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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section
14(d)(1) of the Securities Exchange Act of 1934
Syntex Corporation
(Name of Subject Company)
Roche Capital Corporation
(Bidder)
Common Stock, Par Value $1.00 Per Share
(Title of Class of Securities)
87161610
(CUSIP Number of Class of Securities)
Dr. Felix Amrein
c/o Roche Holding Ltd
Grenzacherstrasse 124,
CH-4002 Basel
Switzerland
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Bidder)
Copies to:
Peter R. Douglas
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telephone: (212) 450-4000
CALCULATION OF FILING FEE
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Transaction valuation Amount of filing fee
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$5,307,221,712.00 $1,061,444.34
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[ ] 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. 871 616 10
1 NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Roche Capital Corporation
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) OR 2(f) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Panama
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES* [ ]
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
N/A
10 TYPE OF REPORTING PERSON*
CO
Item l. Security and Subject Company
(a) The name of the subject company is Syntex Corporation, a Panama
corporation (the "Company"), and the address of its principal executive
offices in the United States is 3401 Hillview Avenue, Palo Alto, California
94304.
(b) This Statement relates to the offer by Roche Capital Corporation, a
Panama corporation ("Bidder") and a wholly owned subsidiary of Sapac
Corporation Limited, a non-resident Canada corporation ("Holding"), which, in
turn, is a wholly owned subsidiary of Roche Holding Ltd, a Switzerland
corporation ("Parent"), to purchase all outstanding shares of Common Stock,
$1.00 par value (the "Shares"), of the Company at $24.00 per Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase (the "Offer to Purchase") and in the related Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(l) and (a)(2)
(which are herein collectively referred to as the "Offer"). The information
set forth in the introduction to the Offer to Purchase (the "Introduction") 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)-(d) This Statement is filed by Bidder. The information set forth in
the Introduction, Section 8 "Certain Information Concerning the Purchaser,
Parent and Sapac Corporation Limited" and Schedule I of the Offer to Purchase
is incorporated herein by reference.
(e)-(f) None of Bidder, Holding or Parent, or, to the best knowledge of
Bidder, any of the persons listed in Schedule 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)-(b) The information set forth in the Introduction, Section 8
"Certain Information Concerning the Purchaser, Parent and Sapac Corporation
Limited" and Section l0 "Background of the Offer; Past Contacts, Transactions
or Negotiations with the Company; Merger Agreement" of the Offer to Purchase
is incorporated herein by reference.
Item 4. Source and Amount of Funds or Other Consideration.
(a)-(b) The information set forth in Section 9 "Source and Amount of
Funds" of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder.
(a)-(e) The information set forth in the Introduction, Section 10
"Background of the Offer; Past Contacts, Transactions or Negotiations with the
Company; Merger Agreement", Section 11 "Purpose of the Offer; Plans for the
Company" and Section 13 "Dividends and Distributions" of the Offer to Purchase
is incorporated herein by reference.
(f)-(g) The information set forth in Section 12 "Effect of the Offer on
the Market for the Shares; Stock Exchange Listing(s); 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)-(b) The information set forth in the Introduction, Section 8
"Certain Information Concerning the Purchaser, Parent and Sapac Corporation
Limited", Section 10 "Background of the Offer; Past Contacts, Transactions or
Negotiations with the Company" and Schedule I of the Offer to Purchase is
incorporated herein by reference.
Item 7. Contracts, Arrangements, Understandings or Relationships with
Respect to the Subject Company's Securities.
The information set forth in the Introduction, Section 8 "Certain
Information Concerning the Purchaser", Section 10 "Background of the Offer;
Past Contacts, Transactions or Negotiations with the Company; Merger
Agreement" and Section 11 "Purpose of the Offer, Plans for the Company" of the
Offer to Purchase is incorporated herein by reference.
Item 8. Persons Retained, Employed or to be Compensated.
The information set forth in Section 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 8 "Certain Information Concerning
the Purchaser, Parent and Sapac Corporation Limited" of the Offer to Purchase
is incorporated herein by reference.
Item 10. Additional Information.
(a) None.
(b)-(c) The information set forth in Section 15 "Certain Conditions of
the Offer" and Section 16 "Certain Legal Matters; Regulatory Approvals" of the
Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 12 "Effect of the Offer in the
Market for Shares; Stock Exchange Listing(s); Registration under the Exchange
Act" of the Offer to Purchase is incorporated herein by reference.
(e) The information set forth in Section 16 "Certain Legal Matters:
Regulatory Approvals" of the Offer to Purchase is incorporated herein by
reference.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal is incorporated herein by reference in its entirety.
Item ll. Material to be Filed as Exhibits.
(a)(1) Offer to Purchase dated May 6, 1994.
(a)(2) Letter of Transmittal (including Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9).
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(6) Text of press release issued by Roche Holding Ltd dated May 2,
1994.
(a)(7) Form of summary advertisement dated May 6, 1994.
(c)(1) Acquisition Agreement and Plan of Merger, dated as of May 1,
1994, among Syntex Corporation, Roche Capital Corporation
and Roche (Panama) Corporation.
(c)(2) Guaranty, dated as of May 1, 1994 among Roche Holding Ltd and
Syntex Corporation
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and
correct.
Dated: May 6, 1994
ROCHE CAPITAL CORPORATION
By /s/ Henri B. Meier
----------------------
Name: Henri B. Meier
Title: Vice President
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Syntex Corporation
at
$24.00 Net Per Share
by
Roche Capital Corporation,
an indirect, wholly owned subsidiary of
Roche Holding Ltd
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, JUNE 6, 1994, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED BY THE EXPIRATION DATE AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE
A NUMBER OF SHARES OF COMMON STOCK, PAR VALUE $1.00 PER SHARE (THE "SHARES")
OF SYNTEX CORPORATION (THE "COMPANY") WHICH, TOGETHER WITH THE SHARES THEN
OWNED BY ROCHE CAPITAL CORPORATION ("THE PURCHASER"), WOULD REPRESENT AT LEAST
A MAJORITY OF THE TOTAL NUMBER OF OUTSTANDING SHARES ON A FULLY DILUTED BASIS.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT ALL
HOLDERS OF SHARES WHO WISH TO RECEIVE CASH TENDER SUCH SHARES PURSUANT TO THE
OFFER. THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF THE COMPANY HAS
DETERMINED, BY A UNANIMOUS VOTE OF THOSE MEMBERS PRESENT, THAT THE
TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT ARE FAIR TO AND IN THE BEST
INTEREST OF THE COMPANY'S STOCKHOLDERS. THE BOARD OF DIRECTORS OF THE COMPANY
HAS APPROVED THE MERGER AGREEMENT, AND THE TRANSACTIONS CONTEMPLATED THEREBY,
BY A UNANIMOUS VOTE OF THOSE MEMBERS PRESENT.
Any stockholder desiring to tender Shares should either (1) complete and
sign the Letter of Transmittal (or facsimile thereof) in accordance with the
instructions in the Letter of Transmittal and deliver it with the
certificate(s) representing the tendered Shares and all other required
documents to the Depositary or tender such Shares pursuant to the procedures
for book-entry transfer set forth in Section 3 or (2) request his or her
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for him or her. A stockholder having Shares registered in the
name of a broker, dealer, commercial bank, trust company or other nominee must
contact such person if he or she desires to tender such Shares.
Any stockholder who desires to tender Shares and cannot deliver such
Shares and all other required documents to the Depositary by the expiration of
the Offer or who cannot comply with the procedures for book-entry transfer on
a timely basis must tender such Shares pursuant to the guaranteed delivery
procedure set forth in Section 3.
Questions and requests for assistance or additional copies of this Offer
to Purchase and the Letter of Transmittal 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 and the Notice of
Guaranteed Delivery may also be obtained from the Information Agent or from
brokers, dealers, commercial banks or trust companies.
The Dealer Manager for the Offer is:
J.P. Morgan Securities Inc.
May 6, 1994
TABLE OF CONTENTS
Section Page
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Introduction 1
1. Terms of the Offer 2
2. Acceptance for Payment and Payment 3
3. Procedure for Tendering Shares 3
4. Withdrawal Rights 5
5. Certain Tax Consequences 6
6. Price Range of Shares; Dividends 6
7. Certain Information Concerning the Company 7
8. Certain Information Concerning the Purchaser,
Parent and Sapac Corporartion Limited 10
9. Source and Amount of Funds 15
10. Background of the Offer; Past Contacts,
Transactions or Negotiations with the Company;
Merger Agreement 15
11. Purpose of the Offer; Plans for the Company 23
12. Effect of the Offer in the Market for Shares;
Stock Exchange Listing(s); Registration under
the Exchange Act 24
13. Dividends and Distributions 25
14. Extension of Tender Period; Termination; Amendment 26
15. Certain Conditions of the Offer 26
16. Certain Legal Matters; Regulatory and
Foreign Approvals 28
17. Fees and Expenses 32
18. Miscellaneous 33
Schedule I--Directors and Executive Officers of Parent and the Purchaser
To the Holders of Common Stock of
SYNTEX CORPORATION:
Roche Capital Corporation, a Panama corporation (the "Purchaser") and an
indirect, wholly owned subsidiary of Roche Holding Ltd, a Switzerland
corporation ("Parent"), hereby offers to purchase all outstanding shares of
Common Stock, par value $1.00 per share (the "Shares"), of Syntex Corporation,
a Panama corporation (the "Company"), at $24.00 per Share, net to the seller
in cash, 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 stockholders will not be obligated to pay
brokerage fees or commissions or, except as set forth in the Letter of
Transmittal, transfer taxes on the purchase of Shares pursuant to the Offer.
The Purchaser will pay all charges and expenses of J.P. Morgan Securities
Inc., which is acting as Dealer Manager of the Offer (in such capacity, the
"Dealer Manager"), First Chicago Trust Company of New York (the "Depositary")
and D.F. King & Co., Inc. (the "Information Agent") incurred in connection
with the Offer. See Section 17.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED BY THE EXPIRATION DATE (AS DEFINED BELOW) AND NOT WITHDRAWN PRIOR TO
THE EXPIRATION DATE A NUMBER OF SHARES WHICH, TOGETHER WITH THE SHARES THEN
OWNED BY THE PURCHASER, WOULD REPRESENT AT LEAST A MAJORITY OF THE TOTAL
NUMBER OF SHARES OUTSTANDING ON A FULLY DILUTED BASIS (THE "MINIMUM
CONDITION"). SEE SECTION 15.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT ALL
HOLDERS OF SHARES WHO WISH TO RECEIVE CASH TENDER SUCH SHARES PURSUANT TO THE
OFFER. THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF THE COMPANY HAS
DETERMINED, BY A UNANIMOUS VOTE OF THOSE MEMBERS PRESENT, THAT THE
TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT (AS DEFINED BELOW) ARE FAIR
TO AND IN THE BEST INTEREST OF THE COMPANY'S STOCKHOLDERS. THE BOARD OF
DIRECTORS OF THE COMPANY HAS APPROVED THE MERGER AGREEMENT, AND THE
TRANSACTIONS CONTEMPLATED THEREBY, BY A UNANIMOUS VOTE OF THOSE MEMBERS
PRESENT.
The Offer is being made pursuant to an Acquisition Agreement and Plan of
Merger, dated as of May 1, 1994 (the "Merger Agreement"), among the Company,
the Purchaser and Roche (Panama) Corporation, a Delaware corporation and
wholly owned subsidiary of the Purchaser ("Merger Subsidiary"). The Merger
Agreement provides, among other things, that as soon as practicable after the
consummation of the Offer and satisfaction or waiver of all conditions to the
Merger, Merger Subsidiary will be merged with and into the Company (the
"Merger"), with the Company as the surviving corporation (the "Surviving
Corporation"). Thereupon, each outstanding Share not owned by Parent, the
Purchaser, Merger Subsidiary or any other subsidiary of Parent (collectively,
the "Purchaser Companies") or the Company will be converted into and represent
the right to receive $24.00 in cash or any higher price that may be paid per
Share in the Offer, without interest or, at the election of the holder,
subject to certain restrictions, 0.024 shares of a new series of limited
conversion preferred stock of the Purchaser ("LCPS"), more fully described in
Section 10. See Section 10.
The Merger Agreement also requires the Company to permit the Purchaser,
promptly upon the purchase of a majority of the outstanding Shares on a fully
diluted basis and subject to certain limitations described in Section 10
hereof, to designate that number of directors, rounded up to the next whole
number, on the Board of Directors that equals the product of (i) the total
number of directors on the Board of Directors (giving effect to the election
of any additional directors pursuant to the terms of the Merger Agreement) and
(ii) the percentage that the number of Shares owned by the Purchaser and its
affiliates (including Shares purchased in the Offer) bears to the total number
of Shares outstanding. The Company has agreed, subject to certain
limitations, to take all action necessary to cause the Purchaser's designees
to be elected or appointed to the Company's Board of Directors, including,
without limitation, increasing the number of directors or seeking and
accepting resignations of incumbent directors.
According to the Company, as of April 27, 1994 there were 221,134,238
Shares outstanding and approximately 13,576,092 Shares subject to issuance
pursuant to the Company's stock option and incentive plans. Accordingly, the
Purchaser believes that the Minimum Condition would be satisfied if
117,355,166 Shares are validly tendered pursuant to the Offer and not
withdrawn.
On April 28, 1994, the Board of Directors declared a regular quarterly
cash dividend of $.26 per Share, payable on June 8, 1994 to holders of record
as of May 13, 1994. Stockholders of record of the Company as of May 13, 1994
will be entitled to receive such dividend, regardless of whether or when their
Shares are tendered or purchased pursuant to the Offer. If the Purchaser
acquires control of the Company, the Purchaser currently intends that, prior
to its acquisition of the entire equity interest in the Company, no further
dividends will be declared on the Shares.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ IN ITS ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
1. Terms of the Offer; Expiration Date. Upon the terms and subject to
the conditions set forth in the Offer, the Purchaser will accept for payment
and pay for all Shares that are validly tendered by the Expiration Date and
not withdrawn as provided in Section 4. The term "Expiration Date" shall mean
12:00 Midnight, New York City time, on Monday, June 6, 1994, unless the
Purchaser shall have extended the period of time for which the Offer is open,
in which event the term "Expiration Date" shall mean the latest time and date
at which the Offer, as so extended by the Purchaser, shall expire.
The Purchaser reserves the right, at any time or from time to time, to
extend the period of time during which the Offer is open by giving oral or
written notice of such extension to the Depositary. There can be no assurance
that the Purchaser will exercise its right to extend the Offer. During any
such extension, the Depositary may, on behalf of the Purchaser, retain all
Shares tendered, and such Shares may not be withdrawn except as provided in
Section 4.
Any such extension, delay, termination or amendment will be followed as
promptly as practicable by a public announcement thereof. Without limiting
the manner in which the Purchaser may choose to make any public announcement,
the Purchaser will have no obligation (except as otherwise required by
applicable law) to publish, advertise or otherwise communicate any such public
announcement other than by making a release to the Dow Jones News Service.
The Offer is subject to certain conditions set forth in Section 15,
including satisfaction of the Minimum Condition, expiration or termination of
the waiting period applicable to the Purchaser's acquisition of Shares
pursuant to the Offer under Title II of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (the "HSR Act") and determination by the Committee on
Foreign Investment in the United States ("CFIUS") not to investigate the Offer
and the Merger (either by action or non-action) under Section 721 of the
Defense Production Act of 1950, as amended ("Exon-Florio") or, if CFIUS shall
have determined to make such an investigation, such investigation shall have
been completed and the President of the United States of America shall have
determined (either by action or non-action) not to take any action under
Exon-Florio. If any such condition is not satisfied, the Purchaser may (i)
subject to certain exceptions, terminate the Offer and return all tendered
Shares to tendering stockholders, (ii) extend the Offer and, subject to
withdrawal rights as set forth in Section 4, retain all such Shares until the
expiration of the Offer as so extended, (iii) waive such condition, (except
that the Purchaser may not waive the Minimum Condition below 77,400,000
Shares) and, subject to any requirement to extend the period of time during
which the Offer is open, purchase all Shares validly tendered by the
Expiration Date and not withdrawn or (iv) delay acceptance for payment or
payment for Shares, subject to applicable law, until satisfaction or waiver of
the conditions to the Offer. For a description of the Purchaser's right to
extend the period of time during which the Offer is open and to amend, delay
or terminate the Offer, see Sections 14 and 15.
The Company has provided the Purchaser with the Company's stockholder
list and security position listings for the purpose of disseminating the Offer
to holders of Shares. This Offer to Purchase and the related Letter of
Transmittal will be mailed to record holders of Shares and will be furnished
to brokers, banks and similar persons whose names, or the names of whose
nominees, appear on the stockholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
2. Acceptance for Payment and Payment. Upon the terms and subject to
the conditions of the Offer, the Purchaser will accept for payment and pay for
all Shares validly tendered by the Expiration Date and not withdrawn as soon
as practicable after the later of (i) the Expiration Date and (ii) the
satisfaction or waiver of the conditions set forth in Section 15. For a
description of the Purchaser's right to terminate the Offer and not accept for
payment or pay for Shares or to delay acceptance for payment or payment for
Shares, see Section 14.
For purposes of the Offer, the Purchaser shall be deemed to have accepted
for payment tendered Shares when, as and if the Purchaser gives oral or
written notice to the Depositary of its acceptance of the tenders of such
Shares. Payment for Shares accepted for payment pursuant to the Offer will
be made by deposit of the purchase price with the Depositary, which will act
as agent for the tendering stockholders for the purpose of receiving payments
from the Purchaser and transmitting such payments to tendering stockholders.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of certificates for
such Shares (or of a confirmation of a book-entry transfer of such Shares into
the Depositary's account at one of the Book-Entry Transfer Facilities (as
defined in Section 3)), a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) and any other required documents. For a
description of the procedure for tendering Shares pursuant to the Offer, see
Section 3. Accordingly, payment may be made to tendering stockholders at
different times if delivery of the Shares and other required documents occur
at different times. Under no circumstances will interest be paid by the
Purchaser on the consideration paid for Shares pursuant to the Offer,
regardless of any delay in making such payment.
If the Purchaser increases the consideration to be paid for Shares
pursuant to the Offer, the Purchaser will pay such increased consideration for
all Shares 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 of its affiliates the right to purchase
Shares tendered pursuant to the Offer, but any such transfer or assignment
will not relieve the 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.
If any tendered Shares are not purchased pursuant to 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 (or,
in the case of Shares tendered by book-entry transfer, such Shares will be
credited to an account maintained at one of the Book-Entry Transfer
Facilities), without expense to the tendering stockholder, as promptly as
practicable following the expiration or termination of the Offer.
3. Procedure for Tendering Shares. To tender Shares pursuant to the
Offer, either (a) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof) and any other documents required by the Letter of
Transmittal must be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase and either (i) certificates
for the Shares to be tendered must be received by the Depositary at one of
such addresses or (ii) such Shares must be delivered pursuant to the
procedures for book-entry transfer described below (and a confirmation of such
delivery received by the Depositary including an Agent's Message (as defined
below) if the tendering stockholder has not delivered a Letter of
Transmittal), in each case by the Expiration Date, or (b) the guaranteed
delivery procedure described below must be complied with. The term "Agent's
Message" means a message, transmitted by a Book-Entry Transfer Facility (as
hereinafter defined) 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 which are the subject of such
book-entry confirmation, that such participant has received and agrees to be
bound by the terms of the Letter of Transmittal and that the Purchaser may
enforce such agreement against such participant.
Book Entry Delivery. The Depositary will establish an account with
respect to the Shares at The Depository Trust Company, Midwest Securities
Trust Company and Philadelphia Depository Trust Company (collectively referred
to as the "Book-Entry Transfer Facilities") for purposes of the Offer within
two business days after the date of this Offer to Purchase, and any financial
institution that is a participant in the system of any Book-Entry Transfer
Facility may make delivery of Shares by causing such Book-Entry Transfer
Facility to transfer such Shares into the Depositary's account in accordance
with the procedures of such Book-Entry Transfer Facility. However, although
delivery of Shares may be effected through book-entry transfer, the Letter of
Transmittal (or facsimile thereof) properly completed and duly executed
together with any required signature guarantees or an Agent's Message and any
other required documents must, in any case, be received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase by
the Expiration Date, or the guaranteed delivery procedure described below must
be complied with. Delivery of the Letter of Transmittal and any other
required documents to a Book-Entry Transfer Facility does not constitute
delivery to the Depositary.
Signature Guarantees. Except as otherwise provided below, all signatures
on a Letter of Transmittal must be guaranteed by a financial institution
(including most banks, savings and loans associations and brokerage houses)
that is a participant in the Securities Transfer Agents Medallion Program, the
New York Stock Exchange Medallion Signature Program or the Stock Exchanges
Medallion Program (an "Eligible Institution"). Signatures on a Letter of
Transmittal need not be guaranteed (a) if the Letter of Transmittal is signed
by the registered holder of the Shares tendered therewith and such holder has
not completed the box entitled "Special Payment Instructions" on the Letter of
Transmittal or (b) if such Shares are tendered for the account of an Eligible
Institution. See Instructions 1 and 5 of the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant
to the Offer and cannot deliver such Shares and all other required documents
to the Depositary by the Expiration Date, or such Stockholder cannot complete
the procedure for delivery by book-entry on a timely basis, such Shares may
nevertheless be tendered if all of the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by the Purchaser is received
by the Depositary (as provided below) by the Expiration Date; and
(iii) the certificates for such Shares (or a confirmation of a
book-entry transfer of such Shares into the Depositary's account at one of
the Book-Entry Transfer Facilities), together with a properly completed
and duly executed Letter of Transmittal (or facsimile thereof) with any
required signature guarantee or an Agent's Message and any other documents
required by the Letter of Transmittal, are received by the Depositary
within five New York Stock Exchange, Inc. ("NYSE") trading days after the
date of execution of the Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, telex, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in such
Notice.
Method of Delivery. The method of delivery of Shares and all other
required documents is at the option and risk of the tendering stockholder. If
certificates for Shares are sent by mail, registered mail with return receipt
requested, properly insured, is recommended.
Federal Income Tax Withholding. Under the federal income tax laws, the
Depositary will be required to withhold 31% of the amount of any payments made
to certain stockholders pursuant to the Offer. In order to avoid such backup
withholding, each tendering stockholder must provide the Depositary with such
stockholder's correct taxpayer identification number and certify that such
stockholder is not subject to such backup withholding by completing the
Substitute Form W-9 included in the Letter of Transmittal.
Tender Constitutes An Agreement. The tender of Shares pursuant to any one
of the procedures described above will constitute an agreement between the
tendering stockholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
By executing a Letter of Transmittal, a tendering stockholder irrevocably
appoints designees of the Purchaser as such stockholder's proxies in the
manner set forth in the Letter of Transmittal to the full extent of such
stockholder's rights with respect to the Shares tendered by such stockholder
and accepted for payment by the Purchaser (and any and all other Shares or
other securities issued or issuable in respect of such Shares on or after May
1, 1994). All such proxies shall be considered coupled with an interest in
the tendered Shares. Such appointment is effective only upon the acceptance
for payment of such Shares by the Purchaser. Upon such acceptance for
payment, all prior proxies and consents granted by such stockholder with
respect to such Shares and other securities will, without further action, be
revoked, and no subsequent proxies may be given nor subsequent written
consents executed by such stockholder (and, if given or executed, will not be
deemed to be effective). Such designees of the Purchaser will be empowered to
exercise all voting and other rights of such stockholder as they, in their
sole discretion, may deem proper at any annual, special or adjourned meeting
of the Company's stockholders, by written consent or otherwise. The
Purchaser reserves the right to require that, in order for Shares to be
validly tendered, immediately upon the Purchaser's acceptance for payment of
such Shares, the Purchaser is able to exercise full voting rights with respect
to such Shares and other securities (including voting at any meeting of
stockholders then scheduled or acting by written consent without a meeting).
Determination of Validity; Rejection of Shares; Waiver of Defects; No
Obligation to Give Notice of Defects. 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 the
Purchaser, in its sole discretion, which determination shall be final and
binding. The Purchaser reserves the absolute right to reject any or all
tenders of Shares determined by it not to be in proper form or the acceptance
for payment of or payment for which may, in the opinion of the Purchaser's
counsel, be unlawful. The Purchaser also reserves the absolute right to waive
any defect or irregularity in any tender of Shares. None of the Purchaser,
the Dealer Manager, the Depositary, the Information Agent or any other person
will be under any duty to give notification of any defect or irregularity in
tenders or incur any liability for failure to give any such notification.
4. Withdrawal Rights. Tenders of Shares made pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date. Thereafter, such
tenders are irrevocable, except that they may be withdrawn after July 3, 1994
unless theretofore accepted for payment as provided in this Offer to Purchase.
If the Purchaser extends the period of time during which the Offer is open, is
delayed in accepting for payment or paying for Shares or is unable to accept
for payment or pay for Shares pursuant to the Offer for any reason, then,
without prejudice to the Purchaser's rights under the Offer, the Depositary
may, on behalf of the Purchaser, retain all Shares tendered, and such Shares
may not be withdrawn except as otherwise provided in this Section 4.
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 and must
specify the name of the person who tendered the Shares to be withdrawn and the
number of Shares to be withdrawn and the name of the registered holder of the
Shares, if different from that of a person who tendered such Shares. If the
Shares to be withdrawn have been delivered to the Depositary, a signed notice
of withdrawal with (except in the case of Shares tendered by an Eligible
Institution) signatures guaranteed by an Eligible Institution must be
submitted prior to the release of such Shares. In addition, such notice must
specify, in the case of Shares tendered by delivery of certificates, the name
of the registered holder (if different from that of the tendering stockholder)
and the serial numbers shown on the particular certificates evidencing the
Shares to be withdrawn. Withdrawals may not be rescinded, and Shares withdrawn
will thereafter be deemed not validly tendered for purposes of the Offer.
However, withdrawn Shares may be retendered by again following one of the
procedures described in Section 3 at any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination shall be final and binding. None of the
Purchaser, the Dealer Manager, the Depositary, the Information Agent or any
other person will be under any duty to give notification of any defect or
irregularity in any notice of withdrawal or incur any liability for failure to
give any such notification.
5. Certain Tax Consequences. Stockholders that receive solely cash in
exchange for their Shares pursuant to the Offer and the Merger will generally
recognize taxable gain or loss for U.S. federal income tax purposes equal to
the difference between the tax basis in such Shares and the amount of cash
received in exchange therefor. Such gain or loss will be capital gain or loss
if the Shares are capital assets in the hands of the stockholder. Gain or
loss must be calculated separately for each block (shares acquired at the same
time and price) of Shares exchanged.
The foregoing discussion may not apply to stockholders who acquired their
Shares pursuant to the exercise of stock options or other compensation
arrangements with the Company or who are not citizens or residents of the
United States or who are otherwise subject to special tax treatment under the
Internal Revenue Code of 1986.
The U.S. federal income tax discussion set forth above is included for
general information only and due to the individual nature of tax consequences
may not apply to all holders of Shares in the Company. Stockholders are urged
to consult their tax advisors as to the specific tax consequences to them of
the Offer and the Merger, including the possibility of tax-free treatment upon
an election to receive LCPS in the Merger and the effects of applicable state,
local and other tax laws. Stockholders who may wish to consider the possible
election of LCPS in the Merger should also consult their tax and financial
advisors in light of the characteristics of the LCPS, including, among other
things, transfer and exchange restrictions which may apply to the LCPS. See
Section 10.
6. Price Range of Shares; Dividends. The Shares are listed and
principally traded on the NYSE. The following table sets forth for the
periods indicated the high and low sales prices per Share on the NYSE
Composite Tape and the amounts of cash dividends paid per Share, as reported
by the Dow Jones News Service and other published financial sources:
<TABLE>
<CAPTION>
Quarter
Ended High Low Dividends
------- ---- --- ---------
1992
<S> <C> <C> <C>
March 31................................... $56 $44 3/4 $.23
June 30.................................... 48 3/8 32 1/8 .26
September 30............................... 36 25 1/2 .26
December 31................................ 28 21 3/4 .26
1993
March 31................................... 23 1/2 17 1/2 .26
June 30.................................... 21 3/8 17 5/8 .26
September 30............................... 19 15 5/8 .26
December 31................................ 18 3/4 15 .26
1994
March 31, 1994............................. 17 1/8 13 1/2 .26
through April 29, 1994..................... 15 1/4 12 5/8
</TABLE>
On April 29, 1994, the last full day of trading prior to the
announcement of the Offer, the reported closing sales price per share on the
NYSE Composite Tape was $15 1/4. On May 5, 1994, the last full day of trading
prior to the commencement of the Offer, the reported closing sales price per
Share on the NYSE Composite Tape was $23 3/8.
Stockholders are urged to obtain current market quotations for the Shares.
7. Certain Information Concerning the Company. The Company is a Panama
corporation with its principal executive offices in the United States located
at 3401 Hillview Avenue, Palo Alto, California 94304. According to the
Company's Annual Report on Form 10-K for the fiscal year ended July 31, 1993
(the "Company 10-K"), the Company is principally engaged in the research,
development, manufacture and sale of pharmaceutical products and medical
diagnostic systems. The pharmaceuticals business segment consists of human
pharmaceuticals and animal health products. Human pharmaceuticals are
primarily ethical pharmaceuticals that are generally provided to the medical
profession and require a prescription. The diagnostics business segment
consists primarily of systems to measure levels of commonly abused drugs,
therapeutic drugs and naturally occurring substances in blood and urine and
tests to detect sexually transmitted and other infectious diseases.
The following selected consolidated financial data relating to the
Company and its subsidiaries has been taken or derived from the audited
financial statements contained in the Company's 10-K and the unaudited
financial statements contained in the Company's quarterly report on Form 10-Q
for its fiscal quarter ended January 31, 1994 (the "Company 10-Q"). More
comprehensive financial information (including the notes to the Company's
financial statements) is included in such Company 10-K and Company 10-Q and
the other documents filed by the Company with the Securities and Exchange
Commission (the "Commission"), and the financial data set forth below is
qualified in its entirety by reference to such reports and other documents
including the financial statements (and notes thereto) contained therein.
Such reports and other documents may be examined and copies may be obtained
from the offices of the Commission in the manner set forth below.
<TABLE>
SYNTEX CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(In millions, except per Share amounts)
<CAPTION>
Six Months Ended
Fiscal Year Ended (unaudited)
--------------------------------- ---------------------
July 31, July 31, July 31, January 31, January 31,
1993 1992 1991 1994 1993
-------- -------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF INCOME
NET SALES............................................. $2,123.0 $2,057.5 $1,794.0 $1,001.4 $997.7
-------- -------- -------- -------- ------
Costs and expenses:
Costs of goods sold................................. 439.3 393.8 341.4 229.2 200.3
Selling, general and administrative................. 761.0 770.8 650.1 346.3 390.7
Research and development............................ 404.4 374.4 315.6 196.1 197.5
Restructuring charge................................ 320.0 -- -- -- 180.0
-------- -------- -------- -------- ------
Total............................................... 1,924.7 1,539.0 1,307.1 771.6 968.5
-------- -------- -------- -------- ------
OPERATING INCOME...................................... 198.3 518.5 486.9 229.8 29.2
-------- -------- -------- -------- ------
Nonoperating income (expense):
Interest income..................................... 39.3 52.8 56.6 17.4 21.5
Interest expense.................................... (26.5) (19.5) (35.6) (13.2) (13.7)
Other -- net........................................ (78.4) (8.9) (31.7) (7.7) (56.0)
-------- -------- -------- -------- ------
Total............................................... (65.6) 24.4 (10.7) (3.5) (48.2)
-------- -------- -------- -------- ------
Income (loss) before taxes on income and
cumulative effect of accounting changes............. 132.7 542.9 476.2 226.3 (19.0)
Provision (benefit) for taxes on income............... (155.4) 70.6 52.4 (4.2) (132.9)
-------- -------- -------- -------- ------
Income before cumulative effect of
accounting changes.................................. 288.1 472.3 423.8 222.1 113.9
Cumulative effect of accounting
changes, net of tax................................. (.9) -- -- -- (.9)
-------- -------- -------- -------- ------
NET INCOME.......................................... $ 287.2 $ 472.3 $ 423.8 $ 222.1 $113.0
======== ======== ======== ======== ======
EARNINGS PER COMMON SHARE........................... $ 1.29 $ 2.10 $ 1.89 $ 1.00 $ .51
======== ======== ======== ======== ======
</TABLE>
<TABLE>
SYNTEX CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(In millions, except per Share amounts)
<CAPTION>
Six Months Ended
Fiscal Year Ended (unaudited)
--------------------------------- ---------------------
July 31, July 31, July 31, January 31, January 31,
1993 1992 1991 1994 1993
-------- -------- -------- ----------- ----------
<S> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET
ASSETS:
Current Assets:
Cash and cash equivalents........................... $ 327.9 $ 296.3 $ 293.1 $ 396.7 $ 137.8
Short-term investments.............................. 281.7 405.4 429.6 314.9 284.3
Trade receivables, net.............................. 264.2 278.0 212.0 226.7 276.3
Inventories, net.................................... 362.1 351.6 257.0 349.6 379.2
Other............................................... 153.8 133.9 102.2 193.7 181.4
-------- -------- -------- -------- --------
Total current assets................................ 1,389.7 1,465.2 1,293.9 1,481.6 1,259.0
-------- -------- -------- -------- --------
Long-term investments................................. 180.9 241.2 135.9 159.7 215.6
Property, plant and equipment -- net................. 1,085.2 1,033.2 785.0 1,078.9 1,045.8
Other assets.......................................... 304.9 69.5 58.0 273.3 168.2
-------- -------- -------- -------- --------
Total............................................... $2,960.7 $2,809.1 $2,272.8 $2,993.5 $2,688.6
======== ======== ======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Short-term debt..................................... $ 82.4 $ 530.3 $ 310.5 $ 104.4 $ 350.6
Accounts payable and accrued expenses............... 231.8 246.9 196.6 206.6 208.0
Income and other taxes.............................. 87.1 200.1 182.8 89.3 91.3
Accrued compensation................................ 97.4 106.1 98.1 75.4 82.3
Other............................................... 293.8 93.6 86.7 197.5 122.5
-------- -------- -------- -------- --------
Total current liabilities........................... 792.5 1,177.0 874.7 673.2 854.7
-------- -------- -------- -------- --------
Noncurrent liabilities................................ 378.0 117.2 120.5 425.4 391.9
Long-term debt........................................ 590.8 231.2 273.1 590.7 306.8
-------- -------- -------- -------- --------
Total liabilities................................... 1,761.3 1,525.4 1,268.3 1,689.3 1,553.4
-------- -------- -------- -------- --------
Shareholders' Equity:
Common stock (shares issued -- 240.9).............. 240.9 240.9 240.9 240.9 240.9
Capital in excess of par value...................... -- .1 4.8 -- .4
Retained earnings................................... 1,471.5 1,419.7 1,168.5 1,577.2 1,415.3
Cumulative translation adjustments.................. (16.9) 3.4 (14.2) (19.8) (21.6)
Common stock in treasury -- at cost
(shares in treasury 1993 - 19.9;
1992 - 15.2; 1991 - 15.8)........................... (496.1) (380.4) (395.5) (494.1) (499.8)
-------- -------- -------- -------- --------
Total stockholders' equity.......................... 1,199.4 1,283.7 1,004.5 1,304.2 1,135.2
-------- -------- -------- -------- --------
Total............................................. $2,960.7 $2,809.1 $2,272.8 $2,993.5 $2,688.6
======== ======== ======== ======== ========
</TABLE>
Except as set forth in the following two paragraphs, the information
concerning the Company contained herein has been taken from or is based upon
reports and other documents on file with the Commission or otherwise publicly
available. Although the Purchaser does not have any knowledge that would
indicate that any statements contained herein based upon such reports and
documents are untrue, the Purchaser does not take any responsibility for the
accuracy or completeness of the information contained in such reports and
other documents or for any failure by the Company to disclose events that may
have occurred and may affect the significance or accuracy of any such
information but that are unknown to the Purchaser.
The Purchaser has been informed by the Company that, in mid-April 1994,
the Company was orally advised by the U.S. Environmental Protection Agency
("EPA") that the EPA was undertaking a review of certain decisions made during
its investigation in the 1980's of sites in Missouri and Illinois suspected of
having been sprayed with dioxin-contaminated oil by a specified individual not
associated with the Company. The EPA stated that: (i) additional sampling
will be undertaken to verify its earlier decision that no clean-up action was
necessary at five sites in Missouri (the EPA had tested certain of these sites
in the 1980's and found either no dioxin or low levels (less than two parts
per billion) of dioxin); (ii) further investigation, but no sampling, is
planned for five additional sites in Missouri; and (iii) a similar review may
be undertaken with regard to a number of sites in Illinois where there exists
a possibility that the specified individual sprayed. The Purchaser has been
informed that the Company has no firsthand knowledge regarding conditions at
these sites. The Company has agreed to use it best efforts to take, or cause
to be taken, all actions and to do, or cause to be done all things necessary,
proper or advisable to permit the Purchaser to make the determination provided
for in paragraph (f) of Section 15 hereof as soon as practicable.
During the course of discussions between Parent and the Company,
representatives of the Company provided to the Parent certain information,
including non-public information, concerning the Company and its subsidiaries.
Such information included, among other things, "base case" and "upside case"
projections of revenues and net income for the Company for the period 1994
through 2002. These projections reflected sales and net income increasing at
compound average annual growth rates of approximately 7% and 17.4% (base
case), respectively, and approximately 9.5% and 22.1% (upside case),
respectively, on a stand-alone basis and without reflecting any synergies from
the acquisition of the Company by the Parent. The Parent understands that
such projections were based on a number of assumptions including assumptions
relating to inflation rates, interest rates, pricing of key products, gross
margins, inventory levels, impact of certain patent expirations, timing of
expected product approvals, timing of commencement of product launches and
years of peak sales, capital spending, expense reduction, level of head count
and plant operations, applicable tax rate and dividend distributions. Such
projections were not prepared by the Company with a view to public
dissemination and actual future sales and net income may be materially greater
or less than the amounts reflected in the Company's projections.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (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
interest 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 Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549 and should also be available for
inspection and copying at the regional offices of the Commission in New York
(7 World Trade Center, 13th Floor, New York, New York 10048), Los Angeles
(Suite 500 East, Tishman Building, 5757 Wilshire Boulevard, Los Angeles,
California 90036) and Chicago (500 West Madison Avenue, Suite 1400, Chicago,
Illinois 60661). Copies of such material can also be obtained from the Public
Reference Section of the Commission in Washington, D.C., at prescribed rates.
Such material should also be available for inspection at the library of the
NYSE, 20 Broad Street, New York, New York 10005.
8. Certain Information Concerning the Purchaser, Parent and Sapac
Corporation Limited. The Purchaser is a Panama corporation incorporated on
December 4, 1990. To date, the Purchaser has engaged in no activities other
than those incident to its formation, the execution and delivery of the Merger
Agreement and the commencement of the Offer. Accordingly, no meaningful
financial information with respect to the Purchaser is available. The
Purchaser is a wholly owned subsidiary of Sapac Corporation Limited, which, in
turn, is a wholly owned subsidiary of Parent. The principal executive offices
of the Purchaser are located at c/o Durling & Durling, Edificio Vallarino,
Ultimo Piso, Calle 52 y Elvira Mendez, Panama, Republic of Panama, and its
telephone number at that address is (507) 638-244.
Sapac Corporation Limited. Sapac Corporation Limited ("Sapac"),
incorporated as a non-resident corporation under the laws of the Province of
New Brunswick, Canada on April 13, 1962, has its principal executive offices
at Cerrito 461, Montevideo, Uruguay. Sapac is a wholly owned subsidiary of
Parent and is the holding company for Parent's operating subsidiaries
principally in Canada, Mexico, Central and South America as well as in various
countries in South East Asia, Africa and Australia.
Parent. Parent is the parent company of an international health care
concern operating in more than 100 countries and employing more than 56,000
people worldwide. Parent was incorporated in 1896 in Basel, Switzerland under
the name F. Hoffmann-La Roche and Co. Parent assumed its present name in June
1989 following a capital and corporate restructuring which established Parent
solely as a holding company and transferred operating businesses and related
assets and liabilities to a newly established operating subsidiary, F.
Hoffmann-La Roche Ltd.
Parent, including its subsidiaries (collectively, the "Roche Group"),
engages primarily in the development and manufacture of pharmaceuticals,
vitamins and fine chemicals, diagnostics, flavors and fragrances and in the
business of analytical laboratory services. The Roche Group is one of the
world's leading research-based healthcare groups active in the discovery,
development, manufacture and marketing of pharmaceuticals and diagnostic
systems. The Roche Group is also one of the world's largest producers of
vitamins and carotenoids and of fragrances and flavors. The principal
executive offices of the Parent are located at Grenzacherstrasse 124, CH-4002
Basel, Switzerland, and its telephone number at that address is (61) 688-1111.
The name, business address, principal occupation or employment, five year
employment history and citizenship of each director and executive officer of
each of the Purchaser and Parent are set forth in Schedule I of this Offer to
Purchase.
Parent furnishes the Commission with certain public reports and documents
required by foreign law or otherwise under Rule 12g3-2(b) under the Exchange
Act. Such reports and documents may be inspected and copied at the public
reference facilities maintained by the Commission located at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549.
The following selected financial data relating to the Roche Group has
been taken or derived from the financial statements contained in the English
translation of Parent's Annual Report to Stockholders for the year ended
December 31, 1992 and from filings made with the Commission pursuant to Rule
12g3-2(b) under the Exchange Act. More comprehensive financial information
(including the notes to the Roche Group's financial statements) is included in
Parent's Annual Report to Stockholders and the other documents filed by Parent
with the Commission, and the financial data set forth below is qualified in
its entirety by reference to such reports and other documents including the
financial statements and related notes contained therein. These documents may
be obtained from Parent at the address listed above or inspected at the
Commission in the manner described above. The data contained in the
consolidated statement of income and consolidated balance sheet presented
below was prepared in accordance with the accounting principles formulated by
the International Accounting Standards Committee. The specific accounting
principles adopted by the Roche Group from the alternatives currently allowed
under International Accounting Standards ("IAS") are generally similar to
United States generally accepted accounting principles ("US GAAP"). However,
the following divergences in respect of recognition and measurement criteria
currently exist:
Amortization of intangible assets: As under US GAAP, the Roche Group
amortizes purchased intangible assets over the lower of their useful
economic or legal lives. However, a maximum life of 10 years is allowed,
in contrast to the 40 years permitted under US GAAP.
Goodwill: US GAAP requires capitalization of goodwill on acquisitions, with
amortization over a maximum of 40 years. The Roche Group charges acquired
goodwill directly to retained earnings, as currently allowed under IAS 22.
Capitalization of borrowing costs: US GAAP requires, under certain
circumstances, the capitalization of the interest costs incurred on
qualifying assets in preparing them for their intended use. In contrast,
the Roche Group expenses all such interest costs, as allowed by IAS 23.
Pensions: Currently, IAS allows a wider range of alternative valuation and
actuarial methods for accounting for pensions than does Financial Accounting
Standard ("FAS") 87 in the United States. Local companies of the Roche
Group account for pensions in accordance with the legal regulations, fiscal
requirements and economic conditions of the countries in which employees are
employed. Funded pension plans in the companies in the United States follow
FAS 87.
The Roche Group's treatment of foreign currency exchange differences is
consistent with both IAS 21 and FAS 52 in the United States: currency
transaction differences are taken directly to income, while currency
translation differences arising on the translation of the financial statements
of subsidiaries reporting in currencies other than the Swiss franc are taken
directly to retained earnings.
The Roche Group's accounting policy for post-retirement benefits other
than pensions was changed in 1992 to comply with FAS 106. A liability was
included in the financial statements which is sufficient to cover the present
value of the accumulated benefit obligations based on certain assumptions. A
charge has been made as a separate item in the statement of income which
reflects the cumulative after tax effect.
The consolidated financial statements of the Roche Group are published in
Swiss francs ("Sfr."). The following table sets forth, for the periods and
dates indicated, certain information concerning the exchange rate for Swiss
francs into U.S. dollars based upon the noon buying rate in New York City for
cable transfers in foreign currencies as determined from publicly available
sources:
<TABLE>
(SFR. PER U.S. DOLLAR)
<CAPTION>
Period At December 31 Average Rate(1) High Low
------ -------------- --------------- ---- ---
<S> <C> <<C> <C> <C> <C> <C>
1990 Sfr. 1.2798 Sfr. 1.3890 Sfr. 1.5791 Sfr. 1.2414
1991 1.3551 1.4344 1.5915 1.2365
1992 1.4665 1.4060 1.5508 1.2173
1993 1.4850 1.4778 1.5470 1.3849
<FN>
- ------------------
(1)The average of the exchange rates on the last day of each month during
the year.
</TABLE>
<TABLE>
THE ROCHE GROUP
SELECTED CONSOLIDATED FINANCIAL DATA
(in millions)
<CAPTION>
Fiscal Year Ended
---------------------------------
December 31, December 31,
1992 1991
--------------- -------------
CONSOLIDATED STATEMENT OF INCOME
<S> <C> <C>
Sales....................................................................... Sfr. 12,953 Sfr. 11,451
Cost of goods sold and delivered............................................ (5,169) (4,865)
Gross profit................................................................ 7,784 6,586
Marketing and selling....................................................... (2,786) (2,504)
Research and development.................................................... (1,998) (1,727)
Administrative.............................................................. (773) (747)
Other operating income (expense), net....................................... (214) (222)
Financial income, net....................................................... 663 651
Income before taxes......................................................... 2,676 2,037
Taxes....................................................................... (539) (531)
Income before accounting change and minority interests...................... 2,137 1,506
Accounting change for post-retirement benefits other than pensions.......... (208) --
Income applicable to minority interests..................................... (13) (24)
Net income.................................................................. Sfr. 1,916 Sfr. 1,482
</TABLE>
<TABLE>
THE ROCHE GROUP
SELECTED FINANCIAL DATA
(in millions)
DIVISION SALES
<CAPTION>
Fiscal Year Ended Quarter Ended
------------------------------------------------ ---------------------------------
December 31, December 31, December 31, March 31, March 31,
1993 1992 1991 1994 1993
--------------- --------------- --------------- ------------- ---------------
<S> <C> <C>
Pharma..................... Sfr. 7,810 Sfr. 6,886 5,908 Sfr. 2,092 Sfr. 1,901
Vitamins & Fine
Chemicals................ 3,270 3,070 2,731 816 795
Diagnostics................ 1,712 1,561 1,422 400 421
Fragrances and
Flavors.................. 1,436 1,352 1,305 405 372
Others..................... 87 84 85 17 22
Total Sales........... Sfr. 14,315 Sfr. 12,953 11,451 Sfr. 3,730 Sfr. 3,511
</TABLE>
<TABLE>
THE ROCHE GROUP
SELECTED CONSOLIDATED FINANCIAL DATA
(in millions)
<CAPTION>
Fiscal Year Ended
---------------------------------
December 31, December 31,
1992 1991
--------------- -------------
CONSOLIDATED BALANCE SHEET
ASSETS:
Long-term assets:
<S> <C> <C>
Property, plant and equipment............................................. Sfr. 6,045 Sfr. 5,379
Intangible assets......................................................... 1,774 1,924
Other long-term assets.................................................... 1,474 1,175
------ ------
Total long-term assets.................................................. 9,293 8,478
Current assets:
Inventories............................................................... 2,864 2,587
Accounts receivable - trade............................................... 2,457 2,120
Other receivables and prepaid expenses.................................... 904 759
Marketable securities..................................................... 9,148 8,171
Cash...................................................................... 2,917 2,930
------ ------
Total current assets.................................................... 18,290 16,567
Total assets........................................................... Sfr. 27,583 Sfr. 25,045
====== ======
EQUITY AND LIABILITIES:
Equity:
Share capital............................................................. 160 160
Retained earnings and reserves............................................ 15,886 14,269
Shareholders' equity per accompanying statement........................... 16,046 14,429
Minority interests........................................................ 581 511
Total stockholders' equity and minority interests....................... 16,627 14,940
Long-term debt............................................................ 3,058 4,375
Noncurrent liabilities
Deferred income taxes..................................................... 841 683
Pensions and similar obligations.......................................... 715 350
Other..................................................................... 2,195 1,621
Total noncurrent liabilities............................................ 3,751 2,654
Current liabilities:
Accounts payable - trade.................................................. 536 417
Other payables and accrued liabilities.................................... 1,937 1,609
Current portion of long-term debt......................................... 813 145
Short-term debt........................................................... 861 905
------ ------
Total current liabilities............................................... 4,147 3,076
------ ------
Total equity and liabilities........................................... Sfr. 27,583 Sfr. 25,045
====== ======
</TABLE>
Consolidated audited financial statements for the Roche Group for the
fiscal year ending December 31, 1993 are expected to be released on or about
May 10, 1994.
Except as described in this Offer to Purchase, (i) neither Parent nor the
Purchaser nor, to the best knowledge of the Purchaser, any of the persons
listed in Schedule I to this Offer to Purchase or any associate or
majority-owned subsidiary of Parent or any of the persons so listed
beneficially owns or has any right to acquire, directly or indirectly, any
Shares and (ii) neither Parent nor the Purchaser nor, to the best knowledge of
the Purchaser, any of the persons or entities referred to above nor any
director, executive officer or subsidiary of any of the foregoing has effected
any transaction in the Shares during the past sixty days.
Professor Charles Weissmann, a member of Parent's board of directors,
owns 3,000 Shares.
Except as provided in the Merger Agreement and as otherwise described in
this Offer to Purchase, neither Parent nor the Purchaser nor, to the best
knowledge of the Purchaser, any of the persons listed in Schedule I to this
Offer to Purchase, has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Company, including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or voting of such
securities, finder's fees, joint ventures, loan or option arrangements, puts
or calls, guarantees of loans, guarantees against loss, guarantees of profits,
division of profits or loss or the giving or withholding of proxies. Except
as set forth in this Offer to Purchase, since August 1, 1990, neither Parent,
the Purchaser nor, to the best knowledge of the Purchaser, any of the persons
listed on Schedule I hereto, has had any business relationship or transaction
with the Company or any of its executive officers, directors, or affiliates
that is required to be reported under the rules and regulations of the
Commission applicable to the Offer. Except as set forth in this Offer to
Purchase, since August 1, 1990, there have been no contracts, negotiations or
transactions between Parent, or any of its subsidiaries or, to the best
knowledge of Parent and the Purchaser, any of the persons listed in Schedule I
to this Offer to Purchase, on the one hand, and the Company or its affiliates,
on the other hand, concerning a merger, consolidation or acquisition, tender
offer or other acquisition of securities, an election of directors or a sale
or other transfer of a material amount of assets.
Hoffmann La Roche Inc., a subsidiary of Parent, and Syntex Laboratories
Inc., a subsidiary of the Company, are parties to two co-marketing agreements
dated as of May, 1990 (with respect to injectable Toradol [Registered]) and
March 1992 (with respect to oral Toradol [Registered]) (the "Co-Marketing
Agreements"). Toradol [Registered] is a non-narcotic analgesic for moderate
to severe acute post-operative pain in oral and injectable forms. Under the
terms of the Co-Marketing Agreements, commission payments based on a
percentage of the sales were made to Hoffman La Roche Inc. during fiscal year
1993 of $51 million and $13.3 million, for sales of injectable and oral
Toradol, respectively; in 1994, to date, payments of $34.8 million and $9.4
million, for sales of injectable and oral Toradol [Registered], respectively,
have been made.
9. Source and Amount of Funds. The total amount of funds required by the
Purchaser to purchase Shares pursuant to the Offer and to pay related fees and
expenses is estimated to be approximately $5.35 billion. The Purchaser will
obtain such funds from the general corporate funds of the Roche Group or
through borrowings from commercial banks or other sources.
10. Background of the Offer; Past Contacts, Transactions or Negotiations
with the Company; Merger Agreement. In late 1993, Parent communicated to
representatives of the Company Parent's interest in exploring opportunities
for collaboration, strategic alliance or some form of combination between
Parent and the Company. In December 1993, Parent communicated to the Company
Parent's possible interest in pursuing an acquisition of the Company for cash
at a price of between $21 and $27 per Share. Parent was thereafter informed
by representatives of and counsel for the Company that the Board of Directors
of the Company had formed a special committee to consider all alternatives
that might be available to the Company and that, if the Company were to pursue
the possibility of an acquisition or other business combination, the Company
might contact Parent to explore such a transaction with Parent. In late
February 1994, representatives of the Company informed representatives of
Parent that the Company intended to explore several other possible
transactions with other parties and wished to explore with Parent an
acquisition or combination transaction with Parent. Thereafter, Parent and
the Company entered into a confidentiality agreement, and the Company provided
to Parent certain financial and other information concerning the Company and
its business. During the week beginning March 8, 1994, Parent communicated,
to representatives of the Company, Parent's interest in acquiring the Company
for cash. Discussions and negotiations between Parent and the Company
followed, and on April 28, 1994 the Purchaser offered to acquire the Company
for a price of $24.00 in cash per Share. On May 1, 1994, the Purchaser, Merger
Subsidiary and the Company executed the Merger Agreement.
The Merger Agreement
The following summary 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 Merger Agreement.
The Offer. The Merger Agreement provides for the making of the Offer.
The obligation of the Purchaser to accept for payment or pay for Shares
tendered pursuant to the Offer is subject to the satisfaction of the Minimum
Condition and certain other conditions that are described in Section 15
hereof. The Purchaser has agreed that no change in the Offer may be made
which changes the form of consideration to be paid or decreases the price per
Share or the number of Shares sought in the Offer, which imposes conditions to
the Offer in addition to the Minimum Condition and those other conditions
described in Section 15 hereof or which makes any other change in the terms or
conditions of the Offer that is materially adverse to the holders of Shares.
Recommendation. The Board of Directors of the Company unanimously
recommends that all holders of Shares who wish to receive cash tender such
Shares pursuant to the Offer. The Special Committee of the Board of Directors
of the Company has determined, by a unanimous vote of those members present,
that the transactions contemplated by the Merger Agreement are fair to and in
the best interest of the Company's stockholders. The Board of Directors of
the Company has approved the Merger Agreement, and the transactions
contemplated thereby, by a unanimous vote of those members present. The Board
of Directors makes no recommendation with respect to the election by
stockholders to receive shares of LCPS to be issued by the Purchaser in
connection with the Merger. The recommendation of the Board of Directors may
be withdrawn or modified to the extent that the Board of Directors deems it
necessary to do so in the exercise of its fiduciary duties under applicable
law as advised by counsel to the Company, provided, however, that the Company
will reimburse the Purchaser for certain fees and expenses as set forth in
"Fees and Expenses" below.
The Merger. The Merger Agreement provides that, unless the Merger
Agreement is terminated (see "Termination" below), provided that all
conditions to the Merger have been satisfied or, to the extent permitted under
the Merger Agreement, waived, at the Effective Time (as defined in the Merger
Agreement), Merger Subsidiary will be merged with and into the Company,
whereupon the separate existence of the Merger Subsidiary will cease and the
Company will be the Surviving Corporation. The Merger Agreement further
provides that the articles of incorporation and bylaws of Merger Subsidiary in
effect at the Effective Time shall be the articles of incorporation and
bylaws, respectively, of the Surviving Corporation, and that, from and after
the Effective Time until successors are duly elected or appointed and
qualified in accordance with applicable law, (i) the directors of Merger
Subsidiary at the Effective Time shall be the directors of the Surviving
Corporation, and (ii) the officers of the Company at the Effective Time shall
be the officers of the Surviving Corporation.
Board Representation. The Merger Agreement provides that promptly upon
the purchase by the Purchaser of a majority of the outstanding Shares on a
fully diluted basis, the Purchaser shall be entitled to designate that number
of directors, rounded up to the next whole number, on the Board of Directors
that equals the product of (i) the total number of directors on the Board of
Directors (giving effect to the election of any additional directors pursuant
to the terms of the Merger Agreement) and (ii) the percentage that the number
of Shares owned by the Purchaser and its affiliates bears to the total number
of Shares outstanding, and the Company will upon request by the Purchaser, at
the Company's election, either increase the number of directors or seek and
accept resignations of incumbent directors. The Company will use its best
efforts to cause individuals designated by the Purchaser to constitute the
same percentage as such individuals represent on the Board of Directors of (x)
each committee of the Board (other than any committee of the Board established
to take action under the Merger Agreement), (y) each board of directors of
each subsidiary of the Company and (z) each committee of each such board;
however, no current member of the Special Committee (as defined in the Merger
Agreement) of the Board of Directors will be required to resign from the Board
of Directors. Subject to the foregoing, the Company is to use its best efforts
to ensure that all of the members of the Board of Directors and such boards
and committees as of the date of the Merger Agreement shall remain members of
the Board of Directors and such boards and committees until the Effective
Time.
The Company's obligations to appoint the Purchaser's designees to the
Board of Directors will be subject to compliance with Section 14(f) of the
Exchange Act and Rule 14f-1 thereunder.
Consideration To Be Paid in the Merger. The Merger Agreement provides
that each Share outstanding immediately prior to the Effective Time shall be
converted into the right to receive $24.00 in cash (or any higher price per
Share paid in the Offer) (a "Cash Election") or at the election of the holder
subject to certain restrictions, 0.024 shares (or proportionately higher for
any higher price per Share paid in the Offer) of LCPS, each full share of
which will have a stated value and liquidation value of $1,000 (a "Stock
Election"). A holder who does not tender into the offer and who does not make
a Stock Election will be deemed to have made a Cash Election. Under Panama
law, holders of shares will not have dissenters or appraisal rights. The
Purchaser will only be obligated to issue LCPS to the extent the LCPS would be
"held of record" (as defined in Rule 12g-5 under the Exchange Act) by not more
than 299 persons. If the issuance of shares of LCPS in respect of all Shares
as to which effective Stock Elections are made would result in LCPS being
"held of record" by more than 299 persons, subject to the terms of the Merger
Agreement, the Purchaser will issue LCPS to the maximum number of persons who
have made valid Stock Elections such that, after giving effect to such
issuance, the LCPS are held of record by 299 persons. In the event more than
299 holders of Shares make otherwise valid Stock Elections, the Purchaser and
the Special Committee may jointly agree, in their discretion, the method for
selecting holders who will be entitled to receive LCPS pursuant to otherwise
valid Stock Elections, which method may consist of a lottery, selection by lot
or according to the aggregate number of Shares as to which a holder makes a
valid Stock Election, or any other method. In the event the Purchaser and the
Special Committee are unable to agree on such a method, holders who made a
Stock Election will be deemed to have made a Cash Election. A Stock Election
must be made with respect to at least one hundred shares to be a valid Stock
Election. Notwithstanding any provision in the Merger Agreement, the Purchaser
will not be obligated to accept Stock Elections with respect to more than 15%
of the Shares outstanding as of the date of the Merger Agreement. No
fractional shares of LCPS will be issued; in lieu thereof, a cash payment will
be made in an amount determined by multiplying the stated value of the LCPS by
the fraction of a share of LCPS to which such holder would otherwise have been
entitled.
The LCPS will be subject to mandatory redemption at the end of its
ten-year term. Holders of LCPS shall be entitled to receive cumulative
dividends at a rate of 3% per annum on the liquidation value of each share;
such dividends to be payable annually. Holders of the LCPS will have no
voting rights except (i) as required under Panama law and (ii) that the
approval of at least a majority of the outstanding shares of LCPS will be
required to change the terms and provisions of the LCPS in a manner that
affects adversely the rights and preference of such holders. The Purchaser
may redeem outstanding shares of LCPS (i) with the consent of the holder if to
be so redeemed, (ii) if such redemption, in the reasonable judgment of the
Purchaser, is necessary to terminate reporting and registration requirements
of the Purchaser under the Exchange Act and (iii) such redemption, in the
reasonable judgment of the Purchaser, is necessary to avoid application of
registration or reporting obligations under applicable securities laws to the
Purchaser, any affiliate thereof, or securities issuable upon exchange of the
LCPS. If Purchaser were to redeem less than all outstanding shares of LCPS for
the purposes described in clauses (ii) or (iii) of the preceding sentence,
shares would be redeemed in the inverse order of size of the aggregate number
of shares held of record (within the meaning of Rule 12g5-1 under the Exchange
Act of each holder or in such other reasonable manner as may be selected by
Purchaser in its sole discretion. Shares of LCPS may not be transferred
except, (i) in the case of LCPS held by an individual, to the estate or member
of the immediate family of such individual or to an entity all of the owners
of which are members of the immediate family of such individual or, in the
case of a corporation or a partnership, to a wholly owned subsidiary of such
corporation or partnership or (ii) in either case, to an institution qualified
as tax exempt under Section 501(c)(3) of the Code. Shares of LCPS may be
exchanged, beginning on the second anniversary of the issuance of such shares
(or if earlier, upon adoption by the Purchaser of a plan of liquidiation,
dissolution or winding up of the Purchaser) and on each anniversary thereafter
prior to the mandatory redemption date, for Genussscheine of Parent
("Non-voting Equity Securities"). Each share of LCPS is only exchangeable
annually for a number of Non-voting Equity Securities equal to the stated
value thereof divided by $7,143.86, representing the April 29, 1994 U.S.
dollar equivalent of 150% of the closing price on April 29, 1994 of Parent's
publicly traded Non-voting Equity Securities. No fractional Non-voting Equity
Securities will be issued. Prior to effecting any exchange, the Purchaser
must have received from each exchanging holder a certification of such
information as the Purchaser may deem necessary to determine the availability
of an exemption from registration under applicable securities laws of such
exchange and an opinion of counsel to the Purchaser that such exchanges are
exempt from registration. The rights of holders to exchange shares of LCPS
shall terminate at the election of the Purchaser if, at any time, the SEC
requires that Parent (i) become a reporting company subject to the
requirements of Section 12 of the Exchange Act or (ii) provide to the SEC
financial or other information with respect to Parent not then published
elsewhere by Parent. In the event the rights of holders of LCPS to exchange
shares of LCPS are terminated by the Purchaser as described in the preceding
sentence, holders whose rights are so terminated will have the right to
require the Purchaser to redeem such holders' LCPS at a redemption price equal
to the aggregate stated value, plus any accrued and unpaid dividends, as of
the date such holder requests redemption. Each holder's right to exchange
shares of LCPS will be exercisable only against the Purchaser.
The Merger Agreement provides that prior to the purchase of Shares
pursuant to the Offer, the Board of Directors of the Company (or, if
appropriate, any committee thereof administering the Stock Plans (as defined
below)) shall adopt such resolutions or take such other actions as are
required to adjust, effective immediately prior to the Effective Time, the
terms of all outstanding employee and director stock options to purchase
Shares ("Stock Options") and all outstanding stock appreciation rights
("SARs"), whether or not presently exercisable, granted under any stock option
or stock appreciation rights plan, program or arrangement of the Company or
its Subsidiaries (as defined in the Merger Agreement) (collectively, the
"Stock Plans") to provide that (i) each Stock Option together with any SAR
related thereto or granted in tandem therewith and (ii) each SAR granted
independent of, and not related to, any Stock Option (a "Free-standing SAR"),
in each case outstanding immediately prior to the Effective Time shall be
converted into the right of the holder of such Stock Option or Free-standing
SAR, as the case may be, to receive a cash payment at that time from the
Company of an amount determined by multiplying (x) the excess, if any, of the
Cash Consideration over the applicable exercise price per Share of such Stock
Option or strike price per Share of such Free-standing SAR, as the case may be
by (y) with respect to each Stock Option and related SAR, the number of Shares
the holder of the Stock Option could have purchased (assuming full vesting of
all Stock Options) had such holder exercised such Stock Option in full
immediately prior to the Effective Time or, with respect to each Free-standing
SAR, the number of Shares with respect to which the Free-standing SAR was
granted (assuming full vesting of all Free-standing SARs). All amounts
payable pursuant to this provision shall be subject to any required
withholding of taxes and shall be paid without interest.
Moreover, prior to the purchase of Shares pursuant to the Offer, the
Board of Directors of the Company (or, if appropriate, any committee
administering the Stock Plans) shall adopt such resolutions or take such other
actions as are required to provide that the Stock Plans shall terminate as of
a date prior to the occurrence of a "Change in Control" as defined in the
Syntex Security of Employment Plan (the "Stock Plan Termination Date"), except
with respect to Stock Options and SARs that are outstanding as of the Stock
Plan Termination Date which Stock Options and SARs shall be adjusted
immediately prior to the Effective Time as described in the preceding
paragraph, and to provide that the provisions in any other Employee Plan or
Benefit Arrangement (as defined in the Merger Agreement) providing for the
issuance, transfer or grant of capital stock of the Company shall be deleted
as of the Stock Plan Termination Date, and the Company shall take all
necessary actions to provide that following the Effective Time, no holder of a
Stock Option or SAR or any participant in any Stock Plan or other Employee
Plan or Benefit Arrangement shall have any right thereunder to acquire any
capital stock of the Company or the Surviving Corporation.
Representations and Warranties. The Merger Agreement contains a number
of representations and warranties by the Company, including representations
with respect to its corporate existence and power, corporate authorizations,
governmental authorizations, capitalization, subsidiaries, Commission filings,
financial statements, material liabilities, litigation, taxes, employee
benefits, compliance with laws, finders' fees, and environmental matters.
Agreement with Respect to the Conduct of Business Pending the Merger.
The Merger Agreement provides that between the date of the Merger Agreement
and the Effective Time, unless the Purchaser shall have consented in writing,
the business of the Company and its subsidiaries will be conducted in the
ordinary course of business consistent with past practice; each of the Company
and its subsidiaries will use its best efforts to preserve intact its business
organization and to keep available the services of its present officers and
key employees, subject to the terms of the Merger Agreement. Among other
things, subject to certain exceptions, neither the Company nor any of its
subsidiaries will (a) adopt or propose any change in its articles of
incorporation or bylaws; (b) merge or consolidate with any other person or
acquire a material amount of assets of any other person; (c) sell, lease,
license or otherwise surrender, relinquish or dispose of any assets or
property which are material to the Company and its subsidiaries as a whole
except (i) pursuant to existing contracts or commitments, (ii) in the ordinary
course consistent with past practice or (iii) as the Purchaser may agree in
writing; (d) agree or commit to do any of the foregoing; or (e) (i) take, or
agree or commit to take, any action that would make any representation and
warranty of the Company thereunder inaccurate in any respect at, or as of any
time prior to, the Effective Time or (ii) omit, or agree or commit to omit, to
take any action necessary to prevent any such representation or warranty from
being inaccurate in any respect at any such time, provided however, that the
Company may take or omit to take such action the effect of which can be cured
at or prior to the Effective Time or a date on which Shares can be purchased
pursuant to the Offer.
The Merger Agreement provides that, as soon as reasonably practicable,
(a) the Company will prepare and file with the Commission a proxy statement
relating to the meeting of the Company's stockholders to be held in connection
with the Merger and (b) the Purchaser will prepare and file with the
Commission a registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), in connection with the registration of the
LCPS to be issued in the Merger ("Registration Statement"). The Purchaser will
use its best efforts to cause the Registration Statement to be declared
effective by the SEC as promptly as practicable. The Purchaser will promptly
take any action required to be taken under foreign or state securities or Blue
Sky laws in connection with the issuance of LCPS.
The Merger Agreement further provides that, as soon as reasonably
practicable, the Company will cause a meeting of its stockholders to be duly
called and held for the purpose of voting on the approval and adoption of the
Merger Agreement and the Merger. The Board of Directors of the Company will,
subject to their fiduciary duties as advised by counsel, recommend approval
and adoption of the Merger Agreement and the Merger by the Company's
stockholders. In connection with such meeting, the Company will, subject to
the fiduciary duties of its Board of Directors, use all reasonable efforts to
obtain the necessary approvals by its stockholders of the Merger Agreement and
the transactions contemplated thereby.
The Merger Agreement also contains provisions relating to (i) the
parties' obligations to use their best efforts, (ii) certain filings and
consents, and (iii) coordination of public announcements.
Other Offers. The Merger Agreement provides that from the date of the
execution of the Merger Agreement until the termination thereof, the Company
and its subsidiaries will not, and will use their best efforts to cause their
respective officers, directors, employees or other agents not to, directly or
indirectly, (i) take any action to solicit, initiate or encourage any
Acquisition Proposal (as hereinafter defined), (ii), subject to the fiduciary
duties of the Board of Directors under applicable law as advised by counsel,
waive any provision of any standstill or similar agreements entered into by
the Company or (iii) subject to the fiduciary duties of the Board of Directors
under applicable law as advised by counsel to the Company, engage in
negotiations with, or disclose any nonpublic information relating to the
Company or any subsidiary or afford access to the properties, books or records
of the Company or any subsidiary to, any person that may be considering
making, or has made, an Acquisition Proposal; provided that, on or prior to
May 14, 1994, the provisions of this sentence shall not apply to any party
that is bound by a standstill or similar agreement with the Company on the
date hereof ("Existing Bidder"). The Merger Agreement does not, however,
prohibit the Company and its Board of Directors from (i) taking and disclosing
a position with respect to a tender offer by a third party pursuant to Rules
14d-9 and 14e-2(a) promulgated under the Exchange Act, and (ii) making such
disclosures to the Company's stockholders which, in the judgment of and
subject to the fiduciary duties of the Board of Directors with the advice of
counsel, may be required under applicable law.
The Company has agreed that it will (i) promptly notify the Purchaser
after receipt of any Acquisition Proposal or any inquiries indicating that any
person is considering making or wishes to make an Acquisition Proposal, (ii)
promptly notify the Purchaser after receipt of any request for nonpublic
information relating to the Company or any subsidiary or for access to the
properties, books or records of the Company or any subsidiary by any person
that may be considering making, or has made, an Acquisition Proposal and (iii)
subject to the fiduciary duties of the Board of Directors under applicable law
as advised by counsel to the Company, keep the Purchaser advised of the status
and principal financial terms of any such Acquisition Proposal, indication or
request. The term "Acquisition Proposal" as used herein means any offer or
proposal for, or any indication of interest in, a merger or other business
combination involving the Company or any subsidiary or the acquisition of any
equity interest in, or a substantial portion of the assets of, the Company or
any subsidiary, other than the transactions contemplated by the Merger
Agreement.
Conditions to the Merger. The respective obligations of the Company, the
Purchaser and Merger Subsidiary to consummate the Merger are subject to the
satisfaction or waiver at or prior to the Effective Time of the following
conditions: (i) the Merger Agreement shall have been adopted by the
affirmative vote of the stockholders of the Company in accordance with Panama
Law; (ii) any applicable waiting period under the HSR Act relating to the
Merger shall have expired; (iii) no provision of any applicable law or
regulation and no judgment, injunction, order or decree shall prohibit the
consummation of the Merger; provided that, neither party may assert this
condition unless it has used its best efforts to oppose such judgment,
injunction, order or decree and to avail itself of all rights of appeal or it
has determined, in its reasonable judgment, that such efforts would not have a
substantial likelihood of success; (iv) all actions by or in respect of or
filings with any governmental body, agency, official, or authority required to
permit the consummation of the Merger, including, without limitation, filing
articles of merger or other appropriate documents for registration in the
Mercantile Registry of the Republic of Panama and pursuant to the Delaware
General Corporation Law, shall have been obtained or made (other than those
actions or filings which, if not obtained or made prior to the consummation of
the Merger, would not individually or in the aggregate reasonably be expected
to have a material adverse effect); and (v) the Registration Statement shall
have been declared effective and no stop order suspending the effectiveness of
the Registration Statement shall be in effect and no proceedings for such
purpose shall be pending before or threatened by the Commission.
The obligations of the Purchaser and Merger Subsidiary to consummate the
Merger are subject to the satisfaction of the following further conditions:
(i) either (A) CFIUS shall have determined not to investigate the Offer and
the Merger under Exon-Florio (either by action or nonaction) or (B) if CFIUS
shall have determined to make such an investigation, such investigation shall
have been completed and the President shall have determined (either by action
or nonaction) not to take any action under Exon-Florio with respect to the
transactions contemplated by the Merger Agreement; (ii) the Company shall have
performed in all material respects all of its obligations under the Merger
Agreement required to be performed by it at or prior to the Effective Time
pursuant to the terms thereof; and (iii) the representations and warranties of
the Company contained in the Merger Agreement and in any certificate or other
writing delivered by the Company pursuant thereto shall be true at and as of
the Effective Time as if made at and as of such time. In the event the
Purchaser has not acquired Shares in the Offer, each of the conditions to the
Offer shall have been satisfied or waived prior to the Effective Time,
provided that for purpose of this paragraph, the reference in paragraph (d)(i)
of Section 15 hereof to "25%" shall be deemed to read "50%" and the phrase "or
proposed to acquire" shall be deleted.
The obligation of the Company to effect the Merger is further subject to
the satisfaction or waiver at or prior to the Effective Time of the condition
that the Purchaser and Merger Subsidiary shall have performed in all material
respects each of their obligations under the Merger Agreement required to be
performed by them at or prior to the Effective Time pursuant to the terms
thereof and the representations and warranties of the Purchaser and Merger
Subsidiary contained in the Merger Agreement and in any certificate or other
writing delivered by the Purchaser or Merger Subsidiary pursuant thereto shall
be true at and as of the Effective Time as if made at and as of such time.
Termination. The Merger Agreement may be terminated at any time prior to
the Effective Time, notwithstanding any approval of the Merger Agreement by
the stockholders of the Company, (i) by mutual written consent of the Company
and the Purchaser; (ii) by either the Company or the Purchaser if (x), either
the Purchaser shall have failed to commence the Offer within 15 days following
the date of the Merger Agreement or (y) the Purchaser shall not have purchased
any Shares pursuant to the Offer prior to December 31, 1994; provided,
however, that the passage of the period referred to in clause (y) shall be
tolled for any part thereof during which any party shall be subject to a
nonfinal order, decree or ruling or action restraining, enjoining or otherwise
prohibiting the purchase of Shares pursuant to the Offer or the consummation
of the Merger; and provided further that the right to terminate the Merger
Agreement under clause (ii) shall not be available to any party whose failure
to fulfill any obligation under the Merger Agreement has been the cause of or
resulted in any of the circumstances described in clauses (x) or (y); (iii) by
the Purchaser or the Company if prior to the purchase of Shares pursuant to
the Offer or the Effective Time, the Board of Directors shall have withdrawn
or materially modified its approval or recommendation of the Offer, the Merger
or the Merger Agreement, recommended another Acquisition Proposal or entered
into a definitive agreement or agreement in principle with respect to another
Acquisition Proposal, or resolved to do any of the foregoing; (iv) by either
the Company or the Purchaser, if there shall be any law or regulation that
makes consummation of the Merger illegal or otherwise prohibited or if any
judgment, injunction, order or decree enjoining the Purchaser or the Company
from consummating the Merger is entered and such judgment, injunction, order
or decree shall become final and nonappealable; (v) by either the Purchaser or
the Company, if the meeting of stockholders of the Company held for the
purpose of voting on the approval and adoption of the Merger Agreement and the
Merger shall have been held and the stockholders of the Company shall have
failed to approve and adopt the Merger Agreement and the Merger at such
meeting; and (vi) by the Purchaser, if the Purchaser shall have received any
communication from the Department of Justice or Federal Trade Commission (each
an "HSR Authority") (which communication shall be confirmed to the other
parties by the HSR Authority) that causes such party to reasonably believe
that any HSR Authority has authorized the institution of litigation
challenging the transactions contemplated by the Merger Agreement under the
U.S. antitrust laws, which litigation will include a motion seeking an order
or injunction prohibiting the consummation of any of the transactions
contemplated by the Merger Agreement.
Agreement With Respect to Employee Matters. The Merger Agreement provides
that the Purchaser shall cause the Company to continue to maintain the
Company's existing compensation, severance, welfare and pension benefit plans,
programs and arrangements (other than any stock based plans, programs and
arrangements) for the benefit of current and former employees and directors of
the Company and its Subsidiaries (subject to such modification as may be
required by applicable law or to maintain the tax exempt status of any such
plan which is intended to be qualified under Section 401(a) of the Code),
provided that (i) nothing in the Merger Agreement shall prohibit the Purchaser
from replacing any such existing plan or plans, program(s) or arrangement(s)
with a plan or plans, program(s) or arrangement(s) which provide such
employees and directors with benefits which are not less favorable in the
aggregate than the benefits that would have been provided under the Company's
existing plan(s), program(s) or arrangement(s) to the extent such replacement
is permitted under the terms of the applicable plan, program or arrangement
and (ii) nothing in the Merger Agreement shall obligate the Purchaser to
provide such employees and directors with any stock based compensation
(including, without limitation, stock options or stock appreciation rights)
after the Effective Time.
In the light of the Purchaser's desire that the Company provide
appropriate employee incentives in the future, the Purchaser has agreed
promptly to develop, and the Company and the Purchaser shall promptly
cooperate in developing, a new performance based incentive compensation plan
for the benefit of employees of the Company and its Subsidiaries as an
appropriate substitute for the current Stock Plans.
The Company has agreed not to, and to cause its Subsidiaries not to,
amend or modify any existing Employee Plan or Benefit Arrangement, nor enter
into or otherwise establish, adopt or maintain any new employee plans,
programs, agreements or arrangements, or grant any additional Free-standing
SARs or other awards based upon the value of the Company's equity securities
prior to and including the Effective Time without the prior written consent of
the Purchaser.
It is the Purchaser's current intention to maintain the Company's
headquarters at its present location in Palo Alto, California.
From and after the Effective Time, for purposes of determining
eligibility, vesting and benefit accrual under any replacement compensation,
severance, welfare, pension benefit or savings plan of the Purchaser or any of
its affiliates in which employees of the Company and its Subsidiaries become
eligible to participate, service with the Company or any of its Subsidiaries
shall be credited as if such services were rendered to the Purchaser or any of
its affiliates; provided that (i) the Purchaser shall not be obligated to
permit employees of the Company and its Subsidiaries to participate in nor,
upon participation, to receive such credited service, with respect to, any
plan maintained by the Purchaser or its affiliates which is not intended to
constitute a replacement plan for any existing plan, program or arrangement of
the Company and its Subsidiaries and (ii) the Purchaser shall not be required
to give any such employee credit for such prior service with the Company or
any of its Subsidiaries for purposes of any plan which is a "defined benefit
plan" within the meaning of Section 3(35) of ERISA, other than the Syntex U.S.
Employees Pension Plan or any successor plan to the assets and liabilities
thereof.
No provision of the Merger Agreement with respect to employee matters
shall create any third party beneficiary rights in any current or former
employee or director of the Company or its Subsidiaries (including any
beneficiary thereof) under the Merger Agreement or in respect of continued or
resumed employment or in respect of any benefits that may be provided,
directly or indirectly, under any employee benefit plan or arrangement.
Agreement With Respect to Director and Officer Indemnification and
Insurance. The Merger Agreement provides that the Purchaser will cause the
Surviving Corporation to indemnify and hold harmless the present and former
officers and directors of the Company in respect of acts or omissions
occurring prior to the Effective Time to the maximum extent permitted under
the Company's articles of incorporation and bylaws in effect on the date of
the Merger Agreement; provided that such indemnification shall (to the maximum
extent permitted by law) be mandatory rather than permissive except in
instances involving willful misconduct or bad faith and that the Surviving
Corporation shall advance expenses, including attorneys' fees, promptly on
demand and delivery of any required undertaking. For three years after the
Effective Time, the Purchaser will cause to be maintained the policies of
officers' and directors' liability insurance in effect as of the date of the
Merger Agreement in respect of acts or omissions occurring prior to the
Effective Time covering each such person covered by the Company's officers'
and directors' liability insurance policy on the date of the Merger Agreement;
provided that the Surviving Corporation may substitute therefor policies of at
least the same coverage containing terms and conditions which in all material
respects are no less advantageous for so long as such substitution does not
result in gaps or lapses in coverage; and provided further that in satisfying
these obligations, the Purchaser shall not be obligated to cause the Surviving
Corporation to pay premiums in excess of the amount per annum the Company paid
in its last full fiscal year, which amount has been disclosed to the
Purchaser. The Purchaser shall cause the Surviving Corporation to pay all
expenses (including attorneys' fees) that may be incurred by any indemnified
party in enforcing the indemnity and other obligations provided for in the
Merger Agreement with respect thereto. The Purchaser has agreed that should
the Surviving Corporation fail to comply with the foregoing obligations, the
Purchaser shall be responsible therefor.
Fees and Expenses. The Merger Agreement provides that the Company will
pay the Purchaser, in immediately available funds, so long as the Purchaser
shall not have materially breached its obligations under the Merger Agreement,
promptly, but in no event later than two business days, (i) after the
termination of the Merger Agreement by the Purchaser or the Company if prior
to the purchase of Shares pursuant to the Offer or the Effective Time, the
Board of Directors of the Company shall have withdrawn or materially modified
its approval or recommendation of the Offer, the Merger or the Merger
Agreement, recommended another Acquisition Proposal or entered into a
definitive agreement or agreement in principle with respect to another
Acquisition Proposal, or resolved to do any of the foregoing or (ii) if any
person or "group" (as defined in Section 13(d)(3) of the Exchange Act), other
than the Purchaser or its affiliates (as defined in the Merger Agreement) or
any group of which any of them is a member, shall have acquired beneficial
ownership of more than 50% of any class or series of capital stock of the
Company (including the Shares), through acquisition of stock, the formation of
a group or otherwise, or shall have been granted any option, right, or
warrant, conditional or otherwise, to acquire beneficial ownership of more
than 50% of any class or series of capital stock of the Company (including the
Shares) hereof, a fee for reimbursement of costs and expenses of (x)
$20,000,000, if such event occurs on or before May 14, 1994, or (y)
$35,000,000, if such event occurs after May 14, 1994. Subject to the
foregoing, the Merger Agreement provides that all costs and expenses incurred
in connection with the Merger Agreement shall be paid by the party incurring
such cost or expense.
Amendment and Waivers. Any provision of the Merger Agreement may be
amended or waived prior to the Effective Time if, and only if, such amendment
or waiver is in writing and signed, in the case of an amendment, by the
Company, the Purchaser and Merger Subsidiary or in the case of a waiver, by
the party against whom the waiver is to be effective; provided that after the
adoption of the Merger Agreement by the stockholders of the Company, no such
amendment or waiver shall, without the further approval of such stockholders,
alter or change (i) the amount or kind of consideration to be received in
exchange for any shares of capital stock of the Company, (ii) any term of the
articles of incorporation of the Surviving Corporation or (iii) any of the
terms or conditions of the Merger Agreement if such alteration or change would
adversely affect the holders of the Shares. No failure or delay by any party
in exercising any right, power or privilege under the Merger Agreement shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies provided in the Merger
Agreement shall be cumulative and not exclusive of any rights or remedies
provided by law.
Guaranty
The following summary of the Guaranty, a copy of which is filed as an
Exhibit to the Schedule 14D-1, is qualified in its entirety by reference to
the Guaranty.
Parent has agreed, by means of a separate Guaranty dated as of May 1,
1994 (the "Guaranty") to guarantee to the Company the prompt and full
performance and discharge by the Purchaser and Merger Subsidiary (together,
the "Obligors") of all of the covenants, agreements, obligations, liabilities,
representations and warranties of the Obligors under the Merger Agreement
(collectively, the "Obligations"), including, without limitation, the due and
punctual payment of all amounts which may become due and payable to the
Company. If the Obligors shall default in the due and punctual performance of
any of the Obligations or in the full and timely payment of any amounts owed
pursuant to the Obligations, Parent will promptly cause to be performed such
Obligations and will promptly cause full payment to be made of any amount due
with respect thereto at its sole cost and expense.
Parent has further guaranteed to those officers and directors of the
Company whom the Purchaser has agreed to indemnify and hold harmless pursuant
to Section 7.03 of the Merger Agreement the full and complete performance by
the Obligors of each and all of the obligations set forth in said Section
7.03, including, without limitation, the amounts due and payable to such
officers and directors.
11. Purpose of the Offer; Plans for the Company. The purpose of the
Offer is to acquire control of, and the entire equity interest in, the
Company. The purpose of the Merger is to acquire all outstanding Shares not
tendered and purchased pursuant to the Offer. The Offer is being made
pursuant to the Merger Agreement and the purchase of the Shares pursuant to
the Offer will increase the likelihood that the Merger will be effected. If
the Offer is successful, the Shares not acquired by the Purchaser pursuant to
the Offer will be converted, subject to the terms of the Merger Agreement,
into the right to receive cash in an amount equal to the price per Share paid
pursuant to the Offer, without interest, or at the election of the holder,
subject to certain restrictions, 0.024 shares of LCPS.
The Board of Directors unanimously recommends that all holders of Shares
who wish to receive cash tender such shares pursuant to the Offer. The Board
of Directors has, by a unanimous vote of those members present, approved the
Merger Agreement and the transactions contemplated thereby, including the
Offer and the Merger, which approval the Purchaser believes satisfies the
relevant requirements of the General Corporation Law of the Republic of Panama
("Panama Law"). Under Panama Law, the Board of Directors is required to
submit the Merger Agreement to the Company's stockholders for approval at a
stockholder's meeting convened for that purpose in accordance with the Panama
Law. The Merger Agreement must be approved by a majority of all votes
entitled to be cast at such meeting. The Board of Directors has unanimously
recommended acceptance of the Offer by all holders of Shares who wish to
receive cash for such Shares and approval and adoption of the Merger Agreement
and the Merger by the Company's stockholders. The Board of Directors has made
no recommendation with respect to the election by stockholders to receive
shares of the LCPS to be issued by the Purchaser in connection with the
Merger. In addition, to the knowledge of the Company, all of its directors and
members of the operating committee intend either to tender their Shares
pursuant to the Offer or to vote, as stockholders, in favor of the Merger and
adoption of the Merger Agreement.
If the Minimum Condition is satisfied, the Purchaser will have sufficient
voting power to approve the Merger Agreement at the stockholders' meeting
without the affirmative vote of any other stockholder. Depending upon the
number of Shares purchased pursuant to the Offer, however, and other factors
relevant to the Purchaser's equity ownership in the Company, the Purchaser
may, subsequent to the consummation of the Offer, seek to acquire additional
Shares through open market purchases, privately negotiated transactions, or
other transactions, or a combination of the foregoing, on such terms and at
such prices as it shall determine, which may be different from the price paid
for Shares in the Offer.
Under Panama law, holders of Shares will not have dissenters' or
appraisal rights as result of the Offer or with respect to the Merger.
Pursuant to Executive Decree No. 45 of December 5, 1977, as amended (the
"Decree"), promulgated by the Republic of Panama, the Purchaser is required to
deliver a declaration (the "Declaration") meeting certain disclosure
requirements set out in the Decree to the Board of Directors in connection
with the making of the Offer. The Decree requires the Board of Directors to
determine whether the Declaration provides the requisite disclosure and, if
so, in its absolute discretion, to decide whether to submit the Declaration to
the National Securities Commission of the Republic of Panama for hearing and
investigation or to the stockholders for their consideration or to permit the
Purchaser to consummate the Offer without any further delay or consideration.
The Purchaser has submitted the Declaration to the Board of Directors in
compliance with the Decree, and the Board of Directors has accepted the
Declaration, and determined not to deliver the Declaration to the National
Securities Commission of the Republic of Panama nor to submit the Declaration
to a meeting of stockholders for their consideration.
In addition, the Merger must comply with certain procedural and
substantive requirements of Panama Law, including any duties to other
stockholders imposed upon a controlling or, if applicable, majority
Stockholder.
The Merger must also comply with any applicable federal law. In
particular, if the Purchaser purchases Shares pursuant to the Offer and the
Merger is consummated more than one year after completion of the Offer or if
an alternative merger transaction were to provide for the payment of
consideration less than that paid pursuant to the Offer, compliance with Rule
13e-3 under the Exchange Act would be required, unless the Shares were to be
deregistered under the Exchange Act prior to such transaction. If applicable,
Rule 13e-3 would require, among other things, that certain financial
information concerning the Company and certain information relating to the
fairness of the proposed transaction and the consideration offered to minority
stockholders in such a transaction be filed with the Commission and
distributed to such stockholders prior to consummation of the transaction.
Plans for the Company. Pursuant to the terms of the Merger Agreement,
effective upon the acceptance for payment by the Purchaser of any Shares, the
Purchaser currently intends to seek maximum representation on the Board of
Directors and on each committee thereof (other than the committee of the Board
of Directors established to take action under the Merger Agreement), each
board of directors of each Subsidiary (as defined in the Merger Agreement) and
each committee of each such board.
In connection with its consideration of the Offer and the Merger, Parent
has made a preliminary review of various business strategies that may be
considered upon completion of the Offer, including, among other things, the
integration of certain assets or lines of business of the Company with those
of Parent and the possible disposition of certain assets or lines of business.
Upon completion of the Offer, Parent, the Purchaser and its affiliates intend
to conduct a detailed review of the Company and its assets, businesses,
operations, properties, policies (including dividend policies), corporate
structure, capitalization and the responsibilities and qualifications of the
Company's management and personnel and consider what, if any, changes would be
desirable.
Except as described above or elsewhere in this Offer to Purchase, Parent
and the Purchaser have no present plans or proposals that would relate to or
result in an extraordinary corporate transaction involving the Company or any
of its subsidiaries (such as a merger, reorganization, liquidation, relocation
of any operations or sale or other transfer of a material amount of assets),
any change in the Board of Directors or management, any material change in the
Company's capitalization or dividend policy or any other material change in
the Company's corporate structure or business.
12. Effect of the Offer on the Market for the Shares; Stock Exchange
Listing(s); Registration under the Exchange Act. The purchase of Shares
pursuant to the Offer will reduce the number of Shares that might otherwise
trade publicly and may reduce the number of holders of Shares, which could
adversely affect the liquidity and market value of the remaining Shares held
by stockholders other than the Purchaser. The Purchaser cannot predict
whether the reduction in the number of Shares that might otherwise trade
publicly would have an adverse or beneficial effect on the market price for or
marketability of the Shares or whether it would cause future market prices to
be greater or less than the Offer price.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the requirements of the NYSE for continued listing
and may, therefore, be delisted from such exchange. According to the NYSE's
published guidelines, the NYSE would consider delisting the Shares if, among
other things, the number of publicly-held Shares (excluding Shares held by
officers, directors, their immediate families and holders of 10% or more of
the Shares) were less than 1,100,000, there were fewer than 2,000 holders of
at least 100 Shares or the aggregate market value of publicly held Shares were
less than $18 million. According to the Company 10-K, there were
approximately 36,292 holders of record of Shares as of September 30, 1993.
If, as a result of the purchase of Shares pursuant to the Offer, the Shares no
longer meet the requirements of the NYSE for continued listing and the listing
of Shares is discontinued, the market for the Shares could be adversely
affected.
If the NYSE were to delist the Shares (which the Purchaser intends to
cause the Company to seek if it acquires control of the Company and the Shares
no longer meet the NYSE listing requirements), it is possible that the Shares
would trade on another securities exchange or in the over-the-counter market
and that price quotations for the Shares would be reported by such exchange or
through the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") or other sources. The extent of the public market for the
Shares and availability of such quotations would, however, depend upon such
factors as the number of holders and/or the aggregate market value of the
publicly-held Shares at such time, the interest in maintaining a market in the
Shares on the part of securities firms, the possible termination of
registration of the Shares under the Exchange Act and other factors.
The Shares are currently "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 such Shares. Depending upon factors
similar to those described above regarding listing and market quotations, the
Shares might no longer constitute "margin securities" for the purposes of the
Federal Reserve Board's margin regulations and, therefore, could no longer be
used as collateral for loans made by brokers.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application of the Company to the
Commission if the Shares are not listed on a national securities exchange and
there are less than 300 holders of record. Termination of the registration of
the Shares under the Exchange Act would substantially reduce the information
required to be furnished by the Company to holders of Shares and to the
Commission and would make certain of the provisions of the Exchange Act, such
as the short-swing profit recovery provisions of Section 16(b), the
requirement of furnishing a proxy or information statement in connection with
stockholder action and the related requirement of an annual report to
stockholders and the requirements of Rule 13e-3 under the Exchange Act with
respect to "going private" transactions, no longer applicable to the Shares.
Furthermore, "affiliates" of the Company and persons holding "restricted
securities" of the Company may be deprived of the ability to dispose of such
securities pursuant to Rule 144 promulgated under the Securities Act. If
registration of the Shares under the Exchange Act were terminated, the Shares
would no longer be "margin securities" or eligible for listing or NASDAQ
reporting. The Purchaser intends to seek to cause the Company to terminate
registration of the Shares under the Exchange Act as soon after consummation
of the Offer as the requirements for termination of registration of the Shares
are met.
13. Dividends and Distributions. If on or after May 1, 1994, the
Company should (i) split, combine or otherwise change the Shares or its
capitalization, (ii) acquire or otherwise cause a reduction in the number of
outstanding Shares or (iii) issue or sell any additional Shares (other than
Shares issued pursuant to and in accordance with the terms in effect on May 1,
1994 of employee stock options outstanding prior to such date), shares of any
other class or series of capital stock, other voting securities or any
securities convertible into, or options, rights, or warrants, conditional or
otherwise, to acquire, any of the foregoing, then, without prejudice to the
Purchaser's rights under Section 15, the Purchaser may, in its sole
discretion, make such adjustments in the purchase price and other terms of the
Offer as it deems appropriate including the number or type of securities to be
purchased.
If, on or after May 1, 1994, the Company should declare or pay any
dividend on the Shares (other than regular quarterly cash dividends not in
excess of $.26 per Share having customary and usual record and payment dates)
or any distribution with respect to the Shares (including the issuance of
additional Shares or other securities or rights to purchase of any securities)
that is payable or distributable to stockholders of record on a date prior to
the transfer to the name of the Purchaser or its nominee or transferee on the
Company's stock transfer records of the Shares purchased pursuant to the
Offer, then, without prejudice to the Purchaser's rights under Section 15, (i)
the purchase price per Share payable by the Purchaser pursuant to the Offer
will be reduced to the extent of any such cash dividend or distribution and
(ii) the whole of any such non-cash dividend or distribution to be received by
the tendering stockholders will (a) be received and held by the tendering
stockholders for the account of the Purchaser and will be required to be
promptly remitted and transferred by each tendering stockholder to the
Depositary for the account of the Purchaser, accompanied by appropriate
documentation of transfer, or (b) at the direction of the Purchaser, be
exercised for the benefit of the Purchaser, in which case the proceeds of such
exercise will promptly be remitted to the Purchaser. Pending such remittance
and subject to applicable law, the Purchaser will be entitled to all rights
and privileges as owner of any such non-cash dividend or distribution or
proceeds thereof and may withhold the entire purchase price or deduct from the
purchase price the amount or value thereof, as determined by the Purchaser in
its sole discretion.
14. Extension of Tender Period; Termination; Amendment. The Purchaser
reserves the right, at any time or from time to time, in its sole discretion
and regardless of whether or not any of the conditions specified in Section 15
shall have been satisfied, (i) to extend the period of time 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 or (ii) to
amend the Offer in any respect by making a public announcement of such
amendment. There can be no assurance that the Purchaser will exercise its
right to extend or amend the Offer.
If the Purchaser decreases the percentage of Shares being sought or
increases the consideration to be paid for Shares pursuant to the Offer and
the Offer is scheduled to expire at any time before the expiration of a period
of 10 business days from, and including, the date that notice of such increase
or decrease is first published, sent or given in the manner specified below,
the Offer will be extended until the expiration of such period of 10 business
days. If the Purchaser makes a material change in the terms of the Offer
(other than a change in price or percentage of securities sought) or in the
information concerning the Offer, or waives a material condition of the Offer,
the Purchaser will extend the Offer, if required by applicable law, for a
period sufficient to allow stockholders to consider the amended terms of the
Offer. In a published release, the Commission has stated that in its view an
offer must remain open for a minimum period of time following a material
change in the terms of such offer and that the waiver of a condition such as
the Minimum Condition is a material change in the terms of an offer. The
release states that an offer should remain open for a minimum of five business
days from the date the material change is first published, sent or given to
securityholders, and that if material changes are made with respect to
information that approaches the significance of price and share levels, a
minimum of 10 business days may be required to allow adequate dissemination
and investor response. The term "business day" shall mean any day other than
Saturday, Sunday or a federal holiday and shall consist of the time period
from 12:01 A.M. through 12:00 Midnight, New York City time.
The Purchaser also reserves the right, in its sole discretion, in the
event any of the conditions specified in Section 15 shall not have been
satisfied and so long as Shares have not theretofore been accepted for
payment, to delay (except as otherwise required by applicable law) acceptance
for payment of or payment for Shares or to terminate the Offer and not accept
for payment or pay for Shares.
If the Purchaser extends the period of time during which the Offer is
open, is delayed in accepting for payment or paying for Shares or is unable to
accept for payment or pay for Shares pursuant to the Offer for any reason,
then, without prejudice to the Purchaser's rights under the Offer, the
Depositary may, on behalf of the Purchaser, retain all Shares tendered, and
such Shares may not be withdrawn except as otherwise provided in Section 4.
The reservation by the Purchaser of the right to delay acceptance for payment
of or payment for Shares is subject to applicable law, which requires that the
Purchaser pay the consideration offered or return the Shares deposited by or
on behalf of stockholders promptly after the termination or withdrawal of the
Offer.
Any extension, termination or amendment of the Offer will be followed as
promptly as practicable by a public announcement thereof. Without limiting
the manner in which the Purchaser may choose to make any public announcement,
the Purchaser will have no obligation (except as otherwise required by
applicable law) to publish, advertise or otherwise communicate any such public
announcement other than by making a release to the Dow Jones News Service. In
the case of an extension of the Offer, the Purchaser will make a public
announcement of such extension no later than 9:00 A.M., New York City time, on
the next business day after the previously scheduled Expiration Date.
15. Certain Conditions of the Offer. Notwithstanding any other
provision of the Offer, the Purchaser shall not be required to accept for
payment or pay for any Shares, and may terminate the Offer, unless (i) a
majority of the outstanding Shares on a fully diluted basis has been tendered
pursuant to the Offer by the Expiration Date and not withdrawn; (ii) the
applicable waiting period under the HSR Act shall have expired or been
terminated; (iii) either (A) CFIUS shall have determined not to investigate
the Offer and the Merger under Exon-Florio (either by action or nonaction) or
(B) if CFIUS shall have determined to make such an investigation, such
investigation shall have been completed and the President of the United States
of America shall have determined (either by action or nonaction) not to take
any action under Exon-Florio with respect to the transactions contemplated by
the Merger Agreement (the "Exon-Florio Condition"); provided, however, that
prior to December 31, 1994, the Purchaser shall not terminate the Offer by
reason of the nonsatisfaction of either of the conditions set forth in clauses
(ii) or (iii) above and shall extend the Offer (it being understood that this
provision shall not prohibit the Purchaser from terminating the Offer or
failing to extend the Offer by reason of the nonsatisfaction of any other
condition of the Offer); or if prior to the acceptance for payment of Shares,
any of the following conditions exist:
(a) there shall be instituted or pending any action or proceeding by
any government or governmental authority or agency, domestic or foreign,
or by any other person, domestic or foreign, before any court or
governmental authority or agency, domestic or foreign, that has a material
likelihood of success, (i) challenging or seeking to make illegal, to
delay materially or otherwise directly or indirectly to restrain or
prohibit the making of the Offer, the acceptance for payment of or payment
for some of or all the Shares by the Purchaser or the consummation by the
Purchaser of the Merger, seeking to obtain material damages or otherwise
directly or indirectly relating to the transactions contemplated by the
Offer or the Merger, (ii) seeking to restrain or prohibit the Purchaser's
ownership or operation (or that of its subsidiaries or affiliates) of all
or any material portion of the business or assets of the Company and its
subsidiaries, taken as a whole, or of the Purchaser and its subsidiaries
or affiliates, taken as a whole, or to compel the Purchaser or any of its
subsidiaries or affiliates to dispose of or hold separate all or any
material portion of the business or assets of the Company and its
subsidiaries, taken as a whole, or of the Purchaser and its subsidiaries
or affiliates, taken as a whole, (iii) seeking to impose or confirm
material limitations on the ability of the Purchaser or any of its
subsidiaries or affiliates effectively to exercise full rights of
ownership of the Shares, including, without limitation, the right to vote
any Shares acquired or owned by the Purchaser or any of its subsidiaries
or affiliates on all matters properly presented to the Company's
stockholders, (iv) seeking to require divestiture by the Purchaser or any
of its subsidiaries or affiliates of any Shares, or (v) that otherwise, in
the reasonable judgment of the Purchaser, is likely to materially
adversely affect the Company and its subsidiaries, taken as a whole, or
the Purchaser and its subsidiaries or affiliates, taken as a whole;
(b) there shall be any action taken, or any statute, rule,
regulation, injunction, order or decree proposed, enacted, enforced,
promulgated, issued or deemed applicable to the Offer or the Merger, by
any court, government or governmental authority or agency, domestic or
foreign, other than the application of the waiting period provisions of
the HSR Act or Exon-Florio to the Offer or the Merger, that has a
substantial likelihood of resulting in any of the consequences referred to
in clauses (i) through (v) of paragraph (a) above;
(c) any material adverse change in the business, assets, financial
condition or results of operations of the Company and its subsidiaries,
taken as a whole, shall have occurred other than as disclosed to the
Purchaser in writing or there shall be any event, occurrence or
development of a state of circumstances or facts which individually or in
the aggregate would reasonably be expected to result in such a material
adverse change;
(d) (i) it shall have been publicly disclosed or the Purchaser shall
have otherwise learned that any person or "group" (as defined in Section
13(d)(3) of the Exchange Act), other than the Purchaser or its affiliates
or any group of which any of them is a member, shall have acquired or
proposed to acquire beneficial ownership of more than 25% of any class or
series of capital stock of the Company (including the Shares), through the
acquisition of stock, the formation of a group or otherwise, or shall have
been granted any option, right or warrant, conditional or otherwise, to
acquire beneficial ownership of more than 25% of any class or series of
capital stock of the Company (including the Shares); (ii) any person or
group shall have entered into a definitive agreement or an agreement in
principle with the Company with respect to a merger, consolidation or
other business combination with the Company; or (iii) the Board of
Directors (or any duly authorized committee thereof) shall have withdrawn
or materially modified its approval or recommendation of the Offer or the
Merger;
(e) the Company shall have breached or failed to perform in any
material respect any of its covenants or agreements under the Merger
Agreement or any of the representations and warranties of the Company set
forth in this Agreement shall not be true when made or at and as of such
time as if made at and as of such time;
(f) the Purchaser, acting in good faith, shall not have satisfied
itself that there exists no potential environmental liability of the
Company or any Subsidiary that has a reasonable prospect individually or
in the aggregate of resulting in a Material Adverse Effect (as defined in
the Merger Agreement) which liability (i) relates to any site in Missouri
or Illinois and is not specifically disclosed in the footnotes to the
financial statements in the Company 10-K or Company 10-K; or (ii) arises
or may arise from (x) any site in Missouri or Illinois identified or
referred to in any writing delivered by the Company to Buyer prior to the
date hereof or (y) any circumstance or condition identified in any such
writing; or
(g) the Merger Agreement shall have been terminated in accordance
with its terms;
which, in the judgment of the Purchaser in any such case, and regardless of
the circumstances (including any action or omission by the Purchaser) giving
rise to any such condition, makes it inadvisable to proceed with such
acceptance for payment or payment.
For the purposes of this Section 15, the term "foreign" means any
jurisdiction other than the United States, in which either the Company and its
Subsidiaries or the Purchaser and its affiliates has any material assets or
operations.
The foregoing conditions are for the sole benefit of the Purchaser and
may be asserted by the Purchaser in its sole discretion regardless of the
circumstances (including any action or omission by the Purchaser) giving rise
to any such conditions or may be waived by the Purchaser in its sole
discretion in whole at any time or in part from time to time. The failure by
the Purchaser at any time to exercise its rights under any of the foregoing
conditions shall not be deemed a waiver of any such right; the waiver of any
such right with respect to particular facts and circumstances shall not be
deemed a waiver with respect to any other facts and circumstances, and each
such right shall be deemed an ongoing right which may be asserted at any time
or from time to time. Any determination by the Purchaser concerning the
events described in this Section will be final and binding upon all parties.
16. Certain Legal Matters; Regulatory Approvals.
(a) General. Based on its examination of publicly available information
filed by the Company with the Commission and other publicly available
information concerning the Company, the Purchaser is not aware of any license
or regulatory permit that appears to be material to the Company's business
that might be adversely affected by the Purchaser's acquisition of Shares as
contemplated herein or, except as set forth below, of any approval or other
action by any government or governmental authority or agency, domestic or
foreign, that would be required for the acquisition or ownership of Shares by
the Purchaser as contemplated herein. Should any such approval or other
action be required, the Purchaser currently contemplates that, except as
described below under "State Takeover Statutes", such approval or other action
will be sought. Except as described under "Antitrust" and "Exon-Florio", there
is, however, no current intent to delay the purchase of Shares tendered
pursuant to the Offer pending the outcome of any such matter. The Purchaser
is unable to predict whether it may determine that it is required to delay the
acceptance for payment of or payment for Shares tendered pursuant to the Offer
pending the outcome of any such matter. There can be no assurance that any
such approval or other action, if needed, would be obtained or would be
obtained without substantial conditions or that if such approvals were not
obtained or such other actions were not taken adverse consequences might not
result to the Company's business or certain parts of the Company's business
might not have to be disposed of, any of which could cause the Purchaser to
elect to terminate the Offer without the purchase of Shares thereunder. The
Purchaser's obligation under the Offer to accept for payment and pay for
Shares is subject to certain conditions. See Section 15.
The Company has advised the Purchaser that on May 5, 1994, the Company
was notified by its legal counsel that counsel had been provided with a copy
of a complaint against the Company, Parent and the members of the Board of
Directors seeking to enjoin the Merger. The complaint was filed in Santa
Clara County, California Superior Court on May 3, 1994, in an action captioned
Piven v. Syntex Corp. The complaint alleges, among other things, that the
defendants breached their fiduciary duties to the public stockholders of the
Company or aided and abetted such breaches and seeks certification as a class
action. The Company believes that the complaint is without merit.
(b) Panama Takeover Law. Pursuant to the Decree promulgated by the
Republic of Panama, the Purchaser is required to deliver a Declaration,
meeting certain disclosure requirements set out in the Decree, to the Board of
Directors in connection with the making of the Offer. The Decree requires the
Board of Directors to determine whether the Declaration provides the requisite
disclosure and, if so, in its absolute discretion, to decide whether to submit
the Declaration to the National Securities Commission of the Republic of
Panama for hearing and investigation or to the stockholders for their
consideration or to permit the Purchaser to consummate the Offer without any
further delay or consideration.
The Purchaser has submitted the Declaration to the Board of Directors in
compliance with the Decree, and the Board of Directors has accepted the
Declaration and determined not to deliver the Declaration to the National
Securities Commission of the Republic of Panama nor to submit the Declaration
to a meeting of stockholders for their consideration.
(c) State Takeover Statutes. A number of states have adopted laws which
purport, to varying degrees, to apply to attempts to acquire corporations that
are incorporated in, or which have substantial assets, stockholders, principal
executive offices or principal places of business or whose business operations
otherwise have substantial economic effects in, such states. The Company,
directly or through subsidiaries, conducts business in a number of states
throughout the United States, some of which have enacted such laws. Except as
described herein, the Purchaser does not know whether any of these laws will,
by their terms, apply to the Offer or the Merger and the Company and has not
complied with any such laws. To the extent that certain provisions of these
laws purport to apply to the Offer or the Merger or other business
combination, the Purchaser believes that there are reasonable bases for
contesting such laws.
In 1982, in Edgar v. MITE Corp., the Supreme Court of the United States
invalidated on constitutional grounds the Illinois Business Takeover Statute
which, as a matter of state securities law, made takeovers of corporations
meeting certain requirements more difficult. However, in 1987 in CTS Corp. v.
Dynamics Corp. of America, the Supreme Court held that the State of Indiana
could, as a matter of corporate law, constitutionally disqualify a potential
acquiror from voting shares of a target corporation without the prior approval
of the remaining stockholders where, among other things, the corporation is
incorporated in, and has a substantial number of stockholders in, the state.
If any government official or third party should seek to apply any state
takeover law to the Offer or the Merger, the Purchaser will take such action
as then appears desirable, which action may include challenging the
applicability or validity of such statute in appropriate court proceedings.
In the event it is asserted that one or more state takeover statutes is
applicable to the Offer or any such merger or other business combination and
an appropriate court does not determine that it is inapplicable or invalid as
applied to the Offer or the Merger or other business combination, the
Purchaser might be required to file certain information with, or to receive
approvals from, the relevant state authorities or holders of Shares, and the
Purchaser might be unable to accept for payment or pay for Shares tendered
pursuant to the Offer, or be delayed in continuing or consummating the Offer
or any such merger or other business combination. In such case, the Purchaser
may not be obligated to accept for payment or pay for any tendered Shares.
See Section 15.
(d) Antitrust. Under the HSR Act and the rules that have been
promulgated thereunder by the Federal Trade Commission (the "FTC"), certain
acquisition transactions may not be consummated unless certain information has
been furnished to the Antitrust Division of the Department of Justice (the
"Antitrust Division") and the FTC and certain waiting period requirements have
been satisfied. The purchase of Shares pursuant to the Offer is subject to
such requirements.
Pursuant to the requirements of the HSR Act, the Purchaser plans to file
a Notification and Report Form with respect to the Offer with the Antitrust
Division and the FTC on or about May 10, 1994. As a result, it is expected
that the waiting period applicable to the purchase of Shares pursuant to the
Offer will be scheduled to expire at 11:59 P.M., New York City time, on or
about Wednesday, May 25, 1994. However, prior to such time, the Antitrust
Division or the FTC may extend the waiting period by requesting additional
information or documentary material relevant to the Offer from the Purchaser
or others. If such a request is made, the waiting period will be extended
until 11:59 P.M., New York City time, on the tenth day after substantial
compliance with such request. Thereafter, such waiting period can be extended
only by court order.
A request is being made pursuant to the HSR Act for early termination of
the waiting period applicable to the Offer. There can be no assurance,
however, that the 15-day HSR Act waiting period will be terminated early.
Shares will not be accepted for payment or paid for pursuant to the Offer
until the expiration or earlier termination of the applicable waiting period
under the HSR Act. See Section 15. Any extension of the waiting period will
not give rise to any withdrawal rights not otherwise provided for by
applicable law. See Section 4. The Merger Agreement provides that, after
December 31, 1994, if the Purchaser's acquisition of Shares is delayed
pursuant to a request by the Antitrust Division or the FTC for additional
information or documentary material pursuant to the HSR Act, the Offer may,
but need not, be extended.
At any time before or after the consummation of any such transactions,
the Antitrust Division or the FTC could take such action under the antitrust
laws as it deems necessary or desirable in the public interest, including
seeking to enjoin the purchase of Shares pursuant to the Offer or seeking
divestiture of the Shares so acquired or divestiture of substantial assets of
the Purchaser or the Company. Private parties (including individual states)
may also bring legal actions under the antitrust laws. The Purchaser does not
believe that the consummation of the Offer will result in a violation of any
applicable antitrust laws. However, there can be no assurance that a
challenge to the Offer on antitrust grounds will not be made, or if such a
challenge is made, what the result will be. See Section 15 for certain
conditions to the Offer, including conditions with respect to litigation and
certain governmental actions and Section 10 for certain termination rights in
connection with antitrust suits.
(e) Exon-Florio. Under Exon-Florio, the President of the United States
is authorized to prohibit or suspend acquisitions, mergers or takeovers by
foreign persons of persons engaged in interstate commerce in the United States
if the President determines, after investigation, that such foreign persons in
exercising control of such acquired persons might take action that threatens
to impair the national security of the United States and that other provisions
of existing law do not provide adequate authority to protect national
security. Pursuant to Exon-Florio, notice of an acquisition by a foreign
person may be made to CFIUS either voluntarily by the parties to such proposed
acquisition, merger or takeover or by any member of CFIUS. CFIUS is comprised
of representatives of the Departments of the Treasury, State, Commerce,
Defense and Justice, the Office of Management and Budget, the Office of
Science and Technology Policy, the United States Trade Representative's Office
and the Council of Economic Advisors, as well as the Assistant to the
President for National Security Affairs and the Assistant to the President for
Economic Policy.
A determination that an investigation is called for must be made within
30 days after notification of a proposed acquisition, merger or takeover is
first filed with CFIUS. Any such investigation must be completed within 45
days of such determination. Any decision by the President to take action must
be announced within 15 days of the completion of the investigation. Although
Exon-Florio does not require the filing of a notification, nor does it
prohibit the consummation of an acquisition, merger or takeover if
notification is not made, such an acquisition, merger or takeover thereafter
remains indefinitely subject to divestment should the President subsequently
determine that the national security of the United States has been threatened
or impaired. The Purchaser and the Company intend to file with CFIUS a joint
notice of the transactions contemplated by the Merger Agreement promptly.
Although the Purchaser believes that the transactions contemplated by the
Merger Agreement should not raise any national security concerns, there can be
no assurance that CFIUS will not determine to conduct an investigation of the
proposed transaction and, if an investigation is commenced, there can be no
assurance regarding the outcome of such investigation.
The Offer is conditioned upon, among other things, either (A) CFIUS
having determined not to investigate (either by action or non-action) the
transactions contemplated by the Merger Agreement under Exon-Florio or (B) if
CFIUS determines to make such an investigation, such investigation having been
completed and the President not having determined (either by action or
non-action) to take any action under the Exon-Florio with respect to the
transactions contemplated by the Merger Agreement.
The Merger Agreement also provides that prior to December 31, 1994, the
Purchaser shall not terminate the Offer by reason of the nonsatisfaction of
the Exon-Florio Condition and shall extend the Offer (provided that such
obligation shall not prohibit the Purchaser from terminating the Offer or
failing to extend the Offer by reason of the nonsatisfaction of any other
condition of the Offer). See Section 15.
(f) Other. Based upon the Purchaser's examination of the Company's
10-K, it appears that the Company and its subsidiaries own property or conduct
business in, among other countries, Puerto Rico, Canada, Mexico, the Bahamas,
Spain, France, Ireland, Scotland, England and Korea. In connection with the
acquisition of Shares pursuant to the Offer, the laws of certain of these
foreign countries may require the filing of information with, or the obtaining
of the approval of, governmental authorities therein. After commencement of
the Offer, the Purchaser will seek further information regarding the
applicability of any such laws and currently intends to take such action as
they may require, but no assurance can be given that such approvals will be
obtained. If any action is taken prior to completion of the Offer by any such
government or governmental authority, the Purchaser may not be obligated to
accept for payment or pay for any tendered Shares. See Section 15. A
discussion of some of the laws that may be applicable to the Offer or the
Merger follows.
Investment Canada Act. According to the Company 10-K, the Company
conducts certain operations in Canada, including administrative activities and
pharmaceuticals production. The Investment Canada Act (Canada) (the "ICA")
requires that notice of the acquisition of "control" (as defined in the ICA)
by a "non-Canadian" (as defined in the ICA) of any "Canadian business" (as
defined in the ICA) be furnished to Investment Canada, a Canadian governmental
agency (the "Agency"), and that certain of these transactions which result in
the acquisition of control of a Canadian business be reviewed and approved by
the Minister of the federal cabinet responsible for the ICA (the "Minister")
as a transaction that is "likely to be of net benefit" to Canada based upon
criteria set forth in the ICA. An acquisition of control of a corporation
incorporated outside Canada that controls, directly or indirectly, an entity
in Canada carrying on a Canadian business (an "indirect acquisition") does
not require approval under the ICA before the acquisition is implemented,
although some indirect acquisitions may require approval after implementation.
Direct acquisitions may require the Minister's approval before they can be
implemented. Under the ICA, the acquisition of more than a majority of the
voting shares of a corporation is deemed to be an acquisition of control.
The Purchaser intends to file within the prescribed time period a notice
with respect to the Offer and the Merger with the Agency and to seek approval
of the Minister, if required. If the Purchaser were to acquire control of a
Canadian business in a transaction reviewable under the ICA and, within
certain specified periods of time provided in the ICA, the Minister decides
that he is not satisfied that the acquisition is "likely to be of net benefit"
to Canada, the Minister could issue a notice the effect of which would be to
prohibit the acquisition of "control" of all or part of the Company's Canadian
business by the Purchaser, or where such acquisition has already been made, to
compel divestiture of control of all or part of the Company's Canadian
businesses.
Competition Act (Canada). Certain provisions of the Canadian Competition
Act require pre-merger notification to the Director of Investigation and
Research (the "Canadian Director") of significant transactions, which may
include the acquisition of a large percentage of the stock of a public company
which has Canadian operations, or a merger or amalgamation involving such an
entity. Pre-merger notification is generally required with respect to
transactions in which the parties to the transaction and their affiliates have
assets in Canada, or annual gross revenues from sales in, from or into Canada,
in excess of Cdn. $400 million and which involve the direct or indirect
acquisition of an operating business in Canada of which the value of the
Canadian assets, or the annual gross revenues from sales in or from Canada
generated from such assets, exceed Cdn. $35 million (or, in the case of an
amalgamation of two or more corporations one or more of which carries on an
operating business in Canada, the Canadian assets or the annual gross revenues
from sales in or from Canada of the entity resulting from such amalgamation or
the entities controlled by such entity exceed Cdn. $70 million). In the case
of an acquisition of shares of a public company, the transaction must also
result in the acquiror holding voting shares which carry more than 20% of the
outstanding votes (or more than 50% if the acquiror already holds 20% or more)
attached to all the voting shares of the public company. If a transaction is
subject to the pre-merger notification requirements, notice must be given
either 7 or 21 days (depending on the information required by the Canadian
Director) prior to the completion of the transaction. The Canadian Director
may waive or seek an extension of the waiting period. After the applicable
waiting period expires or is waived, the transaction may be completed.
The Canadian Director may apply to the Competition Tribunal, a
specialized tribunal empowered to deal with certain matters governed by the
Competition Act with respect to a "merger" (as defined in the Competition Act)
and, if the Competition Tribunal finds that the merger prevents or lessens or
is likely to prevent or lessen competition substantially, it may order that
the merger not proceed or, in the event that the merger has been completed,
order its dissolution or the disposition of some or all of the assets or
shares involved. A merger may be subjected to an order of the Competition
Tribunal whether or not it is a notifiable transaction. In some instances,
the Canadian Director may issue an "advance ruling certificate" to the effect
that he would not have sufficient grounds on which to apply to the Competition
Tribunal under the merger provisions of the Competition Act or a "no-action"
advisory opinion following a notification or voluntary submission. If the
Canadian Director issues an advance ruling certificate in respect of a
proposed transaction, that transaction is exempt from the pre-merger
notification provisions.
The Purchaser intends to file any required notice with respect to the
Offer and the Merger with the Canadian Director and, to the extent necessary,
observe any applicable waiting period.
EC Merger Regulation. According to the Company 10-K, the Company may
conduct substantial operations within the European Community (the "EC") and
certain of the individual member states of the EC. The EC Merger Regulation
requires that notices of concentrations with a "community dimension" be
provided to the EC Commission for review and approval prior to being put into
effect. The Offer will be deemed to have a "community dimension" if the
combined aggregate worldwide annual revenues of both the Company and the
Purchaser exceeds ECU 5 billion, if the community-wide annual revenues of each
of the Company and the Purchaser exceed ECU 250 million, and if both the
Company and the Purchaser do not receive more than two-thirds of their
respective community-wide revenues from one and the same member state. Based
upon information contained in the Company 10-K, the Purchaser believes that
the Offer may be considered to have a "community dimension." If the Offer
falls within the EC Merger Regulation, the EC Commission, as opposed to
individual member states, has exclusive jurisdiction to review it, subject to
certain exceptions.
Under the EC Merger Regulation, a concentration that meets the foregoing
guidelines requires the filing of a notice in a prescribed form with the EC
Commission. This filing must normally be made within seven days of the
earlier of the announcement of a public bid, the conclusion of the relevant
agreement or acquisition of a controlling interest, although extensions of
time are sometimes granted. Transactions subject to the filing requirements
of the EC Merger Regulation are suspended automatically until three weeks
after receipt of the notice. The EC Commission may extend the suspension
period for such period as it finds necessary to make a final decision on the
legality of the transaction. In the case of a public bid, the bidder may
acquire shares of the target company during the suspension period, but may not
vote such shares until after the end of the period unless the EC Commission
grants permission to do so in order to permit the bidder to maintain the full
value of the its investment.
The EC Commission must decide whether to initiate proceedings within one
month after the receipt of the notice, subject to certain extensions for EC
holidays or if an individual member state has requested a referral of the
transaction. If proceedings are initiated, the EC Commission must reach a
decision in the proceedings within four months of the commencement of the
proceedings. If the EC Commission fails to reach a decision within either of
these time periods the transaction will be deemed to be compatible with the
common market.
If the EC Commission declares the Offer to be not compatible with the
common market, it may prevent the consummation of the transaction, order a
divestiture if the transaction has already been consummated or impose
conditions or other obligations. In the event that the transaction is found
not to be subject to the EC Merger Regulation, various national merger control
regimes of the member states may apply, and it may be necessary to obtain
approvals from such national authorities.
There can be no assurance that a challenge to the Offer will not be made
pursuant to the EC Merger Regulation and if such a challenge is made, what the
outcome will be, or, alternatively, if the concentration does not meet the
aforementioned guidelines and does not require the filing of a notice with the
EC Commission, what the outcome will be pursuant to the merger regulations of
one or more of the various member states.
17. Fees and Expenses. J.P. Morgan Securities Inc. ("J.P. Morgan") is
acting as financial advisor to the Purchaser and is acting as Dealer Manager
in connection with the Offer. The Purchaser has agreed to pay J.P. Morgan a
fee for its services as financial advisor and as Dealer Manager in connection
with the Offer. The Purchaser has also agreed to reimburse J.P. Morgan for
certain reasonable out-of-pocket expenses incurred in connection with the
Offer (including the fees and disbursements of counsel) and to indemnify J. P.
Morgan against certain liabilities, including certain liabilities under the
federal securities laws.
The Purchaser has retained D.F. King & Co., Inc. to act as the
Information Agent and First Chicago Trust Company of New York to act as the
Depositary in connection with the Offer. The Information Agent may contact
holders of Shares by mail, telephone, telex, telegraph and personal interviews
and may request brokers, dealers and other nominee stockholders to forward
materials relating to the Offer to beneficial owners. The Information Agent
and the Depositary each will receive reasonable and customary compensation for
their respective services, will be reimbursed for certain reasonable
out-of-pocket expenses and will be indemnified against certain liabilities in
connection therewith, including certain liabilities under the federal
securities laws.
The Purchaser will not pay any fees or commissions to any broker or
dealer or any other person (other than the Dealer Manager, the Information
Agent and the Depository) for soliciting tenders of Shares pursuant to the
Offer. Brokers, dealers, commercial banks and trust companies will, upon
request, be reimbursed by the Purchaser for reasonable and necessary costs and
expenses incurred by them in forwarding 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 in any jurisdiction in which
the making of the Offer or acceptance thereof would not be in compliance with
the laws of such jurisdiction. However, the Purchaser may, in its discretion,
take such action as it may deem necessary to make the Offer in any such
jurisdiction and extend the Offer to holders of Shares in such jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of the Purchaser not contained in this Offer to
Purchase or in the Letter of Transmittal and, if given or made, such
information or representation must not be relied upon as having been
authorized.
The Purchaser has filed with the Commission a Tender Offer Statement on
Schedule 14D-1, together with exhibits, pursuant to Rule 14d-3 of the General
Rules and Regulations under the Exchange Act, furnishing certain additional
information with respect to the Offer. The Schedule 14D-1 and any amendments
thereto, including exhibits, may be examined and copies may be obtained from
the offices of the Commission in the manner set forth in Section 7 of this
Offer to Purchase (except that such information will not be available at the
regional offices of the Commission).
ROCHE CAPITAL CORPORATION
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
I. 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. Except
as otherwise noted, the business address of each such person is c/o Roche
Holding Ltd, Grenzacherstrasse 124, CH-4002 Basel, Switzerland, and each such
person is a Swiss citizen except that Dr. Drews is a German citizen and Mr.
Belingard is a French citizen. In addition, except as otherwise noted, each
executive officer of Parent has been employed by Parent in the positions
listed below during the last five years. Directors are identified by an
asterisk next to their names.
Present Principal Occupation
Name and or Employment and Five-Year
Business Address Employment History
---------------- ----------------------------
*Mr. Fritz Gerber Chairman of the Board and Chief
Executive Officer.
*Dr. Lukas Hoffmann Vice Chairman of the Board. Dr.
Le petit Essert Hoffmann is also the Vice Chairman of
1147 Montricher, World Wildlife Fund International and
Switzerland is the founder and head of Station
Biologique, a private research center
in France.
*Dr. Andres F. Leuenberger Vice Chairman and Delegate of the
Board. Prior to 1990, Mr. Leuenberger
was a member of the Board of Directors
and Chief Operating Officer of Parent.
*Dr. h.c. Paul Sacher Conductor and founder of the Paul
Haus auf Burg Sacher Foundation.
Muensterplatz 4
4051 Basel, Switzerland
*Dr. Armin M. Kessler Chief Operating Officer. Prior to
1990, Mr. Kessler was head of Parent's
Pharma division.
*Dr. Jakob Oeri Retired Surgeon and Head Physician,
Director Kantonsspital Basel.
*Dr. jur. Kurt Jenny Attorney. Prior to 1993, Dr. Jenny
Aeschengraben 18 held various positions in the Basel
4051 Basel, Switzerland State government, including President
and Head of the Department of Finance.
*Prof. Dr. Werner Stauffacher Professor, University of Basel and
Head of Department of Chairman of the Department of
Internal Medicine Medicine.
Hebelstrasse 32
4056 Basel, Switzerland
*Prof. Charles Weissmann Professor, University of Zurich.
Director Institut fur
Molekularbiologie I
der Universitaet Zurich
Hoenggerberg
8903 Zurich, Switzerland
Dr. Markus Altwegg General Manager.
Dr. Roland Broennimann General Manager.
Prof. Jurgen Drews General Manager.
Dr. Henri B. Meier General Manager.
Mr. Peter Simon General Manager.
Mr. Jean-Luc Belingard General Manager.
II. Directors and Executive Officers of the 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 the Purchaser.
Except as otherwise noted, the business address of each such person is c/o
Roche Holding Ltd, and such person is a Swiss citizen. Directors are
identified by an asterisk next to their names.
Present Principal Occupation
Name and or Employment and Five-Year
Business Address Employment History
---------------- ----------------------------
*Mr. Fritz Gerber
Chairman of the Board and Chief
Executive Officer of Parent.
*Dr. Henri B. Meier General Manager of Parent.
*Mr. Lambertus H.M. President of the Board of Directors
van Wilgenburg and General Manager of Productos
Post Office Box 3438 Roche, S.A., San Jose, Costa Rica.
San Jose, Costa Rica Prior to 1993, Mr. van Wilgenburg was
General Manager of Roche Korea Company
Ltd in Seoul, South Korea.
Facsimile copies of the Letter of Transmittal will be accepted. The Letter of
Transmittal and certificates for Shares and any other required documents
should be sent to the Depositary at one of the addresses set forth below:
The Depositary:
First Chicago Trust Company of New York
By Mail: By Facsimile Transmission:
First Chicago Trust Company (201) 222-4720 or 4721
of New York
Tenders & Exchanges
Suite 4660 Confirm by Telephone:
P.O. Box 2563 (201) 222-4707
Jersey City, NJ 07303-2563
By Hand or Overnight Delivery:
First Chicago Trust Company
of New York
Tenders & Exchanges
Suite 4680
14 Wall Street, 8th Floor
New York, New York 10005
Questions or requests for assistance or additional copies of this Offer
to Purchase and the Letter of Transmittal may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone
numbers set forth below. Stockholders may also contact their broker, dealer,
commercial bank or trust company for assistance concerning the Offer.
The Information Agent is:
D.F. King & Co., Inc.
77 Water Street 37 Sun Street
New York, New York 10005 London, England EC2 2PY
(800) 669-5550 (Toll Free) 011-4471-247-8263 (collect)
(212) 269-5550 (collect)
The Dealer Manager for the Offer is:
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260-0060
(800) 642-5098 (Toll Free)
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
of
Syntex Corporation
Pursuant to the Offer to Purchase
Dated May 6, 1994
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, JUNE 6, 1994, UNLESS THE OFFER IS EXTENDED.
To: First Chicago Trust Company of New York, as Depositary
By Mail: By Hand or Overnight Delivery:
First Chicago Trust Company First Chicago Trust Company
of New York of New York
Tenders & Exchanges Tenders & Exchanges
Suite 4660 Suite 4680
P.O. Box 2563 14 Wall Street, 8th Floor
Jersey City, NJ 07303-2563 New York, New York 10005
Delivery of this instrument to an address other than as set forth above
or transmission of instructions to a facsimile number other than the one
listed above will not constitute a valid delivery.
This Letter of Transmittal is to be used if certificates are to be
forwarded herewith or, unless an Agent's Message (as defined in the Offer to
Purchase) is utilized, if delivery of Shares (as defined below) is to be made
by book-entry transfer to the Depositary's account at The Depository Trust
Company, Midwest Securities Trust Company or Philadelphia Depository Trust
Company (hereinafter collectively referred to as the "Book-Entry Transfer
Facilities") pursuant to the procedures set forth in Section 3 of the Offer to
Purchase.
Stockholders who cannot deliver their Shares and all other documents
required hereby to the Depositary by the Expiration Date (as defined in the
Offer to Purchase) must tender their Shares pursuant to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. See
Instruction 2.
DESCRIPTION OF SHARES TENDERED
____________________________________________________________________________
| Name(s) and Address(es) of| |
| Registered Holder (s) | Shares Tendered |
|(Please fill in, if blank) | (Attach additional list if necessary) |
|____________________________________________________________________________|
| | | Total Number | |
| | | of Shares | Number of |
| | Certificate | Represented by | Shares |
| | Number(s)* | Certificate(s)* | Tendered** |
| | | | |
| |______________|___________________|_____________|
| | | | |
| |______________|___________________|_____________|
| | | | |
| |______________|___________________|_____________|
| | | | |
| |______________|___________________|_____________|
| | | | |
| | Total Shares | | |
|____________________________________________________________________________|
|* 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. |
____________________________________________________________________________
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
TO THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution_______________________________________________
Account No. _____________________________________ at
[ ] The Depositary Trust Company
[ ] Midwest Securities Trust Company
[ ] Philadelphia Depositary Trust Company
Transaction Code No. _______________________________________________________
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name of Tendering Stockholder(s)____________________________________________
Date of Execution of Notice of Guaranteed Delivery__________________________
Name of Institution which Guaranteed Delivery_______________________________
If delivery is by book-entry transfer:
Name of Tendering Institution
Account No.______________________________ at
[ ]The Depositary Trust Company
[ ]Midwest Securities Trust Company
[ ]Philadelphia Depositary Trust Company
Transaction Code No._____________________
Ladies and Gentlemen:
The undersigned hereby tenders to Roche Capital Corporation, a Panama
corporation (the "Purchaser") and an indirect, wholly owned subsidiary of
Roche Holding Ltd, the above-described shares of Common Stock, par value $1.00
per share (the "Shares"), of Syntex Corporation, a Panama corporation (the
"Company"), pursuant to the Purchaser's offer to purchase all outstanding
Shares at a price of $24.00 per Share, net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer to Purchase dated
May 6, 1994, receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which together constitute the "Offer"). The Purchaser reserves
the right to transfer or assign, in whole or from time to time in part, to one
or more of its affiliates the right to purchase Shares tendered pursuant to
the Offer.
Subject to and effective upon acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms of the Offer, the
undersigned hereby sells, assigns and transfers to, or upon the order of, the
Purchaser all right, title and interest in and to all the Shares that are
being tendered hereby (and any and all other Shares or other securities issued
or issuable in respect thereof on or after May 1, 1994) and appoints the
Depositary the true and lawful agent and attorney-in-fact of the undersigned
with respect to such Shares (and all such other Shares or securities), with
full power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest), to (a) deliver certificates for
such Shares (and all such other Shares or securities), or transfer ownership
of such Shares (and all such other Shares or securities) on the account books
maintained by any of the Book-Entry Transfer Facilities, together, in any such
case, with all accompanying evidences of transfer and authenticity, to or upon
the order of the Purchaser, (b) present such Shares (and all such other Shares
or securities) for transfer on the books of the Company and (c) receive all
benefits and otherwise exercise all rights of beneficial ownership of such
Shares (and all such other Shares or securities), all in accordance with the
terms of the Offer.
The undersigned hereby irrevocably appoints Dr. Felix Amrein, Mr. Phillip
R. Mills and Mr. Peter R. Douglas and each of them, the attorneys and proxies
of the undersigned, each with full power of substitution, to exercise all
voting and other rights of the undersigned in such manner as each such
attorney and proxy or his substitute shall in his sole discretion deem proper,
with respect to all of the Shares tendered hereby which have been accepted for
payment by the Purchaser prior to the time of any vote or other action (and
any and all other Shares or other securities issued or issuable in respect
thereof on or after May 1, 1994), at any meeting of stockholders of the
Company (whether annual or special and whether or not an adjourned meeting),
by written consent or otherwise. This proxy is irrevocable and coupled with
an interest in the tendered Shares and is granted in consideration of, and is
effective upon, the acceptance for payment of such Shares by the Purchaser in
accordance with the terms of the Offer. Such acceptance for payment shall
revoke any other proxy or written consent granted by the undersigned at any
time with respect to such Shares (and all such other Shares or securities),
and no subsequent proxies will be given or written consents will be executed
by the undersigned (and if given or executed, will not be deemed to be
effective).
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby (and any and all other Shares or other securities issued or
issuable in respect thereof on or after May 1, 1994) and that when the same
are accepted for payment by the Purchaser, the Purchaser will acquire good and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances and not subject to any adverse claims. The undersigned will,
upon request, execute and deliver any additional documents deemed by the
Depositary or the Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby (and all such other
Shares or securities).
All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the undersigned, and any obligation of the
undersigned hereunder shall be binding upon the heirs, personal
representatives, successors and assigns of the undersigned. Except as stated
in the Offer, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute an agreement between the undersigned and
the Purchaser upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated under "Special Payment Instructions", please
issue the check for the purchase price of any Shares purchased, and return any
Shares not tendered or not purchased, in the name(s) of the undersigned.
Similarly, unless otherwise indicated under "Special Delivery Instructions",
please mail the check for the purchase price of any Shares purchased and any
certificates for Shares not tendered or not purchased (and accompanying
documents, as appropriate) to the undersigned at the address shown below the
undersigned's signature(s). In the event that both "Special Payment
Instructions" and "Special Delivery Instructions" are completed, please issue
the check for the purchase price of any Shares purchased and return any Shares
not tendered or not purchased in the name(s) of, and mail said check and any
certificates to, the person(s) so indicated. The undersigned recognizes that
the Purchaser has no obligation, pursuant to the "Special Payment
Instructions", to transfer any Shares from the name of the registered
holder(s) thereof if the Purchaser does not accept for payment any of the
Shares so tendered.
_____________________________________ _____________________________________
| SPECIAL PAYMENT INSTRUCTIONS || SPECIAL DELIVERY INSTRUCTIONS |
| (See Instructions 5, 6 and 7) || (See Instructions 5 and 7) |
| || |
| To be completed ONLY if || To be completed ONLY if the |
| the check for the purchase || check for the purchase price of |
| price of Shares purchased || Shares purchased or certificates |
| or certificates for Shares not || for Shares not tendered or not |
| tendered or not purchased are || purchased are to be mailed to |
| to be issued in the name of || someone other than the undersigned |
| someone other than the undersigned. || or to the undersigned at an address |
| || other than that shown below the |
| || undersigned's signature(s). |
| Issue [ ] check || |
| [ ] certificates to: || |
| || Issue [ ] check |
| || [ ] certificates to: |
| Name_______________________________ || |
| (Please Print) || Name_______________________________ |
| || (Please Print) |
| Address____________________________ || |
| || Address____________________________ |
| ___________________________________ || |
| (Zip Code) || |
| || |
| ___________________________________ ||____________________________________ |
| (Taxpayer Identification No.) || (Zip Code) |
_____________________________________ _____________________________________
________________________________________________________
| |
| SIGN HERE |
| (Complete Substitute Form W-9 Below) |
| |
|________________________________________________________|
| |
=====> |________________________________________________________| <=====
| Signature(s) of Owner(s) |
| |
| Name(s)________________________________________________|
| (Please Print) |
| |
| _______________________________________________________|
| |
| Capacity (full title)__________________________________|
| |
| Address________________________________________________|
| |
| _______________________________________________________|
| |
| _______________________________________________________|
| (Include Zip Code) |
| |
| Area Code and Telephone Number_________________________|
| |
| Dated____________________________________________199___|
| |
| (Must be signed by registered holder(s) exactly as |
| name(s) appear(s) on stock certificate(s) or on a |
| security position listing or by person(s) authorized |
| to become registered holder(s) by certificates and |
| documents transmitted herewith. If signature is by |
| a trustee, executor, administrator, guardian, |
| attorney-in-fact, agent, officer of a corporation or |
| other person acting a fiduciary or representative in |
| capacity, please set forth full title and see |
| Instruction 5.) |
| |
| Guarantee of Signature(s) |
| (If required; see Instructions 1 and 5) |
| |
| Name of Firm___________________________________________|
| |
| Authorized Signature___________________________________|
| |
| Dated____________________________________________199___|
________________________________________________________
<TABLE>
<CAPTION>
Payer's Name: FIRST CHICAGO TRUST COMPANY OF NEW YORK
<S> <C> <C>
_______________________________________________________________________________________________________________________________
| | | |
| SUBSTITUTE | Part I Taxpayer Identification No.-- | Part II For Payees Exempt From |
| FORM W-9 | For All Accounts | Backup Witholding (see enclosed |
| | | Guidelines) |
|____________________|____________________________________________________________________|_____________________________________|
| | | |
| Department of | Enter your taxpayer | |
| the Treasury | identification ________________________________ | |
| Internal Revenue | number in the appropriate | Social security number | | |
| Service | box. For most individuals, ________________________________ | |
| | this is your social OR | |
| Payer's Request | security number. If you ________________________________ | |
| for Taxpayer | do not have a number, see | Employer identification number | | |
| Identification No. | How to Obtain a TIN ________________________________ | |
| | in the enclosed Guidelines. | |
| | | |
| | Note: If the account is in more | |
| | than one name, see the chart on | |
| | page 2 of enclosed Guidelines for | |
| | guidelines on which number to | |
| | give the payer. | |
|____________________|____________________________________________________________________|_____________________________________|
| |
| Certification. -- Under penalties of perjury, I certify that: |
| |
| (1) The number shown on this form is my correct taxpayer identification |
| number, or I am waiting for a number to be issued to me and either (a) |
| I have mailed or delivered an application to receive a taxpayer |
| identification number to the appropriate Internal Revenue Service Center |
| or Social Security Administration Office or (b) I intend to mail or |
| deliver an application in the near future. I understand that if I do |
| not provide a taxpayer identification number within sixty (60) days, 31% |
| of all reportable payments made to me thereafter will be withheld until |
| I provide a number; |
| (2) I am not subject to backup withholding either because (a) I am exempt |
| from backup withholding, or (b) I have not been notified by the Internal Revenue |
| Service (``IRS'') that I am subject to backup withholding as a result of a failure |
| to report all interest or dividends, or (c) the IRS has notified me that I am no |
| longer subject to backup withholding; and |
| (3) Any information provided on this form is true, correct and complete. |
|_______________________________________________________________________________________________________________________________|
| |
| SIGNATURE_______________________________________________________________DATE_________________________________________199______|
|_______________________________________________________________________________________________________________________________|
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 ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER
ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
</TABLE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a financial
institution (including most banks, savings and loans associations and
brokerage houses) that is a participant in the Securities Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Program or
the Stock Exchanges Medallion Program (an "Eligible Institution"). Signatures
on this Letter of Transmittal need not be guaranteed (a) if this Letter of
Transmittal is signed by the registered holder(s) of the Shares (which term,
for purposes of this document, shall include any participant in one of the
Book-Entry Transfer Facilities whose name appears on a security position
listing as the owner of Shares) tendered herewith and such holder(s) have not
completed the instruction entitled "Special Payment Instructions" on this
Letter of Transmittal or (b) if such Shares are tendered for the account of an
Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Shares. This Letter of
Transmittal is to be used either if certificates are to be forwarded herewith
or if delivery of Shares is to be made by book-entry transfer pursuant to the
procedures set forth in Section 3 of the Offer to Purchase. Certificates for
all physically delivered Shares, or a confirmation of a book-entry transfer
into the Depositary's account at one of the Book-Entry Transfer Facilities of
all Shares delivered electronically, as well as a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) and any other documents
required by this Letter of Transmittal, must be received by the Depositary at
one of its addresses set forth on the front page of this Letter of Transmittal
by the Expiration Date. Stockholders who cannot deliver their Shares and all
other required documents to the Depositary by the Expiration Date must tender
their Shares pursuant to the guaranteed delivery procedure set forth in
Section 3 of the Offer to Purchase. Pursuant to such procedure: (a) such
tender must be made by or through an Eligible Institution, (b) a properly
completed and duly executed Notice of Guaranteed Delivery substantially in the
form provided by the Purchaser must be received by the Depositary by the
Expiration Date and (c) the certificates for all physically delivered Shares,
or a confirmation of a book-entry transfer into the Depositary's account at
one of the Book-Entry Transfer Facilities of all Shares delivered
electronically, as well as a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) and any other documents required by this
Letter of Transmittal, must be received by the Depositary within five New York
Stock Exchange, Inc. trading days after the date of execution of such Notice
of Guaranteed Delivery, all as provided in Section 3 of the Offer to Purchase.
The method of delivery of Shares and all other required documents is at
the option and risk of the tendering stockholder. If certificates for Shares
are sent by mail, registered mail with return receipt requested, properly
insured, is recommended.
No alternative, conditional or contingent tenders will be accepted, and
no fractional Shares will be purchased. By executing this Letter of
Transmittal (or facsimile thereof), the tendering stockholder waives any right
to receive any notice of the acceptance for payment of the Shares.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. Partial Tenders (not applicable to stockholders who tender by
book-entry transfer). If fewer than all the Shares represented 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, a new certificate for the remainder of the Shares
represented by the old certificate will be sent to the person(s) signing this
Letter of Transmittal, unless otherwise provided in the appropriate box on
this Letter of Transmittal, as promptly as practicable following the
expiration or termination of the Offer. All Shares represented by
certificates delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, the signature(s) must correspond with the name(s) as
written on the face of the certificates without alteration, enlargement or any
change whatsoever.
If any of the Shares tendered hereby is held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal is signed by the registered holder(s) of
the Shares tendered hereby, no endorsements of certificates or separate stock
powers are required unless payment of the purchase price is to be made, or
Shares not tendered or not purchased are to be returned, in the name of any
person other than the registered holder(s). Signatures on any such
certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the
certificates for such Shares. Signature(s) on any such certificates or stock
powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal or any certificate or stock power is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of
a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to the Purchaser of the authority of such person so to act must
be submitted.
6. Stock Transfer Taxes. The Purchaser will pay any stock transfer
taxes with respect to the sale and transfer of any Shares to it or its order
pursuant to the Offer. If, however, payment of the purchase price is to be
made to, or Shares not tendered or not purchased are to be returned in the
name of, any person other than the registered holder(s), or if a transfer tax
is imposed for any reason other than the sale or transfer of Shares to the
Purchaser pursuant to the Offer, then the amount of any stock transfer taxes
(whether imposed on the registered holder(s), such other person or otherwise)
will be deducted from the purchase price unless satisfactory evidence of the
payment of such taxes, or exemption therefrom, is submitted herewith.
7. Special Payment and Delivery Instructions. If the check for the
purchase price of any Shares purchased is to be issued, or any Shares not
tendered or not purchased are to be returned, in the name of a person other
than the person(s) signing this Letter of Transmittal or if the check or any
certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to the
person(s) signing this Letter of Transmittal at an address other than that
shown above, the appropriate boxes on this Letter of Transmittal should be
completed.
8. Substitute Form W-9. Under the federal income tax laws, the
Depositary will be required to withhold 31% of the amount of any payments made
to certain stockholders pursuant to the Offer. In order to avoid such backup
withholding, each tendering stockholder, and, if applicable, each other payee,
must provide the Depositary with such stockholder's or payee's correct
taxpayer identification number and certify that such stockholder or payee is
not subject to such backup withholding by completing the Substitute Form W-9
set forth above. In general, if a stockholder or payee is an individual, the
taxpayer identification number is the Social Security number of such
individual. If the Depositary is not provided with the correct taxpayer
identification number, the stockholder or payee may be subject to a $50
penalty imposed by the Internal Revenue Service. Certain stockholders or
payees (including, among others, all corporations and certain foreign
individuals) are not subject to these backup withholding and reporting
requirements. In order to satisfy the Depositary that a foreign individual
qualifies as an exempt recipient, such stockholder or payee must submit a
statement, signed under penalties of perjury, attesting to that individual's
exempt status. Such statements can be obtained from the Depositary. For
further information concerning backup withholding and instructions for
completing the Substitute Form W-9 (including how to obtain a taxpayer
identification number if you do not have one and how to complete the
Substitute Form W-9 if Shares are held in more than one name), consult the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
Failure to complete the Substitute Form W-9 will not, by itself, cause
Shares to be deemed invalidly tendered, but may require the Depositary to
withhold 31% of the amount of any payments made pursuant to the Offer.
Backup withholding is not an additional federal income tax. Rather, the
federal income tax liability of a person subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained provided that the required
information is furnished to the Internal Revenue Service. NOTE: FAILURE TO
COMPLETE AND RETURN THE SUBSTITUTE FORM W-9 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.
9. Requests for Assistance or Additional Copies. Requests for
assistance or additional copies of the Offer to Purchase and this Letter of
Transmittal may be obtained from the Information Agent or Dealer Manager at
their respective addresses or telephone numbers set forth below.
The Information Agent for the Offer is:
D. F. King & Co., Inc.
77 Water Street 37 Sun Street
New York, New York 10005 London, England EC2 2PY
800-669-5550 (Toll Free) 011-4471-247-8263 (Collect)
212-269-5550 (Collect)
The Dealer Manager for the Offer is:
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260-0060
800-642-5098 (Toll Free)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the
Payer. Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer.
- ---------------------------------------------------------------------------
Give the
For this type of account: SOCIAL SECURITY
number of --
- ---------------------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals The actual owner of the account or,
(joint account) if combined funds, any one
of the individuals(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 or The ward, minor or incompetent
committee for a designated ward, person(3)
minor, or incompetent person
7. a. The usual revocable savings trust The grantor-trustee(1)
account (grantor is also trustee)
b. So-called trust account that is The actual owner(1)
not a legal or valid trust under
State law
8. Sole proprietorship account The owner(4)
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Give the EMPLOYER
For this type of account: IDENTIFICATION
number of --
- ---------------------------------------------------------------------------
9. A valid trust, estate Legal entity (Do not
or 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 partnership
the name of the business
13. Association, club or other The organization
tax-exempt organization
14. A broker or registered The broker or nominee
nominee
15. Account with the Department The public entity
of Agriculture in the name
of a public entity (such as
a State or local government,
school district or prison)
that receives agricultural
program payments
- ---------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(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.
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
Obtaining a Number
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or
Form SS-4, Application for Employer Identification Number, at the local office
of the Social Security Administration or the Internal Revenue Service and
apply for a number.
Payees Exempt from Backup Withholding
Payees specifically exempted from backup withholding or information reporting
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 of its agencies or
instrumentalities.
- A dealer in securities or commodities required to register
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 reminder 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
including the following:
- Payments of interest on obligations issued by individuals.
Note: You may be subject to backup withholding if this
interest is $600 or more and is paid in the course of the
payer's trade or business and you have not provided your
correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest
dividends under section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND
RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS OR
PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM.
Certain payments, other than interest, dividends and patronage
dividends that are not subject to information reporting are also not
subject to backup withholding. For details, see the regulations under
sections 6041, 6041A(a), 6045 and 6050A.
Privacy Act Notice.--Section 6109 requires most recipients of dividend,
interest or other payments to give taxpayer identification numbers to
payers who must report the payments to IRS. IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Payers must generally
withhold 20% 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 Identification Number. -- If you fail
to furnish your taxpayer identification number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) Failure to Report Certain Dividend and Interest Payments. -- If you
fail to include any portion of an includible payment for interest,
dividends or patronage dividends in gross income, such failure will be
treated as being due to negligence and will be subject to a penalty of 20%
on any portion of any under-payment attributable to that failure unless
there is clear and convincing evidence to the contrary.
(3) Civil Penalty for False Information With Respect to Withholding. -- If
you make a false statement with no reasonable basis which results in no
imposition of backup withholding, you are subject to a penalty of $500.
(4) Criminal Penalty for Falsifying Information. -- Falsifying
certifications or affirmations may subject you to criminal penalties
including fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE.
NOTICE OF GUARANTEED DELIVERY
for
Tender of Shares of Common Stock
of
Syntex Corporation
This form, or a form substantially equivalent to this form, must be used
to accept the Offer (as defined below) if the shares of Common Stock of Syntex
Corporation and all other documents required by the Letter of Transmittal
cannot be delivered to the Depositary by the expiration of the Offer. Such
form may be delivered by hand or facsimile transmission or mail to the
Depositary. See Section 3 of the Offer to Purchase. To: First Chicago
Trust Company of New York, Depositary
By Mail: By Facsimile Transmission:
First Chicago Trust Company (201) 222-4720 or 4721
of New York
Tenders & Exchanges
Suite 4660 Confirm by Telephone:
P.O. Box 2563 (201) 222-4707
Jersey City, NJ 07303-2563
By Hand or Overnight Delivery:
First Chicago Trust Company
of New York
Tenders & Exchanges
Suite 4680
14 Wall Street, 8th Floor
New York, New York 10005
Ladies and Gentlemen:
The undersigned hereby tenders to Roche Capital Corporation, a Panama
corporation (the "Purchaser") and an indirect, wholly owned subsidiary of
Roche Holding Ltd, upon the terms and subject to the conditions set forth in
the Offer to Purchase dated May 6, 1994 and the related Letter of Transmittal
(which together constitute the "Offer"), receipt of which is hereby
acknowledged, _______ shares of Common Stock, par value $1.00 per share (the
"Shares"), of Syntex Corporation, a Panama corporation, pursuant to the
guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.
Certificate No. for Shares:
(if available)
- -----------------------------------
Name of Record
Holder: _________________________
If shares will be tender by book-entry transfer,
check one box and provide account number:
Account No._________________________at
SIGN HERE
_________________________________________
(Signature(s))
_________________________________________
(Name(s)) (Please Print)
_________________________________________
(Address)
_________________________________________
(Zip Code)
_________________________________________
(Area Code and Telephone No.)
[ ]The Depositary Trust Company
[ ]Midwest Securities Trust Company
[ ]Philadelphia Depositary Trust Company
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm which is a member of a registered national
securities exchange or the National Association of Securities Dealers, Inc.,
or a commercial bank or trust company having an office or correspondent in
the United States, guarantees (a) that the above named person(s) "own(s)"
the Shares tendered hereby within the meaning of Rule 10b-4 under the
Securities Exchange Act of 1934, as amended ("Rule 10b-4"), (b) that such
tender of Shares complies with Rule 10b-4 and (c) to deliver to the
Depositary the Shares tendered hereby, together with a properly completed
and duly executed Letter(s) of Transmittal (or facsimile(s) thereof), unless
an Agent's Message is utilized, and any other required documents, all
within five New York Stock Exchange, Inc. trading days of the date hereof.
___________________________________
(Name of Firm)
___________________________________
(Authorized Signature)
___________________________________
(Name)
___________________________________
(Address)
___________________________________
(Zip Code)
___________________________________
(Area Code and Telephone No.)
Dated:________________, 199_
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Syntex Corporation
at
$24.00 Net Per Share
by
Roche Capital Corporation,
an indirect, wholly owned subsidiary of
Roche Holding Ltd
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, JUNE 6, 1994 UNLESS THE OFFER IS EXTENDED.
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Roche Capital Corporation, a Panama
corporation (the "Purchaser") and an indirect, wholly owned subsidiary of
Roche Holding Ltd, to act as Dealer Manager in connection with its offer to
purchase all outstanding shares of Common Stock, par value $1.00 per share
(the "Shares"), of Syntex Corporation, a Panama corporation (the "Company"),
at $24.00 per Share, net to the seller in cash, upon the terms and subject to
the conditions set forth in the Purchaser's Offer to Purchase dated May 6,
1994 and the related Letter of Transmittal (which together constitute the
"Offer").
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are
enclosing the following documents:
1 Offer to Purchase dated May 6, 1994;
2 Letter of Transmittal for your use and for the information of your
clients, together with Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 providing information
relating to backup federal income tax withholding;
3 Notice of Guaranteed Delivery to be used to accept the Offer if the
Shares and all other required documents cannot be delivered to the
Depositary by the Expiration Date (as defined in the Offer to
Purchase);
4 A form of letter which may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of
your nominee, with space provided for obtaining such clients'
instructions with regard to the Offer; and
5 Return envelope addressed to First Chicago Trust Company of New
York, the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, JUNE 6, 1994, UNLESS THE OFFER IS EXTENDED.
The Purchaser will not pay any fees or commissions to any broker or
dealer or other person (other than the Dealer Manager, the Information Agent
or the Depositary as described in the Offer to Purchase) for soliciting
tenders of Shares pursuant to the Offer. The Purchaser will, however, upon
request, reimburse brokers, dealers, commercial banks and trust companies for
reasonable and necessary costs and expenses incurred by them in forwarding
materials to their customers. The Purchaser will pay all stock transfer taxes
applicable to its purchase of Shares pursuant to the Offer, subject to
Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed
to, and additional copies of the enclosed materials may be obtained from, the
Information Agent or the undersigned at the addresses and telephone numbers
set forth on the back cover of the Offer to Purchase.
Very truly yours,
J.P. Morgan Securities Inc.
as Dealer Manager
60 Wall Street
New York, New York 10260-0060
(800) 642-5098 (Toll Free)
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE
YOU THE AGENT OF ROCHE CAPITAL CORPORATION, THE DEALER MANAGER, THE
INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO
USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION
WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS
CONTAINED THEREIN.
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Syntex Corporation
at
$24.00 Net Per Share
by
Roche Capital Corporation,
an indirect, wholly owned subsidiary of
Roche Holding Ltd
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, JUNE 6, 1994 UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated May 6,
1994 and the related Letter of Transmittal (which together constitute the
"Offer") in connection with the offer by Roche Capital Corporation, a Panama
corporation (the "Purchaser") and an indirect, wholly owned subsidiary of
Roche Holding Ltd, to purchase for cash all outstanding shares of Common
Stock, par value $1.00 per share (the "Shares"), of Syntex Corporation, a
Panama corporation (the "Company"). We are the holder of record of Shares held
for your account. A tender of such Shares can be made only by us as the holder
of record and pursuant to your instructions. The Letter of Transmittal is
furnished to you for your information only and cannot be used by you to tender
Shares held by us for your account.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the Letter of Transmittal.
Your attention is invited to the following:
1. The tender price is $24.00 per Share, net to you in cash.
2. The Offer and withdrawal rights expire at 12:00 Midnight, New York
City time, on Monday, June 6, 1994, unless the Offer is extended.
3. The Offer is conditioned upon, among other things, there being
validly tendered by the Expiration Date (as defined in the Offer) and not
withdrawn prior to the Expiration Date a number of Shares which, together with
the Shares then owned by the Purchaser would represent at least a majority of
the total number of outstanding Shares on a fully diluted basis.
4. Any stock transfer taxes applicable to the sale of Shares to the
Purchaser pursuant to the Offer will be paid by the Purchaser, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
If you wish to have us tender any or all of your Shares, please so
instruct us by completing, executing, detaching and returning to us the
instruction form on the detachable part 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 detachable part
hereof. Your instructions should be forwarded to us in ample time to permit
us to submit a tender on your behalf by the expiration of the Offer.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares in any jurisdiction in which the making of the
Offer or acceptance thereof would not be in compliance with the laws of such
jurisdiction.
Instructions with Respect to
Offer to Purchase for Cash
All Outstanding Shares of Special Common Stock
of
Syntex Corporation
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated May 6, 1994, and the related Letter of Transmittal, in
connection with the offer by Roche Capital Corporation, an indirect, wholly
owned subsidiary of Roche Holding Ltd, to purchase for cash all outstanding
shares of Common Stock, par value $1.00 per share (the "Shares"), of Syntex
Corporation.
This will instruct you to tender the number of Shares indicated below
held by you for the account of the undersigned, upon the terms and subject to
the conditions set forth in the Offer to Purchase and the related Letter of
Transmittal.
Number of Shares to be Tendered: SIGN HERE
_____________________________ Shares* _______________________________
Signature(s)
Dated: ________________________, 1994 _______________________________
_______________________________
_______________________________
Please print name(s)
and address(es) here
Taxpayer ID No. or
Social Security No.__________________
- --------------------
* Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
ROCHE TO ACQUIRE SYNTEX
SYNTEX BOARD UNANIMOUSLY RECOMMENDS CASH OFFER
Roche Holding Ltd and Syntex Corporation today announced
that they had entered into a definitive agreement for the
acquisition of Syntex by a subsidiary of Roche in a
transaction in which Syntex shareholders would receive
$24.00 in cash per Syntex common share. The transaction
values Syntex at approximately $5.3 billion in total. The
$24.00 cash price represents a premium of approximately 57
percent over last Friday's closing price of Syntex stock on
the New York Stock Exchange.
After receiving the recommendation of a Special Committee of
Directors the Board of Directors of Syntex unanimously
recommended that Syntex shareholders who wished to receive
cash tender their shares to Roche.
The transaction will be effected by means of a first-step
cash tender offer for all of Syntex's outstanding common
stock. The tender offer is expected to commence on or
before May 9 and to remain open for at least 20 business
days. The tender offer will be followed by a merger in
which shareholders whose shares are not purchased in the
tender offer will receive $24.00 per share in cash or, at
their election, subject to certain restrictions, shares of
preferred stock of a new Syntex holding company. The new
preferred stock will pay dividends annually at a three
percent rate and will be subject to mandatory redemption ten
years after issuance. The preferred stock will be
nontransferable, subject to limited exceptions, and will be
exchangeable, on limited basis, for nonvoting equity
securities (NESs) of Roche at a premium of 50 percent over
Roche NES closing price of Friday, April 29. The tender
offer is subject to certain conditions, including that at
least a majority of Syntex shares are tendered and certain
regulatory approvals are obtained.
Mr. Paul Freiman, Syntex Chairman and Chief Executive
Officer said, "We have spent many months intensively
studying the healthcare environment, evaluating the
increasingly competitive market place, and analyzing our
current and future prescription pharmaceutical product line.
Given the speed of changes in the industry and a radically
different competitive situation, we ultimately felt the need
to align with a strong global partner. We now strongly
believe that the sale of Syntex to Roche would be in the
best interests of our shareholders, our customers, and our
employees."
"Roche is truly a global company with strong operations in
major parts of the world where Syntex has little or no
presence, such as South America, Japan and the Middle East.
Roche has a far greater ability to fully commercialize the
compounds in our pipeline than we do. Roche and Syntex have
already successfully cooperated in the US where we have
copromoted TORADOL (ketorolac) since 1990. The proposed
combination of our companies would help us to see that
patients everywhere have access to the new drugs we have
discovered and are developing", Mr. Freiman said.
Roche Chairman and Chief Executive Officer Mr. Fritz Gerber
said, "Innovative products and critical mass in development,
marketing and sales are key to success in today's
competitive environment. Syntex's substantial ethical
business and its leadership in the indication area of pain
and inflammation would ideally complement the pharma
portfolio of Roche and add a further center of excellence to
Roche group."
With Syntex's market share Roche would move to position six
of the US Pharma market and in the world pharma market it
would become number four in terms of sales.
Syntex is a multinational healthcare company, incorporated
in Panama, that discovers, develops, manufactures and
markets prescription pharmaceutical products, animal health
products, and medical diagnostic systems. The company
currently has more than 9,000 employees. There are research
subsidiaries in Palo Alto, California, Scotland, Mexico, and
Japan. Syntex's leading prescription pharmaceutical
products are NAPROSYN (naproxen), a non-steroidal anti-
inflammatory drug to treat inflammation and pain, and
TORADOL (keterolac), a non-steroidal anti-inflammatory drug
for the short-term management of pain. Syntex's main
products include medicines to treat allergies,
cardiovascular and cerebrovascular diseases. In December
1993 Syntex launched its own generic version of naproxen.
On the basis of a R&D spending of 19 percent of sales Syntex
has built up a pharma product pipeline which offers the
chance to enter into indications with a high market
potential. The company currently has in clinical trials
compounds being studied for the prevention and treatment of
organ transplant rejection, and for the treatment of
Alzheimer's disease, osteoporosis and peripheral artery
disease, among others. Total worldwide sales in fiscal 1993
were US$ 2.1 billion, of which 70 percent were in the United
States. Pharmaceutical sales accounted for approximately 85
percent of Syntex's worldwide sales. Syntex's net income in
2
fiscal 1993 was US$ 287 million, after pre-tax restructuring
charges of US$ 320 million.
The international Roche Group is a leader in research-based
healthcare with activities in pharmaceuticals (55 percent of
total sales), diagnostics, vitamins and fine chemicals and
fragrances and flavors. It has a long tradition of
innovative breakthroughs in drug development and is a
pioneer in pharmaceutical and other applications of gene
technology. It has demonstrated its commitment to this area
by the acquisition of a majority stake in the biotechnology
company, Genentech, Inc., South San Francisco, and by the
purchase of exclusive rights to the polymerase chain
reaction (PCR) technology, which has a wide range of
potential applications. Roche group sales in 1993 totalled
14.3 billion Swiss francs (appr. US$ 9.7 billion at 1993
year-average exchange rate of Sfr 1.48 to one US$), an
increase of 11 percent on the previous year. Net income in
1993 amounted to 2.5 billion Swiss francs (appr. US$ 1.7
billion), an increase of 29 percent over 1992.
Roche has operated in the United States since the beginning
of this century. The US affiliate, Hoffmann-LaRoche Inc.,
based in Nutley, New Jersey, employs over 17,000 people in
its activities in pharmaceuticals, vitamins and fine
chemicals and diagnostics including Roche Biomedical
Laboratories, the third largest clinical service laboratory
chain in the United States. Nutley is also one of the Roche
Group's main research centers. The Roche sub-holding,
Givaudan-Roure with its US Headquarters in Clifton N.J. is
well-established in the United States as a major supplier of
fragrances and flavors.
3
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 May 6,
1994 and the related Letter of Transmittal and is not being made to, nor will
tenders be accepted from or on behalf of, holders of Sh ares in any jurisdiction
in which the making of the Offer or acceptance thereof would not be in
compliance with the laws of such jurisdiction. In those jurisdictions where the
applicable laws require that the Offer be made by a licensed broker or dealer,
the Offer shall be deemed to be made o n behalf of the Company by J.P. Morgan
Securities Inc. or one or more registered brokers licensed under the laws of
such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Syntex Corporation
at
$24.00 Net Per Share by
Roche Capital Corporation
an indirect, wholly owned subsidiary
of
Roche Holding Ltd
Roche Capital Corporation, a Panama corporation (the "Purchaser") and an
indirect, wholly owned subsidiary of Roche Holding Ltd, a Switzerland
corporation, is offering to purchase all outstanding shares of Common Stock, par
value $1.00 per share (the "Shares"), of Syntex Corporation, a Panama
corporation (the "Company"), at $24.00 per Share, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Offer to Purchase
dated May 6, 1994 (the "Offer to Purchase") and in the related Letter of
Transmittal (which together constitute the "Offer").
The Offer and Withdrawal rights expire at 12:00 Midnight, New York
City Time, on monday, june 6, 1994, unless the Offer is extended.
The Board of Directors of the Company unanimously recommends that all holders of
Shares who wish to receive cash tender such Shares pursuant to the Offer. The
Special Committee of the Board of Directors of the Company has determined, by a
unanimous vote of those members present, that the tran sactions contemplated by
the Merger Agreement (as defined below) are fair to and in the best interest of
the Company's stockholders. The Board of Directors of the Company has approved
the Merger Agreement, and the transactions contemplated thereby, by a unanimous
vote of those members present.
The Offer is conditioned upon, among other things, there being validly tendered
by the Expiration Date (as defined in the Offer to Purchase) and not withdrawn
prior to the Expiration Date a number of Shares which, together with the Shares
then owned by the Purchaser, would represent at least a majority of the total
number of outstanding Shares on a fully diluted basis (the "Minimum Condition").
The Offer is being made pursuant to an Acquisition Agreement and Plan of Merger,
dated as of May 1, 1994 (the "Merger Agreement"), among the Company, the
Purchaser and Roche (Panama) Corporation, a Delaware corporation and wholly
owned subsidiary of the Purchaser ("Merger Subsidiary"). The Me rger Agreement
provides, among other things, that as soon as practicable after the consummation
of the Offer and satisfaction or waiver of all conditions to the Merger, Merger
Subsidiary will be merged with and into the Company (the "Merger"), with the
Company as the surviving corporation (th e "Surviving Corporation"). Each
outstanding Share not owned by Parent, the Purchaser, Merger Subsidiary or any
other subsidiary of Parent (collectively, the "Purchaser Companies") or the
Company will be converted into and represent the right to receive at the
election of the holder either (i ) $24.00 in cash or any higher price that may
be paid per Share in the Offer, without interest, or (ii) subject to certain
restrictions, 0.024 shares of a new series of limited conversion preferred stock
of the Purchaser described in the Offer to Purchase.
The Offer is subject to certain conditions set forth in the Offer to Purchase.
If any such condition is not satisfied, the Purchaser may (i) subject to certain
exceptions, terminate the Offer and return all tendered Shares to tendering
stockholders, (ii) extend the Offer and, subject to withd rawal rights as set
forth below, retain all such Shares until the expiration of the Offer as so
extended or (iii) waive such condition (except that Purchaser may not reduce the
Minimum Condition to fewer than 77,400,000 Shares), and, subject to any
requirement to extend the time during which the Offer is open, purchase all
Shares validly tendered prior to the Expiration Date and not withdrawn or (iv)
delay acceptance for payment of or payment for Shares, subject to applicable
law, until satisfaction or waiver of the conditions to the Offer.
The Purchaser reserves the right, at any time or from time to time, to extend
the period of time during which the Offer is open by giving oral or written
notice of such extension to the Depositary (as defined below). Any such
extension will be followed as promptly as practicable by public announcement.
For purposes of the Offer, the Purchaser shall be deemed to have accepted for
payment tendered Shares when, as and if the Purchaser gives oral or written
notice to First Chicago Trust Company of New York (the "Depositary") of its
acceptance of the tenders of such Shares. Payment for Shares ac cepted for
payment pursuant to the Offer will be made only after timely receipt by the
Depositary of certificates for such Shares (or a confirmation of a book-entry
transfer of such Shares into the Depositary's account at one of the Book-Entry
Transfer Facilities (as defined in the Offer to P urchase)), a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) and any
other required documents.
Tenders of Shares made pursuant to the Offer may be withdrawn at any time prior
to the Expiration Date. Thereafter, such tenders are irrevocable, except that
tendered Shares may be withdrawn after July 5, 1994 unless theretofore accepted
for payment as provided in the Offer to Purchase. To be effective, a written,
telegraphic, telex or facsimile transmission notice of withdrawal must be timely
received by the Depositary at one of its addresses set forth in the Offer to
Purchase and must specify the name of the person who tendered the Shares to be
withdrawn and the number of Share s to be withdrawn and the name of the
registered holder of the Shares, if different from that of the person who
tendered such shares. If the Shares to be withdrawn have been delivered to the
Depositary, a signed notice of withdrawal with (except in the case of Shares
tendered by an Eligible I nstitution (as defined in the Offer to Purchase))
signatures guaranteed by an Eligible Institution must be submitted prior to the
release of such Shares. In addition, such notice must specify, in the case of
Shares tendered by delivery of certificates, the name of the registered holder
(if di fferent from that of the tendering stockholder) and the serial numbers
shown on the particular certificates evidencing the Shares to be withdrawn.
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 the Purchaser with the Company's stockholder list and
security position listings for the purpose of disseminating the Offer to holders
of Shares. The Offer to Purchase and the related Letter of Transmittal will be
mailed to record holders of Shares and will be furnish ed to brokers, banks and
similar persons whose names, or the names of whose nominees, appear on the
stockholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing for subsequent transmittal to beneficial
owners of Shares.
The Offer to Purchase and Letter of Transmittal contain important information
which should be read before any decision is made with respect to the Offer.
Requests for copies of the Offer to Purchase and the related Letter of
Transmittal and other tender offer materials may be directed to the Information
Agent or the Dealer Manager as set forth below, and copies will be furnished
promptly at the Purchaser's expense.
The Information Agent is:
D.F. King & Co., Inc.
77 Water Street 37 Sun Street
New York, New York 10005 London, England EC2 2PY
(800) 669-5550 (Toll Free) 011-4471-247-8263 (Collect)
(212) 269-5550 (Collect)
The Dealer Manager for the Offer is:
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260-0060
(800) 642-5098 (Toll free)
May 6, 1994
CONFORMED COPY
ACQUISITION AGREEMENT AND PLAN OF MERGER
dated as of
May 1, 1994
among
Syntex Corporation,
Roche Capital Corporation
and
Roche (Panama) Corporation
TABLE OF CONTENTS
ARTICLE I
THE OFFER
SECTION 1.01. The Offer . . . . . . . . . . . . . 1
SECTION 1.02. Company Action . . . . . . . . . . 2
SECTION 1.03. Directors . . . . . . . . . . . . . 4
ARTICLE II
THE MERGER
SECTION 2.01. The Merger . . . . . . . . . . . . 6
SECTION 2.02. Conversion of Shares . . . . . . . 7
SECTION 2.03. Surrender and Payment . . . . . . . 9
SECTION 2.04. Stock Options . . . . . . . . . . . 11
ARTICLE III
THE SURVIVING CORPORATION
SECTION 3.01. Articles of Incorporation . . . . . 13
SECTION 3.02. Bylaws . . . . . . . . . . . . . . 13
SECTION 3.03. Directors and Officers . . . . . . 13
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
SECTION 4.01. Corporate Existence and Power . . . 13
SECTION 4.02. Corporate Authorization . . . . . . 14
SECTION 4.03. Governmental Authorization . . . . 14
SECTION 4.04. Non-Contravention . . . . . . . . . 14
SECTION 4.05. Capitalization . . . . . . . . . . 15
SECTION 4.06. Subsidiaries . . . . . . . . . . . 16
SECTION 4.07. SEC Filings . . . . . . . . . . . . 16
SECTION 4.08. Financial Statements . . . . . . . 17
SECTION 4.09. Disclosure Documents . . . . . . . 17
SECTION 4.10. Absence of Certain Changes . . . . 18
SECTION 4.11. No Undisclosed Material
Liabilities . . . . . . . . . . 20
SECTION 4.12. Litigation . . . . . . . . . . . . 20
SECTION 4.13. Taxes . . . . . . . . . . . . . . . 20
SECTION 4.15. Compliance with Laws . . . . . . . 25
SECTION 4.16. Finders' Fees . . . . . . . . . . . 25
SECTION 4.17. Environmental Matters . . . . . . . 25
ARTICLE V
i
REPRESENTATIONS AND WARRANTIES
OF BUYER
SECTION 5.01. Corporate Existence and Power . . . 26
SECTION 5.02. Corporate Authorization . . . . . . 27
SECTION 5.03. Governmental Authorization. . . . . 27
SECTION 5.04. Non-Contravention . . . . . . . . . 27
SECTION 5.05. Disclosure Documents . . . . . . . 28
SECTION 5.06. Finders' Fees . . . . . . . . . . . 29
SECTION 5.07. Financing . . . . . . . . . . . . . 29
ARTICLE VI
COVENANTS OF THE COMPANY
SECTION 6.01. Conduct of the Company . . . . . . 30
SECTION 6.02. Stockholder Meeting; Proxy
Material . . . . . . . . . . . . 30
SECTION 6.03. Access to Information . . . . . . . 31
SECTION 6.04. Other Offers . . . . . . . . . . . 32
SECTION 6.05. Notice of Certain Events . . . . . 33
ARTICLE VII
COVENANTS OF BUYER
SECTION 7.01. Obligations of Merger Subsidiary . 34
SECTION 7.02. Voting of Shares . . . . . . . . . 34
SECTION 7.03. Director and Officer Liability . . 34
SECTION 7.04. Employee Matters . . . . . . . . . 35
ARTICLE VIII
COVENANTS OF BUYER AND THE COMPANY
SECTION 8.01. Best Efforts . . . . . . . . . . . 37
SECTION 8.02. Certain Filings . . . . . . . . . . 37
SECTION 8.03. Public Announcements . . . . . . . 38
SECTION 8.04. Further Assurances . . . . . . . . 38
ARTICLE IX
CONDITIONS TO THE MERGER
SECTION 9.01. Conditions to the Obligations of
Each Party . . . . . . . . . . . 38
SECTION 9.02. Conditions to the Obligations of
Buyer and Merger Subsidiary . . 39
SECTION 9.03. Conditions to the Obligation of the
Company to Effect the Merger . . 40
ii
ARTICLE X
TERMINATION
SECTION 10.01. Termination . . . . . . . . . . . 40
SECTION 10.02. Effect of Termination . . . . . . 41
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Notices . . . . . . . . . . . . . 42
SECTION 11.02. Survival of Representations and
Warranties . . . . . . . . . . . 43
SECTION 11.03. Amendments; No Waivers . . . . . . 43
SECTION 11.04. Expenses . . . . . . . . . . . . . 43
SECTION 11.05. Successors and Assigns . . . . . . 44
SECTION 11.06. Governing Law . . . . . . . . . . 44
SECTION 11.07. Counterparts; Effectiveness . . . 44
SECTION 11.08. Validity . . . . . . . . . . . . . 44
SECTION 11.09. Entire Agreement . . . . . . . . . 45
SECTION 11.10. Definition . . . . . . . . . . . . 45
iii
ACQUISITION AGREEMENT AND PLAN OF MERGER
ACQUISITION AGREEMENT AND PLAN OF MERGER dated as
of May 1, 1994 among Syntex Corporation, a Panama
corporation (the "Company"), Roche Capital Corporation, a
Panama corporation ("Buyer") and an indirectly, wholly owned
subsidiary of Roche Holding Ltd, a Swiss corporation
("Parent"), and Roche (Panama) Corporation, a Delaware
corporation and wholly owned subsidiary of Buyer ("Merger
Subsidiary").
The parties hereto agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01. The Offer. (a) Provided that none
of the conditions set forth in Annex I hereto shall have
been occurred, Buyer shall, as promptly as practicable after
the date hereof, but in no event later than five business
days following the public announcement of the terms of this
Agreement, commence an offer (the "Offer") to purchase all
of the outstanding shares of common stock, $1.00 par value
(the "Shares"), of the Company at a price of $24.00 per
Share, net to the seller in cash (the "Offer Price"). The
Offer shall be subject to the condition that there shall be
validly tendered in accordance with the terms of the Offer
prior to the expiration date of the Offer and not withdrawn
a number of Shares which, together with the Shares then
owned by Buyer, represents at least a majority of the Shares
outstanding on a fully diluted basis (the "Minimum
Condition") and to the other conditions set forth in Annex I
hereto. Buyer expressly reserves the right to waive the
Minimum Condition (but not below 77,400,000 shares) or any
of the other conditions to the Offer and to make any change
in the terms or conditions of the Offer; provided that no
change may be made which changes the form of consideration
to be paid or decreases the price per Share or the number of
Shares sought in the Offer or which imposes conditions to
the Offer in addition to those set forth in Annex I or makes
any other change in the terms or conditions of the Offer
which is materially adverse to the holders of Shares.
Subject to the terms and conditions of the Offer, Buyer
shall pay for Shares which have been validly tendered and
not withdrawn pursuant to the Offer at the earliest such
time following expiration of the Offer that all conditions
to the Offer shall have been satisfied or waived by Buyer.
Buyer covenants and agrees that, subject to the terms and
conditions of this Agreement, including but not limited to
the conditions of the Offer set forth in Annex I hereto, it
will accept for payment and pay for Shares validly tendered
and not withdrawn pursuant to the Offer as soon as it is
permitted to do so under applicable law.
(b) As soon as practicable on the date of
commencement of the Offer, Buyer shall file with the SEC (as
defined in Section 4.07) a Tender Offer Statement on
Schedule 14D-1 with respect to the Offer which will contain
the offer to purchase and form of the related letter of
transmittal (together with any supplements or amendments
thereto, collectively the "Offer Documents"). Buyer and the
Company each agrees promptly to correct any information
provided by it for use in the Offer Documents if and to the
extent that it shall have become false or misleading in any
material respect. Buyer agrees to take all steps necessary
to cause the Offer Documents as so corrected to be filed
with the SEC and to be disseminated to holders of Shares, in
each case as and to the extent required by applicable
federal securities laws. The Company and its counsel shall
be given a reasonable opportunity to review and comment on
the Offer Documents prior to their being filed with the SEC.
Buyer and Merger Subsidiary agree to provide the Company and
its counsel in writing with any comments Buyer, Merger
Subsidiary or their counsel may receive from the SEC or its
Staff with respect to the Offer Documents promptly after the
receipt of such comments.
SECTION 1.02. Company Action. (a) The Company
hereby consents to the Offer and represents as of the date
hereof that its Board of Directors, at a meeting duly called
and held, has by a unanimous vote of those directors who
were present and voting (i) determined that this Agreement
and the transactions contemplated hereby, including the
Offer and the Merger (as defined in Section 2.01), are fair
to and in the best interest of the Company's stockholders,
(ii) approved this Agreement and the transactions
contemplated hereby, including the Offer and the Merger,
which approval satisfies the relevant requirements of the
General Corporation Law of the Republic of Panama (the
"Panama Law"), and (iii) (A) accepted the Declaration dated
May 1, 1994 setting forth information regarding the Buyer
and the Buyer's future plans regarding the Company (the
"Declaration") as satisfying Panama Law and all Executive
Decrees relating to declarations, including but not limited
to Executive Decree No. 45 of December 5, 1977, as amended
by Executive Decree No. 51 of July 12, 1985 (the "Decree")
and (B) determined not to deliver the Declaration to the
National Securities Commission of the Republic of Panama as
2
permitted by Article 5 of the Decree nor to submit the
Declaration to a meeting of Shareholders of the Corporation
for their consideration, as permitted by Article 5-A of the
Decree. The Company represents that its Board of Directors
unanimously recommends acceptance of the Offer and approval
and adoption of this Agreement and the Merger by its
stockholders; provided, however, that subject to Section
11.04, any such recommendation may be withdrawn or modified
to the extent that the Board of Directors deems it necessary
to do so in the exercise of their fiduciary duties under
applicable law as advised by counsel to the Company.
The Company further represents that Arias, Fabrega
y Fabrega has advised the Company's Board of Directors of
its opinion to the effect that the Declaration was delivered
in substantially proper form and content to the Company
pursuant to the Decree, that the Declaration contains
substantially all the information and documentation required
by the Decree to be delivered for proper appraisal and
recommendation of a purchase offer for securities of a
company under the Decree, and that the Declaration provides
sufficient disclosure under Panamanian law for the making
and consummation of the Offer. In so advising the Company's
Board of Directors, Arias, Fabrega y Fabrega shall have
relied on the representation of the Buyer that (i) there
were no audited financial statements for the Buyer for the
fiscal year ending December 31, 1993 available on the date
thereof, (ii) the audited financial statements for the Buyer
for the fiscal year ending December 31, 1993 will be ready
and released on or about May 10th, 1994, (iii) the financial
position of Buyer as of not more than ninety days prior to
the date thereof, was, in all material respects, no worse
than the financial position of the Buyer as of December 31,
1992 and (iv) the Declaration is true in all material
respects and that the statements included in the Declaration
do not omit any material information necessary to make such
statements not misleading in any material respect under the
circumstances in which such statements were made.
The Company further represents that Goldman
Sachs & Co. has delivered to the Company's Board of
Directors its written opinion to the effect that, as of the
date of said opinion, the cash consideration to be received
by the holders of Shares in the transactions contemplated by
this Agreement is fair to such holders. To the knowledge of
the Company, all of its directors and members of the
operating committee intend either to tender their Shares
pursuant to the Offer or to vote, as shareholders, in favor
of the Merger and adoption of this Agreement.
3
In connection with the Offer, the Company will
promptly furnish Buyer with a list of its stockholders,
mailing labels and any available listing or computer file
containing the names and addresses of all record holders of
Shares and lists of securities positions of Shares held in
stock depositories, in each case to the best knowledge of
the Company true and correct as of the most recent
practicable date, and will provide to Buyer such additional
information (including, without limitation, updated lists of
stockholders, mailing labels and lists of securities
positions) and such other assistance as Buyer may reasonably
request in connection with the Offer. Subject to the
requirements of applicable law, and except for such steps as
are necessary to disseminate the Offer Documents and any
other documents necessary to consummate the Merger, Buyer
and its affiliates and associates shall hold in confidence
the information contained in any such labels, listings and
files, will use such information only in connection with the
Offer and the Merger, and, if this Agreement shall be
terminated, will deliver to the Company all copies of, and
any extracts and summaries from, such information then in
their possession.
(b) As soon as practicable on the day that the
Offer is commenced the Company will file with the SEC (as
defined in Section 5.07) a Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9") which
shall reflect the recommendations of the Company's Board of
Directors referred to above. The Company and Buyer each
agree promptly to correct any information provided by it for
use in the Schedule 14D-9 if and to the extent that it shall
have become false or misleading in any material respect.
The Company agrees to take all steps necessary to cause the
Schedule 14D-9 as so corrected to be filed with the SEC and
to be disseminated to holders of Shares, in each case as and
to the extent required by applicable United States federal
securities laws. Buyer and its counsel shall be given an
opportunity to review and comment on the Schedule 14D-9
prior to its being filed with the SEC and shall be provided
with any comments the Company and its counsel may receive
from the SEC or its Staff with respect to the Schedule 14D-9
promptly after receipt of such comments. Notwithstanding
anything contained in this Section 1.02, if the Board of
Directors determines in the exercise of their fiduciary
duties to withdraw, modify or amend the recommendation of
the Board of Directors referred to above, such withdrawal,
modification or amendment shall not constitute a breach of
this Agreement.
SECTION 1.03. Directors. (a) Promptly upon the
purchase by Buyer of a majority of the outstanding Shares on
4
a fully diluted basis (including Shares purchased pursuant
to the Offer), and subject to the last sentence of this
Section 1.03(a), Buyer shall be entitled to designate the
number of directors, rounded up to the next whole number, on
the Company's Board of Directors that equals the product of
(i) the total number of directors on the Company's Board of
Directors (giving effect to the election of any additional
directors pursuant to this Section) and (ii) the percentage
that the number of Shares owned by Buyer and its affiliates
(including Shares so purchased) bears to the total number of
Shares outstanding, and the Company shall upon request by
Buyer, at the Company's election, either increase the number
of directors or seek and accept resignations of incumbent
directors. At such times, and subject to the last sentence
of this Section 1.03(a) the Company will use its best
efforts to cause individuals designated by Buyer to
constitute the same percentage as such individuals represent
on the Company's Board of Directors of (x) each committee of
the Board (other than any committee of the Board established
to take action under this Agreement), (y) each board of
directors of each Subsidiary (as defined in Section 5.06)
and (z) each committee of each such board. Notwithstanding
the foregoing, nothing contained in this Section shall
require any current member of the Special Committee of the
Board of Directors to resign from the Board of Directors.
Subject to the foregoing, the Company shall use its best
efforts to ensure that all of the members of the Board of
Directors and such boards and committees as of the date
hereof shall remain members of the Board of Directors and
such boards and committees until the Effective Time (as
defined in Section 2.01).
(b) The Company's obligations to appoint
designees to the Board of Directors shall be subject to
Section 14(f) of the 1934 Act (as defined in Section 4.03)
and Rule 14f-1 promulgated thereunder. The Company shall
promptly take all actions required pursuant to Section 14(f)
and Rule 14f-1 in order to fulfill its obligations under
this Section and shall include in the Schedule 14D-9 such
information with respect to the Company and its officers and
directors as is required under Section 14(f) and Rule 14f-1
to fulfill its obligations under this Section 1.03. Buyer
will supply to the Company in writing and be solely
responsible for any information with respect to itself and
its nominees, officers, directors and affiliates required by
Section 14(f) and Rule 14f-1.
(c) Following the election or appointment of
Buyer's designees pursuant to this Section 1.03 and prior to
the Effective Time, except as provided in Section 2.02(g),
any amendment of this Agreement or the articles of
5
incorporation or by-laws of the Company, any termination or
amendment of this Agreement by the Company, any extension by
the Company of the time for the performance of any of the
obligations or other acts of Buyer or Merger subsidiary or
any exercise or waiver of any of the Company's rights
hereunder, will require the concurrence of a majority of the
directors of the Company then in office who are neither
designated by Buyer, employees of the Company or any of its
subsidiaries nor otherwise affiliated with Buyer, and who,
if serving on the Board currently, were disinterested
directors in connection with the Board's consideration of
this Agreement.
ARTICLE II
THE MERGER
SECTION 2.01. The Merger. (a) Upon the terms
and subject to the conditions of this Agreement, at the
Effective Time (as defined in Section 2.01(b)), Merger
Subsidiary shall be merged with and into the Company (the
"Merger"), whereupon the separate existence of Merger
Subsidiary shall cease, and the Company shall be the
surviving corporation (the "Surviving Corporation").
(b) As soon as practicable after satisfaction or,
to the extent permitted hereunder, waiver of all conditions
to the Merger in Article X hereof, the Company and Merger
Subsidiary will file articles of merger or other appropriate
documents for registration in the Mercantile Registry of the
Republic of Panama and make all other filings or recordings
required by Panama Law and the General Corporations Law of
the State of Delaware ("Delaware GCL") in connection with
the Merger. The Merger shall become effective at such time
as articles of merger or other appropriate documents are
duly filed in the Mercantile Registry of the Republic of
Panama (the "Effective Time").
(c) From and after the Effective Time, the
Surviving Corporation shall possess all the rights,
privileges, powers and franchises and be subject to all of
the restrictions, disabilities and duties of the Company and
Merger Subsidiary, all as provided under Panama Law and the
Delaware GCL.
6
SECTION 2.02. Conversion of Shares. At the
Effective Time, by virtue of the Merger and without any
action on the part of Buyer, Merger Subsidiary, the Company
or the holder of any of the following securities:
(a) each Share held by the Company as treasury
stock or owned by Buyer or any subsidiary of Buyer
immediately prior to the Effective Time shall be
canceled, and no payment shall be made with respect
thereto;
(b) each share of common stock of Merger
Subsidiary outstanding immediately prior to the
Effective Time shall be converted into and become one
share of common stock of the Surviving Corporation with
the same rights, powers and privileges as the shares so
converted and shall constitute the only outstanding
shares of capital stock of the Surviving Corporation;
and
(c) each Share outstanding immediately prior to
the Effective Time shall, except as otherwise provided
in Section 2.02(a), be converted into the right to
receive, at the election of the holders of Shares,
either (i) subject to the restrictions set forth in
Section 2.02(g), 0.024 shares of Limited Conversion
Preferred Stock of Buyer, which Limited Conversion
Preferred Stock shall have terms substantially as set
forth in Exhibit A and shall have a stated value and
liquidation value of $1,000 (or proportionately
increased for any higher price per Share paid in the
Offer) (the "LCPS") or (ii) $24.00 in cash, or any
higher price per Share paid in the Offer, payable to
the holder thereof, without interest ("Cash
Consideration").
(d) Prior to the date of the Company Stockholder
Meeting contemplated by Section 6.02, Buyer and the
Company shall prepare a form (an "Election Form")
pursuant to which a holder of Shares may specify the
number of Shares owned by such holder that such holder
desires to be converted into a right to receive cash in
the Merger and the number of Shares owned by such
holder that such holder desires to be converted into a
right to receive shares of LCPS in the Merger. The
Company shall cause an Election Form (and a letter of
transmittal for use in exchanging certificates
representing Shares for the consideration set forth in
Section 2.02(c) (the "Merger Consideration")) mailed to
each holder of Shares who shall request such an
Election Form.
7
(e) Each holder of Shares (other than holders of
Shares which, in accordance with subsection (a) above,
are to be canceled in the Merger) shall have the right
to specify in an Election Form the number of Shares
owned by such holder that such holder desires to have
converted into the right to receive cash in the Merger
(a "Cash Election") and the number of Shares owned by
such holder that such holder desires to have converted
into the right to receive shares of LCPS in the Merger
(a "Stock Election"). A Cash Election or a Stock
Election shall be effective only if the Exchange Agent
appointed by Buyer pursuant to Section 2.03 shall have
received no later than 5:00 p.m. New York City time on
the date three business days prior to the date of the
Company Stockholder Meeting (the "Election Deadline")
(i) an Election Form covering the Shares to which such
Cash Election and/or Stock Election applies, executed
and completed in accordance with the instructions set
forth in such Election Form and (ii) the certificate or
certificates representing such Shares, in such form and
with such endorsements, stock powers and signature
guarantees as may be required by such Election Form. A
Cash Election or Stock Election may be revoked or
changed only by delivering to the Exchange Agent, prior
to the Election Deadline, a written notice of
revocation or, in the case of a change, a properly
completed revised Election Form that identifies the
share certificates to which such revised Election Form
applies. Delivery to the Exchange Agent prior to the
Election Deadline of a revised Election Form with
respect to any certificate representing Shares shall
result in the revocation of all prior Election Forms
with respect to all Shares evidenced by such
certificate. Any termination of this Agreement in
accordance with Article X shall result in the
revocation of all Election Forms delivered to the
Exchange Agent on or prior to the date of such
termination. If an Election Form is revoked (either by
delivery of a written notice of revocation or by
delivery of a revised Election Form), the share
certificates to which such Election Form applies, if
previously delivered to the Exchange Agent, shall be
returned to the person revoking such Election Form
unless such person otherwise instructs the Exchange
Agent. For purposes of this Agreement, "Non-Electing
Shares" means all Shares (other than Shares that are to
be canceled in the Merger) as to which neither an
effective Cash Election nor an effective Stock Election
has been made as of the Election Deadline. All Non-
Electing Shares shall be deemed to have made the Cash
Election.
8
(f) Buyer and the Company shall have the right to
make rules, not inconsistent with the terms of this
Agreement, governing the validity and effectiveness of
Election Forms, the manner and extent to which Cash
Elections and Stock Elections are to be taken into
account in making the determinations required by this
Section and the payment of the Merger Consideration.
(g) Notwithstanding any other provision of this
Agreement to the contrary, Buyer shall be obligated to
issue shares of LCPS only to the extent that the LCPS
would be "held of record" (as such term is defined in
the 1934 Act and Rule 12g-5 thereunder) by not more
than 299 Persons. If the issuance of shares of LCPS in
respect of all Shares as to which effective Stock
Elections are made would result in the LCPS being "held
of record" by more than 299 Persons, subject to the
terms of this Agreement, Buyer shall issue LCPS to the
maximum number of Persons who have made a valid Stock
Election such that, after giving effect to such
issuance, the LCPS are held of record by 299 Persons.
In the event more than 299 holders of Shares make a
valid Stock Election, Buyer and the Special Committee
of the Board of Directors of the Company shall jointly
agree, in their discretion, as to the method for
selecting the holders who shall be entitled to receive
shares of LCPS in the Stock Election; such method may
consist of a lottery, selection by lot or the aggregate
number of Shares as to which a holder makes a valid
Stock Election, or any other method. In the event
Buyer and the Special Committee of the Board of
Directors are unable to agree on such a method, holders
who made a Stock Election shall be deemed to have made
a Cash Election.
(h) A Stock Election must be made with respect to
at least one hundred Shares to be a valid Stock
Election.
(i) Notwithstanding any provision of this
Agreement, Buyer shall not be obligated to accept
Stock Elections with respect to more than 15% of the
Shares outstanding as of the date hereof.
SECTION 2.03. Surrender and Payment. (a) Prior
to the record date for the Company Stockholder Meeting,
Buyer shall appoint an agent (the "Exchange Agent") for the
purposes of receiving the Election Forms, determining (in
accordance with Section 2.02) the form of the Merger
Consideration to be received by each holder of Shares and
exchanging certificates (the "Certificates") that prior to
9
the Effective Time represented Shares for the Merger
Consideration. Buyer will make available to the Exchange
Agent, as needed, the Merger Consideration to be paid in
respect of the Shares.
(b) Each holder of Shares that have been
converted into a right to receive the Merger Consideration,
upon surrender to the Exchange Agent of a Certificate or
Certificates, together with a properly completed letter of
transmittal covering the Shares formerly represented by such
Certificate or Certificates, will be entitled to receive the
Merger Consideration payable in respect of such Shares.
Until so surrendered, each such Certificate shall, after the
Effective Time, represent for all purposes, only the right
to receive such Merger Consideration.
(c) If any portion of the Merger Consideration is
to be paid to a person other than the registered holder of
the Shares represented by the Certificate or Certificates
surrendered in exchange therefor, it shall be a condition to
such payment that the Certificate or Certificates so
surrendered shall be properly endorsed or otherwise be in
proper form for transfer and that the person requesting such
payment shall pay to the Exchange Agent any transfer or
other taxes required as a result of such payment to a person
other than the registered holder of such Certificates or
establish to the satisfaction of the Exchange Agent that
such tax has been paid or is not payable. For purposes of
this Agreement, "Person" means an individual, a corporation,
a partnership, an association, a trust or any other entity
or organization, including a government or political
subdivision or any agency or instrumentality thereof.
(d) After the Effective Time, there shall be no
further registration of transfers of Shares. If, after the
Effective Time, Certificates representing Shares are
presented to the Surviving Corporation, they shall be
canceled and exchanged for the consideration provided for,
and in accordance with the procedures set forth, in this
Article II.
(e) Any portion of the Merger Consideration made
available to the Exchange Agent pursuant to Section 2.03(a)
that remains unclaimed by the holders of Shares six months
after the Effective Time shall be returned to Buyer, upon
demand, and any such holder who has not exchanged his Shares
for the Merger Consideration in accordance with this Section
prior to that time shall thereafter look only to Buyer for
payment of the Merger Consideration in respect of his
Shares. Buyer shall indemnify the Surviving Corporation for
any payment of the Merger Consideration it may be required
10
to make to a holder of Shares after the Merger Consideration
has been returned to Buyer. Notwithstanding the foregoing
none of Buyer, the Company or the Surviving Corporation
shall be liable to any holder of Shares for any amount paid
to a public official pursuant to applicable abandoned
property laws. Any amounts remaining unclaimed by holders
of Shares three years after the Effective Time (or such
earlier date immediately prior to such time as such amounts
would otherwise escheat to or become property of any
governmental entity) shall, to the extent permitted by
applicable law, become the property of Buyer free and clear
of any claims or interest of any person previously entitled
thereto.
(f) No dividends, interest or other distributions
with respect to securities of Buyer constituting part of the
Merger Consideration shall be paid to the holder of any
unsurrendered certificates representing Shares until such
certificates are surrendered as provided in this Section.
Upon such surrender, there shall be paid, without interest,
to the person in whose name the certificates representing
the securities of Buyer into which such Shares were
converted are registered, all dividends, interest and other
distributions payable in respect of such securities on a
date subsequent to, and in respect of a record date after,
the Effective Time.
SECTION 2.04. Stock Options. (a) Prior to the
purchase of Shares pursuant to the Offer, the Board of
Directors of the Company (or, if appropriate, any committee
administering the Stock Plans (as defined below)) shall
adopt such resolutions or take such other actions as are
required to adjust, effective immediately prior to the
Effective Time, the terms of all outstanding employee and
director stock options to purchase Shares ("Stock Options")
and all outstanding stock appreciation rights ("SARs"),
whether or not presently exercisable, heretofore granted
under any stock option or stock appreciation rights plan,
program or arrangement of the Company or its Subsidiaries
(collectively, the "Stock Plans") to provide that (i) each
Stock Option together with any SAR related thereto or
granted in tandem therewith and (ii) each SAR granted
independent of, and not related to, any Stock Option (a
"Free-standing SAR"), in each case outstanding immediately
prior to the Effective Time shall be converted into the
right of the holder of such Stock Option or Free-standing
SAR, as the case may be, to receive a cash payment at that
time from the Company of an amount determined by multiplying
(x) the excess, if any, of the Cash Consideration over the
applicable exercise price per Share of such Stock Option or
strike price per Share of such Free-standing SAR, as the
11
case may be by (y) with respect to each Stock Option and
related SAR, the number of Shares the holder of the Stock
Option could have purchased (assuming full vesting of all
Stock Options) had such holder exercised such Stock Option
in full immediately prior to the Effective Time or, with
respect to each free-standing SAR, the number of Shares with
respect to which the Free-Standing SAR was granted (assuming
full vesting of all free-standing SARs). All amounts
payable pursuant to this Section 2.04(a) shall be subject to
any required withholding of taxes and shall be paid without
interest.
(b) Prior to the purchase of Shares pursuant to
the Offer, the Board of Directors of the Company (or, if
appropriate, any committee administering the Stock Plans)
shall adopt such resolutions or take such other actions as
are required to provide that the Stock Plans shall terminate
as of a date prior to the occurrence of a "Change in
Control" as defined in the Syntex Security of Employment
Plan (the "Stock Plan Termination Date"), except with
respect to Stock Options and SARs that are outstanding as of
the Stock Plan Termination Date which Stock Options and SARs
shall be adjusted immediately prior to the Effective Time as
contemplated by Section 2.04(a), and to provide that the
provisions in any other Employee Plan or Benefit Arrangement
(each as defined in Section 4.14) providing for the
issuance, transfer or grant of capital stock of the Company
shall be deleted as of the Stock Plan Termination Date, and
the Company shall take all necessary actions to provide that
following the Effective Time, no holder of a Stock Option or
SAR or any participant in any Stock Plan or other Employee
Plan or Benefit Arrangement shall have any right thereunder
to acquire any capital stock of the Company or the Surviving
Corporation.
SECTION 2.05. Adjustments. If at any time during
the period between the date of this Agreement and the
Effective Time, any change in the outstanding shares of
capital stock of Buyer shall occur, including by reason of
any reclassification, recapitalization, stock split or
combination, exchange or readjustment of shares, or any
stock dividend thereon with a record date during such
period, the number of shares of LCPS constituting all or
part of the Merger Consideration shall be appropriately
adjusted.
SECTION 2.06. Fractional Shares. No fractional
shares of LCPS shall be issued in the Merger. All
fractional shares of LCPS that a holder of Shares would
otherwise be entitled to receive as a result of the Merger
shall be aggregated and if a fractional share results from
12
such aggregation, such holder shall be entitled to receive,
in lieu thereof, an amount in cash determined by multiplying
the stated value of the LCPS by the fraction of a share of
LCPS to which such holder would otherwise have been
entitled.
ARTICLE III
THE SURVIVING CORPORATION
SECTION 3.01. Articles of Incorporation. The
articles of incorporation of Merger Subsidiary in effect at
the Effective Time shall be the articles of incorporation of
the Surviving Corporation until amended in accordance with
applicable law, except that the name of the Surviving
Corporation shall be that of the Company at the date hereof.
SECTION 3.02. Bylaws. The bylaws of Merger
Subsidiary in effect at the Effective Time shall be the
bylaws of the Surviving Corporation until amended in
accordance with applicable law.
SECTION 3.03. Directors and Officers. From and
after the Effective Time, until successors are duly elected
or appointed and qualified in accordance with applicable
law, (i) the directors of Merger Subsidiary at the Effective
Time shall be the directors of the Surviving Corporation,
and (ii) the officers of the Company at the Effective Time
shall be the officers of the Surviving Corporation.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to Buyer that:
SECTION 4.01. Corporate Existence and Power. The
Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the Republic of
Panama, and has the requisite corporate powers and all
material governmental licenses, authorizations, consents and
approvals required to carry on its business as now
conducted. The Company is duly qualified to do business as
a foreign corporation and is in good standing in each
jurisdiction where the character of the property owned or
leased by it or the nature of its activities makes such
qualification necessary, except for those jurisdictions
where the failure to be so qualified would not, individually
13
or in the aggregate, have a material adverse effect on the
business, assets, financial condition or results of
operations of the Company and the Subsidiaries (as defined
in Section 4.06), taken as a whole (a "Material Adverse
Effect") or would not reasonably be expected to result in a
Material Adverse Effect. The Company has heretofore
delivered to Buyer true and complete copies of the Company's
articles of incorporation and bylaws as currently in effect.
SECTION 4.02. Corporate Authorization. The
execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the
transactions contemplated hereby are within the Company's
corporate powers and, except for any required approval by
the Company's stockholders in connection with the
consummation of the Merger, have been duly authorized by all
necessary corporate action. This Agreement has been duly
and validly executed and delivered by the Company and
constitutes a valid and binding agreement of the Company.
SECTION 4.03. Governmental Authorization. The
execution, delivery and performance by the Company of this
Agreement and the consummation of the Merger by the Company
require no action by or in respect of, or filing by the
Company with, any governmental body, agency, official or
authority other than (i) the filing of articles of merger or
other appropriate documents for registration in the
Mercantile Registry of the Republic of Panama in accordance
with Panama Law and the Delaware GCL; (ii) compliance with
any applicable requirements of the HSR Act; and (iii)
compliance with any applicable requirements of the United
States Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder (the "1934
Act"); and (iv) such filings or registration with, or
authorizations, consents or approvals of governmental
bodies, agencies, officials or authorities, the failure of
which to make or obtain, individually or in the aggregate,
would not result in or could not reasonably be expected to
result in a Material Adverse Effect or materially affect the
consummation of the transactions contemplated by this
Agreement.
SECTION 4.04. Non-Contravention. The execution,
delivery and performance by the Company of this Agreement
and the consummation by the Company of the transactions
contemplated hereby do not and will not (i) contravene or
conflict with the articles of incorporation or bylaws of the
Company, (ii) assuming compliance with the matters referred
to in Sections 4.03 and 5.03, contravene or conflict with or
constitute a violation of any provision of any material law,
regulation, judgment, injunction, order or decree binding
14
upon or applicable to the Company or any Subsidiary,
(iii) except as disclosed in writing to Buyer prior to the
date hereof, to the knowledge of the Company, require any
consent, approval or notice under and will not conflict
with, or result in the breach or termination of any
provision of or constitute a default (with or without the
giving of notice or the lapse of time or both) under, or
give rise to any right of termination, cancellation, or loss
of any benefit to which the Company or any Subsidiary is
entitled under any provision of any material agreement,
contract, license or other instrument binding on the Company
or any Subsidiary, or allow the acceleration of the
performance of, any material obligation of the Company or
any of its subsidiaries under any material indenture,
mortgage, deed of trust, lease, license, contract,
instrument or other agreement to which the Company or any of
its Subsidiaries is a party or by which the Company or any
of its Subsidiaries or any of their respective assets or
properties is subject or bound or (iv) result in the
creation or imposition of any Lien on any material asset of
the Company or any Subsidiary. For purposes of this
Agreement, "Lien" means, with respect to any asset, any
mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset.
SECTION 4.05. Capitalization. The authorized
capital stock of the Company consists of 600,000,000 Shares.
As of April 27, 1994, there were outstanding 221,134,238
Shares and employee stock options to purchase an aggregate
of 11,562,042 Shares (of which, options to purchase an
aggregate of 5,578,520 Shares were exercisable), in addition
to options granted to substantially all employees of the
Company in 1992 and 1993 with respect to an aggregate amount
of approximately 1,000,000 Shares, none of which were
exercisable. All outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are
fully paid and nonassessable. Except as set forth in this
Section and except for changes since April 27, 1994
resulting from the exercise of employee stock options
outstanding on such date, there are outstanding (i) no
shares of capital stock or other voting securities of the
Company, (ii) no securities of the Company or any Subsidiary
convertible into or exchangeable for shares of capital stock
or voting securities of the Company, and (iii) no options or
other rights to acquire from the Company or any Subsidiary,
and no obligation of the Company or any Subsidiary to issue,
any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting
securities of the Company (the items in clauses (i), (ii)
and (iii) being referred to collectively as the "Company
Securities"). There are no outstanding obligations of the
15
Company or any Subsidiary to repurchase, redeem or otherwise
acquire any Company Securities.
SECTION 4.06. Subsidiaries. (a) Each Subsidiary
is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of
incorporation, has the requisite corporate powers and all
material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted
and is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction
where the character of the property owned or leased by it or
the nature of its activities make such qualification
necessary, except for those jurisdictions where failure to
be so qualified would not, individually or in the aggregate,
have or could not reasonably be expected to have a Material
Adverse Effect. For purposes of this Agreement,
"Subsidiary" means any entity of which securities or other
ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons
performing similar functions are directly or indirectly
owned by the Company. Except as disclosed in writing to
Buyer prior to the date hereof, all Subsidiaries and their
respective jurisdictions of incorporation are identified in
the Company's annual report on Form 10-K for the fiscal year
ended July 31, 1993 (the "Company 10-K").
(b) All of the outstanding capital stock of, or
other ownership interests in, each Subsidiary, is owned by
the Company, directly or indirectly, free and clear of any
Lien and free of any other limitation or restriction
(including any restriction on the right to vote, sell or
otherwise dispose of such capital stock or other ownership
interests). There are no outstanding (i) securities of the
Company or any Subsidiary convertible into or exchangeable
for shares of capital stock or other voting securities or
ownership interests in any Subsidiary, and (ii) options or
other rights to acquire from the Company or any Subsidiary,
and no other obligation of the Company or any Subsidiary to
issue, any capital stock, voting securities or other
ownership interests in, or any securities convertible into
or exchangeable for any capital stock, voting securities or
ownership interests in, any Subsidiary (the items in clauses
(i) and (ii) being referred to collectively as the
"Subsidiary Securities"). There are no outstanding
obligations of the Company or any Subsidiary to repurchase,
redeem or otherwise acquire any outstanding Subsidiary
Securities.
SECTION 4.07. SEC Filings. (a) The Company has
delivered to Buyer (i) the annual reports on Form 10-K for
16
its fiscal years ended July 31, 1991, 1992 and 1993, (ii)
its quarterly reports on Form 10-Q for its fiscal quarters
ended October 31, 1993 and January 31, 1994 (the latter
referred to herein as the "Company 10-Q"), (iii) its proxy
or information statements relating to meetings of, or
actions taken without a meeting by, the stockholders of the
Company held since December 7, 1992, and (iv) all of its
other reports, statements, schedules and registration
statements filed with the United States Securities and
Exchange Commission (the "SEC") since December 7, 1992
(collectively, the "SEC Filings").
(b) As of its filing date, each of the SEC
Filings, complied as to form in all material respects and
did not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make
the statements made therein, in the light of the
circumstances under which they were made, not misleading.
SECTION 4.08. Financial Statements. The audited
consolidated financial statements and unaudited consolidated
interim financial statements of the Company included in its
annual reports on Form 10-K and the quarterly reports on
Form 10-Q referred to in Section 4.07 fairly present, in
conformity with generally accepted accounting principles
applied on a consistent basis (except as may be indicated in
the notes thereto), the consolidated financial position of
the Company and its consolidated Subsidiaries as of the
dates thereof and their consolidated results of operations
and changes in financial position for the periods then ended
(subject to normal year-end adjustments in the case of any
unaudited interim financial statements). For purposes of
this Agreement, "Balance Sheet" means the consolidated
Balance Sheet of the Company as of July 31, 1993 and
"Balance Sheet Date" means July 31, 1993.
SECTION 4.09. Disclosure Documents. (a) Each
document required to be filed by the Company with the SEC in
connection with the transactions contemplated by this
Agreement (the "Company Disclosure Documents"), including,
without limitation, the Schedule 14D-9, the proxy or
information statement of the Company (the "Company Proxy
Statement"), if any, to be filed with the SEC in connection
with the Merger, and any amendments or supplements thereto
will, when filed, comply as to form in all material respects
with the applicable requirements of the 1934 Act.
(b) At the time the Company Proxy Statement or
any amendment or supplement thereto is first mailed to
stockholders of the Company, at the time such stockholders
vote on adoption of this Agreement and at the Effective
17
Time, the Company Proxy Statement, as supplemented or
amended, if applicable, will not contain any untrue
statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were
made, not misleading. At the time of the filing of any
Company Disclosure Document other than the Company Proxy
Statement and at the time of any distribution thereof to the
Company's stockholders, such Company Disclosure Document
will not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements made therein, in the light of the circumstances
under which they were made, not misleading.
(c) The representations and warranties contained
in this Section 4.09 will not apply to statements included
in or omissions from the Company Disclosure Documents based
upon information furnished to the Company in writing by
Buyer specifically for use therein.
(d) The information with respect to the Company
or any Subsidiary that the Company furnishes to Buyer in
writing specifically for use in the Offer Documents will
not, at the time of the filing thereof, at the time first
published, sent or given to the holders of Shares and
immediately prior to the time Buyer accepts any Shares for
payment, contain any untrue statement of a material fact or
omit to state any material fact required to be stated
therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they
were made, not misleading.
(e) The information with respect to the Company
or any Subsidiary that the Company furnishes to Buyer in
writing specifically for use in the Registration Statement
(as defined in Section 5.05(c)) will not contain at the time
the Registration Statement becomes effective or at the
Effective Time, any untrue statement of a material fact or
omit to state a material fact required to be stated therein
or necessary in order to make the statements made therein,
not misleading.
SECTION 4.10. Absence of Certain Changes. Except
as disclosed in writing to Buyer prior to the date hereof,
since the Balance Sheet Date, the Company and Subsidiaries
have in all material respects conducted their business in
the ordinary course consistent with past practice and there
has not been:
(a) any material adverse change in the business,
assets, financial condition or results of operations of
18
the Company and the Subsidiaries taken as a whole or
any event, occurrence or development of a state of
circumstances or facts which would reasonably be
expected to result in such a material adverse change (a
"Material Adverse Change");
(b) any declaration, setting aside or payment of
any dividend or other distribution with respect to any
shares of capital stock of the Company (other than
quarterly cash dividends on the Shares not in excess of
$.26 per Share per quarter and having customary record
and payment dates), or any repurchase, redemption or
other acquisition by the Company or any Subsidiary of
any outstanding shares of capital stock or other
securities of, or other ownership interests in, the
Company or any Subsidiary;
(c) any amendment of any material term of any
outstanding security of the Company or of any
Subsidiary;
(d) any incurrence, assumption or guarantee by
the Company or any Subsidiary of any material
indebtedness for borrowed money or any creation or
assumption by the Company or any Subsidiary of any Lien
on any material asset other than in the ordinary course
of business consistent with past practices;
(e) any making of any loan, advance or capital
contributions to or investment in any person other than
loans, advances or capital contributions to or
investments in wholly-owned Subsidiaries made in the
ordinary course of business consistent with past
practices;
(f) any change in any method of accounting or
accounting practice by the Company or any Subsidiary,
except for any such change required by reason of a
concurrent change in generally accepted accounting
principles; or
(g) any (i) grant of any severance or termination
pay to any director, officer or employee of the Company
or any Subsidiary, (ii) entering into of any
employment, deferred compensation or other similar
agreement (or any amendment to any such existing
agreement) with any director, officer or employee of
the Company or any Subsidiary, (iii) any increase in
benefits payable under any existing severance or
termination pay policies or employment agreements, or
19
(iv) any increase in compensation, bonus or other
benefits payable to directors, officers or employees of
the Company or any Subsidiary, other than in the
ordinary course of business consistent with past
practice other than fees payable to the Special
Committee of the Board of Directors not exceeding the
amounts disclosed in writing to Buyer.
SECTION 4.11. No Undisclosed Material
Liabilities. Except as previously disclosed to Buyer in
writing, there are no liabilities of the Company or any
Subsidiary of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise,
and there is no existing condition, situation or set of
circumstances which could reasonably be expected to result
in such a liability, other than:
(i) liabilities disclosed or provided for in the
Balance Sheet or in the Company 10-Q;
(ii) liabilities which in the aggregate are not
material to the Company and the Subsidiaries, taken as
a whole; and
(iii) liabilities under this Agreement and fees and
expenses related thereto previously disclosed in
writing to Buyer.
SECTION 4.12. Litigation. Except as set forth in
the Company 10-K, the Company 10-Q or disclosed in writing
to Buyer prior to the date hereof, there is no action, suit,
investigation or proceeding (or, to the knowledge of the
Company, any basis for any Person to assert any claim likely
to result in liability or any other adverse determination)
pending against, or to the knowledge of the Company
threatened against or affecting, the Company or any
Subsidiary or any of their respective properties before any
court or arbitrator or any governmental body, agency or
official which, if determined or resolved adversely to the
Company or any Subsidiary in accordance with the plaintiff's
demands, would individually or in the aggregate reasonably
be expected to have a Material Adverse Effect or which in
any manner challenges or seeks to prevent, enjoin, alter or
materially delay the Offer or the Merger or any of the other
transactions contemplated hereby.
SECTION 4.13. Taxes. Except as set forth in the
Company 10-K or 10-Q, to the knowledge of the Company,
(a) the Company and the Subsidiaries have filed, been
included in or sent, all material returns, declarations and
reports and information returns and statements required to
20
be filed or sent by or relating to any of them relating to
any Taxes (as defined below) with respect to any material
income, properties or operations of the Company or any
Subsidiary prior to the Effective Time (collectively,
"Returns"); (b) as of the time of filing, the Returns
correctly reflected in all material respects the facts
regarding the income, business, assets, operations,
activities and status of the Company and the Subsidiaries
and any other information required to be shown therein; (c)
the Company and the Subsidiaries have timely paid or made
provision for all material Taxes that have been shown as due
and payable on the Returns that have been filed; (d) the
Company and the Subsidiaries have made or will make
provision for all material Taxes payable for any periods
that end before the Effective Time for which no Returns have
yet been filed and for any periods that begin before the
Effective Time and end after the Effective Time to the
extent such Taxes are attributable to the portion of any
such period ending at the Effective Time; (e) the charges,
accruals and reserves for taxes reflected on the books of
the Company and the Subsidiaries are adequate to cover the
Tax liabilities accruing or payable by the Company and the
Subsidiaries in respect of periods prior to the date hereof;
(f) neither the Company nor any Subsidiary is delinquent in
the payment of any material Taxes or has requested any
extension of time within which to file or send any material
Return, which Return has not since been filed or sent; (g)
no material deficiency for any Taxes has been proposed,
asserted or assessed in writing against the Company or any
Subsidiary (or any member of any affiliated or combined
group of which the Company or any Subsidiary is or has been
a member for which either the Company or any Subsidiary
could be liable) other than those Taxes being contested in
good faith; (h) neither the Company nor any Subsidiary has
granted any extension of the limitation period applicable to
any material Tax claims other than those Taxes being
contested in good faith; and (i) neither the Company nor any
Subsidiary is or has been a party to any material tax
sharing agreement with any corporation which, as of the
Effective Time, is not a member of the affiliated group of
which the Company is a member.
"Tax" means with respect to any person (i) any net
income, gross income, gross receipts, sales, use, ad
valorem, franchise, profits, license, withholding, payroll,
employment, excise, severance, stamp, occupation, premium,
property, value-added or windfall profit tax, custom duty
or other tax, governmental fee or other like assessment or
charge of any kind whatsoever, together with any interest
and any penalty, addition to tax or additional amount
imposed by any taxing authority (domestic or foreign) on
21
such person and (ii) any liability of the Company or any
Subsidiary for the payment of any amount of the type
described in clause (i) as a result of being a member of an
affiliated or combined group.
SECTION 4.14. Employee Benefits. (a) The Company
has provided Buyer with complete age, salary, bonus, service
and related data as of a date no earlier than March 31, 1994
for employees and former employees of the Company and its
Subsidiaries or, to the extent not so provided shall provide
Buyer with such data as is maintained by the Company or its
Subsidiaries or reasonably obtainable as soon as practicable
after the date hereof.
(b) Section I of Schedule 4.14 identifies each
"employee benefit plan", as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974 ("ERISA"),
which (i) is subject to any provision of ERISA and (ii) is
maintained, administered or contributed to by the Company or
any of its ERISA Affiliates (as defined below) and covers
any current or former employee or director of the Company or
any Subsidiary or under which the Company or any of its
ERISA Affiliates has any liability (collectively, the
"Employee Plans"). Copies of each Employee Plan (and, if
applicable, related trust agreements) and all amendments
thereto and written interpretations thereof have been
furnished to Buyer or, to the extent not so furnished, shall
be furnished as soon as practicable after the date hereof,
in either case together with (x) the most recent annual
report (Form 5500 including, if applicable, Schedule B
thereto) prepared in connection with any such Employee Plan
and (y) the most recent actuarial valuation report prepared
in connection with any such plan. For purposes of this
Section 4.14, "ERISA Affiliate" of any person means any
other person which, together with such person, would be
treated as a single employer under Section 414 of the
Internal Revenue Code of 1986, as amended (the "Code").
(c) To the knowledge of the Company, no condition
exists and no event has occurred that could constitute
grounds for termination of any Employee Plan subject to
Title IV of ERISA (a "Title IV Plan") or, with respect to
any Employee Plan which is a multiemployer plan as defined
in Section 3(37) of ERISA (a "Multiemployer Plan"), presents
a material risk of a complete or partial withdrawal under
Title IV of ERISA. To the knowledge of the Company, if a
"complete withdrawal" by the Company and all of its ERISA
Affiliates were to occur as of the Effective Time with
respect to all Employee Plans which are Multiemployer Plans,
neither the Company nor any of its ERISA Affiliates would
22
incur any material withdrawal liability under Title IV of
ERISA.
(d) Each Employee Plan which is intended to be
qualified under Section 401(a) of the Code is so qualified
and has been so qualified during the period from its
adoption to date (after giving effect to any timely
effective remedial amendments that may have been necessary
to maintain such Employee Plans qualified status), and each
trust forming a part thereof is exempt from tax pursuant to
Section 501(a) of the Code; provided however, that in order
to maintain such qualified and tax exempt status, certain of
such Employee Plans may be required to be amended during the
currently pending remedial amendment period to conform to
the Tax Reform Act of 1986 and subsequent legislation in a
manner that is consistent with the manner in which such
Employee Plan has operated. The Company has furnished to
the Buyer copies of the most recent Internal Revenue Service
determination letters with respect to each such Plan. Each
Employee Plan has been maintained in compliance in all
material respects with its terms and with the requirements
prescribed by any and all statutes, orders, rules and
regulations, including but not limited to ERISA and the
Code, which are applicable to such Employee Plan.
(e) Except to the extent specifically set forth
and quantified in Section II of Schedule 4.14, there is no
contract, agreement, plan or arrangement covering any
employee or former employee of the Company or any Subsidiary
that, individually or collectively, could give rise to the
payment of any amount that would not be deductible pursuant
to the terms of Section 280G of the Code.
(f) Section III of Schedule 4.14 identifies each
employment, severance or other similar contract, arrangement
or policy and each plan or arrangement (written or oral)
providing for insurance coverage (including any self-insured
arrangements), workers' compensation, disability benefits,
supplemental unemployment benefits, vacation benefits,
retirement benefits or for deferred compensation,
profit-sharing, bonuses, stock options, stock appreciation
or other forms of incentive compensation or post-retirement
insurance, compensation or benefits which (i) is not an
Employee Plan, (ii) is entered into, maintained or
contributed to, as the case may be, by the Company or any of
its Subsidiaries and (iii) covers any current or former
employee or director of the Company or any of its
Subsidiaries. Such contracts, plans and arrangements as are
described above, copies or descriptions of all of which have
been furnished previously to Buyer, or, to the extent not so
furnished, shall be furnished as soon as practicable after
23
the date hereof, are referred to collectively herein as the
"Benefit Arrangements". Each Benefit Arrangement has been
maintained in compliance in all material respects with its
terms and with the requirements prescribed by any and all
statutes, orders, rules and regulations that are applicable
to such Benefit Arrangement.
(g) Except as disclosed in writing to Buyer prior
to the date hereof, there has been no amendment to, written
interpretation or announcement (whether or not written) by
the Company or any of its Subsidiaries relating to, or
change in employee participation or coverage under, any
Employee Plan or Benefit Arrangement which would increase
materially the expense of maintaining such Employee Plan or
Benefit Arrangement above the level of the expense incurred
in respect thereof for the fiscal year ended on the Balance
Sheet Date.
(h) (i) As of the Balance Sheet Date, the fair
market value of the assets of each Title IV Plan (excluding
for these purposes any accrued but unpaid contributions)
exceeded the present value of all benefits accrued under
such Title IV Plan determined using the assumptions and
methods set forth in the most recent actuarial valuation
report delivered by the Company's independent auditors with
respect to such Plan.
(ii) As of the Balance Sheet Date, the aggregate
unfunded liability of the Company and its ERISA Affiliates
in respect to all Employee Plans described under
Sections 4(b)(5) or 401(a)(1) of ERISA, computed using
reasonable actuarial assumptions consistent with GAAP and
determined as if all benefits under such plans were vested
as of such date, did not exceed $14,000,000.
(iii) With respect to each Benefit Arrangement
which is maintained for the benefit of non United States
employees of the Company or its Subsidiaries, as of the
Balance Sheet Date, according to the actuarial assumptions
and valuations most recently used for the purpose of funding
each such Benefit Arrangement (or, if the same has no such
assumptions and valuations or is unfunded, according to
reasonable actuarial assumptions and valuations consistent
with GAAP), the total amount or value of the funds available
under such Benefit Arrangement to pay benefits accrued
thereunder, together with any reserve or accrual with
respect thereto, exceeded the present value of all benefits
(actual or contingent) accrued as of the Balance Sheet Date
of all participants and past participants therein who are
employees or former employees of the Company or its
Subsidiaries.
24
(iv) Except for (x) the accelerated payment of
Deferred Cash Incentive Awards under the Company's Call-To-
Action Incentive Plan which will result in an aggregate
payment of not more than $2,000,000, and (y) the
acceleration of vesting of stock options and stock
appreciation rights which are to be adjusted pursuant to
Section 2.04, no employee or former employee of the Company
or any Subsidiary will become entitled to any compensation,
bonus, retirement, severance, job security or similar
benefit or enhanced such benefit solely as a result of the
transactions contemplated hereby, without regard to any
events that may occur after the Effective Time.
Immediately after giving effect to the transactions
contemplated hereby, the aggregate maximum contingent
liability of the Surviving Corporation and its subsidiaries
in respect of cash termination and severance benefits under
the Employee Plans and Benefit Arrangements will not exceed
$355,000,000.
SECTION 4.15. Compliance with Laws. Except as
previously disclosed to Buyer in writing, to the knowledge
of the Company, neither the Company nor any Subsidiary is in
violation of, or has violated, any applicable provisions of
any laws, statutes, ordinances or regulations which would,
individually or in the aggregate, result in or could
reasonably be expected to result in a Material Adverse
Effect.
SECTION 4.16. Finders' Fees. Except for Goldman,
Sachs & Co., whose fees have been disclosed in writing to
Buyer and will be paid by the Company, there is no
investment banker, broker, finder or other intermediary
which has been retained by or is authorized to act on
behalf, of the Company or any Subsidiary who might be
entitled to any fee or commission from Buyer or any of its
Affiliates upon consummation of the transactions
contemplated by this Agreement.
SECTION 4.17. Environmental Matters. (a) To the
knowledge of the Company, except as previously disclosed to
Buyer in writing, there are no Environmental Liabilities of
the Company or any Subsidiary other than:
(i) Environmental Liabilities disclosed or
provided for in the Company 10-K or the Company 10-Q;
(ii) Environmental Liabilities that individually
or in the aggregate are not material to the Company and
the Subsidiaries, taken as a whole; and
25
(iii) Environmental Liabilities that individually
or in the aggregate have not had and are not reasonably
expected to have a Material Adverse Effect.
(b) The following terms as used in this Section
shall have the following meanings:
"Environmental Liabilities" means any and all
liabilities of the Company or any Subsidiary (including any
entity which is a predecessor of the Company or any
Subsidiary), whether accrued, contingent, absolute,
determined, determinable, vested, potential, known or
otherwise, and any existing condition, situation or set of
circumstances which could reasonably be expected to result
in such a liability, which (i) arise under or relate to
matters covered by Environmental Laws and (ii) relate to
actions occurring or conditions existing on or prior to the
Effective Time.
"Environmental Laws" means any and all federal,
state, local and foreign statutes, laws, judicial decisions,
regulations, ordinances, rules, judgments, orders, decrees,
codes, and governmental restrictions, now in effect or in
effect at the Effective Time, relating to human health, the
environment or to emissions, discharges or releases of
pollutants, contaminants or other hazardous substances or
wastes into the environment, including without limitation
ambient air, surface water, ground water or land, or
otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport
or handling of pollutants, contaminants or other hazardous
substances or wastes or the clean-up or other remediation
thereof.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF BUYER
Buyer represents and warrants to the Company that:
SECTION 5.01. Corporate Existence and Power.
Each of Buyer and Merger Subsidiary is a corporation duly
incorporated, validly existing and in good standing under
the laws of its jurisdiction of incorporation and has all
corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on
its business as now conducted. Since the date of its
incorporation, Merger Subsidiary has not engaged in any
activities other than in connection with or as contemplated
26
by this Agreement or in connection with arranging any
financing required to consummate the transactions
contemplated hereby.
SECTION 5.02. Corporate Authorization. The
execution, delivery and performance by Buyer and Merger
Subsidiary of this Agreement and the consummation by Buyer
and Merger Subsidiary of the transactions contemplated
hereby are within the corporate powers of Buyer and Merger
Subsidiary and have been duly authorized by all necessary
corporate action. This Agreement has been duly and validly
executed and delivered by each of Buyer and Merger
Subsidiary and constitutes a valid and binding agreement of
Buyer and Merger Subsidiary.
SECTION 5.03. Governmental Authorization. The
execution, delivery and performance by Buyer and Merger
Subsidiary of this Agreement and the consummation by Buyer
and Merger Subsidiary of the transactions contemplated by
this Agreement, to the knowledge of Buyer and Merger
Subsidiary, require no action by or in respect of, or filing
with, any governmental body, agency, official or authority
other than (i) the filing of the articles of merger or other
appropriate documents in accordance with Panama Law and the
Delaware GCL, (ii) compliance with any applicable
requirements of the HSR Act, (iii) compliance with any
applicable requirements of the 1934 Act, (iv) the filing of
a notice pursuant to Section 721 of the Defense Production
Act of 1950, as amended ("Exon-Florio") and (v) compliance
with the applicable requirements of the Securities Act of
1933 (the "1933 Act"), and (vi) compliance with any
applicable foreign or state securities or Blue Sky laws.
SECTION 5.04. Non-Contravention. The execution,
delivery and performance by Buyer and Merger Subsidiary of
this Agreement and the consummation by Buyer and Merger
Subsidiary of the transactions contemplated hereby do not
and will not (i) contravene or conflict with the certificate
or articles of incorporation or bylaws of Buyer or Merger
Subsidiary, (ii) assuming compliance with the matters
referred to in Section 5.03, contravene or conflict with any
provision of law, regulation, judgment, order or decree
binding upon Buyer or Merger Subsidiary or (iii) constitute
a default under or give rise to any right of termination,
cancellation or acceleration of any right or obligation of
Buyer or Merger Subsidiary or to a loss of any benefit to
which Buyer or Merger Subsidiary is entitled under any
agreement, contract or other instrument binding upon Buyer
or Merger Subsidiary.
27
SECTION 5.05. Disclosure Documents. (a) The
information with respect to Buyer and its subsidiaries
(including without limitation Merger Subsidiary), Parent and
their respective Affiliates that Buyer furnishes to the
Company in writing specifically for use in any Company
Disclosure Document will not contain any untrue statement of
a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light
of the circumstances under which they were made, not
misleading (i) in the case of the Company Proxy Statement,
at the time the Company Proxy Statement or any amendment or
supplement thereto is first mailed to stockholders of the
Company, at the time the stockholders vote on adoption of
this Agreement and at the Effective Time and (ii) in the
case of any Company Disclosure Document other than the
Company Proxy Statement, at the time of the filing thereof
and at the time of any distribution thereof to the Company's
stockholders.
(b) The Offer Documents, when filed, will comply
as to form in all material respects with the applicable
requirements of the 1934 Act and will not at the time of the
filing thereof, at the time first published, sent or given
to the holders of Shares and at the time of consummation of
the Offer, contain any untrue statement of a material fact
or omit to state any material fact required to be stated
therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they
were made, not misleading, provided, that this
representation and warranty will not apply to statements
included in or omissions from the Offer Documents based upon
information furnished to Buyer or Merger Subsidiary in
writing by the Company specifically for use therein.
(c) The Registration Statement to be filed by
Buyer with the SEC with respect to the offering of the LCPS
in connection with the Merger (the "Registration Statement")
and any amendments or supplements thereto will, at the time
the Registration Statement becomes effective or at the
Effective Time, comply as to form in all material respects
with the requirements of the 1933 Act and will not contain
any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in
order to make the statements contained therein, not
misleading; provided that the foregoing representation shall
not apply to statements or omissions in the Registration
Statement based upon information furnished to Buyer or
Merger Subsidiary in writing by the Company specifically for
use therein.
28
(d) Buyer agrees to cause the Surviving
Corporation to satisfy any claims or liabilities arising
directly or indirectly as a result of Section 2.04(b) or the
actions required thereby.
SECTION 5.06. Finders' Fees. Except for J.P.
Morgan Securities Inc., whose fees will be paid by Buyer,
there is no investment banker, broker, finder or other
intermediary who might be entitled to any fee or commission
from the Buyer or any of its Affiliates upon consummation of
the transactions contemplated by this Agreement.
SECTION 5.07. Financing. Buyer has or will have,
prior to the expiration of the Offer and the Effective Date
of the Merger, sufficient funds available to purchase all of
the Shares outstanding on a fully diluted basis in the Offer
and the Merger and to pay all related fees and expenses
pursuant to the Offer and the Merger.
SECTION 5.08. Capitalization. The authorized
capital stock of Buyer consists of 500 shares of Common
Stock. As of April 28, 1994, there were outstanding 500
shares of Common Stock. All outstanding shares of capital
stock of Buyer have been duly authorized and validly issued
and are fully paid and nonassessable. The shares of LCPS to
be issued as part of the Merger Consideration have been duly
authorized and when issued and delivered in accordance with
the terms of this Agreement, will have been validly issued
and will be fully paid and nonassessable and the issuance
thereof is not subject to any preemptive or other similar
right. The non-voting securities issuable upon exchange of
LCPS will, at the time of exchange be validly issued and
will be fully paid and non-assessable.
29
ARTICLE VI
COVENANTS OF THE COMPANY
The Company agrees that:
SECTION 6.01. Conduct of the Company. From the
date hereof until the Effective Time, the Company and the
Subsidiaries shall conduct their business in the ordinary
course consistent with past practice and shall use their
best efforts to preserve intact their business organizations
and relationships with third parties and to keep available
the services of their present officers and key employees,
subject to the terms of this Agreement. Without limiting
the generality of the foregoing, and except as otherwise
provided in this Agreement, from the date hereof until the
Effective Time without the consent of Buyer:
(a) the Company will not adopt or propose any
change in its articles of incorporation or bylaws;
(b) the Company will not, and will not permit any
Subsidiary to, merge or consolidate with any other Person or
acquire a material amount of assets of any other Person;
(c) the Company will not, and will not permit any
Subsidiary to, sell, lease, license or otherwise surrender,
relinquish or dispose of any assets or property which are
material to the Company and its Subsidiaries as a whole
except (i) pursuant to existing contracts or commitments,
(ii) in the ordinary course consistent with past practice;
or (iii) as Buyer may agree in writing;
(d) the Company will not, and will not permit any
Subsidiary to, agree or commit to do any of the foregoing;
and
(e) the Company will not, and will not permit any
Subsidiary to (i) take, or agree or commit to take, any
action that would make any representation and warranty of
the Company hereunder inaccurate in any respect at, or as of
any time prior to, the Effective Time or (ii) omit, or agree
or commit to omit, to take any action necessary to prevent
any such representation or warranty from being inaccurate in
any respect at any such time, provided however that the
Company shall be permitted to take or omit to take such
action which can (without any uncertainty) be cured at or
prior to the Effective Time or a date on which Shares can be
purchased pursuant to the Offer.
SECTION 6.02. Stockholder Meeting; Proxy
Material. The Company shall cause a meeting of its
30
stockholders (the "Company Stockholder Meeting") to be duly
called and held as soon as reasonably practicable for the
purpose of voting on the approval and adoption of this
Agreement and the Merger. The Board of Directors of the
Company shall, subject to their fiduciary duties as advised
by counsel, recommend approval and adoption of this
Agreement and the Merger by the Company's stockholders. In
connection with such meeting, the Company (i) will promptly
prepare and file with the SEC, will use all reasonable
efforts to have cleared by the SEC and will thereafter mail
to its stockholders as promptly as practicable a proxy
statement and all other proxy materials for such meeting,
(ii) will, subject to the fiduciary duties of its Board of
Directors, use all reasonable efforts to obtain the
necessary approvals by its stockholders of this Agreement
and the transactions contemplated hereby and (iii) will
otherwise comply with all legal requirements applicable to
such meeting.
SECTION 6.03. Access to Information. From the
date hereof until the Effective Time, the Company will give
Buyer, its counsel, financial advisors, auditors and other
authorized representatives reasonable access during normal
business hours to the offices, properties, books and records
of the Company and the Subsidiaries, will furnish to Buyer,
its counsel, financial advisors, auditors and other
authorized representatives such financial and operating data
and other information as such persons may reasonably request
and will instruct the Company's employees, counsel and
financial advisors to cooperate with Buyer in its
investigation of the business of the Company and the
Subsidiaries; provided that no investigation pursuant to
this Section shall affect any representation or warranty
given by the Company to Buyer hereunder; and provided,
further, that the foregoing shall not require the Company to
permit any inspection, or to disclose any information, which
in the reasonable judgment of the Company would result in
the disclosure of any trade secrets of third parties or
violate any obligation of the Company with respect to
confidentiality if the Company shall have used reasonable
efforts to obtain the consent of such third party to such
inspection or disclosure. All requests for information made
pursuant to this Section shall be directed to an executive
officer of the Company or such person as may be designated
by any such officer.
(b) Each of Buyer and Merger Subsidiary agrees to
be bound by the letter agreement dated February 28, 1994,
between Parent and the Company as if the references to
Parent therein were to Buyer and Merger Subsidiary, except
that Buyer and Merger Subsidiary may (i) enter into this
31
Agreement, (ii) acquire Shares pursuant to the Offer and the
Merger so long as this Agreement shall not have been
breached by Buyer or Merger Subsidiary or terminated in
accordance with its terms and (iii) in the event described
in the last sentence of Section 2.02(g), agree with any
shareholder of the Company to exchange such shareholder's
Shares for a security having terms no more favorable to such
shareholder than the terms of the LCPS (so long as all such
exchanges are effected on the same terms) and (iv) Buyer and
its subsidiaries may make such disclosures in the Offer
Documents as Buyer may determine in its reasonable
discretion is required by applicable law.
SECTION 6.04. Other Offers. (a) From the date
hereof until the termination hereof, the Company and the
Subsidiaries will not, and will use their best efforts to
cause their respective officers, directors, employees or
other agents not to, directly or indirectly, (i) take any
action to solicit, initiate or encourage any Acquisition
Proposal (as hereinafter defined), (ii) subject to the
fiduciary duties of the Board of Directors under applicable
law as advised by counsel, waive any provision of any
standstill or similar agreements entered into by the Company
or (iii) subject to the fiduciary duties of the Board of
Directors under applicable law as advised by counsel to the
Company, engage in negotiations with, or disclose any
nonpublic information relating to the Company or any
Subsidiary or afford access to the properties, books or
records of the Company or any Subsidiary to, any Person that
may be considering making, or has made, an Acquisition
Proposal; provided that, on or prior to May 14, 1994 the
provisions of this sentence shall not apply to any party
that is bound by a standstill or similar agreement with the
Company on the date hereof (an "Existing Bidder"). Nothing
contained in this Section 6.04 shall prohibit the Company
and its Board of Directors from (i) taking and disclosing a
position with respect to a tender offer by a third party
pursuant to Rules 14d-9 and 14e-2(a) promulgated under the
1934 Act, and (ii) making such disclosures to the Company's
stockholders which, in the judgment of and subject to the
fiduciary duties of the Board of Directors with the advice
of counsel, may be required under applicable law.
(b) The Company will (i) promptly notify Buyer
after receipt of any Acquisition Proposal or any inquiries
indicating that any person is considering making or wishes
to make an Acquisition Proposal, (ii) promptly notify Buyer
after receipt of any request for nonpublic information
relating to the Company or any Subsidiary or for access to
the properties, books or records of the Company or any
Subsidiary by any Person that may be considering making, or
32
has made, an Acquisition Proposal and (iii) subject to the
fiduciary duties of the Board of Directors under applicable
law as advised by counsel to the Company, keep Buyer advised
of the status and principal financial terms of any such
Acquisition Proposal, indication or request. The term
"Acquisition Proposal" as used herein means any offer or
proposal for, or any indication of interest in, a merger or
other business combination involving the Company or any
Subsidiary or the acquisition of any equity interest in, or
a substantial portion of the assets of, the Company or any
Subsidiary, other than the transactions contemplated by this
Agreement.
SECTION 6.05. Notice of Certain Events. The
Company shall notify Buyer, and Buyer shall notify the
Company, as promptly as practicable following its receipt
of:
(i) any notice or other communication from any
Person alleging that the consent of such Person is or
may be required in connection with the transactions
contemplated by this Agreement;
(ii) any notice or other communication from any
governmental or regulatory agency or authority in
connection with the transactions contemplated by this
Agreement; and
(iii) notice that any actions, suits, claims,
investigations or proceedings have been commenced or,
to the knowledge threatened against, or involving the
Company or any Subsidiary, or Buyer, as applicable,
which, if pending on the date of this Agreement, would
have been required to have been disclosed pursuant to
Section 4.12 or which relate to the consummation of the
transactions contemplated by this Agreement.
SECTION 6.06. Rule 145 Affiliates. Prior to the
Effective Time, the Company shall cause to be delivered to
Buyer an opinion of Skadden, Arps, Slate, Meagher & Flom or
Holtzmann, Wise & Shepard in form and substance satisfactory
to counsel to Buyer, identifying all persons who might, in
the opinion of counsel to the Company, at the time of the
meeting of the Company Stockholder Meeting, be deemed to be
"affiliates" of the Company for purposes of Rule 145 under
the 1933 Act (the "1933 Act Affiliates"). The Company shall
use its best efforts to cause each person who is identified
as a possible 1933 Act Affiliate to enter into prior to the
Effective Time an agreement in form and substance reasonably
acceptable to Buyer pursuant to which each such person
acknowledges his responsibilities as such an "affiliate".
33
ARTICLE VII
COVENANTS OF BUYER
Buyer agrees that:
SECTION 7.01. Obligations of Merger Subsidiary.
Buyer will take all action necessary to cause Merger
Subsidiary to perform its obligations under this Agreement
and to consummate the Merger on the terms and conditions set
forth in this Agreement.
SECTION 7.02. Voting of Shares. Buyer agrees to
vote all Shares beneficially owned by it in favor of
adoption of this Agreement and the Merger at the Company
Stockholder Meeting.
SECTION 7.03. Director and Officer Liability.
Buyer will cause the Surviving Corporation to indemnify and
hold harmless the present and former officers and directors
of the Company in respect of acts or omissions occurring
prior to the Effective Time to the maximum extent permitted
under the Company's articles of incorporation and bylaws in
effect on the date hereof; provided that, such
indemnification shall (to the maximum extent permitted by
law) be mandatory rather than permissive except in instances
involving willful misconduct or bad faith and that the
Surviving Corporation shall advance expenses, including
attorneys' fees promptly on demand and delivery of any
required undertaking. For three years after the Effective
Time, Buyer will cause to be maintained the current policies
of officers' and directors' liability insurance in respect
of acts or omissions occurring prior to the Effective Time
covering each such person currently covered by the Company's
officers' and directors' liability insurance policy;
provided that the Surviving Corporation may substitute
therefore policies of at least the same coverage containing
terms and conditions which in all material respects are no
less advantageous for so long as such substitution does not
result in gaps or lapses in coverage; and provided further
that in satisfying its obligation under this Section, Buyer
shall not be obligated to cause the Surviving Corporation to
pay premiums in excess of the amount per annum the Company
paid in its last full fiscal year, which amount has been
disclosed to Buyer. Buyer shall cause the Surviving
Corporation to pay all expenses (including attorneys' fees)
that may be incurred by any indemnified party in enforcing
the indemnity and other obligations provided for in this
Section 7.03. Buyer agrees that should the Surviving
Corporation fail to comply with the foregoing obligations,
34
Buyer shall be responsible therefor. The obligations of
Buyer under this Section 7.03 shall not be terminated or
modified in such manner as to adversely affect directors and
officers to whom this Section 7.03 applies without the
consent of such director or officer. Directors and officers
to whom this Section 7.03 applies shall be third party
beneficiaries of this Section.
SECTION 7.04. Employee Matters.
(a) For a period of at least one year after the
Effective Time, Buyer shall cause the Company to continue to
maintain the Company's existing compensation, severance,
welfare and pension benefit plans, programs and arrangements
(other than any stock based plans, programs and
arrangements) for the benefit of current and former
employees and directors of the Company and its Subsidiaries
(subject to such modification as may be required by
applicable law or to maintain the tax exempt status of any
such plan which is intended to be qualified under Section
401(a) of the Code), provided that (i) nothing herein shall
prohibit Buyer from replacing any such existing plan or
plans, program(s) or arrangement(s) with a plan or plans,
program(s) or arrangement(s) which provide such employees
and directors with benefits which are not less favorable in
the aggregate than the benefits that would have been
provided under the Company's existing plan(s), program(s) or
arrangement(s) to the extent such replacement is permitted
under the terms of the applicable plan, program or
arrangement and (ii) nothing herein shall obligate the Buyer
to provide such employees and directors with any stock based
compensation (including, without limitation, stock options
or stock appreciation rights) after the Effective Time.
In the light of Buyer's desire that the Company
provide appropriate employee incentives in the future, the
Buyer agrees promptly to develop, and the Company and Buyer
shall promptly cooperate in developing, a new performance
based incentive compensation plan for the benefit of
employees of the Company and its Subsidiaries as an
appropriate substitute for the current Stock Plans.
(b) The Company hereby agrees not to, and to
cause its Subsidiaries not to, amend or modify any existing
Employee Plan or Benefit Arrangement, nor enter into or
otherwise establish, adopt or maintain any new employee
plans, programs, agreements or arrangements, or grant any
additional Free-standing SARs or other awards based upon the
value of the Company's equity securities prior to and
including the Effective Time without the prior written
consent of the Buyer.
35
(c) It is the Buyer's current intention to
maintain the Company's headquarters at its present location
in Palo Alto, California.
(d) From and after the Effective Time, for
purposes of determining eligibility, vesting and benefit
accrual under any replacement compensation, severance,
welfare, pension benefit or savings plan of Buyer or any of
its affiliates in which employees of the Company and its
Subsidiaries become eligible to participate, service with
the Company or any of its Subsidiaries shall be credited as
if such services were rendered to Buyer or any of its
affiliates; provided that (i) Buyer shall not be obligated
to permit employees of the Company and its Subsidiaries to
participate in nor, upon participation, to receive such
credited service, with respect to, any plan maintained by
Buyer or its affiliates which is not intended to constitute
a replacement plan for any existing plan, program or
arrangement of the Company and its Subsidiaries and
(ii) Buyer shall not be required to give any such employee
credit for such prior service with the Company or any of its
Subsidiaries for purposes of any plan which is a "defined
benefit plan" within the meaning of Section 3(35) of ERISA,
other than the Syntex U.S. Employees Pension Plan or any
successor plan to the assets and liabilities thereof.
(e) No provision of this Section 7.04 shall
create any third party beneficiary rights in any current or
former employee or director of the Company or its
Subsidiaries (including any beneficiary thereof) hereunder
or in respect of continued or resumed employment or in
respect of any benefits that may be provided, directly or
indirectly, under any employee benefit plan or arrangement.
SECTION 7.05. Registration Statement. Buyer
shall promptly prepare and file with the SEC under the 1933
Act the Registration Statement and shall use its best
efforts to cause the Registration Statement to be declared
effective by the SEC as promptly as practicable. Buyer
shall promptly take any action required to be taken under
state securities or Blue Sky laws in connect with the
issuance of LCPS in the Merger. Notwithstanding the
foregoing, this Section 7.05 shall not require Buyer, Merger
Subsidiary or Parent to furnish, other than for Buyer and
its Subsidiaries, financial statements prepared in
accordance with United States generally accepted accounting
principles or any reconciliation of financial statements
with generally accepted accounting principles.
36
ARTICLE VIII
COVENANTS OF BUYER AND THE COMPANY
The parties hereto agree that:
SECTION 8.01. Best Efforts. (a) Subject to the
terms and conditions of this Agreement, each party will use
its best efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement;
provided that Buyer and its Affiliates shall not be required
to agree to any consent decree or order in connection with
the objections of any HSR Authority to the transactions
contemplated by this Agreement; and provided further that
the foregoing shall not require Parent or Buyer to furnish,
other than for Buyer and its United States subsidiaries,
financial statements prepared in accordance with United
States generally accepted accounting principles or any
reconciliation of financial statements with United States
generally accepted accounting principles.
(b) The Company will use its best efforts to
take, or cause to be taken, all actions and to do, or cause
to be done all things reasonably necessary, proper or
advisable to permit Buyer to make the determination provided
for in paragraph (f) of Annex I to this Agreement as soon as
practicable after the date of this Agreement.
SECTION 8.02. Certain Filings. The Company and
Buyer and Merger Subsidiary shall cooperate with one another
(a) in connection with the preparation of the Company
Disclosure Documents and the Offer Documents, (b) in
determining whether any action by or in respect of, or
filing with, any governmental body, agency or official, or
authority, including the filing or notification required
under the Merger Control Regulation of the European
Community, or by the competition authorities of its Member
States or any other jurisdiction is required, proper or
advisable or any actions, consents, approvals or waivers are
required to be obtained from parties to any material
contracts, in connection with the consummation of the
transactions contemplated by this Agreement and (c) in
seeking any such actions, consents, approvals or waivers or
making any such filings, furnishing information so required,
proper or advisable in connection with the transactions
contemplated hereby or with the Company Disclosure Documents
or the Offer Documents and seeking timely to obtain any such
actions, consents, approvals or waivers.
37
SECTION 8.03. Public Announcements. Buyer and
the Company will consult with each other before issuing any
press release or making any public statement or any filing
with any governmental body, agency, official or authority
with respect to this Agreement and the transactions
contemplated hereby and, except as may be required by
applicable law or any listing agreement with any national
securities exchange, will use all reasonable efforts not to
issue any such press release or make any such public
statement or such filing prior to such consultation.
SECTION 8.04. Further Assurances. At and after
the Effective Time, the officers and directors of the
Surviving Corporation will be authorized to execute and
deliver, in the name and on behalf of the Company or Merger
Subsidiary, any deeds, bills of sale, assignments or
assurances and to take and do, in the name and on behalf of
the Company or Merger Subsidiary, any other actions and
things to vest, perfect or confirm of record or otherwise in
the Surviving Corporation any and all right, title and
interest in, to and under any of the rights, properties or
assets of the Company acquired or to be acquired by the
Surviving Corporation as a result of, or in connection with,
the Merger.
ARTICLE IX
CONDITIONS TO THE MERGER
SECTION 9.01. Conditions to the Obligations of
Each Party. The respective obligations of the Company,
Buyer and Merger Subsidiary to consummate the Merger are
subject to the satisfaction or waiver at or prior to the
Effective Time of the following conditions:
(i) this Agreement shall have been adopted by the
affirmative vote of the stockholders of the Company in
accordance with Panama Law;
(ii) any applicable waiting period under the HSR
Act relating to the Merger shall have expired;
(iii) no provision of any applicable law or
regulation and no judgment, injunction, order or decree
shall prohibit the consummation of the Merger; provided
that neither party may assert this condition unless it
has used its best efforts to oppose such judgment,
injunction, order or decree and to avail itself of all
rights of appeal or it has determined, in its
38
reasonable judgment, that such efforts would not have a
substantial likelihood of success;
(iv) all actions by or in respect of or filings
with any governmental body, agency, official, or
authority required to permit the consummation of the
Merger, including, without limitation, filing articles
of merger or other appropriate documents for
registration in the Mercantile Registry of the Republic
of Panama and pursuant to the Delaware GCL shall have
been obtained or made (other than those actions or
filings which, if not obtained or made prior to the
consummation of the Merger, would not individually or
in the aggregate reasonably be expected to have a
Material Adverse Effect); and
(v) the Registration Statement shall have been
declared effective and no stop order suspending the
effectiveness of the Registration Statement shall be in
effect and no proceedings for such purpose shall be
pending before or threatened by the SEC.
SECTION 9.02. Conditions to the Obligations of
Buyer and Merger Subsidiary. The obligations of Buyer and
Merger Subsidiary to consummate the Merger are subject to
the satisfaction of the following further conditions:
(a)(i) either (A) the Committee on Foreign
Investment in the United States shall have determined
not to investigate the Offer and the Merger under Exon-
Florio (either by action or nonaction) or (B) if such
Committee shall have determined to make such an
investigation, such investigation shall have been
completed and the President shall have determined
(either by action or nonaction) not to take any action
under Exon-Florio with respect to the transactions
contemplated by this Agreement;
(ii) the Company shall have performed in all
material respects all of its obligations hereunder
required to be performed by it at or prior to the
Effective Time pursuant to the terms hereof; and
(iii) the representations and warranties of the
Company contained in this Agreement and in any
certificate or other writing delivered by the Company
pursuant hereto shall be true at and as of the
Effective Time as if made at and as of such time.
(b) In the event Buyer has not acquired Shares in
the Offer, each of the conditions set forth in Annex I
39
hereto shall have been satisfied or waived prior to the
Effective Time, provided that for the purpose of this
Section 9.02(b), the reference in clause (d)(i) of
Annex I to "25%" shall be deemed to read "50%" and the
phrase "or proposed to acquire" shall be deleted.
SECTION 9.03. Conditions to the Obligation of the
Company to Effect the Merger. The obligation of the Company
to effect the Merger is further subject to the satisfaction
or waiver at or prior to the Effective Time of the condition
that Buyer and Merger Subsidiary shall have performed in all
material respects each of their obligations under this
Agreement required to be performed by them at or prior to
the Effective Time pursuant to the terms hereof and the
representations and warranties of Buyer and Merger
Subsidiary contained in this Agreement and in any
certificate or other writing delivered by Buyer or Merger
Subsidiary pursuant hereto shall be true at and as of the
Effective Time as if made at and as of such time.
ARTICLE X
TERMINATION
SECTION 10.01. Termination. This Agreement may
be terminated and the Merger may be abandoned at any time
prior to the Effective Time (notwithstanding any approval of
this Agreement by the stockholders of the Company):
(i) by mutual written consent of the Company and
Buyer;
(ii) by either the Company or Buyer if (x) either
Buyer shall have failed to commence the Offer within 15
days following the date of this Agreement or (y) Buyer
shall not have purchased any Shares pursuant to the
Offer prior to December 31, 1994; provided, however,
that the passage of the period referred to in clause
(y) shall be tolled for any part thereof during which
any party shall be subject to a nonfinal order, decree
or ruling or action restraining, enjoining or otherwise
prohibiting the purchase of Shares pursuant to the
Offer or the consummation of the Merger; and provided
further that the right to terminate this Agreement
under this clause (ii) shall not be available to any
party whose failure to fulfill any obligation under
this Agreement has been the cause of or resulted in any
of the circumstances described in clauses (x) or (y);
40
(iii) by Buyer or the Company if prior to the
purchase of Shares pursuant to the Offer or the
Effective Time, the Board of Directors of the Company
shall have withdrawn or materially modified its
approval or recommendation of the Offer, the Merger or
this Agreement, recommended another Acquisition
Proposal or entered into a definitive agreement or
agreement in principle with respect to another
Acquisition Proposal, or resolved to do any of the
foregoing;
(iv) by either the Company or Buyer, if there
shall be any law or regulation that makes consummation
of the Merger illegal or otherwise prohibited or if any
judgment, injunction, order or decree enjoining Buyer
or the Company from consummating the Merger is entered
and such judgment, injunction, order or decree shall
become final and nonappealable;
(v) by either Buyer or the Company, if the
Company Stockholder Meeting shall have been held and
the stockholders of the Company shall have failed to
approve and adopt this Agreement and the Merger at such
meeting; and
(vi) by Buyer, if Buyer shall have received any
communication from the Department of Justice or Federal
Trade Commission (each an "HSR Authority") (which
communication shall be confirmed to the other parties
by the HSR Authority) that causes such party to
reasonably believe that any HSR Authority has
authorized the institution of litigation challenging
the transactions contemplated by this Agreement under
the U.S. antitrust laws, which litigation will include
a motion seeking an order or injunction prohibiting the
consummation of any of the transactions contemplated by
this Agreement.
SECTION 10.02. Effect of Termination. If this
Agreement is terminated pursuant to Section 10.01, this
Agreement shall become void and of no effect with no
liability on the part of any party hereto, except for fraud
and for willful breach of a material obligation contained
herein and except that the agreements contained in Section
11.04 shall survive the termination hereof.
41
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Notices. All notices, requests
and other communications to any party hereunder shall be in
writing (including telecopy, telex or similar writing) and
shall be given,
if to Buyer or Merger Subsidiary, to:
Dr. Felix Amrein
Roche Capital Corporation
Grenzacherstrasse 124
CH - 4002 Basel
Telecopier: 011-41-61-688-1396
with a copy to: Peter R. Douglas
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telecopier: (212) 450-4800;
and
if to the Company, to:
Syntex Corporation
3401 Hillview Avenue
Palo Alto, California 94304
Telecopier: (415) 852-1144
Attention: Neil Flanzraich
with a copy to: Holtzmann, Wise & Shepard
1271 Avenue of the Americas
New York, New York 10020
Telecopier: (212) 554-8181
Attention: Harvey Goldschmid
and a copy to: Skadden, Arps, Slate, Meagher
& Flom
919 Third Avenue
New York, New York 10022
Telecopier: (212) 735-2000
Attention: Joseph H. Flom
or such other address or telex number as such party may
hereafter specify for the purpose by notice to the other
parties hereto. Each such notice, request or other
communication shall be effective (i) if given by telex, when
42
such telex is transmitted to the telex number specified in
this Section and the appropriate answerback is received or
(ii) if given by any other means, when delivered at the
address specified in this Section.
SECTION 11.02. Survival of Representations and
Warranties. The representations and warranties and
agreements contained herein and in any certificate or other
writing delivered pursuant hereto (other than the Guaranty
of Roche Holding Ltd, dated May 1, 1994) shall not survive
the Effective Time except for the provisions of Article II
and Sections 7.03, 7.04 and 8.04 hereof.
SECTION 11.03. Amendments; No Waivers. (a)
Subject to the provisions of Section 1.03 hereof, any
provision of this Agreement may be amended or waived prior
to the Effective Time if, and only if, such amendment or
waiver is in writing and signed, in the case of an
amendment, by the Company, Buyer and Merger Subsidiary or in
the case of a waiver, by the party against whom the waiver
is to be effective; provided that after the adoption of this
Agreement by the stockholders of the Company, no such
amendment or waiver shall, without the further approval of
such stockholders, alter or change (i) the amount or kind of
consideration to be received in exchange for any shares of
capital stock of the Company, (ii) any term of the articles
of incorporation of the Surviving Corporation or (iii) any
of the terms or conditions of this Agreement if such
alteration or change would adversely affect the holders of
any shares of capital stock of the Company.
(b) No failure or delay by any party in
exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 11.04. Expenses. (a) The Company will
pay Buyer, in immediately available funds, so long as Buyer
shall not have materially breached its obligations under
this Agreement, promptly, but in no event later than two
business days, after the termination of this Agreement
pursuant to clause (iii) of Section 10.01 or if any Person
or "group" (as defined in Section 13(d)(3) of the Exchange
Act), other than Buyer or its Affiliates or any group of
which any of them is a member, shall have acquired
beneficial ownership of more than 50% of any class or series
of capital stock of the Company (including the Shares),
43
through acquisition of stock, the formation of a group or
otherwise, or shall have been granted any option, right, or
warrant, conditional or otherwise, to acquire beneficial
ownership of more than 50% of any class or series of capital
stock of the Company (including the Shares) hereof a fee for
reimbursement of costs and expenses of (x) $20,000,000, if
such event occurs on or before May 14, 1994, or (y)
$35,000,000, if such event occurs after May 14, 1994.
(b) Subject to Section 11.04(a), all costs and
expenses incurred in connection with this Agreement shall be
paid by the party incurring such cost or expense.
SECTION 11.05. Successors and Assigns. The
provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and assigns, provided that no party may assign,
delegate or otherwise transfer any of its rights or
obligations under this Agreement without the consent of the
other parties hereto except that Buyer may transfer or
assign, in whole or from time to time in part, to one or
more of its direct or indirect wholly owned subsidiaries of
its ultimate parent entity, the right to purchase shares
pursuant to the Offer, but any such transfer or assignment
will not relieve Buyer 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.
SECTION 11.06. Governing Law. This Agreement
shall be construed in accordance with and governed by the
law of the State of Delaware, without regard to the
principles of conflicts of laws.
SECTION 11.07. Counterparts; Effectiveness. This
Agreement may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each
party hereto shall have received counterparts hereof signed
by all of the other parties hereto.
SECTION 11.08. Validity. If any provision of
this Agreement, or the application thereof to any person or
circumstance, is held invalid or unenforceable, the
remainder of this Agreement, and the application of such
provision to other persons or circumstances, shall not be
affected thereby, and to such end, the provisions of this
Agreement are agreed to be severable.
44
SECTION 11.09. Entire Agreement. This Agreement,
the Guaranty of Roche Holding Ltd. dated May 1, 1994
including the documents and instruments referred to herein,
together with the letter agreement, dated February 28, 1994,
between Parent and the Company, constitutes the entire
agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties or
any of them, with respect to the subject matter hereof.
SECTION 11.10. Definition. For purposes of this
Agreement the phrases "to the knowledge of the Company" or
"known to the Company" mean (i) known to any senior manager
of the Company or any material Subsidiary or (ii) could
reasonably be expected to be known by any of such persons.
45
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective
authorized officers as of the day and year first above
written.
SYNTEX CORPORATION
By: /s/ Paul E. Freiman
--------------------------------
Name: Paul E. Freiman
Title: Chief Executive Officer
ROCHE CAPITAL CORPORATION
By: /s/ Henri B. Meier
--------------------------------
Name: Henri B. Meier
Title: Vice President
ROCHE (PANAMA) CORPORATION
By: /s/ Henri B. Meier
--------------------------------
Name: Henri B. Meier
Title: Vice President
46
ANNEX I
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer
pursuant to the Acquisition Agreement and Plan of Merger
(the "Agreement") dated as of May 1, 1994 among Syntex
Corporation (the "Company"), Roche Capital Corporation
("Buyer") and Roche (Panama) Corporation (the "Merger
Subsidiary"), Buyer shall not be required to accept for
payment or pay for any Shares, and may terminate the Offer,
unless (i) a majority of the outstanding Shares on a fully
diluted basis has been tendered pursuant to the Offer by the
expiration of the Offer and not withdrawn; (ii) the
applicable waiting period under the HSR Act shall have
expired or been terminated; (iii) either (A) the Committee
on Foreign Investment in the United States shall have
determined not to investigate the Offer and the Merger under
Exon-Florio (either by action or nonaction) or (B) if such
Committee shall have determined to make such an
investigation, such investigation shall have been completed
and the President shall have determined (either by action or
nonaction) not to take any action under Exon-Florio with
respect to the transactions contemplated by this Agreement;
provided, however, that prior to December 31, 1994, Buyer
shall not terminate the Offer by reason of the
nonsatisfaction of either of the conditions set forth in
clauses (ii) or (iii) above and shall extend the Offer (it
being understood that this provision shall not prohibit
Buyer from terminating the Offer or failing to extend the
Offer by reason of the nonsatisfaction of any other
condition of the offer); or if prior to the acceptance for
payment of Shares, any of the following conditions exist:
(a) there shall be instituted or pending any
action or proceeding by any government or governmental
authority or agency, domestic or foreign, or by any
other person, domestic or foreign, before any court or
governmental authority or agency, domestic or foreign,
that has a substantial likelihood of success, (i)
challenging or seeking to make illegal, to delay
materially or otherwise directly or indirectly to
restrain or prohibit the making of the Offer, the
acceptance for payment of or payment for some of or all
the Shares by Buyer or the consummation by Buyer of the
Merger, seeking to obtain material damages or otherwise
directly or indirectly relating to the transactions
contemplated by the Offer or the Merger, (ii) seeking
ii
to restrain or prohibit Buyer's ownership or operation
(or that of its subsidiaries or Affiliates) of all or
any material portion of the business or assets of the
Company and its subsidiaries, taken as a whole, or of
Buyer and its subsidiaries or Affiliates, taken as a
whole, or to compel Buyer or any of its subsidiaries or
Affiliates to dispose of or hold separate all or any
material portion of the business or assets of the
Company and its subsidiaries, taken as a whole, or of
Buyer and its subsidiaries or Affiliates, taken as a
whole, (iii) seeking to impose or confirm material
limitations on the ability of Buyer or any of its
subsidiaries or Affiliates effectively to exercise full
rights of ownership of the Shares, including, without
limitation, the right to vote any Shares acquired or
owned by Buyer or any of its subsidiaries or Affiliates
on all matters properly presented to the Company's
stockholders, (iv) seeking to require divestiture by
Buyer or any of its subsidiaries or Affiliates of any
Shares, or (v) that otherwise, in the reasonable
judgment of Buyer, is likely to materially adversely
affect the Company and its subsidiaries, taken as a
whole, or Buyer and its subsidiaries or Affiliates,
taken as a whole;
(b) there shall be any action taken, or any
statute, rule, regulation, injunction, order or decree
proposed, enacted, enforced, promulgated, issued or
deemed applicable to the Offer or the Merger, by any
court, government or governmental authority or agency,
domestic or foreign, other than the application of the
waiting period provisions of the HSR Act or Exon-Florio
to the Offer or the Merger, that has a substantial
likelihood of resulting in any of the consequences
referred to in clauses (i) through (v) of paragraph (a)
above;
(c) any material adverse change in the business,
assets, financial condition or results of operations of
the Company and its subsidiaries, taken as a whole,
shall have occurred other than as disclosed to Buyer in
writing or there shall be any event, occurrence or
development of a state of circumstances or facts which
individually or in the aggregate would reasonably be
expected to result in such a material adverse change;
(d) (i) it shall have been publicly disclosed or
Buyer shall have otherwise learned that any person or
"group" (as defined in Section 13(d)(3) of the Exchange
Act), other than Buyer or its Affiliates or any group
of which any of them is a member, shall have acquired
iii
or proposed to acquire beneficial ownership of more
than 25% of any class or series of capital stock of the
Company (including the Shares), through the acquisition
of stock, the formation of a group or otherwise, or
shall have been granted any option, right or warrant,
conditional or otherwise, to acquire beneficial
ownership of more than 25% of any class or series of
capital stock of the Company (including the Shares);
(ii) any person or group shall have entered into a
definitive agreement or an agreement in principle with
the Company with respect to a merger, consolidation or
other business combination with the Company; or (iii)
the Board of Directors of the Company (or any duly
authorized committee thereof) shall have withdrawn or
materially modified its approval or recommendation of
the Offer or the Merger;
(e) the Company shall have breached or failed to
perform in any material respect any of its covenants or
agreements under this Agreement, or any of the
representations and warranties of the Company set forth
in this Agreement shall not be true when made or at and
as of such time as if made at and as of such time;
(f) Buyer, acting in good faith, shall not have
satisfied itself that there exists no potential
environmental liability of the Company or any
Subsidiary that has a reasonable prospect individually
or in the aggregate of resulting in a Material Adverse
Effect which liability (i) relates to any site in
Missouri or Illinois and is not specifically disclosed
in the footnotes to the financial statements in the
Company 10-K or Company 10-Q; or (ii) arises or may
arise from (x) any site in Missouri or Illinois
identified or referred to in any writing delivered by
the Company to Buyer prior to the date hereof or (y)
any circumstance or condition identified in any such
writing; or
(g) the Agreement shall have been terminated in
accordance with its terms;
which, in the judgment of Buyer in any such case, and
regardless of the circumstances (including any action or
omission by Buyer) giving rise to any such condition, makes
it inadvisable to proceed with such acceptance for payment
or payment.
For purposes of this Annex I, the term "foreign"
shall mean any jurisdiction other than the United States, in
which either the Company and its Subsidiaries or Buyer and
iv
its Affiliates has any material assets or operations. Each
other term used herein that is defined in the Agreement
shall have the meaning assigned to such term in the
Agreement.
v
EXHIBIT A
CERTIFICATE OF DESIGNATION OF
LIMITED CONVERSION PREFERRED STOCK
OF
ROCHE CAPITAL CORPORATION
We, _____________________, President, and
________________, Secretary, of Roche Capital Corporation
(the "Corporation"), a corporation organized and existing
under the Laws of the Republic of Panama (the "Panama
Corporate Law" or "PCL"), in accordance with the provisions
of Section ____ thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board
of Directors by the Certificate of Incorporation of the
Corporation, the Board of Directors on ____________ __, 1994
adopted a resolution creating a series of preferred stock of
the Corporation titled Limited Conversion Preferred Stock
the designation and amount thereof and the relative powers,
preferences, rights, qualifications, limitations and
restrictions of the shares of such series are as follows:
SECTION 1. DESIGNATION, AMOUNT AND STATED VALUE.
The shares of such series shall be designated "Limited
Conversion Preferred Stock" (the "Limited Conversion
Preferred Stock" or "LCPS"), and the authorized number of
shares constituting such series shall be ____________. The
stated value of each share of Limited Conversion Preferred
Stock shall be $1000.00 ("Stated Value"). No fractional
shares of LCPS shall be issuable.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(A) The Holders of shares of the Limited
Conversion Preferred Stock ("Holders"), in preference to the
holders of the Corporation's common stock (the "Common
Stock"), shall be entitled to receive, subject to paragraphs
B and C below, when, as and if declared by the Board of
Directors, out of funds legally available for the payment of
dividends, cumulative dividends in cash at the rate of 3%
per annum (computed on the basis of a 360-day year) on the
Liquidation Value of each share of Limited Conversion
Preferred Stock on and as of the most recent Dividend
Payment Date (as defined below). Such dividends shall be
payable annually in arrears each year on the date of the
anniversary of the issuance of the LCPS (each such date
being referred to herein as a "Dividend Payment Date"),
commencing on the first Dividend Payment Date after the
issuance of such share. Accrued and unpaid dividends on
outstanding shares of Limited Conversion Preferred Stock, if
any, shall be added to the Liquidation Value (as defined in
Section 6) of such shares on and as of the Dividend Payment
Date on which such dividends were originally scheduled to be
paid and shall thereupon cease to be accrued and unpaid
dividends.
(B) Dividends shall begin to accrue (whether or
not declared) and be cumulative on outstanding shares of the
Limited Conversion Preferred Stock from the date of issue of
each such share of Limited Conversion Preferred Stock.
Accrued but unpaid dividends shall not bear interest.
Dividends paid on shares of the Limited Conversion Preferred
Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among
all shares of Limited Conversion Preferred Stock at the time
outstanding. The Board of Directors may fix a record date
for the determination of Holders entitled to receive payment
of any dividend declared thereon, which record date shall
not be more than 60 days prior to the date fixed for any
such payment.
(C) In no event shall any dividend in cash be
paid or set apart for payment on shares of stock ranking
pari passu (either as to dividends or upon liquidation,
dissolution, or winding up) with the Limited Conversion
Preferred Stock unless, contemporaneously therewith, a like
ratable dividend in cash is declared by the Board of
Directors, paid or set aside for payment on or in respect of
the shares of Limited Conversion Preferred Stock outstanding
at the time.
SECTION 3. VOTING RIGHTS. Except as otherwise
provided under applicable law, the Holders shall have no
voting rights, except that the approval of Holders of at
least a majority of the outstanding shares of Limited
Conversion Preferred Stock shall be required to change the
terms and provisions of the Limited Conversion Preferred
Stock (whether by amendment to the Corporation's Certificate
of Incorporation or otherwise) in a manner which affects
adversely the rights and preferences of the Holders of the
Limited Conversion Preferred Stock.
SECTION 4. CERTAIN RESTRICTIONS.
(A) Whenever dividends payable on the Limited
Conversion Preferred Stock as provided in Section 2 hereof
are in arrears, thereafter and until all accrued and unpaid
dividends, whether or not declared, on outstanding shares of
2
the Limited Conversion Preferred Stock shall have been paid
in full as provided in Section 2, the Corporation shall not:
(i) declare or pay dividends on, or make any
other distributions on, any shares of stock ranking
junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Limited Conversion
Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Limited Conversion
Preferred Stock, except like dividends paid ratably
(according to respective aggregate Liquidation Values)
on shares of the Limited Conversion Preferred Stock and
all other stock ranking on a parity therewith on which
dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such
shares are then entitled; or
(iii) redeem, purchase or otherwise acquire for
value any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding
up) to the Limited Conversion Preferred Stock; provided
that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Corporation
ranking junior (as to dividends and upon liquidation,
dissolution and winding up) to the Limited Conversion
Preferred Stock.
(B) The Corporation shall not permit any
subsidiary of the Corporation to purchase or otherwise
acquire for value any shares of the capital stock of the
Corporation unless the Corporation could, under paragraph
(A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
(C) The Corporation shall not be a party to any
consolidation, merger or binding share exchange or a
transfer of all or substantially all of its assets in a
transaction in which LCPSs are changed into or mandatorily
exchanged for other securities or property unless the
Holders of the LCPSs shall receive securities in such
transaction which are exchangeable for NESs (as defined in
Section 9(A) hereof) and unless the Corporation has received
an opinion of Davis Polk & Wardwell (or other counsel
satisfactory to the Holders of a majority of the outstanding
shares of LCPS at the time of such transaction) to the
effect that receipt of such securities or other property
shall be tax free to the holders of such LCPSs for U.S.
federal income tax purposes.
3
SECTION 5. REACQUIRED SHARES. Any shares of
Limited Conversion Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever
(including by redemption or reclassification) may, in the
sole discretion of the Corporation, be retired and canceled
promptly after the acquisition thereof. All such shares
shall upon their retirement and upon the filing of any
required certificate pursuant to the PCL, become authorized
but unissued shares of preferred stock without designation
as to series and may be reissued as part of a new series of
preferred stock to be created by resolution or resolutions
of the Board of Directors or as otherwise permitted under
the PCL.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING
UP.
(A) Upon any liquidation, dissolution or winding
up of the Corporation, the Holder of each share of Limited
Conversion Preferred Stock shall be entitled to a payment in
an amount equal to the Liquidation Value of such share,
together with any accrued and unpaid dividends thereon, at
the time fixed for such liquidation, dissolution or winding
up, before any payment shall be made or any assets
distributed to the Holders of the Common Stock or any other
stock of the Corporation ranking junior (as to dividends and
upon distribution, liquidation or winding up) to the Limited
Conversion Preferred Stock. The Corporation shall give each
Holder of LCPS notice of any such liquidation, dissolution
or winding up at least 60 days prior to consummation
thereof. "Liquidation Value" means, with respect to any
share of Limited Conversion Preferred Stock, (i) at any time
on or prior to the first Dividend Payment Date with respect
to such share, the Stated Value thereof (the "Initial
Liquidation Value") and (ii) thereafter, the sum of the
Initial Liquidation Value and the aggregate of all accrued
and unpaid dividends on such share on and as of the
immediately preceding Dividend Payment Date without regard
to whether any such dividends have been added to the
Liquidation Value of such share. If the assets of the
Corporation, or the proceeds thereof, are not sufficient to
pay in full the aggregate Liquidation Value payable to the
Holders of outstanding shares of Limited Conversion
Preferred Stock and all shares of any stock ranking pari
passu therewith (either as to dividends or upon dissolution,
liquidation or winding up), if any, then the Holders of all
such shares shall share ratably (according to respective
aggregate Liquidation Values) in such distribution of
assets, or the proceeds thereof, in accordance with the
amount which would be payable on such distribution if the
amounts to which the Holders of all outstanding shares of
Limited Conversion Preferred Stock and the holders of all
4
outstanding shares of such parity stock are entitled were
paid in full. Except as provided in this Section 6, Holders
of Limited Conversion Preferred Stock shall not be entitled
to any distribution in respect of the Limited Conversion
Preferred Stock in the event of liquidation, dissolution or
winding up of the affairs of the Corporation.
(B) For the purposes of this Certificate of
Designation, neither the voluntary sale, conveyance,
exchange or transfer (for cash, shares of stock, securities
or other consideration) of all or substantially all the
property or assets of the Corporation nor the consolidation
or merger (or similar combination) of the Corporation with
or into one or more other corporations shall, without
further corporate action, be deemed to be a liquidation,
dissolution or winding up of the Corporation, voluntary or
involuntary.
SECTION 7. REDEMPTION.
(A) Optional Redemption. The Corporation may
redeem outstanding shares of Limited Conversion Preferred
Stock, at any time in whole or from time to time in part, at
a redemption price (the "Redemption Price") equal to the
aggregate Liquidation Value of such shares on and as of the
date (the "Redemption Date") on which such redemption is to
occur, together with accrued and unpaid dividends thereon to
but not including the date fixed for redemption if, and to
the extent, the Corporation shall have funds legally
available for such payment (i) with the consent of the
Holder of the Limited Conversion Preferred Stock to be so
redeemed, (ii) such redemption, in the reasonable judgment
of the Corporation, shall be necessary to terminate
reporting and registration requirements of the Corporation
under the Exchange Act of 1934, as amended ("Exchange Act")
or (iii) such redemption, in the reasonable judgment of the
Corporation, shall be necessary to avoid application of
registration or reporting obligations under applicable
securities laws to the Corporation, any affiliate of the
Corporation or securities issuable upon exchange of the
Limited Conversion Preferred Stock. In the event the
Corporation shall redeem less than all outstanding shares of
the Limited Conversion Preferred Stock for the purposes set
forth in clauses (ii) or (iii) of the preceding sentence,
shares will be redeemed in the inverse order of size of the
aggregate number of shares held of record (within the
meaning of Rule 12g5-1 under the Exchange Act, as amended
from time to time) of each Holder or in such other
reasonable manner as may be selected by the Corporation in
its sole discretion from time to time.
(B) Mandatory Redemption. The Corporation shall,
on the date of the tenth anniversary of the issuance of the
5
shares, redeem all outstanding shares of Limited Conversion
Preferred Stock at the aggregate Liquidation Value.
(C) In the event the Corporation shall redeem any
or all shares of Limited Conversion Preferred Stock, notice
of such redemption shall be given by first class mail,
postage prepaid, mailed not less than 10 days nor more than
60 days prior to the Redemption Date, to each Holder of
record of the shares to be redeemed at such Holder's address
as the same appears on the stock register of the
Corporation; provided, however, that no failure to give such
notice nor any defect therein shall affect the validity of
the proceedings for the redemption of any share of Limited
Conversion Preferred Stock to be redeemed except in respect
of the Holder to whom the Corporation has failed to give
said notice or except as to the Holder whose notice was
defective. Each such notice shall state: (1) the
Redemption Date; (2) the number of shares of Limited
Conversion Preferred Stock to be redeemed (the "Redeemed
Shares") on such Redemption Date and, if less than all the
shares held by such Holder are to be redeemed from such
Holder, the number of Redeemed Shares to be redeemed from
such Holder; (3) the Redemption Price; (4) the place or
places where certificates for the Redeemed Shares are to be
surrendered for payment of the Redemption Price; and
(5) that dividends on the Redeemed Shares will cease to
accrue on and as of the Redemption Date.
(D) Notice having been mailed as aforesaid, on
and as of the Redemption Date (unless the Corporation shall
have defaulted in the payment of the Redemption Price for
the Redeemed Shares), dividends on the Redeemed Shares shall
cease to accrue, such shares shall no longer be deemed to be
outstanding, and all rights of the Holders thereof as
stockholders of the Corporation (except the right to receive
from the Corporation the Redemption Price with respect
thereto) shall cease. In case fewer than all the shares of
Limited Conversion Preferred Stock represented by any
certificate representing such shares are redeemed, a new
certificate shall be issued representing the number of
unredeemed shares without cost to the Holder thereof.
SECTION 8. RESTRICTIONS ON TRANSFER. Shares of
Limited Conversion Preferred Stock shall not be transferable
except (i) in the case of shares held by an individual, to
the estate or the immediate family of such individual (as
that term is defined in Rule 16a-1(e) under the Exchange
Act, as amended from time to time) or to an entity all of
the owners of which are members of the immediate family of
such individual, (ii) in the case of shares held by a
corporation or partnership, to a wholly-owned subsidiary of
such corporation or partnership, or (iii) in either case, to
6
an institution qualified as tax-exempt under
Section 501(c)(3) of the Internal Revenue Code of 1986.
SECTION 9. EXCHANGE.
(A)
Description of the Exchange
. Subject to the
provisions of Section 10(A) hereof, on the second
anniversary of the date the Shares are first issued (or, if
earlier, adoption by the Corporation of a plan of
liquidation, dissolution or winding-up of the Corporation
("Liquidation"), and on each anniversary thereafter prior to
the Mandatory Redemption Date (or, in the event of a
Liquidation, the date 30 days prior to consummation of such
Liquidation) (the "Exchange Date"), Holders of the Limited
Conversion Preferred Stock may exchange their Shares for
Genussscheine of Roche Holding Ltd, a Swiss corporation
("Roche") ("Non-voting Equity Securities" or "NESs") (the
"Exchange"). The Exchange right is exercisable against the
Corporation.
(B) Provided a Holder complies with the Exchange
Conditions, such Holder of outstanding shares of Limited
Conversion Preferred Stock will be entitled to receive in
exchange for each share of LCPS to be exchanged by such
Holder a number of NESs equal to the Stated Value divided by
$[ ] [150% of U.S. $ equivalent of NES price based on
the closing Zurich NES price, and Noon Buying Rate, on April
29, 1994] (the "Exchange Ratio"). No fractional NESs will
be issued on exchange of shares of LCPS. A Holder who, in
the absence of the preceding sentence, would otherwise be
entitled to a fractional NES will receive cash in U.S.
dollars equal to the value of such fractional NESs based
upon the Sale Price (as defined below) of a single NES on
the Trading Day (as defined below) immediately preceding the
Exchange Date. At the time of any exchange hereunder, the
rights of the holders of LCPS so exchanged as shareholders
of the Corporation (with respect to such exchanged LCPS
shares) shall cease, and the person or persons entitled to
receive the NESs issuable upon exchange shall be treated for
all purposes as the registered holder or holders of such
NESs as of the Exchange Date.
"Sale Price" means the closing sale price per Non-
voting Equity Security in Swiss Francs (or, if no closing
sale price is reported, the mean of the closing bid and
closing asked prices) on the Zurich Stock Exchange on such
Trading Day. The equivalent price in U.S. dollars shall be
based on the Noon Buying Rate on such Trading Day, or if
such Trading Day is a Saturday or Sunday or other day on
which commercial banks in The City of New York are obligated
or authorized to close, shall be based on the Noon Buying
Rate on the preceding day for which a Noon Buying Rate is
available. "Trading Day" means each day on which the Zurich
7
Stock Exchange is open for trading, other than day a day on
which such exchange is scheduled to close prior to its
regular weekday closing time. The "Noon Buying Rate" as of
any date means the noon buying rate in The City of New York
for cable transfers in Swiss francs (to purchase U.S.
dollars and sell Swiss francs) as certified for customs
purposes by the Federal Reserve Bank of New York in effect
on such date.
(C) Exchange Conditions. Prior to effecting an
Exchange, (i) each exchanging Holder shall have delivered to
the Corporation, not later than 20 days prior to the
Exchange Date, a certification in a form to be provided by
the Corporation of such information as the Corporation deems
necessary in order to determine the availability of an
exemption from registration under applicable securities laws
with respect to such exchanging holder, and (ii) the
Corporation shall have received an opinion of counsel to the
Corporation that such Exchange (together with all other
relevant Exchanges) is exempt from registration under
applicable securities laws.
(D) Exchange Notice. The Corporation shall give
notice of each Exchange Date by first class mail, postage
prepaid, mailed not less than 30 days nor more than 60 days
prior to the Exchange Date, to each Holder of record of the
shares at such Holder's address as the same appears on the
stock register of the Corporation (the "Exchange Notice");
provided, however, that no failure to give such notice nor
any defect therein shall affect the validity of the
proceedings for the exchange of any share of Limited
Conversion Preferred Stock to be exchanged. Each such
notice shall state: (1) the Exchange Date and the date by
which an Exchanging Holder must deliver the certification
required by Section 9(C); (2) the form of such
certification; (3) the name and address of the Exchange
Agent (as defined in Section 9(E) hereof); and (4)
instructions for completion of the Exchange.
(E) Method for Exchange. To exchange shares of
LCPS, a Holder must (i) complete and manually sign the
Notice of Intent to Exchange on the back of the LCPS
certificate (or complete and manually sign a facsimile
thereof) and deliver such notice to the agent acting on
behalf of the Corporation designated in the Exchange Notice
("Exchange Agent"), (ii) surrender the LCPS certificate to
the Exchange Agent, (iii) if required, furnish appropriate
endorsements and transfer documents and (iv) if required,
pay all transfer or similar taxes. Such Notice of Intent to
Exchange shall include, if required, an agreement to abide
by the Post-Exchange Transfer Restrictions.
8
(F) Adjustment of Exchange Ratio. The Exchange
Ratio will be adjusted if any of the following events occur:
(i) Rights Issues
If Roche shall by way of Subscription Rights (as
defined below) (otherwise than in lieu of a cash
dividend), offer new Shares, Non-voting Equity
Securities, new participation certificates and other
new securities forming part of the capital of Roche for
subscription to the holders of existing Non-voting
Equity Securities (a "Rights Issue"), then the Exchange
Ratio shall be adjusted by multiplying the Exchange
Ratio in effect immediately prior to the issuance of
the Subscription Rights by a fraction, the numerator of
which shall be the Value of a Non-voting Equity
Security for the period ending on the date immediately
preceding the date on which the Non-voting Equity
Securities are traded ex such Subscription Rights and
the denominator of which is (x) such Value of a Non-
voting Equity Security for such period less (y) the
Value of the Subscription Right offered for each Non-
voting Equity Security for the period commencing on the
date the Subscription Rights are first traded on the
Zurich Stock Exchange.
"Subscription Rights" means the entitlement or
right, as the case may be, attached to each existing
Non-voting Equity Security to subscribe or acquire,
directly or indirectly, new Shares of Roche, Non-voting
Equity Securities or participation certificates of
Roche (as the case may be) (including, for the
avoidance of doubt, any issues of convertible bonds,
exchangeable bonds or bonds with warrants) pursuant to
a Rights Issue by Roche (whether by the exercise of one
Subscription Right, a part of a Subscription Right or
an aggregate number of Subscription Rights).
"Value" means the average of the daily closing
prices (the "Price") of the Non-voting Equity
Securities or the Subscription Rights, as the case may
be, on the Zurich Stock Exchange during the relevant
ten Trading Day period (or in the case of Subscription
Rights, such shorter period as the Subscription Rights
may be traded) rounded to the nearest whole Swiss
franc, provided that if the Subscription Right is not
traded on the Zurich Stock Exchange, the Price shall be
the price published by the Zurich Stock Exchange in
respect of such Subscription Rights.
(ii) Bonus Issues
9
If Roche shall make an issue of Shares, Non-voting
Equity Securities or participation certificates of
Roche credited as fully paid to the holders of Non-
voting Equity Securities by way of capitalization of
profits or reserves (a "Bonus Issue") (otherwise than
in lieu of a cash dividend and without any payment or
other consideration being made or given by such
holders), then the Exchange Ratio shall be adjusted by
multiplying the Exchange Ratio in effect immediately
prior to such Bonus Issue by a fraction, the numerator
of which is the Value of a Non-voting Equity Security
for the period ending on the date immediately preceding
the date on which the Non-voting Equity Securities are
traded ex such Bonus Issue and the denominator of which
is the Value of a Non-voting Equity Security for the
period commencing on such ex-date.
(iii) Non-voting Equity Security Splits
If Roche shall subdivide the Non-voting Equity
Securities into a greater number of Non-voting Equity
Securities, then the Exchange Ratio shall be multiplied
by the number of subdivided Non-voting Equity
Securities replacing one former Non-voting Equity
Security.
(iv) Non-Voting Equity Security Consolidations
If Roche shall consolidate its Non-voting Equity
Securities into a smaller number of Non-voting Equity
Securities, then the Exchange Ratio shall be divided by
the number of former Non-voting Equity Securities which
corresponds to one consolidated Non-voting Equity
Security.
(v) Extraordinary Distributions
If Roche shall, by dividend or otherwise,
distribute securities, assets, or rights thereto, to
holders of Non-voting Equity Securities (but excluding
any dividend, whether in cash or property, that is
distributed in the ordinary course, and any rights or
issues referred to above in subparagraph 9(F)(i) or
9(F)(ii)), then the Exchange Ratio shall be adjusted by
multiplying the Exchange Ratio in effect immediately
prior to such distribution by a fraction, the numerator
of which is the closing Sale Price of a Non-voting
Equity Security in Swiss francs (or, if no closing Sale
Price is reported, the mean of the bid and asked
prices) on the Zurich Stock Exchange on the day
immediately preceding the date on which the Non-voting
Equity Security is traded ex such distribution and the
denominator of which is the closing Sale Price of a
10
Non-voting Equity Security in Swiss francs (or, if no
closing Sale Price is reported, the mean of the bid and
asked prices) on the Zurich Stock Exchange on such
ex-date.
(vi) Exchange and Liquidation
If the holders of Non-voting Equity Securities
shall be required to exchange Non-voting Equity
Securities for one or more Shares or participation
certificates, other securities, cash and/or property or
if on a liquidation of Roche the Non-voting Equity
Securities shall receive a return of capital, whether
in the form of securities, cash and/or property, then
the holder of the shares of Limited Conversion
Preferred Stock shall be entitled to receive on
exchange the kind and amount of securities, cash and/or
property that the Holder would have received if the
Holder had exchanged such Holder's shares of Limited
Conversion Preferred Stock immediately prior to the
effective date of the transaction.
(vii) Other Adjustments
Adjustments will not be made in any other
circumstances; subject to the right of the Corporation
(after consultation with Roche) to make such
adjustments as it believes appropriate in circumstances
where an event or events occur which it believes should
give rise to such adjustment provided that any such
adjustments shall only be made for the benefit of the
Holders of the shares of LCPS generally (without
considering the circumstances of any individual Holder
or the tax or other consequences of such adjustments in
any particular jurisdiction).
The adjustments described in (i), (ii) and (v)
shall be made only if the Non-voting Equity Securities
trade ex such Rights Issue, Bonus Issue or
extraordinary distribution on or prior to the effective
date of the transaction.
If Roche is a party to a consolidation, merger or
binding share exchange or a transfer of all or
substantially all of its assets, the right to exchange
a share of LCPS for NESs shall be converted into a
right to exchange such share of LCPS into the kind and
amount of securities, cash or other assets that the
Holder would have received if the Holder had exchanged
such Holder's shares of LCPS immediately prior to the
effective date of the transaction.
11
(G) Post-Exchange Transfer Restrictions. The
Non-voting Equity Securities have not been and will not be
registered under the Securities Act. Therefore, the Non-
voting Equity Securities may not be offered or sold in the
United States or to, or for the account or benefit of, U.S.
persons (as defined in Regulation S under the Securities
Act), except to qualified institutional buyers (as defined
in Rule 144A) in reliance on Rule 144A or to institutional
"accredited investors" (as defined in Rule 501(a)(1), (2),
(3) and (7) under the Securities Act) in transactions exempt
from the registration requirements of the Securities Act.
Upon exchange of LCPSs for NESs, the exchanging Holder shall
agree with Roche in the certification required by
Section 9(C) hereof to the foregoing.
SECTION 10. EXCHANGE TERMINATION. (A) The rights
of Holders to exchange shares of LCPS in accordance with the
terms of Section 9 hereof shall terminate at the election of
the Corporation if, at any time, the Securities and Exchange
Commission ("SEC") requires that Roche
(i) become a reporting company subject to the
requirements of Section 12 of the Exchange Act or
(ii) provide to the SEC financial or other
information with respect to Roche not then published
elsewhere by Roche.
(B) In the event the rights of Holders of the
LCPS to exchange shares of LCPS are terminated by the
Corporation pursuant to Section 10(A) hereof, Holders whose
rights are so terminated shall have the right to require the
Corporation to redeem such Holders' shares of LCPS at a
redemption price equal to the aggregate Stated Value, plus
any accrued and unpaid dividends, as of the date such Holder
requests redemption. The last sentence of Section 7(A)
shall not apply to any redemption of shares requested by
Holders under this Section 10(B).
SECTION 11. RANK. The Limited Conversion
Preferred Stock shall rank senior to the Common Stock with
respect to dividend payments, liquidation preference and
redemption.
12
IN WITNESS WHEREOF, this Certificate of
Designation has been duly executed on behalf of the
Corporation by its President and attested by its Secretary
on this __th day of ____________, 1994.
ROCHE CAPITAL CORPORATION
By:
---------------------------
Name:
Title: President
ATTEST:
Name:
---------------------------
Title: Secretary
13
CONFORMED COPY
GUARANTY
SECTION 1. The Guaranty. (a) For valuable
consideration, Roche Holding Ltd, a Swiss corporation
("Guarantor"), hereby unconditionally and irrevocably
guarantees to Syntex Corporation, a Panama corporation (the
"Company") the prompt and full performance and discharge by
Roche Capital Corporation, a Panama corporation ("Buyer")
and Roche (Panama) Corporation, a Delaware corporation
("Merger Subsidiary") (together, the "Obligors") of all of
the covenants, agreements, obligations, liabilities,
representations and warranties of the Obligors under the
Acquisition Agreement and Plan of Merger dated as of May 1,
1994 (the "Agreement") among the Company, Buyer and Merger
Subsidiary (collectively, the "Obligations"), in accordance
with the terms hereof and thereof. Guarantor hereby
guarantees to the Company full and complete performance by
the Obligors of each and all of the Obligations, including,
without limitation, the due and punctual payment of all
amounts which may become due and payable to the Company.
Guarantor acknowledges and agrees that, with respect to all
obligations to pay money, such guaranty shall be a guaranty
of payment and not of collection. If the Obligors shall
default in the due and punctual performance of any of the
Obligations or in the full and timely payment of any amounts
owed pursuant to the Obligations, Guarantor will promptly
cause to be performed such Obligations and will promptly
cause full payment to be made of any amount due with respect
thereto at its sole cost and expense.
(b) Guarantor further guarantees to those officers
and directors of the Company whom the Buyer has agreed will
be indemnified and held harmless pursuant to Section 7.03 of
the Agreement the full and complete performance by the
Obligors of each and all of the obligations set forth in
said Section 7.03, including, without limitation, any
amounts due and payable to such officers and directors.
SECTION 2. Guaranty Unconditional. The
liabilities and obligations of Guarantor to the Company
pursuant to this Guaranty shall be unconditional and
irrevocable and shall not be conditioned or contingent upon
the pursuit of any remedies against either Obligor or any
other person.
SECTION 3. Waivers of the Guarantor. (a)
Guarantor hereby waives any right, whether legal or
equitable, statutory or non-statutory, to require the
Company to proceed against or take any action against or
pursue any remedy with respect to the Obligors or any other
person or make presentment or demand for performance or give
any notice of nonperformance or pursue any other remedy in
their power whatsoever before the Company may enforce rights
against Guarantor hereunder. The unconditional obligation
of Guarantor hereunder will not be affected, impaired or
released by any extension, waiver, amendment or thing
whatsoever which would release a guarantor (other than
performance). This Guaranty shall be construed as a
continuing, absolute and unconditional guaranty of payment
without regard to the validity or enforceability of the
Agreement.
(b) Guarantor hereby waives irrevocably any
defense other than payment in full of the indebtedness,
including without limitation any defense based upon or
arising by reason of any disability or incapacity of the
Obligors or lack of authority of any officer or director of
the Obligors, the unenforceability of the indebtedness or
any part thereof for any cause, or the cessation for any
cause of the liability of the Obligors other than by payment
in full of the indebtedness and any immunity (whether on the
basis of sovereignty or otherwise) from the jurisdiction,
attachment or execution to which it or its property might
otherwise be entitled in any action arising out of or based
upon this Guaranty which may be instituted in the courts of
the Republic of Panama, the State of New York, the United
States of America, or any other domestic or foreign
jurisdiction.
SECTION 4. Definitions. Terms used herein that
are defined in the Acquisition Agreement are, unless
otherwise defined, used herein as therein defined.
SECTION 5. Representations and Warranties. (a)
Corporate Existence and Power. The Guarantor is a
corporation duly incorporated, validly existing and in good
standing under the laws of Switzerland, and has the
requisite corporate powers required to carry on its business
as now conducted. The Guarantor is duly qualified to do
business as a foreign corporation and is in good standing in
each jurisdiction where the character of the property owned
or leased by it or the nature of its activities makes such
qualification necessary, except for those jurisdictions
where the failure to be so qualified would not, individually
or in the aggregate, have a material adverse effect on the
2
financial condition, business or results of operations of
the Guarantor.
(b) Corporate Authorization. The execution,
delivery and performance by the Guarantor of this Guaranty
and the consummation by the Guarantor of the transactions
contemplated hereby are within the Guarantor's corporate
powers and have been duly authorized by all necessary
corporate action. This Guaranty has been duly and validly
executed and delivered by Guarantor and constitutes a valid
and binding obligation of the Guarantor, enforceable in
accordance with its terms, except as (i) the enforceability
hereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (ii) the
availability of equitable remedies may be limited by
equitable principles of general applicability.
(c) Governmental Authorization. The execution,
delivery and performance by the Guarantor of this Guaranty
require no action by or in respect of, or filing with, any
governmental body, agency, official or authority other than
such filings or registrations with, or authorizations,
consents or approvals of, governmental bodies, agencies,
officials or authorities, the failure of which to make or
obtain would not reasonably be expected to have a material
adverse effect on the financial condition, business or
results of operations of Guarantor.
(d) Non-Contravention. The execution, delivery
and performance by the Guarantor of this Guaranty and the
consummation by the Guarantor of the transactions
contemplated hereby do not and will not (i) contravene or
conflict with the certificate of incorporation or bylaws of
the Guarantor, (ii) assuming compliance with the matters
referred to in Section 5(c), contravene or conflict with or
constitute a violation of any provision of any law,
regulation, judgment, injunction, order or decree binding
upon or applicable to the Guarantor or any of its
subsidiaries or (iii) constitute a default under or give
rise to a right of termination, cancellation or acceleration
of any right or obligation of the Guarantor or to a loss of
any benefit to which the Guarantor is entitled under any
provision of any agreement, contract or other instrument
binding upon the Guarantor or any license, franchise, permit
or other similar authorization held by the Guarantor, except
such as would not have a material adverse effect on the
business, financial condition or results of operations of
the Guarantor and its subsidiaries, taken as a whole.
SECTION 6. Covenants of Guarantor. (a)
Guarantor hereby agrees to vote any Shares beneficially
3
owned by it, and to cause any Shares beneficially owned by
any of its subsidiaries to be voted, in favor of adoption of
the Agreement and the Merger at the meeting of the Company's
stockholders called for that purpose.
SECTION 7. Notices. All notices, requests and
other communications to any party hereunder shall be in
writing (including telecopier or similar writing) and shall
be given to:
Dr. Felix Amrein
Roche Holding Ltd
Grenzacherstrasse 124
CH - 4002 Basel
Switzerland
Telecopier: 011-41-61-688-1396
with a copy to:
Peter R. Douglas, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Telecopier: (212) 450-4800
or such other address or telecopier number as such party may
hereafter specify for the purpose by notice to the parties
to the Agreement. Each such notice, request or other
communication shall be effective (i) if given by telecopier,
when such telecopy is transmitted to the telecopier number
specified in this Section and the appropriate confirmation
is received or (ii) if given by any other means, when
delivered at the address specified in this Section.
SECTION 8. Authorized Agent and Venue. The
Guarantor hereby appoints Davis Polk & Wardwell as its
authorized agent upon whom process may be served in any
action or proceeding arising out of or based upon this
Guaranty. Any dispute arising out of this Guaranty or out
of any other agreement executed in connection with the
transactions contemplated by this guaranty shall be brought
in any State or Federal court in the State of New York, and,
by execution and delivery of this Guaranty, each of the
parties to this Guaranty accepts for itself the exclusive
jurisdiction of such courts and irrevocably agrees to be
bound by any judgment rendered thereby.
SECTION 9. Successors and Assigns. The
provisions of this Guaranty shall be binding upon and inure
to the benefit of and enforceable by the Company and its
respective successors and assigns. This Guaranty is
4
intended (i) to be for the benefit of holders of Shares
outstanding at the Effective Time and for the benefit of the
officers and directors referred to in Section 1(b) hereof
and (ii) to grant to such holders, officers and directors,
respectively the rights of the Company specified herein.
SECTION 10. Governing Law. THIS AGREEMENT SHALL
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF
THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAW.
SECTION 11. Attorney's Fees and Costs. In
addition to the amounts guaranteed under this Guaranty, the
Guarantor agrees to pay all reasonable attorneys' fees and
all other costs and expenses incurred by the beneficiaries
hereof in enforcing this Guaranty in any action or
proceeding arising out of, or relating to, this Guaranty.
SECTION 12. Nonwaiver of Rights of Obligees. No
right or power of any person under this Guaranty shall be
deemed to have been waived by any act or conduct on the part
of such person, or by any neglect to exercise that right or
power, or by any delay in so doing; and every right or power
shall continue in full force and effect until specifically
waived or released by an instrument in writing executed by
such person.
SECTION 13. Invalidity. If any provision of this
Guaranty contravenes or is held invalid under the laws of
any jurisdiction, this Guaranty shall be construed as though
it did not contain that provision, and the rights and
liabilities of the parties shall be construed and enforced
accordingly.
5
IN WITNESS WHEREOF, Guarantor has caused this
Guaranty to be duly executed as of this 1st day of May 1994.
ROCHE HOLDING LTD
By /s/ Henri B. Meier
--------------------------
Name: Henri B. Meier
Title: Vice President
Agreed and Accepted:
SYNTEX CORPORATION
By /s/ Paul E. Freiman
--------------------------
Name: Paul E. Freiman
Title: Chief Executive Officer
6
<ins/TEXT>
