at least until
the second anniversary of the Effective Time.
6.10 Indemnification Rights.
(a) From and after the Effective Time, to
the extent not covered by the insurance set forth in the next succeeding
sentence, Parent and Purchaser shall jointly and severally indemnify, defend and
hold harmless the officers, directors and employees of the Company or any of its
subsidiaries against all losses, expenses, claims, damages or liabilities
arising out of claims brought or made by third parties, including, without
limitation, derivative claims, in connection with the transactions contemplated
by this Agreement to the fullest extent permitted or required under applicable
law and shall advance expenses prior to the final disposition of such claims and
liabilities to which this sentence applies. Purchaser agrees that all rights to
indemnification now existing in favor of the directors, officers or employees of
the Company or any of its subsidiaries (including, without limitation, any
person who was or becomes a director, officer or employee prior to the Effective
Time (the "Indemnified Parties")) under the Florida Law or as provided in the
Company's Articles of Incorporation or by By-Laws with respect to matters
occurring on or
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<PAGE> 29
prior to the Effective Time shall survive the Merger and shall continue in full
force and effect for a period of not less than six years after the Effective
Time (or, in the case of claims or other matters occurring on or prior to the
expiration of such six year period which have not been resolved prior to the
expiration of such six year period, until such matters are finally resolved) and
Purchaser shall honor, and shall cause the Company to honor, all such rights.
Purchaser shall cause to be maintained in effect for not less than six years
from the Effective Time the current policies of the directors' and officers'
liability insurance maintained by the Company (provided that Purchaser may
substitute therefor policies of at least the same coverage containing terms and
conditions which are no less advantageous) with respect to matters occurring on
or prior to the Effective Time; provided that in no event shall Purchaser or the
Company be required to expend annually more than 150% of the amount that the
Company spent for these purposes in the last fiscal year to maintain or procure
insurance coverage pursuant hereto; and provided further that if Purchaser or
the Company are unable to obtain the insurance called for by this section
Purchaser or the Company will obtain as much comparable insurance as is
available for such amount per year.
(b) Without limiting the foregoing, in the event any
claim, action, suit, proceeding or investigation to which the provisions of this
Section 6.10 are applicable is brought against any Indemnified Party (whether
arising before or after the Effective Time), (i) any counsel retained by the
Indemnified Parties for any period after the Effective Time shall be subject to
the approval of the Surviving Corporation (such approval to not be unreasonably
withheld); (ii) after the Effective Time, the Surviving Corporation shall pay
all reasonable fees and expenses of such counsel for the Indemnified Parties
promptly as statements therefor are received; and (iii) after the Effective
Time, the Surviving Corporation will use reasonable efforts to assist in the
vigorous defense of any such matter, provided that the Surviving Corporation
shall not be liable for any settlement of any claim effected without its written
consent, which consent, however, shall not be unreasonably withheld. Any
Indemnified Party wishing to claim indemnification under this Section 6.10, upon
learning of any such claim, action, suit, proceeding or investigation, shall
notify the Surviving Corporation (but the failure so to notify the Surviving
Corporation shall not relieve it from any liability which it may have under this
Section
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<PAGE> 30
6.10 except to the extent such failure materially prejudices the Surviving
Corporation). The Surviving Corporation shall be liable for the fees and
expenses hereunder with respect to only one law firm, in addition to local
counsel in each applicable jurisdiction, to represent the Indemnified Parties
as a group with respect to each such matter unless there is, under applicable
standards of professional conduct, a conflict between the positions of any two
or more Indemnified Parties that would preclude or render inadvisable joint or
multiple representation of such parties.
6.11 Takeover Law Exemption. The Company shall not take any action
that would cause the transactions contemplated by this Agreement, the Stock
Option Agreement or the Tender and Option Agreement to be subject to
requirements imposed by any Takeover Law and the Company shall take all
reasonably necessary steps within its control to ensure this Agreement, the
Stock Option Agreement and the Tender and Option Agreement and the transactions
contemplated hereby and thereby are not subject to such Takeover Laws, or if
reasonably necessary shall cooperate with Parent and Purchaser in challenging
the validity or applicability of, any applicable Takeover Law, as now or
hereafter in effect, including, without limitation, Sections 607.0901 through
607.0903, inclusive, of the Florida Law.
7
ARTICLE VII
CONDITIONS
7.1 Conditions to Obligations of Each Party to Effect the Merger.
The respective obligations of each party to effect the Merger shall be subject
to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) the Offer shall have been consummated
in accordance with its terms; provided, however, that this condition shall be
deemed to be satisfied if Purchaser fails to accept for payment and pay for
Shares pursuant to the Offer other than as a result of a failure of a condition
thereof;
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<PAGE> 31
(b) the waiting period applicable to the consummation of
the Merger under the H-S-R Act shall have expired or been terminated;
(c) there shall have been no law, statute, rule or
regulation, domestic or foreign, enacted or promulgated which is in effect and
has the effect of making the acquisition of Shares illegal or otherwise
prohibits consummation of the Merger;
(d) there shall not be in effect any preliminary or final
injunction or temporary restraining order or other order or decree issued by any
foreign or United States federal or state court or foreign or United States
federal or administrative agency or authority, enjoining, restraining or
otherwise prohibiting the Offer, the Merger or the acquisition by Purchaser of
Shares; and
(e) the shareholder notification, information statement
and proxy requirements, if any, imposed by the Florida Law, the Delaware Law or
by federal law shall have been satisfied.
8
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated at any time prior
to the Effective Time, whether prior to or after approval by the stockholders of
the Company:
(a) by written mutual consent of Purchaser and the
Company;
(b) by either Purchaser or the Company:
(i) if the Offer shall not have been consummated
by March 1, 1998; or
(ii) at any time after June 30, 1998 if the
conditions set forth in Section 7.1 shall not have been satisfied or waived; or
(c) by Purchaser:
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<PAGE> 32
(i) if (1) the Board of Directors of the Company
shall have failed to recommend, or shall have withdrawn, its approval or
recommendation of the Offer or the Merger or shall have resolved to do any of
the foregoing; or (2) if the Company shall have entered into a definitive
agreement to accept an Acquisition Proposal;
(ii) if the Board of Directors of the Company
shall have modified its approval of the Offer or the Merger in a manner adverse
to Purchaser and the Minimum Condition shall not have been met on the Expiration
Date;
(iii) if as a result of the failure of any
conditions set forth in Annex I hereto the Offer shall have terminated or
expired without Purchaser or a subsidiary of Parent having purchased any Shares
thereunder; or
(d) by the Company: if the Company withdraws its
recommendation of the Offer or the Merger pursuant to Section 6.5(c)(iv)(1), or
takes the actions described in Section 6.5(c)(iv)(2), and such action is taken
pursuant to, and in compliance with, such provision.
Notwithstanding the above, neither the Company nor Purchaser shall be permitted
to terminate this Agreement if the event which gave rise to such termination
right is a result of or arose in connection with any action or inaction of the
party seeking to terminate taken or not taken in breach of the terms hereof.
8.2 Amendment. Subject to applicable law, this Agreement may be
amended by an instrument signed by each of the parties hereto before or after
approval of the Merger by the stockholders of the Company, if required;
provided, however, that after approval of the Merger by the stockholders of the
Company, no amendment may be made which decreases the amount of the Common Stock
Consideration or effects any change which would materially and adversely affect
the stockholders of the Company without the further approval of the stockholders
of the Company.
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<PAGE> 33
8.3 Grant of Stock Option Upon Termination. The Company agrees that
if this Agreement is terminated pursuant to:
(a) Section 8.1(b)(ii) and at the time of
such termination any person, entity or group (as defined in Section 13(d)(3) of
the Exchange Act) (other than Parent or Purchaser) shall have become the
beneficial owner of more than 20% of the outstanding Shares (with appropriate
adjustments for reclassifications of capital stock, stock dividends, stock
splits, reverse stock splits and similar events) and such person, entity or
group (or any subsidiary of such person, entity or group) thereafter shall enter
into a definitive agreement with the Company to accept an Acquisition Proposal
at any time on or prior to the date which is six months after the termination of
this Agreement and such transaction is thereafter consummated;
(b) Sections 8.1(c)(i) or Section 8.1(d);
(c) Section 8.1(c)(ii) and at the time of
termination of this Agreement, the Company shall enter into a definitive
agreement to accept an Acquisition Proposal at any time on or prior to the date
which is six months after the termination of this Agreement; or
(d) Section 8.1(c)(iii) and such failure
was the result of any action taken by or on behalf of the Company giving rise to
an Event specified in paragraph (a), (b), (c), (d), (f), (g) or (i) of Annex I
and such action was in breach of the Company's obligations hereunder, and with
respect to an Event specified in paragraph (g), if such action was taken by the
Company for the purpose of causing Purchaser to terminate this Agreement;
then the Company shall grant to Purchaser the option, pursuant to the Stock
Option Agreement, to purchase that number of Shares which would equal 19.9% of
the aggregate number of Shares outstanding after giving effect to the exercise
of such option.
8.4 Effect of Termination.
(a) The provisions of Sections 6.3 (expenses), 6.7
(return of information upon
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termination), 6.10 (indemnification) and 8.3 (grant of option upon termination)
shall survive the termination of this Agreement.
(b) The rights of termination provided for
in Section 8.1 shall not be an exclusive remedy hereunder but shall be in
addition to any other legal or equitable remedies that may be available to any
nondefaulting party hereto arising out of any default hereunder by any other
party hereto; provided, however, that in the event that the amount set forth in
Section 8.3 shall have been paid to Purchaser, this Agreement shall forthwith
become void and there shall be no liability on the part of either the Company or
its respective officers or directors, except for a willful and intentional
breach of any representation, warranty, covenant or agreement contained herein.
8.5 Waiver. At any time prior to the Effective Time, any party
hereto may (i) extend the time for the performance of any of the obligations or
other acts of any other party hereto or (ii) waive compliance with any of the
agreements of any other party or with any conditions to its own obligations, in
each case only to the extent such obligations, agreements and conditions
are intended for its benefit.
9
ARTICLE IX
GENERAL PROVISIONS
9.1 Brokers. The Company represents and warrants that no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission, or to the reimbursement of any of its expenses, in connection
with the Offer or the Merger or any similar transaction based upon arrangements
made by or on behalf of the Company, except for the arrangements between the
Company and Raymond James & Associates, Inc.
9.2 Public Statements. Except as required by applicable law or
stock exchange regulation, none of Parent or Purchaser, on the one hand, or the
Company, on the other hand, shall make any public announcement or statement with
respect to the Offer, the Merger or
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<PAGE> 35
this Agreement without the approval of the Company or Purchaser, respectively,
which approval shall not be unreasonably withheld. Moreover, the parties hereto
agree to consult with each other prior to issuing each public announcement or
statement with respect to the Offer, the Merger or this Agreement.
9.3 Notices. All notices and other communications hereunder shall
be given by telephone and immediately confirmed in writing and shall be deemed
given if delivered personally or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Purchaser:
c/o Tel-Save Holdings, Inc.
6805 Route 202
New Hope, Pennsylvania 18938
Attention: General Counsel
With copies to:
Arnold & Porter
399 Park Avenue
New York, New York 10022
Attention: Jonathan C. Stapleton,
Esq.
(b) if to the Company:
Symetrics Industries, Inc.
1615 W. Nasa Boulevard
Melbourne, Florida 32901
Attention: Dudley E. Garner, Jr.
with copies to:
Suzan A. Abramson
Grocock, Loftis & Abramson
126 East Jefferson Street
Orlando, Florida 32801
9.4 Interpretation. When a reference is made in this Agreement to a
subsidiary of Parent or the Company, the word "subsidiary" means any
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<PAGE> 36
"majority-owned subsidiary" (as defined in Rule 12b-2 promulgated under the
Exchange Act) of Parent or the Company, as the case may be; provided, however,
that the Company shall in no event and at no time be considered a subsidiary of
Purchaser for purposes of this Agreement. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. References to Sections and Articles
refer to sections and articles of this Agreement unless otherwise stated.
9.5 Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants, and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated and the parties shall negotiate
in good faith to modify the Agreement to preserve, to the extent legally
permitted, each party's anticipated benefits and obligations under this
Agreement.
9.6 Miscellaneous. This Agreement and the Confidentiality Agreement
constitute the entire agreement, and supersede all other prior agreements and
undertakings, both written and oral, among the parties with respect to the
subject matter hereof. This Agreement (i) is not intended to confer upon any
other person any rights or remedies hereunder, except as set forth in Section
9.9; and (ii) shall not be assigned by operation of law or otherwise, except
that Parent and Purchaser may assign all or any portion of their rights under
this Agreement to any of their subsidiaries (provided, however, that in the
event of any such assignment, Parent or Purchaser, as the case may be, shall
cause such assignee to execute and become a party to this agreement and such
assignee shall be vested with all the rights and obligations assigned to it by
the assignor as if it were named in this Agreement), but no such assignment
shall relieve Parent or Purchaser, as applicable, of their obligations
hereunder, and except that this Agreement may be assigned by operation of law to
any corporation with or into which Purchaser may be merged; (d) shall be
governed in all respects, including validity, interpretation and effect, by the
internal laws of the
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<PAGE> 37
State of Delaware, without giving effect to the principles of conflict of laws
thereof; and (e) the parties hereto expressly consent to the personal
jurisdiction of the courts of the United States of America and of the courts of
the State of Delaware, in each case sitting in the State of Delaware.
9.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute an original, but together shall be
construed as one document.
9.8 Survival. The representations, warranties, covenants and
agreements of the parties set forth herein shall terminate as of the Effective
Time, except as provided in Sections 6.9 and 6.10.
9.9 Third Party Beneficiaries. The parties entitled to the employee
benefits pursuant to the terms of Section 6.9 and indemnification pursuant to
the terms of Section 6.10 are expressly made third party beneficiaries solely of
Section 6.9 and Section 6.10, respectively, of this Agreement.
IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused
this Agreement to be executed on the date first written above by their
respective officers thereunder duly authorized.
TEL-SAVE HOLDINGS, INC.
By: /s/ Daniel Borislow
-------------------------
Name: Daniel Borislow
Title: Chairman and CEO
TSHCo, Inc.
By: /s/ Daniel Borislow
-------------------------
Name: Daniel Borislow
Title: Chairman and CEO
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<PAGE> 38
SYMETRICS INDUSTRIES, INC.
By: /s/ Dudley E. Garner
-------------------------
Name: Dudley E. Garner
Title: President
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<PAGE> 39
Annex I
CONDITIONS TO THE OFFER
Purchaser shall not be required to continue the Offer or to accept
for payment, purchase or pay for any Shares tendered, may postpone the
acceptance for payment, purchase of, and/or payment for, Shares, may amend or
terminate the Offer, and may extend the Offer beyond January 21, 1998 (the
"Initial Expiration Date") in which event the expiration date (the "Expiration
Date") shall mean the latest time and date which the Offer as so extended by
Purchaser, shall expire), whether or not any Shares have theretofore been
purchased or paid for, (i) if a number of Shares which would result in
Purchaser's ownership of at least a majority of the outstanding Shares of the
Company on a fully diluted basis shall not have been validly tendered and not
withdrawn, or (ii) if, at any time on or after December 22, 1997 and prior to
the time of payment for any such Shares (whether or not theretofore accepted for
payment pursuant to the Offer), any of the following events (each, an "Event")
shall have occurred, (an Event shall be deemed to have occurred notwithstanding,
where applicable, the provision for a cure period) (each of paragraphs (a)
through (i) providing a separate and independent condition to Purchaser's
obligations pursuant to the Offer), provided, however, that Purchaser may
terminate the Offer at any time if any of the other conditions hereunder shall
have occurred (including during the period of any such extension) and may waive
any Event at any time (including during the period of any such extension):
(a) there shall be in effect any preliminary or final
injunction or temporary restraining order or other order or decree issued by any
foreign or United States federal or state court or foreign or United States
federal or administrative agency or authority, enjoining, restraining or
otherwise prohibiting the Offer, the Merger or the acquisition by Parent or
Purchaser of Shares;
(b) an action or a proceeding shall have been commenced
by any governmental agency under federal or state antitrust laws or any other
applicable law before any court or any governmental or other
<PAGE> 40
administrative or regulatory authority or agency, domestic or foreign, or there
shall be an imminent threat which, would reasonably be expected to result in the
foregoing, or any of the Authorizations listed in Section 3.2 or 4.4 shall have
been conditioned in such a manner, that would reasonably be expected to (i)
materially restrict or prohibit consummation of the Offer or the Merger or any
other merger or business combination between the Company, Parent and Purchaser,
(ii) impose material limitations on the ability of Parent or Purchaser
effectively to acquire or hold or to exercise full rights of ownership of the
Shares acquired by it, including, but not limited to, the right to vote the
Shares purchased by it on all matters properly presented to the stockholders of
the Company, or (iii) impose material limitations on the ability of either
Purchaser or the Company to continue effectively to conduct all or any material
portion of its respective business as heretofore conducted or to continue to own
or operate effectively all or any material portion of its respective assets as
heretofore owned or operated;
(c) there shall have been any law, statute, rule or
regulation, domestic or foreign, enacted, promulgated or proposed that, directly
or indirectly, would reasonably be expected to result in any of the consequences
referred to in paragraph (b) above;
(d) a material adverse change in the business, property,
financial condition or results of operations of the Company and its subsidiaries
taken as a whole shall have occurred;
(e) there shall have occurred (i) any general suspension
of trading in securities on the NASDAQ National Market, (ii) a declaration of a
banking moratorium or any suspension of payments by United States authorities on
the extension of credit by lending institutions, or (iii) a commencement of a
war, armed hostilities or other international or national calamity directly or
indirectly involving the United States which would reasonably be expected to
have a material adverse effect on the business, property, financial condition or
results of operations of the Company and its subsidiaries taken as a whole;
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<PAGE> 41
(f) any representation or warranty of the Company in the
Agreement and Plan of Merger shall at any time prove to have been incorrect in
any material respect at the time made;
(g) the Company shall fail to perform or comply in any
material respect with any covenant or agreement to be performed or complied with
by the Company under the Agreement and Plan of Merger;
(h) the Company and Purchaser shall have agreed to
terminate the Offer or the Agreement and Plan of Merger or the Tender Agreement
is no longer in full force and effect;
(i) the Board of Directors of the Company or the
Company, as the case may be, shall have (i) publicly (including by amendment of
the Schedule 14D-9) withdrawn its recommendation to stockholders of acceptance
of the Offer and adoption of the Agreement and Plan of Merger, or shall have
resolved to do so; or (ii) entered into an agreement with a third party
providing for the acquisition or purchase of all or substantially all of the
assets of, or equity interest, in the Company by such third party; and
(j) the Offer shall not have been consummated by March
1, 1998.
The foregoing conditions are for the sole benefit of Parent and
Purchaser and may be asserted by Parent and Purchaser regardless of the
circumstances giving rise to such condition or may be waived by Parent or
Purchaser in whole at any time or in part from time in its reasonable
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 and each
such right shall be deemed an ongoing right and may be asserted at any time and
from time to time.
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<PAGE> 1
Exhibit(c)(2)
TENDER AND OPTION AGREEMENT
TENDER AND OPTION AGREEMENT (this "Agreement"), dated as of
December 18, 1997, by and between Tel-Save Holdings, Inc., a Delaware
corporation ("Parent"), and _______________ ("Seller").
W I T N E S S E T H :
WHEREAS, the respective Boards of Directors of Parent, TSHCo, Inc.,
a Delaware corporation and wholly-owned subsidiary of the Parent ("Purchaser"),
and Symetrics Industries, Inc., a Florida corporation (the "Company"), have
entered into an Agreement and Plan of Merger of even date herewith (the "Merger
Agreement") pursuant to which the Purchaser will make a tender offer (the
"Offer") for all of the outstanding shares of common stock, par value $.25 per
share, of the Company (the "Common Stock"), at a price of $15.00 in cash per
share to be followed by a merger of the Purchaser with and into the Company; and
WHEREAS, as of the date hereof, Seller beneficially owns shares of
Common Stock (such shares, together with any shares of Common Stock acquired
after the date hereof and prior to the termination hereof, whether upon the
exercise of options or otherwise, collectively referred to herein as "Shares");
and
WHEREAS, as a condition of Parent's willingness to enter into the
Merger Agreement and Purchaser's willingness to make the Offer, Parent has
required that Seller agree to tender in the Offer all of the Shares;
NOW THEREFORE, in consideration of the premises and mutual
agreements, provisions and covenants herein contained, the parties hereby agree
as follows:
1. Agreement To Tender and Vote
1.1 Tender. Seller hereby agrees to validly tender pursuant to the
Offer, and not withdraw, all of the Shares.
1.2 Voting. Seller hereby agrees that, during the time this
Agreement is in effect, at any meeting of the stockholders of the Company,
however called, Seller shall (a) vote the Shares in favor of the Merger; (b)
vote the Shares against any action or agreement that to the best of Seller's
knowledge would result in a breach in any material respect of any covenant,
representation or warranty or any other obligation or agreement of the Company
under the Merger Agreement; and (c) vote the Shares against any action or
agreement (other than the Merger Agreement or the transactions contemplated
thereby) that to the best of Seller's knowledge would impede, interfere with,
delay, postpone or attempt to discourage the Merger or the Offer, including but
not limited to (i) any extraordinary corporate transaction, such as a merger,
consolidation or other business combination involving the Company and its
subsidiaries; (ii) a sale or transfer of a material amount of assets of the
Company and its subsidiaries or a reorganization, recapitalization or
liquidation of the Company and its subsidiaries; or (iii) any change in the
Company's management or in the board of directors of the Company (the "Board")
except as otherwise agreed to in writing by Parent.
1.3 Expiration. Seller's obligation to tender and vote the Shares
as provided herein shall terminate on the first to
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<PAGE> 2
occur of (a) the Effective Time and (b) termination of the Merger Agreement.
2. Option.
2.1 Grant of Option. Effective on the date hereof, Parent shall
have, and Seller hereby grants to Parent, the right and option to purchase (the
"Option") from the Seller, at a price of $15.00 per share (the "Exercise
Price"), the Shares. If the Shares shall not have been tendered and purchased in
accordance with Section 1.1 hereof, the Option shall be exercisable by Parent,
in whole or, from time to time, in part, for six months from the date hereof
only in the event that (i) a third party makes an Acquisition Proposal, as
defined in Section 6.5 of the Merger Agreement, or (ii) the Seller intends to
sell some or all of the Shares to a third party, in which case the Seller must
notify the Parent five business days before the proposed sale, and the Parent
then shall have three business days within which to exercise the Option. This
Option may be exercised by tender to the Seller of cash in payment of the
exercise price therefor, whereupon the Seller shall promptly deliver the Shares
to Parent,
2.2 Exercise of Option. If Parent wishes to exercise the Option, it
shall send to Seller a written notice (the date of which being herein referred
to as the "Notice Date") specifying (i) the total number of shares of Common
Stock it will purchase pursuant to such exercise, and (ii) a place and date not
earlier than three business days nor later than 10 business days from the Notice
Date for the closing of such purchase (the "Closing Date"); provided that, if
prior notification to or approval of any federal or state regulatory agency is
required in connection with such purchase, the Parent shall promptly file the
required notice or application for approval and shall expeditiously process the
same and the period of time that otherwise would run pursuant to this sentence
shall run instead from the date on which any required notification period has
expired or been terminated or such approval has been obtained and any requisite
waiting period shall have passed.
2.3. Payment and Delivery of Certificates.
(a) At the closing referred to in Section 2.2 hereof, Parent shall
pay to Seller the aggregate purchase price for the Shares purchased pursuant to
the exercise of the Option in immediately available funds by a wire transfer to
a bank account designated by the Seller.
(b) At such closing, simultaneously with the delivery of cash as
provided in subsection (a), Seller shall deliver to Parent a certificate or
certificates representing the number of Shares purchased by Parent.
3. Representations and Warranties.
3.1 Representations and Warranties of Parent.
Parent hereby represents and warrants to Seller as
follows:
(a) Due Authorization. This Agreement has been duly
authorized by all necessary corporate action on the part of Parent,
has been duly executed and delivered on behalf of Parent by a duly
authorized officer of Parent and is valid, binding and enforceable
against Parent in accordance with its terms, except to the extent
that enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to
-2-
<PAGE> 3
or affecting the enforcement of creditors' rights generally or by
equitable principles. The execution, delivery and performance of
this Agreement by Parent and the consummation by it of the
transactions contemplated hereunder do not require the consent,
waiver, approval, license or authorization of or any filing with
any person or domestic public authority (other than in compliance
with the Hart-Scott-Rodino Act, the rules of the Nasdaq Stock
Market, or the securities or blue sky laws) and will not violate,
result in a breach of or the acceleration of any obligation under,
or constitute a default under, any provision of Parent's charter or
by-laws, or any indenture, mortgage, lease, agreement, contract,
instrument, order, judgment, ordinance, regulation or decree
specifically applicable to Parent, the effect of which could impair
the ability of Parent to perform its obligations under this
Agreement. Parent is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and
has the full corporate power and authority to execute, deliver and
perform this Agreement.
(b) Distribution. Parent is acquiring the Shares for
its own account for investment only and not with a view to the
distribution or resale of the Shares so acquired. Any sale,
transfer or other disposition of the Shares by Parent will be made
in compliance with all applicable provisions of the Securities Act
of 1933, as amended (the "1933 Act"), and the rules and regulations
thereunder.
3.2 Representations and Warranties of Seller. Seller hereby
represents and warrants to Parent as follows:
(a) Due Authorization. This Agreement is valid,
binding and enforceable against the Seller in accordance with its
terms, except to the extent that the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the
enforcement of creditors' rights generally or by equitable
principles. The execution, delivery and performance of this
Agreement by Seller and the consummation by Seller of the
transactions contemplated hereunder do not require the consent,
waiver, approval, license or authorization or any filing (other
than in compliance with the Hart-Scott-Rodino Act, the rules of the
Nasdaq Stock Market, or the securities or blue sky laws), with any
person or domestic public authority and will not violate, result in
a breach of or the acceleration of any obligation under, or
constitute a default under, any indenture, mortgage, lease,
agreement, contract, instrument, order, judgment, ordinance,
regulation or decree specifically applicable to Seller, the effect
of which would be material and adverse to the ability of Seller to
consummate the transactions contemplated in this Agreement.
(b) Shares. Seller beneficially owns all of the
Shares, and has good and marketable title thereto, free and clear
of all claims, liens, encumbrances, security interests and charges
of any nature whatsoever (together, "Liens"). Upon the tender and
acceptance of the Shares pursuant to the Offer, Seller shall
transfer to Parent good and valid title to the Shares free and
clear of all Liens.
4. Certain Covenants of Seller. Except in accordance with the terms
of this Agreement and the Merger Agreement, Seller hereby covenants and agrees
as follows:
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<PAGE> 4
4.1 No Solicitation. Seller shall not, directly or indirectly,
solicit any proposal by any person or entity (other than Parent or any affiliate
of Parent) which constitutes, or may reasonably be expected to lead to, an
Acquisition Proposal. Seller will immediately cease and cause to be terminated
any existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing.
4.2 Restrictions on Transfer, Proxies and Non-Interference. Seller
hereby agrees, while this Agreement is in effect, and except as contemplated
hereby, not to (i) sell, transfer, pledge, encumber, assign or otherwise dispose
of, or enter into any contract, option or other arrangement or understanding
with respect to the sale, transfer, pledge, encumbrance, assignment or other
disposition of, any of the Shares or (ii) grant any proxies, deposit any Shares
into a voting trust or enter into a voting agreement with respect to any Shares
or (iii) take any action that would make any representation or warranty of
Seller contained herein untrue or incorrect or have the effect of preventing or
disabling Seller from performing Seller's obligations under this Agreement.
5. Fiduciary Duties. Notwithstanding anything in this Agreement to
the contrary, the covenants and agreements set forth herein shall not prevent
the Seller, when serving on the Board, from taking any action, subject to the
applicable provisions of the Merger Agreement, in Seller's capacity as a
director of the Company.
6. Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take such further action as may be
necessary or desirable to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement.
7. Miscellaneous.
7.1 Entire Agreement; Assignment. This Agreement (i) constitutes
the entire agreement among the parties with respect to the subject matter hereof
and supersedes all other prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof and (ii)
shall not be assigned by operation of law or otherwise, provided that Parent may
assign its rights and obligations hereunder to any direct or indirect
wholly-owned subsidiary of Parent, but no such assignment shall relieve Parent
of its obligations hereunder if such assignee does not perform such obligations.
7.2 Amendments. This Agreement may not be modified, amended,
altered or supplemented, except upon the execution and delivery of a written
agreement executed by the parties hereto.
7.3 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 received if so given) by hand delivery, telecopy, mail
(registered or certified mail, postage prepaid, return receipt requested) or
courier service, such as Federal Express, providing proof of delivery. All
communications hereunder shall be delivered to the respective parties at the
following addresses:
If to Parent:
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<PAGE> 5
Tel-Save Holdings, Inc.
6805 Route 202
New Hope, PA 18938
Attention: Daniel Borislow
Fax: (215) 862-1083
copy to:
Arnold & Porter
399 Park Avenue
New York, NY 10022
Attention: Jonathan C. Stapleton
Fax: (212) 715-1399
If to Seller
____________________
____________________
____________________
Fax: ______________
copy to:
____________________
____________________
____________________
Fax: ______________
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
7.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law thereof.
7.5 Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore each of the
parties hereto agrees that in the event of any such breach, the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled at law or in equity.
7.6 Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed to be an originally, but both of
which shall constitute one and the same Agreement.
7.7 Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
7.8 Severability. Whenever possible, each provision or portion of
any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of any
provision is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or portion of any provision
-5-
<PAGE> 6
in such jurisdiction, and this Agreement will be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of provision had never been contained herein.
7.9 Capitalized Terms. Capitalized terms used but not defined
herein shall have the meanings set forth in the Merger Agreement.
IN WITNESS WHEREOF, Parent and Seller have caused this Agreement to
be duly executed as of the date and year first above written.
TEL-SAVE HOLDINGS, INC.
By:_________________________
Name:
Title:
[SELLER]
________________________
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<PAGE> 1
EXHIBIT (c)(3)
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT, dated as of December 18, 1997 (the
"Agreement"), is by and between TEL-SAVE HOLDINGS, INC., a Delaware corporation
("Parent"), and SYMETRICS INDUSTRIES, INC., a Florida corporation (the
"Company").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Parent, TSHCo,
Inc., a Delaware corporation ("Purchaser"), and the Company have approved the
acquisition of the Company by Purchaser pursuant to a tender offer (the "Offer")
by Purchaser for all of the outstanding shares of common stock, par value $0.25
per share (the "Common Stock"), of the Company at a price of $15.00 in cash per
share followed by a merger (the "Merger") of the Purchaser with and into the
Company, all upon the terms and subject to the conditions set forth in an
Agreement and Plan of Merger of even date herewith by and among Parent,
Purchaser and the Company (the "Merger Agreement"), and certain other agreements
contemplated by the Merger Agreement (the "Transaction Documents"); and
WHEREAS, as a condition to Parent's entry into the Transaction
Documents, and to induce such entry, the Company has agreed to grant Parent the
option set forth herein to purchase authorized but unissued shares of Common
Stock, par value $0.25 per share;
NOW, THEREFORE, in consideration of the premises herein
contained, the parties agree as follows:
1. Certain Definitions.
(a) Capitalized terms used but not defined herein shall have the
same meanings as in the Transaction Documents.
(b) The term "Effective Date" shall have the meaning specified in
the Merger Agreement.
(c) The term "Grant Event" shall mean any occurrence described in
Section 8.3 of the Merger Agreement.
2. Grant of Option. Effective on the date of any Grant Event,
Parent shall have, and the Company hereby grants to Parent, the right and option
to purchase (the "Option") from the Company, at a price of $15.00 per share of
Common Stock (the "Exercise Price"), a number of shares of Common Stock equal to
19.9% of the aggregate number of shares of Common Stock outstanding after giving
effect to the exercise of the Option (the "Option Shares"). The Option shall be
exercisable by Parent, in whole at any time and in part from time to time,
within one (1) year after the effective date of such grant, by tender to the
Company of cash in payment of the exercise price therefor, whereupon the Company
shall promptly issue to Parent the number of shares of Common Stock for which
the Option is being exercised and the exercise price for which is so tendered,
such shares to be deemed for all purposes to be issued and outstanding as of and
after such tender of cash to the Company in payment of such exercise price.
3. Exercise of Option. In the event Parent wishes to exercise the
Option, it shall send to the Company a written notice (the date of which being
herein referred to as the "Notice Date")
<PAGE> 2
specifying (i) the total number of Option Shares it will purchase pursuant to
such exercise, and (ii) a place and date not earlier than three business days
nor later than 10 business days from the Notice Date for the closing of such
purchase (the "Closing Date"); provided that, if prior notification to or
approval of any federal or state regulatory agency is required in connection
with such purchase, Parent shall promptly file the required notice or
application for approval and shall expeditiously process the same and the period
of time that otherwise would run pursuant to this sentence shall run instead
from the date on which any required notification period has expired or been
terminated or such approval has been obtained and any requisite waiting period
shall have passed.
4. Payment and Delivery of Certificates.
(a) At the closing referred to in Section 3 hereof, Parent shall
pay to the Company the aggregate purchase price for the Option Shares purchased
pursuant to the exercise of the Option in immediately available funds by a wire
transfer to a bank account designated by the Company.
(b) At such closing, simultaneously with the delivery of cash as
provided in subsection (a), the Company shall deliver to Parent a certificate or
certificates representing the number of Option Shares purchased by Parent, and
Parent shall deliver to the Company a letter agreeing that Parent will not offer
to sell, pledge or otherwise dispose of such Option Shares in violation of
applicable law or the provisions of this Agreement.
(c) Certificates for the Common Stock delivered at a closing
hereunder may be endorsed with a restrictive legend which shall read
substantially as follows:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), and the regulations promulgated thereunder and
may not be sold without registration under the Securities Act or
pursuant to an exemption from registration thereunder or with
such modifications as otherwise required by applicable law."
It is understood and agreed that the above legend shall be removed by delivery
of substitute certificate(s) without such legend if Parent shall have delivered
to the Company a copy of a letter from the staff of the SEC, or an opinion of
counsel, in form and substance satisfactory to the Company, to the effect that
such legend is not required for purposes of the Securities Act and any
applicable state securities laws and this Agreement.
5. Representations. The Company hereby represents, warrants and
covenants to Parent as follows:
(a) The Company shall at all times maintain sufficient authorized
but unissued shares of Common Stock so that the Option may be exercised without
authorization of additional shares of the Common Stock.
(b) The shares to be issued upon due exercise, in whole or in
part, of the Option, when paid for as provided herein, will be duly authorized,
validly issued, fully paid and nonassessable.
6. Adjustment Upon Changes in Capitalization. In the event of any
change in the Common Stock by reason of stock dividends, split-ups,
recapitalizations, combinations, exchanges of
<PAGE> 3
shares or the like, the type of shares subject to the Option, and the purchase
price per share, as the case may be, shall be adjusted appropriately. Nothing
contained in this Section 6 shall be deemed to authorize the Company to breach
any provision of the Transaction Documents.
7. Registration Rights. The Company shall, if requested by Parent,
as expeditiously as possible file a registration statement on a form of general
use and available for use by the Company under the Securities Act if necessary
in order to permit or assist the sale or other disposition of the Option Shares
that have been acquired upon exercise of the Option in accordance with the
intended method of sale or other disposition requested by Parent. Parent shall
provide all information reasonably requested by the Company for inclusion in any
registration statement to be filed hereunder. The Company will use its best
efforts to cause such registration statement first to become effective and then
to remain effective for such period not in excess of 270 days from the day such
registration statement first becomes effective as may be reasonably necessary to
effect such sales or other dispositions. The obligations of the Company
hereunder to file a registration statement and to maintain its effectiveness may
be suspended for one or more periods of time not exceeding 60 days in the
aggregate if the Board of Directors of the Company shall have determined that
the filing of such registration statement or the maintenance of its
effectiveness would require disclosure of non-public information that would
materially and adversely affect the Company. The first registration statement
prepared under this Section 7 shall be at the Company's expense except for
underwriting commissions and the fees and disbursements of Parent's counsel
attributable to the offering of the Common Stock by Parent. The preparation of a
second registration statement may be requested and effected hereunder at
Parent's sole expense. In no event shall the Company be required to effect more
than two registration statements hereunder. The filing of any registration
statement hereunder may be delayed for such period of time as may reasonably be
required to facilitate any public distribution by the Company of the Common
Stock. If requested by Parent in connection with any registration, the Company
will become a party to any underwriting agreement relating to the sale of such
shares, but only to the extent of obligating itself in respect of
representations, warranties, indemnities and other agreements customarily
included in such underwriting agreements for parties similarly situated. In any
such transaction the Company and Parent will also agree to indemnify each other
on customary terms with respect to any information provided by such party.
8. Severability. If any term, provision, covenant or restriction
contained in this Agreement is held by a court or a federal or state regulatory
agency of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions and covenants and restrictions contained in
this Agreement shall remain in full force and effect, and shall in no way be
affected, impaired or invalidated. If for any reason such court or regulatory
agency determines that the Option will not permit the holder to acquire the full
number of Option Shares provided in Section 2 hereof, it is the express
intention of the Company to allow the holder to acquire such lesser number of
shares as may be permissible, without any amendment or modification hereof.
9. Miscellaneous.
(a) Expenses. Except as otherwise provided herein, each of the
parties hereto shall bear and pay all costs and expenses
<PAGE> 4
incurred by it or on its behalf in connection with the transactions contemplated
hereunder, including fees and expenses of its own financial consultants,
investment bankers, accountants and counsel.
(b) Entire Agreement. Except as otherwise expressly provided
herein, this Agreement and the Transaction Documents contain the entire
agreement between the parties with respect to the transactions contemplated
hereunder and supersedes all prior arrangements or understandings with respect
thereto, written or oral. The terms and conditions of this Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement, expressed or
implied, is intended to confer upon any party, other than the parties hereto,
and their respective successors and assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement, except as expressly
provided herein.
(c) Assignment. Other than as provided in Section 7 hereof,
neither of the parties hereto may assign any of its rights or obligations under
this Agreement or the Option created hereunder to any other person, without the
express written consent of the other party.
(d) Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
personally or sent by overnight express or by registered or certified mail,
postage prepaid, addressed as provided in the Merger Agreement. A party may
change its address for notice purposes by written notice to the other party
hereto.
(e) Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
(f) Specific Performance. The parties agree
that damages would be an inadequate remedy for a breach
of the provisions of this Agreement by either party
hereto and that this Agreement may be enforced by either party hereto through
injunctive or other equitable relief.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of Delaware applicable to agreements made
and entirely to be performed within such state and such federal laws as may be
applicable.
(h) Termination. This Agreement, and all rights and obligations
of the parties hereunder, shall terminate upon the first to occur of (a) the
consummation of the Merger, (b) December 18, 1998, or (c) the date of
termination of the Merger Agreement by any of the parties thereto other than
pursuant to a Grant Event.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the day and year first written above.
TEL-SAVE HOLDINGS, INC.
By: /s/ Daniel Borislow
---------------------------
Name: Daniel Borislow
Title: Chairman and CEO
<PAGE> 5
SYMETRICS INDUSTRIES, INC.
By: /s/ Dudley E. Garner, Jr.
--------------------------
Name: Dudley E. Garner, Jr.
Title: President
<PAGE> 1
EXHIBIT (c)(4)
TEL-SAVE HOLDINGS, INC.
6805 Route 202
New Hope, PA 18938
December 18, 1997
Symetrics Industries, Inc.
1615 West NASA Boulevard
Melbourne, FL 32901
Attention: Mr. Dudley E. Garner, Jr.
Ladies and Gentlemen:
We refer to the Agreement and Plan of Merger (the "Merger
Agreement") among Tel-Save Holdings, Inc., TSH Co., Inc. and Symetrics
Industries, Inc. (the "Company"), dated as of December 18, 1997. Tel-Save hereby
acknowledges that this agreement is a condition to Company's entering into the
Merger Agreement and agrees that:
1. Subject to the terms of this agreement, for a period of two
years from the Effective Time (as such term is defined in the Merger Agreement),
Tel-Save shall cause the Company and its subsidiary (collectively, the
"Company") to retain each employee named on the attached Schedule ("Named
Employees") in the same or in a substantially comparable position with the
Company, at compensation at least commensurate with the level of such employee's
compensation set forth on the attached Schedule.
2. The Named Employees may be terminated for cause. In the event a
Named Employee is terminated without cause (which shall include relocation of
such employee required by the Company, Parent or Purchaser), such terminated
employee shall be entitled to receive in a lump sum by Company check on the date
of termination of employment, the portion of the base salary to which such
employee would have been entitled (as indicated on the attached schedule) had
such employee remained employed by the Company until the end of the two-year
period referred to in Section 1 hereof. For the purposes of this agreement, the
Company shall have "cause" to terminate a Named Employee's employment upon
<PAGE> 2
Symetrics Industries, Inc.
December 18, 1997
Page 2
such employee's (i) failure to perform substantially the employee's duties owed
to the Company after a written demand for substantial performance is delivered
to such employee which specifically identifies the nature of such
non-performance, or (ii) engaging in dishonorable or disruptive behavior which
would be reasonably expected to harm the Company, its business or its employees.
3. Tel-Save will use its reasonable best efforts to negotiate
individual contractual arrangements with each of the Named Employees relating to
their employment with the Company on or before the Effective Time. Such
individual arrangements shall supercede any arrangements set forth herein.
4. (a) Tel-Save acknowledges and agrees that, at the Effective
Time, the Company shall pay to Mr. Garner a cash amount equal to the portion of
the base salary that would have been payable under his employment agreement for
a period of 18 months.
(b) At Tel-Save's request, Mr. Garner shall remain employed by
the Company for a mutually agreed upon time not to exceed six months in
consideration of his compensation payable under his employment agreement.
(c) Tel-Save acknowledges and agrees that, at the Effective
Time, the Company shall pay to Mr. Garner the amount of deferred compensation
that has been duly accrued in the Company's audited financial statements, which
amount shall not exceed $440,000.00.
5. The employment agreement with Earl J. Claire shall remain in
full force and effect in accordance with its terms, except that, Mr. Claire
shall be entitled to the provisions of this Agreement as a Named Employee, and
notwithstanding anything to the contrary in such employment agreement or as set
forth above, Mr. Claire shall be entitled to receive the same payment on the
same terms as a Named Employee upon the termination of his employment with
cause, as he would have been entitled to receive had such termination occurred
without "cause," as defined herein.
Please indicate your agreement that this letter correctly sets
forth the understanding between us on the issues discussed herein by
countersigning each of
<PAGE> 3
Symetrics Industries, Inc.
December 18, 1997
Page 3
the two copies of the letter provided to you in the space indicated below.
Very truly yours,
TEL-SAVE HOLDINGS, INC.
/s/ Daniel Borislow
-------------------------------------------------
Name: Daniel Borislow
Title: Chairman and CEO
Agreed and accepted as of the date hereof:
SYMETRICS INDUSTRIES, INC.
/s/ Dudley Garner, Jr.
- ---------------------------------
Name: Dudley Garner, Jr.
Date: President
Attachment
<PAGE> 4
SCHEDULE I
<TABLE>
<CAPTION>
Base Incentive
Name Position Salary Bonus
- ---- -------- ------ -----
<S> <C> <C> <C>
Earl J. Claire President ADS $112,000 $20,000
Richard F. Ostrow Sr. V.P. ADS 75,000 40,000
Karl W. Kettner V.P. Engr ADS 86,008 14,000
Robert A. Lyons, Jr. V.P. GM CMD, DPD 90,064 20,000
Jerry L. Sinclair V.P. DPD 84,448 10,000
Campbell McKegg, Jr. V.P. Finance 74,880 10,000
D. Mitchel Garner V.P. Op. DPD 74,880 10,000
Anton Szpendyk V.P. CMD 75,000 75,000
based on
Sales &
Revenues
Richard E. Nichols V.P. CTS 84,448 10,000
Erik L. Whitehead Dir. Engr. CTS 76,960 5,000
</TABLE>
ADS American Digital Switching
CMD Contract Manufacturing Division
CTS Computer Telephony Systems
DPD Defense Products Division
