<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 20, 2000
REGISTRATION NO. 333-41030
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
TEXAS INSTRUMENTS INCORPORATED
(Exact Name of Registrant as Specified in Its Charter)
---------------------
<TABLE>
<S> <C> <C>
DELAWARE 3600 75-0289970
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
</TABLE>
---------------------
<TABLE>
<S> <C>
JOSEPH F. HUBACH
SENIOR VICE PRESIDENT, SECRETARY & GENERAL
COUNSEL
12500 TI BOULEVARD 12500 TI BOULEVARD
P.O. BOX 660199 P.O. BOX 660199
DALLAS, TEXAS 75266-0199 DALLAS, TEXAS 75266-0199
(972) 995-3773 (972) 995-3773
(Address, Including Zip Code, and Telephone (Name, Address, Including Zip Code, and Telephone
Number,
Including Area Code, of Registrant's Principal Number, Including Area Code, of Agent for
Executive Service)
Offices)
</TABLE>
---------------------
Copies to:
<TABLE>
<S> <C> <C>
R. SCOTT COHEN, ESQ. BRADLEY S. PAULSON, ESQ. STEVEN D. PIDGEON, ESQ.
WEIL, GOTSHAL & MANGES LLP GENERAL COUNSEL AND SECRETARY SNELL & WILMER L.L.P.
100 CRESCENT COURT, SUITE 1300 BURR-BROWN CORPORATION ONE ARIZONA CENTER
DALLAS, TEXAS 75201 6730 SOUTH TUCSON BOULEVARD PHOENIX, ARIZONA 85004-0001
(214) 746-7700 TUCSON, ARIZONA 85706 (602) 382-6000
(520) 746-1111
</TABLE>
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: Upon the effective time of the merger described in this Registration
Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED(1) REGISTERED(2) PER SHARE(3) PRICE(4) FEE(4)(5)
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $1.00 per share..... 82,395,795 $62.44 $5,144,666,696 $1,358,192
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Texas Instruments common stock being registered hereby includes
associated rights to acquire Series B Participating Cumulative Preferred
Stock of Texas Instruments.
(2) Represents the maximum number of shares of Texas Instruments common stock to
be issued in the merger described in this Registration Statement based upon
(i) 56,539,790 shares of Burr-Brown common stock outstanding as of July 5,
2000, (ii) 2,514,834 shares of Burr-Brown common stock issuable upon the
exercise of options that are expected to be exercisable prior to the
effective time of the merger and (iii) 4,326,757 shares of Burr-Brown common
stock issuable upon conversion of Burr-Brown's 4 1/4% Convertible
Subordinated Notes due 2007, each exchanged at an exchange ratio of 1.3.
(3) Represents the quotient obtained by dividing the proposed maximum aggregate
offering price (determined as described in note 4 below) by the number of
shares of Texas Instruments common stock registered hereby.
(4) Estimated in accordance with Rule 457(c) and (f), solely for the purpose of
determining the registration fee. Represents the product of (i) $81.17, the
average of the high and low prices quoted on the Nasdaq National Market on
July 5, 2000 for Burr-Brown common stock, multiplied by (ii) 63,381,381, the
maximum number of shares of Burr-Brown common stock which will be converted
into shares of Texas Instruments common stock pursuant to the merger.
(5) Previously paid on July 7, 2000.
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE> 2
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. 1)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
</TABLE>
BURR-BROWN CORPORATION
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required.
[X] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
Common Stock par value $.01 per share, of Burr-Brown Corporation
(" Burr-Brown common stock").
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
Up to 63,381,381 shares of Burr-Brown common stock
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
The filing fee of $1,358,192 was calculated pursuant to Rule 0-11(c)(k)
of the Securities Exchange Act, by multiplying 1/50 of 1% of the value
of the Burr-Brown common stock to be received by Texas Instruments
Incorporated in the transaction. The value of the Burr-Brown common
stock was determined to be $81.17 per share in accordance with Rule
0-1(a)(4) of the Exchange Act based on the average high and low prices
of Burr-Brown common stock reported on The Nasdaq National Market on
July 5, 2000.
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
$ 5,144,666,696
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(5) Total fee paid:
$1,358,192
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[ ] Fee paid previously with preliminary materials.
[X] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
$1,358,192
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(2) Form, Schedule or Registration Statement No.:
Form S-4, registration No. 333-41030
-----------------------------------------------------------------------
(3) Filing Party:
Texas Instruments Incorporated
-----------------------------------------------------------------------
(4) Date Filed:
July 7, 2000
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<PAGE> 3
BURR-BROWN
MERGER PROPOSED -- YOUR VOTE IS VERY IMPORTANT
July 21, 2000
Dear Burr-Brown Corporation stockholder,
The boards of directors of Burr-Brown Corporation, Texas Instruments
Incorporated and Burma Acquisition Corp., a wholly owned subsidiary of Texas
Instruments, have approved, and the parties have entered into, a merger
agreement that, subject to Burr-Brown stockholder approval, will result in Burma
Acquisition being merged with and into Burr-Brown. As a result of the merger,
Burr-Brown will become a wholly owned subsidiary of Texas Instruments. The
merger agreement provides that Burr-Brown stockholders will receive 1.3 shares
of Texas Instruments common stock for each share of Burr-Brown common stock that
they own immediately before the merger.
AFTER CAREFUL CONSIDERATION, YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY
DETERMINED THAT THE MERGER IS ADVISABLE AND IS FAIR TO, AND IN THE BEST
INTERESTS OF, BURR-BROWN AND ITS STOCKHOLDERS. YOUR BOARD OF DIRECTORS HAS
UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND UNANIMOUSLY RECOMMENDS THAT YOU
VOTE "FOR" APPROVAL OF THE MERGER.
Approval and adoption of the merger agreement and approval of the merger
requires the affirmative vote of at least a majority of the outstanding shares
of Burr-Brown common stock. We have scheduled a special meeting for you to vote
on the merger. YOUR VOTE IS VERY IMPORTANT.
The meeting will be held on Thursday, August 24, 2000 at 9:00 a.m., local
time, at Burr-Brown's principal offices located at 6730 South Tucson Boulevard,
Tucson, Arizona 85706.
Whether or not you plan to attend the meeting, please take the time to vote
by completing and mailing the enclosed proxy card or by providing your proxy by
telephone or over the Internet, as described in the enclosed proxy information.
If you sign, date and mail your proxy card without indicating how you wish to
vote, your proxy will be voted in favor of approval and adoption of the merger.
Your failure to return your proxy card will be considered a vote against
approval and adoption of the merger. Returning the proxy does NOT deprive you of
your right to attend the meeting and to vote your shares in person.
The enclosed proxy statement/prospectus provides you with detailed
information about the proposed merger and about Texas Instruments. We encourage
you to read this entire document carefully. IN PARTICULAR, YOU SHOULD CONSIDER
CAREFULLY THE DISCUSSION IN THE SECTION ENTITLED "RISK FACTORS" BEGINNING ON
PAGE 14 OF THE PROXY STATEMENT/PROSPECTUS. You may also obtain information about
Burr-Brown and Texas Instruments from documents that they have filed with the
Securities and Exchange Commission. Some of these documents are included with or
incorporated by reference into the enclosed proxy statement/prospectus.
Thank you for your cooperation.
Sincerely,
/s/ SYRUS P. MADAVI
Syrus P. Madavi
President, Chief Executive Officer
and
Chairman of the Board
<PAGE> 4
Burr-Brown
BURR-BROWN CORPORATION
---------------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
---------------------
TO BE HELD THURSDAY, AUGUST 24, 2000
To the Stockholders:
A Special Meeting of Stockholders of Burr-Brown Corporation, a Delaware
corporation, will be held on Thursday, August 24, 2000 at 9:00 a.m., local time,
at Burr-Brown's principal offices located at 6730 South Tucson Boulevard,
Tucson, Arizona 85706, to consider and to vote upon the following proposals:
1. To approve and adopt the Agreement and Plan of Merger, dated as of
June 21, 2000, by and among Texas Instruments Incorporated, a Delaware
corporation, Burma Acquisition Corp., a Delaware corporation and a wholly
owned subsidiary of Texas Instruments, and Burr-Brown, and approve the
related merger pursuant to which, among other things, Burma Acquisition
will be merged with and into Burr-Brown, with Burr-Brown surviving the
merger, and each share of Burr-Brown's common stock, $.01 par value per
share, issued and outstanding immediately prior to the effective time of
the merger will be converted into the right to receive 1.3 shares of common
stock, $1.00 par value per share, of Texas Instruments, other than
fractional shares which will be paid in cash.
2. Such other business as may properly come before the Special Meeting
or any postponement or adjournment thereof.
These items of business are described in the enclosed proxy
statement/prospectus. The Board of Directors has fixed the close of business on
July 19, 2000 as the record date for determining the stockholders entitled to
notice of and to vote at the Special Meeting.
IN ORDER THAT YOUR STOCK MAY BE REPRESENTED AT THE SPECIAL MEETING IN CASE
YOU ARE NOT PERSONALLY PRESENT, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED
PROXY CARD AND RETURN IT PROMPTLY IN THE ACCOMPANYING ADDRESSED ENVELOPE. NO
POSTAGE NEED BE AFFIXED IF MAILED IN THE U.S. REGISTERED STOCKHOLDERS MAY ALSO
AUTHORIZE THE PROXIES VIA A TOLL-FREE TELEPHONE CALL FROM THE U.S. AND CANADA OR
THE INTERNET. THE TELEPHONE AND INTERNET VOTING PROCEDURES ARE DESIGNED TO
AUTHENTICATE STOCKHOLDERS' IDENTITIES, TO ALLOW STOCKHOLDERS TO PROVIDE VOTING
INSTRUCTIONS TO THE PROXIES AND TO CONFIRM THAT THEIR VOTING INSTRUCTIONS HAVE
BEEN PROPERLY RECORDED. BURR-BROWN HAS BEEN ADVISED BY COUNSEL THAT THE
PROCEDURES WHICH HAVE BEEN PUT IN PLACE ARE CONSISTENT WITH THE REQUIREMENTS OF
APPLICABLE LAW. SPECIFIC INSTRUCTIONS TO BE FOLLOWED BY ANY REGISTERED
STOCKHOLDER INTERESTED IN PROXY VOTING VIA TELEPHONE OR THE INTERNET ARE SET
FORTH ON THE ENCLOSED PROXY CARD.
By order of the Board of Directors,
/s/ BRADLEY S. PAULSON
Bradley S. Paulson
General Counsel and Secretary
6730 South Tucson Boulevard
Tucson, Arizona 85706
July 21, 2000
<PAGE> 5
[TEXAS INSTRUMENTS LOGO] [BURR-BROWN LOGO]
PROXY STATEMENT/PROSPECTUS
---------------------
MERGER PROPOSED -- THE VOTE OF BURR-BROWN CORPORATION STOCKHOLDERS IS IMPORTANT
The boards of directors of Texas Instruments Incorporated, a Delaware
corporation, Burma Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of Texas Instruments, and Burr-Brown Corporation, a Delaware
corporation, have approved, and the parties have entered into, a merger
agreement under which Burma Acquisition would merge with and into Burr-Brown and
Burr-Brown would become a wholly owned subsidiary of Texas Instruments.
This proxy statement/prospectus is being sent to stockholders of Burr-Brown
in connection with the solicitation of proxies by the board of directors of
Burr-Brown for use at the special meeting of Burr-Brown stockholders to be held
on August 24, 2000, to consider and to vote upon the proposed merger. This proxy
statement also constitutes a prospectus with respect to the shares of Texas
Instruments common stock to be issued to Burr-Brown stockholders in the merger.
The merger agreement provides that Burr-Brown stockholders will receive 1.3
shares of Texas Instruments common stock for each share of Burr-Brown common
stock that they own immediately before the merger. If the merger is completed,
Burr-Brown stockholders will collectively own or be entitled to receive an
aggregate of approximately 4.3% of the outstanding Texas Instruments common
stock.
Pursuant to a voting agreement executed concurrently with the merger
agreement, officers and directors of Burr-Brown holding an aggregate of
approximately 29.6% of the shares of Burr-Brown common stock entitled to vote on
the merger have agreed to vote in favor of approval of the merger.
After careful consideration, the board of directors of Burr-Brown has
determined that the merger is advisable and is fair to, and in the best
interests of, its stockholders and recommends that its stockholders vote in
favor of approval of the merger.
---------------------
Texas Instruments common stock is traded on the New York Stock Exchange
under the symbol "TXN." Texas Instruments intends to have the shares of Texas
Instruments common stock offered in connection with the merger listed on the New
York Stock Exchange.
WE URGE YOU TO CAREFULLY REVIEW THE RISK FACTORS DESCRIBED IN THIS PROXY
STATEMENT/PROSPECTUS BEGINNING ON PAGE 14.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROXY STATEMENT/ PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
This proxy statement/prospectus is dated July 21, 2000, and was first
mailed to the stockholders of Burr-Brown on or about July 25, 2000.
<PAGE> 6
SOURCES OF ADDITIONAL INFORMATION
THIS PROXY STATEMENT/PROSPECTUS INCORPORATES IMPORTANT BUSINESS AND
FINANCIAL INFORMATION ABOUT TEXAS INSTRUMENTS AND BURR-BROWN FROM DOCUMENTS THAT
ARE NOT INCLUDED IN OR DELIVERED WITH THIS DOCUMENT. THIS INFORMATION IS
AVAILABLE TO YOU WITHOUT CHARGE UPON YOUR WRITTEN OR ORAL REQUEST. YOU CAN
OBTAIN DOCUMENTS INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT/PROSPECTUS,
OTHER THAN SOME OF THE EXHIBITS TO THOSE DOCUMENTS, BY REQUESTING THEM IN
WRITING OR BY TELEPHONE AT THE FOLLOWING ADDRESSES OR TELEPHONE NUMBERS:
<TABLE>
<S> <C>
TEXAS INSTRUMENTS INCORPORATED BURR-BROWN CORPORATION
ATTENTION: INVESTOR RELATIONS ATTENTION: INVESTOR RELATIONS
12500 TI BOULEVARD 6730 SOUTH TUCSON BOULEVARD
P.O. BOX 660199 TUCSON, ARIZONA 85706
DALLAS, TEXAS 75266-0199 (520) 746-7365
(972) 995-3773
</TABLE>
IF YOU WOULD LIKE TO REQUEST DOCUMENTS, PLEASE DO SO BY AUGUST 17, 2000 IN
ORDER TO RECEIVE THEM BEFORE THE SPECIAL MEETING OF BURR-BROWN STOCKHOLDERS.
ALSO SEE THE SECTIONS ENTITLED "INCORPORATION BY REFERENCE TO OTHER
DOCUMENTS" ON PAGES 62 AND 64 AND "WHERE YOU CAN FIND MORE INFORMATION ABOUT
TEXAS INSTRUMENTS" ON PAGE 63 AND "WHERE YOU CAN FIND MORE INFORMATION ABOUT
BURR-BROWN" ON PAGE 65 OF THIS PROXY STATEMENT/PROSPECTUS.
TEXAS INSTRUMENTS HAS SUPPLIED ALL OF THE INFORMATION CONTAINED IN THIS
PROXY STATEMENT/PROSPECTUS RELATING TO TEXAS INSTRUMENTS AND BURMA ACQUISITION,
AND BURR-BROWN HAS SUPPLIED ALL OF THE INFORMATION RELATING TO BURR-BROWN.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROXY
STATEMENT/PROSPECTUS OR IN THE DOCUMENTS INCORPORATED BY REFERENCE. NONE OF
TEXAS INSTRUMENTS, BURMA ACQUISITION OR BURR-BROWN HAS AUTHORIZED ANYONE TO GIVE
YOU ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS ABOUT EITHER THE MERGER OR
THE OTHER TRANSACTIONS THAT ARE DISCUSSED IN THIS PROXY STATEMENT/PROSPECTUS
OTHER THAN THE INFORMATION OR REPRESENTATIONS CONTAINED IN THIS PROXY
STATEMENT/PROSPECTUS OR IN THE DOCUMENTS INCORPORATED BY REFERENCE. IF YOU ARE
GIVEN ANY INFORMATION ABOUT THESE MATTERS THAT IS NOT DISCUSSED OR INCORPORATED
BY REFERENCE IN THIS PROXY STATEMENT/PROSPECTUS, YOU MUST NOT RELY ON THAT
INFORMATION.
THIS PROXY STATEMENT/PROSPECTUS IS NOT AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY SECURITIES IN ANY LOCATION WHERE OR TO ANY PERSON TO WHOM
TEXAS INSTRUMENTS IS NOT PERMITTED TO OFFER OR TO SELL SECURITIES UNDER
APPLICABLE LAW.
THE DELIVERY OF THIS PROXY STATEMENT/PROSPECTUS OR THE COMMON STOCK OF
TEXAS INSTRUMENTS OFFERED BY THIS PROXY STATEMENT/PROSPECTUS DOES NOT, UNDER ANY
CIRCUMSTANCE, MEAN THAT THERE HAS NOT BEEN A CHANGE IN THE AFFAIRS OF TEXAS
INSTRUMENTS OR BURR-BROWN SINCE THE DATE OF THIS PROXY STATEMENT/ PROSPECTUS. IT
ALSO DOES NOT MEAN THAT THE INFORMATION IN THIS PROXY STATEMENT/PROSPECTUS IS
CORRECT AFTER THIS DATE OR THAT THE INFORMATION IN THE DOCUMENTS INCORPORATED BY
REFERENCE IS CORRECT AFTER THE RESPECTIVE DATES OF THOSE DOCUMENTS.
i
<PAGE> 7
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
ANSWERS TO FREQUENTLY ASKED QUESTIONS
ABOUT THE MERGER.................... 1
SUMMARY............................... 3
SELECTED HISTORICAL FINANCIAL DATA OF
TEXAS INSTRUMENTS................... 8
SELECTED HISTORICAL FINANCIAL DATA OF
BURR-BROWN.......................... 9
COMPARATIVE MARKET PRICE AND DIVIDEND
INFORMATION......................... 10
SELECTED UNAUDITED PRO FORMA COMBINED
FINANCIAL DATA...................... 12
COMPARATIVE PER SHARE DATA............ 13
RISK FACTORS.......................... 14
You will receive 1.3 shares of Texas
Instruments common stock for each
share of Burr-Brown common stock
owned despite changes in the market
value of Texas Instruments common
stock or Burr-Brown common stock.... 14
Burr-Brown officers and directors have
conflicts of interest that may
influence them to support or
recommend the merger................ 14
Texas Instruments may have difficulty
integrating Burr-Brown's operations
and retaining important employees of
Burr-Brown.......................... 14
The integration of Burr-Brown will
require substantial time and effort
of key managers of Texas
Instruments, which could divert the
attention of those managers from
other matters....................... 15
Burr-Brown stockholders should not
place undue reliance on
forward-looking information......... 15
UNAUDITED PRO FORMA COMBINED FINANCIAL
INFORMATION......................... 16
UNAUDITED PRO FORMA COMBINED BALANCE
SHEET............................... 17
UNAUDITED PRO FORMA COMBINED STATEMENT
OF OPERATIONS....................... 18
</TABLE>
<TABLE>
<CAPTION>
PAGE
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<S> <C>
NOTES TO UNAUDITED PRO FORMA COMBINED
FINANCIAL INFORMATION............... 23
THE BURR-BROWN SPECIAL MEETING........ 24
General............................... 24
Matters to be Considered at the
Burr-Brown Special Meeting.......... 24
Date, Time and Place.................. 24
Record Date; Quorum................... 24
Votes Required........................ 24
Voting by Burr-Brown's Executive
Officers and Directors.............. 25
Voting of Proxies; Revocability of
Proxies............................. 25
Solicitation of Proxies and
Expenses............................ 25
THE MERGER............................ 26
Background............................ 26
Reasons for the Merger................ 28
Recommendation of the Board of
Directors of Burr-Brown............. 30
Opinion of Financial Advisor to the
Board of Directors of Burr-Brown.... 30
Interests of Certain Persons in the
Merger.............................. 38
Employee Benefit Plans................ 39
No Dissenters' Appraisal Rights....... 39
Accounting Treatment.................. 39
Federal Securities Laws
Consequences........................ 39
Comparison of Rights of Stockholders
of Texas Instruments and
Burr-Brown.......................... 39
U.S. Federal Income Tax Consequences
of the Merger....................... 43
Regulatory Matters.................... 44
THE MERGER AGREEMENT.................. 45
General............................... 45
Completion and Effectiveness of the
Merger.............................. 45
Conversion of Shares of Burr-Brown
Common Stock........................ 45
Treatment of Stock Options............ 46
Exchange Procedures................... 46
Directors and Officers................ 47
Charter and Bylaws.................... 47
Representations and Warranties........ 48
Conduct of Business Before Completion
of the Merger....................... 49
Conditions to the Completion of the
Merger.............................. 52
</TABLE>
ii
<PAGE> 8
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Additional Covenants of Burr-Brown and
Texas Instruments................... 54
Termination of the Merger Agreement... 57
Indemnification of Burr-Brown's
Directors and Officers.............. 59
Amendment of the Merger Agreement..... 59
Extension and Waiver.................. 59
VOTING AGREEMENT...................... 60
STOCK OPTION AGREEMENT................ 60
General............................... 60
Exercise of the Option; Profit
Limitations......................... 60
Termination of the Option............. 61
Other Provisions...................... 61
BUSINESS OF TEXAS INSTRUMENTS......... 61
Incorporation by Reference to Other
Documents........................... 62
Where You Can Find More Information
About Texas Instruments............. 63
BUSINESS OF BURR-BROWN................ 63
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Incorporation by Reference to Other
Documents........................... 64
Where You Can Find More Information
About Burr-Brown.................... 65
DESCRIPTION OF CAPITAL STOCK OF TEXAS
INSTRUMENTS......................... 65
General............................... 65
The Common Stock...................... 65
The Preferred Stock................... 66
The Rights Plan....................... 66
LEGAL MATTERS......................... 68
INDEPENDENT AUDITORS.................. 68
ANNEX A -- Agreement and Plan of
Merger.............................. A-1
ANNEX B -- Voting Agreement........... B-1
ANNEX C -- Stock Option Agreement..... C-1
ANNEX D -- Opinion of Broadview
International LLC................... D-1
</TABLE>
iii
<PAGE> 9
ANSWERS TO FREQUENTLY ASKED QUESTIONS ABOUT THE MERGER
Q. When do you expect the merger to be completed?
A. We are working towards completing the merger as quickly as possible. For
the merger to be completed, the Burr-Brown stockholders must approve the merger
at the special meeting of Burr-Brown stockholders. We expect to complete the
merger promptly following the Burr-Brown special meeting.
Q. What will Burr-Brown stockholders receive in the merger?
A. For each share of Burr-Brown common stock you own, you will receive 1.3
shares of Texas Instruments common stock. Texas Instruments will not issue
fractional shares of Texas Instruments common stock. You will receive cash based
upon the market price of Texas Instruments common stock instead of any
fractional share. Texas Instruments common stock is traded on the New York Stock
Exchange under the symbol "TXN", and on July 19, 2000, Texas Instruments common
stock closed at $67.25 per share. Because the exchange ratio is fixed at 1.3 but
the market price of Texas Instruments common stock is subject to fluctuation,
the market value of the shares of Texas Instruments common stock that you will
receive in the merger may increase or decrease prior to and following the
merger. We urge you to obtain current market quotations for Texas Instruments
common stock and Burr-Brown common stock.
Q. When will Burr-Brown stockholders receive shares of Texas Instruments
common stock?
A. Shortly following the merger you will receive a letter of transmittal to
complete and return along with your Burr-Brown stock certificates. Once you have
done so, Texas Instruments will issue you shares of Texas Instruments common
stock.
Q. What are the U.S. federal income tax consequences of the merger to
Burr-Brown stockholders?
A. In general, holders of Burr-Brown common stock will not recognize gain
or loss for U.S. federal income tax purposes on the exchange of their stock in
the merger, except with respect to any cash they receive in lieu of fractional
shares of Texas Instruments common stock.
Q. What percentage of Texas Instruments will Burr-Brown stockholders own
following the merger?
A. Based upon:
- the number of shares of Burr-Brown common stock outstanding on July 19,
2000; and
- the number of shares of Texas Instruments common stock outstanding on
July 19, 2000,
Burr-Brown stockholders will collectively own approximately 4.3%, or 73,643,280
shares, of Texas Instruments common stock.
Q. What should Burr-Brown stockholders do now?
A. After you have carefully read this proxy statement/prospectus, indicate
how you want to vote by completing and signing the enclosed proxy card. After
completing the proxy card, sign and mail it in the enclosed prepaid return
envelope marked "Proxy" as soon as possible so that your shares may be
represented and voted at the special meeting. Please do not send your Burr-Brown
stock certificates with your proxy card. After the merger is completed, you will
receive written instructions for exchanging your stock certificates.
You may also provide your proxy by a toll-free telephone call from the U.S.
and Canada or over the Internet. The enclosed proxy information contains
specific instructions for you to follow if you are interested in proxy voting by
telephone or over the Internet.
If you sign and send your proxy card and do not indicate how you want to
vote, we will count your proxy as a vote in favor of approval and adoption of
the merger agreement and approval of the merger. If you abstain from voting or
do not vote, it will have the effect of a vote against approval and adoption of
the merger agreement and approval of the merger.
The special meeting will take place on August 24, 2000. Even if you have
signed and mailed your proxy card or provided your proxy by telephone or over
the Internet, you may still
1
<PAGE> 10
attend the special meeting and vote your shares in person.
Q. Can Burr-Brown stockholders change their votes after mailing signed
proxy cards or providing their proxy by telephone or over the Internet?
A. Yes. There are five ways in which you may revoke your proxy before it is
exercised and change your vote:
- first, you may send a written notice revoking your proxy to the Secretary
of Burr-Brown;
- second, you may complete and submit a new, later-dated proxy card;
- third, you may proxy vote by telephone on a later date than an
earlier-submitted proxy;
- fourth, you may proxy vote over the Internet on a later date than an
earlier-submitted proxy; and
- fifth, you may attend the Burr-Brown special meeting and vote in person.
Simply attending the Burr-Brown special meeting, however, will not revoke
your proxy.
Q. If my Burr-Brown shares are held in "street name" by my broker, will my
broker vote my shares for me?
A. Your broker will vote your Burr-Brown shares only if you provide
instructions on how to vote. You should follow the directions provided by your
broker regarding how to instruct your broker to vote your shares. Without
instructions, your shares will not be voted, which will have the effect of a
vote against approval of the merger.
2
<PAGE> 11
SUMMARY
This brief summary highlights selected information from this proxy
statement/prospectus. It does not contain all of the information that may be
important to you in deciding how to vote. We urge you to read carefully the
entire proxy statement/prospectus and the other documents to which this proxy
statement/ prospectus refers for further information about the merger. To learn
how to obtain more information about Texas Instruments, see page 63. To learn
how to obtain more information about Burr-Brown, see page 65. Each item in this
summary includes a page reference directing you to a more complete description
of that item.
THE COMPANIES
TEXAS INSTRUMENTS INCORPORATED (See page 61)
12500 TI BOULEVARD
P.O. BOX 660199
DALLAS, TEXAS 75266-0199
(972) 995-3773
Texas Instruments is a global semiconductor company and the world's leading
designer and supplier of digital signal processing and analog technologies, the
engines driving the digitalization of electronics. Headquartered in Dallas,
Texas, Texas Instruments' businesses also include materials and controls and
educational and productivity solutions. Texas Instruments has manufacturing or
sales operations in more than 25 countries.
BURR-BROWN CORPORATION (See page 63)
6730 SOUTH TUCSON BOULEVARD
TUCSON, ARIZONA 85706
(520) 746-7365
Burr-Brown is a global leader in the development, manufacturing and
marketing of high performance analog and mixed signal integrated circuits.
Through its proprietary design expertise and specialized application knowledge,
Burr-Brown delivers more than 1,400 innovative products to 25,000 customers
worldwide. Burr-Brown targets high growth segments of the communications,
consumer, computing and industrial markets and its major customers are among the
world's leading electronics manufacturers. Burr-Brown is headquartered in
Tucson, Arizona.
THE SPECIAL MEETING (See page 24)
Burr-Brown will hold the special meeting at its principal offices located
at 6730 South Tucson Boulevard, Tucson, Arizona 85706, at 9:00 a.m., local time,
on Thursday, August 24, 2000. At the special meeting, Burr-Brown is asking the
holders of its common stock to approve the merger.
RECOMMENDATION OF BURR-BROWN'S BOARD OF DIRECTORS (See page 30)
After careful consideration, both a special committee of the Burr-Brown
board of directors and the full board of directors have determined that the
merger is advisable and is fair to, and in the best interests of, Burr-Brown and
its stockholders. The special committee and the Burr-Brown board of directors
have unanimously approved the merger and the merger agreement and unanimously
recommend that Burr-Brown stockholders vote "for" approval and adoption of the
merger agreement and approval of the related merger.
OPINION OF BURR-BROWN'S FINANCIAL ADVISOR (See page 30)
Broadview International LLC, Burr-Brown's financial advisor, delivered an
opinion to Burr-Brown's board of directors that, subject to the considerations
described in the opinion, the exchange ratio in the merger is fair, from a
financial point of view, to Burr-Brown stockholders. The complete opinion of
Broadview is attached as Appendix D. We urge you to read the opinion in its
entirety.
BURR-BROWN STOCKHOLDER APPROVAL (See page 24)
The approval of the merger requires the affirmative vote of at least a
majority of the shares of Burr-Brown common stock outstanding on July 19, 2000,
the record date for the special meeting. You are entitled to cast one vote per
share of Burr-Brown common stock you owned as of the record date.
Directors and executive officers who beneficially own and are entitled to
vote shares of Burr-Brown common stock representing approximately 29.6% of the
total voting power of all outstanding shares of Burr-Brown common stock have
entered into an agreement with Texas
3
<PAGE> 12
Instruments and Burma Acquisition to vote those shares for approval of the
merger.
PROCEDURE FOR CASTING YOUR VOTE (See page 25)
Please mail your signed proxy card in the enclosed return envelope or
provide your proxy by telephone or over the Internet, as described in the
information enclosed with this proxy statement/ prospectus, as soon as possible
so that your shares of Burr-Brown common stock may be represented and voted at
the special meeting. If you do not include instructions on how to vote your
proxy, your shares will be voted "for" approval of the merger.
PROCEDURE FOR CASTING YOUR VOTE IF YOUR SHARES ARE HELD BY YOUR BROKER IN
"STREET NAME" (See page 25)
Your broker will vote your shares only if you provide instructions on how
to vote by following the instructions provided to you by your broker. If you do
not provide your broker with voting instructions, your shares will not be voted
at the Burr-Brown special meeting and it will have the same effect as voting
against approval of the merger.
PROCEDURE FOR CHANGING YOUR VOTE (See page 25)
If you want to change your vote, just send a later-dated, signed proxy
card, or proxy vote by telephone or over the Internet on a later date than your
earlier-submitted proxy, before the Burr-Brown special meeting or attend the
special meeting and vote your shares in person. You may also revoke your proxy
by sending written notice to the Secretary of Burr-Brown before the special
meeting.
PROCEDURE FOR EXCHANGING YOUR STOCK CERTIFICATES (See page 46)
After the merger is completed, you will receive written instructions for
exchanging your Burr-Brown stock certificates for Texas Instruments stock
certificates. Do not send your Burr-Brown stock certificates now.
THE MERGER AGREEMENT
The merger agreement is attached to this proxy statement/prospectus as
Annex A. Please read the merger agreement in its entirety. It is the legal
document that governs your rights in connection with the merger.
Conditions to Completion of the Merger (See page 52)
Texas Instruments' and Burr-Brown's obligations to complete the merger are
subject to a number of conditions, including the following:
- approval of the merger by the Burr-Brown stockholders;
- the expiration or termination of the waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and any waiting
periods or consents under any comparable foreign antitrust laws shall
have expired or been obtained;
- no injunction being entered by a court preventing the merger and no
continuing injunction proceeding having been instituted by a governmental
entity;
- this proxy statement/prospectus shall have been declared effective by the
Commission at the effective time of the merger and no stop order
suspending effectiveness shall have been issued; and
- the Texas Instruments common stock required to be issued in the merger
shall have been approved for listing on the NYSE.
Each of Texas Instruments' and Burma Acquisition's obligation to complete
the merger is also subject to the following additional conditions:
- the representations and warranties made by Burr-Brown in the merger
agreement are true except where the failure to be true would not
reasonably be expected to have a material adverse effect;
- Burr-Brown has performed or complied in all material respects with all
agreements contained in the merger agreement;
- Texas Instruments has received letters from Ernst & Young LLP,
accountants for both Texas Instruments and Burr-Brown, regarding the
treatment of the merger as a "pooling of interests" for accounting
purposes;
4
<PAGE> 13
- Texas Instruments has received an opinion of its tax counsel, Weil,
Gotshal & Manges LLP, to the effect that the merger will qualify as a
reorganization within the meaning of Section 368(a) of the Internal
Revenue Code; and
- the receipt of all authorizations, consents or other approvals of any
domestic or foreign governmental entity required in connection with the
merger.
In the event Texas Instruments or Burr-Brown determines to waive compliance
with any of these conditions, they will seek the advice of counsel with respect
to whether this proxy statement/prospectus should be revised and recirculated to
stockholders to reflect the waiver.
Burr-Brown's obligation to complete the merger is also subject to the
following additional conditions:
- the representations and warranties made by Texas Instruments and Burma
Acquisition in the merger agreement are true except where the failure to
be true would not reasonably be expected to have a material adverse
effect;
- Texas Instruments has performed or complied in all material respects with
all agreements contained in the merger agreement; and
- Burr-Brown has received an opinion of its tax counsel, Snell & Wilmer
L.L.P., to the effect that the merger will qualify as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code.
Termination of the Merger Agreement (See page 57)
As summarized below, the merger agreement may be terminated under certain
circumstances at any time before the completion of the merger. The merger
agreement may be terminated by mutual consent of Texas Instruments and Burr-
Brown, whether before or after the vote by Burr-Brown stockholders. The merger
agreement may also be terminated by either Texas Instruments or Burr-Brown under
any of the following circumstances:
- if the merger is not completed by December 31, 2000, except that either
Texas Instruments or Burr-Brown may extend that termination date to a
date not beyond February 28, 2001 if they reasonably determine in good
faith that additional time is necessary to obtain any required
governmental consents or approvals;
- if Burr-Brown stockholders do not approve the merger at the special
meeting;
- if any final and non-appealable law prohibits the completion of the
merger; or
- if any governmental entity has failed to issue an order or ruling or has
not taken any action necessary for the consummation of the merger.
Burr-Brown may terminate the merger agreement under the following
circumstances:
- if, pursuant to the terms and conditions of the merger agreement, prior
to Burr-Brown stockholder approval of the merger, the Burr-Brown board of
directors authorizes Burr-Brown to enter into a binding agreement
relating to an unsolicited proposal by a third party to acquire
Burr-Brown on terms determined by the Burr-Brown board of directors to be
more favorable than the terms of the merger with Texas Instruments; or
- if Texas Instruments or Burma Acquisition has breached any
representation, warranty, covenant or agreement in the merger agreement
that cannot be cured and would cause certain conditions to the
consummation of the merger not to be met before December 31, 2000, or if
applicable, the extended termination date.
Texas Instruments may terminate the merger agreement under the following
circumstances:
- if Burr-Brown enters into a binding agreement for a proposal by a third
party to acquire Burr-Brown on terms determined by the Burr-Brown board
of directors to be more favorable than the terms of the merger with Texas
Instruments;
5
<PAGE> 14
- if the Burr-Brown board of directors has withdrawn or adversely modified
its approval or recommendation of the merger; or
- if Burr-Brown has breached any representation, warranty, covenant or
agreement in the merger agreement that cannot be cured and would cause
certain conditions to the consummation of the merger not to be met before
December 31, 2000, or if applicable, the extended termination date.
Termination Fees (See page 58)
Burr-Brown has agreed to pay Texas Instruments a termination fee of
$223,203,810 if the merger agreement is terminated in any of the following
circumstances:
- if an acquisition proposal by a third party has been made or any third
party has publicly announced an intention, whether or not conditional, to
make an acquisition proposal in respect of Burr-Brown or any of its
subsidiaries and the merger agreement is subsequently terminated (1) by
either Texas Instruments or Burr-Brown because Burr-Brown's stockholders
have not approved the merger or (2) by Texas Instruments because
Burr-Brown, in violation of the terms and conditions of the merger
agreement, solicits a proposal to acquire Burr-Brown from any party other
than Texas Instruments or Burma Acquisition or participates in any
discussions or negotiations regarding an acquisition, furnishes any
information to any third party or takes any other actions that may
reasonably be expected to lead to a proposal for an acquisition of
Burr-Brown by any party other than Texas Instruments or Burma Acquisition
and, in the case of clauses (1) or (2), within nine months of the
termination Burr-Brown enters into an agreement with, or completes an
extraordinary transaction with, a third party regarding an acquisition of
Burr-Brown;
- if, prior to Burr-Brown stockholder approval of the merger, Burr-Brown
terminates the merger agreement to enter into a binding agreement
relating to an unsolicited proposal by a third party determined by the
Burr-Brown board of directors to be more favorable than the terms of the
merger with Texas Instruments;
- if Texas Instruments terminates the merger agreement because Burr-Brown
enters into a binding agreement relating to a proposal by a third party
to acquire Burr-Brown on terms determined by the Burr-Brown board of
directors to be more favorable than the terms of the merger with Texas
Instruments; or
- if Texas Instruments terminates the merger agreement because the
Burr-Brown board of directors withdraws or adversely modifies its
approval or recommendation of the merger and within nine months of the
termination Burr-Brown enters into an agreement with, or completes an
extraordinary transaction with, a third party regarding an acquisition of
Burr-Brown.
Burr-Brown will not be obligated to pay a termination fee to Texas
Instruments in the instances described in the first and fourth bullets above if:
- Burr-Brown acquires a third party in a merger, recapitalization, share
exchange or similar transaction in which Burr-Brown survives and the
stockholders of the acquired third party receive shares of Burr-Brown
common stock which, immediately following the closing of the acquisition
of the third party, represents no more than 45% of the issued and
outstanding shares of Burr-Brown common stock; and
- the third party acquired by Burr-Brown was not the subject of an
acquisition proposal at any time after the date of the merger agreement
and prior to the termination of the merger agreement.
NO DISSENTERS' APPRAISAL RIGHTS (See page 39)
Because Burr-Brown's common stock is traded on the Nasdaq National Market
and Texas Instruments' common stock is traded on the NYSE, holders of Burr-Brown
common stock will not be entitled under the Delaware General Corporation Law to
exercise dissenting stockholders' appraisal rights with respect to their shares
of Burr-Brown common stock.
6
<PAGE> 15
ACCOUNTING TREATMENT (See page 39)
We expect the merger to qualify as a "pooling of interests" under generally
accepted accounting principles, which means that for accounting and financial
reporting purposes, the recorded assets and liabilities of Burr-Brown will be
carried forward and combined with those of Texas Instruments at their recorded
amounts.
U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER TO BURR-BROWN STOCKHOLDERS
(See page 43)
The merger is intended to qualify as a nontaxable transaction and we expect
that the exchange of your shares of Burr-Brown common stock for shares of Texas
Instruments common stock will generally not cause you to recognize any gain or
loss for U.S. federal income tax purposes. You will, however, have to recognize
gain, if any, in connection with any cash you receive in lieu of fractional
shares of Texas Instruments common stock.
TAX MATTERS ARE VERY COMPLICATED AND THE TAX CONSEQUENCES OF THE MERGER TO
YOU WILL DEPEND ON THE FACTS OF YOUR OWN SITUATION. YOU SHOULD CONSULT YOUR OWN
TAX ADVISORS FOR A FULL UNDERSTANDING OF THE TAX CONSEQUENCES OF THE MERGER TO
YOU.
REGULATORY MATTERS (See page 44)
The merger is subject to antitrust laws in the United States and other
countries. We have made the required filings with the U.S. Department of Justice
and the Federal Trade Commission as well as the appropriate foreign regulatory
agencies. The parties filed premerger notifications with the Antitrust Division
of the Department of Justice and the Federal Trade Commission on July 6, 2000.
The waiting period is scheduled to expire on August 7, 2000, unless a request
for additional information is made by the reviewing agency prior to that time or
the parties request for early termination of the waiting period is granted. In
addition we have made filings with the appropriate foreign regulatory agencies.
We cannot assure you that the U.S. Department of Justice or the Federal Trade
Commission, appropriate foreign regulatory agencies or others will not challenge
the merger at any time before or after its completion.
VOTING AGREEMENT (See page 60)
In order to induce Texas Instruments to enter into the merger agreement,
some of the officers and directors of Burr-Brown entered into a voting agreement
with Texas Instruments on June 21, 2000. Those officers and directors who signed
the voting agreement have agreed to vote an aggregate of 16,787,528 shares of
Burr-Brown common stock held by them, representing approximately 29.6% of the
total outstanding voting power as of the record date, in favor of approval of
the merger.
STOCK OPTION AGREEMENT (See page 60)
In order to induce Texas Instruments to enter into the merger agreement,
Burr-Brown and Texas Instruments entered into a stock option agreement pursuant
to which Burr-Brown granted Texas Instruments an irrevocable option to purchase
up to 11,236,702 shares of Burr-Brown common stock, representing 19.9% of the
outstanding Burr-Brown common stock as of June 21, 2000, at an exercise price of
$112.94 per share. The option is only exercisable in the event Texas Instruments
is entitled to receive a termination fee under the merger agreement.
INTERESTS OF CERTAIN PERSONS IN THE MERGER (See page 38)
In considering the recommendation of the Burr-Brown board of directors with
respect to the merger and the transactions contemplated by the merger agreement,
stockholders of Burr-Brown should be aware that some members of management and
the board of directors of Burr-Brown have particular interests in the merger
that are different from, or in addition to, the interests of stockholders of
Burr-Brown generally.
RISK FACTORS (See page 14)
Stockholders of Burr-Brown are urged to consider the items under the
section entitled "Risk Factors" beginning on page 14 in determining whether to
vote in favor of approval of the merger.
7
<PAGE> 16
SELECTED HISTORICAL FINANCIAL DATA OF TEXAS INSTRUMENTS
Set forth below is selected financial data for Texas Instruments for the
periods and as of the dates indicated. This selected historical financial data
is only a summary and we urge you to read this summary in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the financial statements and related notes to those financial
statements contained in Texas Instruments' proxy statement for the 2000 annual
meeting of stockholders and incorporated by reference in its annual report on
Form 10-K for the year ended December 31, 1999, and contained in its quarterly
report on Form 10-Q for the quarter ended March 31, 2000.
<TABLE>
<CAPTION>
IN MILLIONS, EXCEPT PER-SHARE DATA
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
-------------------------------------------------------------- -----------------------
1999 1998 1997 1996 1995 2000 1999
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net revenues.................... $ 9,468 $ 8,617 $ 9,972 $ 10,113 $ 11,554 $ 2,653 $ 2,081
Operating costs and expenses.... 7,772 8,205 9,306 10,103 10,087 2,131 1,775
---------- ---------- ---------- ---------- ---------- ---------- ----------
Profit from operations.......... 1,696 412 666 10 1,467 522 306
Other income (expense) net...... 398 295 199 81 83 124 88
Interest on loans............... 75 75 94 73 48 19 18
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income from continuing
operations before provision
for income taxes and
extraordinary item............ 2,019 632 771 18 1,502 627 376
Provision for income taxes...... 613 216 432 37 484 201 121
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from continuing
operations before
extraordinary Item............ $ 1,406 $ 416 $ 339 $ (19) $ 1,018 $ 426 $ 255
========== ========== ========== ========== ========== ========== ==========
Diluted earnings (loss) per
common share from continuing
operations before
extraordinary item(1)......... $ .84 $ .25 $ .21 $ (.01) $ .64 .25 $ .15
Basic earnings (loss) per common
share from continuing
operations before
extraordinary item(1)......... $ .87 $ .26 $ .21 $ (.01) $ .67 .26 $ .16
Dividends declared per common
share(1)...................... $ .085 $ .064 $ .085 $ .085 $ .08 $ .021 $ .021
Average common and dilutive
potential common shares
outstanding during period, in
thousands(1).................. 1,673,519 1,636,500 1,623,672 1,547,320 1,579,146 1,703,236 1,649,333
</TABLE>
<TABLE>
<CAPTION>
IN MILLIONS
AS OF DECEMBER 31, AS OF
------------------------------------------ MARCH 31,
1999 1998 1997 1996 1995 2000
------ ------ ------ ------ ------ ---------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and short-term investments............... $2,662 $2,341 $3,105 $1,046 $1,602 $2,430
Working capital............................... 3,427 2,776 3,708 2,046 2,628 3,456
Property, plant and equipment (net)........... 3,835 3,451 4,264 4,209 2,933 4,216
Total assets.................................. 15,028 11,490 11,093 9,539 8,891 17,500
Long-term debt................................ 1,097 1,027 1,286 1,697 804 991
Stockholders' equity.......................... 9,255 6,736 6,109 4,239 4,206 11,199
</TABLE>
---------------
(1) Reflects a two-for-one stock split effective May 22, 2000.
8
<PAGE> 17
SELECTED HISTORICAL FINANCIAL DATA OF BURR-BROWN
Set forth below is selected financial data for Burr-Brown for the periods
and as of the dates indicated. This selected historical financial data is only a
summary and we urge you to read this summary in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the financial statements and related notes to those financial statements
contained in Burr-Brown's annual report on Form 10-K for the year ended December
31, 1999 and quarterly report on Form 10-Q for the quarter ended April 1, 2000.
<TABLE>
<CAPTION>
IN THOUSANDS, EXCEPT PER-SHARE DATA
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED
---------------------------------------------------- -----------------------------
1999 1998 1997 1996 1995 APRIL 1, 2000 APRIL 3, 1999
-------- -------- -------- -------- -------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Net revenues.............. $291,448 $258,094 $252,102 $219,997 $269,162 $90,554 $61,007
Cost of revenues.......... 138,704 125,446 125,075 109,228 138,257 40,760 30,228
-------- -------- -------- -------- -------- ------- -------
Gross profit............ 152,744 132,648 127,027 110,769 130,905 49,794 30,779
Operating costs and
expenses................ 93,117 87,995 83,459 80,654 90,370 25,901 21,154
-------- -------- -------- -------- -------- ------- -------
Income from operations.... 59,627 44,653 43,568 30,115 40,535 23,893 9,625
Other income (expense),
net..................... 3,002 3,802 3,092 9,729 (518) 2,160 600
-------- -------- -------- -------- -------- ------- -------
Income before taxes....... 62,629 48,455 46,660 39,844 40,017 26,053 10,225
Provision for income
taxes................... 16,911 12,598 13,998 10,160 10,805 7,556 2,761
-------- -------- -------- -------- -------- ------- -------
Net income................ $ 45,718 $ 35,857 $ 32,662 $ 29,684 $ 29,212 $18,497 $ 7,464
======== ======== ======== ======== ======== ======= =======
Basic income per share.... $ .83 $ .65 $ .60 $ .55 $ .58 $ .33 $ .14
Diluted income per
share................... .78 .62 .57 .53 .55 .31 .13
Shares used in per share
calculations:
-- Basic net income..... 55,296 55,005 54,081 54,005 50,250 55,816 55,038
-- Diluted net income... 58,570 57,419 56,902 56,265 52,972 60,605 57,372
</TABLE>
<TABLE>
<CAPTION>
IN THOUSANDS
AS OF DECEMBER 31, AS OF
---------------------------------------------------- APRIL 1,
1999 1998 1997 1996 1995 2000
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash, cash equivalents and
short-term investments........... $163,321 $ 76,047 $ 54,284 $ 52,840 $ 86,215 $431,119
Working capital.................... 229,586 141,372 114,017 97,914 129,908 496,280
Total assets....................... 399,717 338,691 299,388 261,588 252,249 680,885
Total debt......................... 20,105 21,445 12,145 17,450 20,862 267,322
Stockholders' equity............... 323,218 273,513 234,916 199,406 179,145 348,492
</TABLE>
9
<PAGE> 18
COMPARATIVE MARKET PRICE AND DIVIDEND INFORMATION
COMPARATIVE MARKET PRICE DATA
The following table presents trading information for Texas Instruments
common stock on the New York Stock Exchange and Burr-Brown common stock on the
Nasdaq National Market on June 21, 2000 and July 19, 2000. June 21, 2000 was the
last full trading day prior to our announcement of the signing of the merger
agreement. July 19, 2000 was the last trading day for which it was practicable
to include information in this proxy statement/prospectus. YOU ARE URGED TO
OBTAIN CURRENT MARKET QUOTATIONS FOR THE TEXAS INSTRUMENTS COMMON STOCK AND THE
BURR-BROWN COMMON STOCK.
<TABLE>
<CAPTION>
TEXAS INSTRUMENTS COMMON STOCK BURR-BROWN COMMON STOCK
-------------------------------- ------------------------------
HIGH LOW CLOSE HIGH LOW CLOSE
-------- -------- -------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
June 21, 2000................. $ 88.00 $ 80.00 $ 82.00 $ 76.00 $ 71.75 $ 72.625
July 19, 2000................. $ 70.50 $ 67.00 $ 67.25 $ 90.56 $ 86.00 $ 86.25
</TABLE>
On July 19, 2000 there were approximately 28,397 holders of record of Texas
Instruments common stock and approximately 796 holders of record of Burr-Brown
common stock.
HISTORICAL MARKET PRICE DATA FOR TEXAS INSTRUMENTS
Texas Instruments common stock is listed on the New York Stock Exchange
under the symbol "TXN." The table below sets forth for each of the calendar
quarters indicated, the high and low sales prices per share of Texas Instruments
common stock on the composite tape as reported by The Wall Street Journal and
the dividends per share paid on the Texas Instruments common stock, both as
adjusted for stock splits. Additional stock splits may be considered in the
future based on a variety of factors, including market conditions and the
trading price of Texas Instruments common stock.
<TABLE>
<CAPTION>
CALENDAR QUARTER
-----------------------------------------------
1ST 2ND 3RD 4TH
------- ------- -------- -------
<S> <C> <C> <C> <C>
Stock prices:
2000 High.................................. $99.78 $90.00 $ 74.50(1)
Low..................................... 45.25 60.13 63.75(1)
1999 High.................................. 26.97 36.25 46.72 $55.75
Low..................................... 21.50 24.75 33.53 37.88
1998 High.................................. 15.69 16.75 15.91 22.59
Low..................................... 10.06 11.72 11.50 11.34
Dividends paid:
2000....................................... .021 .021 -- --
1999....................................... .021 .021 .021 .021
1998....................................... .021 .021 .021 .021
</TABLE>
---------------
(1) Through July 19, 2000.
10
<PAGE> 19
HISTORICAL MARKET PRICE DATA FOR BURR-BROWN
Burr-Brown common stock trades on the Nasdaq National Market under the
symbol "BBRC." The table below sets forth for each of the calendar quarters
indicated, the high and low sales prices per share of Burr-Brown common stock as
reported by Nasdaq, as adjusted for stock splits. Burr-Brown has never declared
or paid a cash dividend on its common stock.
<TABLE>
<CAPTION>
CALENDAR QUARTER
-------------------------------------------
1ST 2ND 3RD 4TH
------ ------- ------ ------
<S> <C> <C> <C> <C>
Stock prices:
2000 High...................................... $66.69 $104.88 $95.13(1)
Low......................................... 31.13 50.63 79.00(1)
1999 High...................................... 18.00 26.69 28.81 $36.50
Low......................................... 11.94 15.69 22.75 22.69
1998 High...................................... 19.00 21.00 16.25 16.63
Low......................................... 11.31 12.81 8.00 8.94
</TABLE>
---------------
(1) Through July 19, 2000.
11
<PAGE> 20
TEXAS INSTRUMENTS
SELECTED UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
IN MILLIONS, EXCEPT PER-SHARE DATA
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
------------------------- ---------------
1999 1998 1997 2000 1999
------ ------ ------- ------ ------
<S> <C> <C> <C> <C> <C>
Statement of Operations Data:(1)
Total revenues................................. $9,759 $8,875 $10,224 $2,744 $2,142
Income from continuing operations before
extraordinary item.......................... 1,452 452 372 444 262
Income from continuing operations before
extraordinary item per share -- diluted..... 0.83 0.26 0.22 0.25 0.15
Income from continuing operations before
extraordinary item per share -- basic....... 0.86 0.27 0.23 0.26 0.16
</TABLE>
<TABLE>
<CAPTION>
AS OF
MARCH 31,
2000
---------
<S> <C>
Balance Sheet Data:(1)
Total assets.............................................. $18,181
Long-term debt, excluding current portion................. 1,243
Stockholders' equity...................................... 11,517
</TABLE>
---------------
(1) See notes to unaudited pro forma combined financial information on page 23
of this proxy statement/ prospectus.
12
<PAGE> 21
COMPARATIVE PER SHARE DATA
We have summarized below the per share information of Texas Instruments and
Burr-Brown on a historical, pro forma combined and pro forma equivalent basis,
each as adjusted for stock splits. The information should be read in conjunction
with the historical financial statements and related notes to those financial
statements of Texas Instruments and Burr-Brown that are incorporated by
reference in this proxy statement/prospectus. For information on where you can
find more information about Texas Instruments and Burr-Brown, see pages 63 and
65.
You should be aware that this pro forma information may not be indicative
of what actual results will be in the future or what the results would have been
for the periods presented.
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, THREE MONTHS ENDED
--------------------- -------------------------------
1999 1998 1997 APRIL 1, 2000 APRIL 3, 1999
----- ----- ----- -------------- --------------
<S> <C> <C> <C> <C> <C>
Burr-Brown Historical
Income per common share, basic............................ $ .83 $ .65 $ .60 $ .33 $ .14
Income per common share, diluted.......................... .78 .62 .57 .31 .13
Cash dividends declared per share......................... -- -- -- -- --
Book value per share(1)................................... 5.81 6.22
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, THREE MONTHS ENDED
--------------------- -------------------------------
1999 1998 1997 MARCH 31, 2000 MARCH 31, 1999
----- ----- ----- -------------- --------------
<S> <C> <C> <C> <C> <C>
Texas Instruments Historical
Income per common share from continuing operations,
basic................................................... $ .87 $ .26 $ .21 $ .26 $ .16
Income per common share from continuing operations,
diluted................................................. .84 .25 .21 .25 .15
Cash dividends declared per share......................... .085 .064 .085 .021 .021
Book value per share(1)................................... 5.69 6.84
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, THREE MONTHS ENDED
--------------------- -------------------------------
1999 1998 1997 MARCH 31, 2000 MARCH 31, 1999
----- ----- ----- -------------- --------------
<S> <C> <C> <C> <C> <C>
Unaudited Pro Forma Combined(2)
Income per common share from continuing operations,
basic................................................... $ .86 $ .27 $ .23 $ .26 $ .16
Income per common share from continuing operations,
diluted................................................. .83 .26 .22 .25 .15
Cash dividends declared per share......................... .085 .064 .085 .021 .021
Book value per share...................................... 5.62 6.74
Burr-Brown Per Share Equivalent(3)
Income per common share from continuing operations,
basic................................................... 1.12 .35 .30 .34 .21
Income per common share from continuing operations,
diluted................................................. 1.08 .34 .29 .33 .20
Cash dividends declared per share......................... .111 .083 .111 .027 .027
Book value per share...................................... 7.31 8.76
</TABLE>
---------------
(1) Historical book value per share is computed by dividing stockholders' equity
by the number of shares of common stock outstanding at the end of each
period.
(2) For purposes of the unaudited pro forma combined share data, Burr-Brown's
historical financial data has been combined for the years ended December 31,
1999, 1998 and 1997 and the three months ended April 1, 2000 and April 3,
1999 with Texas Instruments' historical financial data for the years ended
December 31, 1999, 1998 and 1997 and the three months ended March 31, 2000
and 1999. The unaudited pro forma combined share data has been prepared as
if the merger had occurred at the beginning of each respective Texas
Instruments fiscal period, except with respect to book value data, which has
been prepared as if the merger had occurred at the end of each respective
Texas Instruments fiscal period. Pro forma cash dividends declared per share
represent historical dividends per share declared by Texas Instruments.
(3) The equivalent pro forma share amounts of Burr-Brown are calculated by
multiplying unaudited pro forma combined income per share and book value per
share amounts by the exchange ratio of 1.3.
13
<PAGE> 22
RISK FACTORS
We urge you to carefully consider the risk factors set forth below, as well
as the other information set forth in this proxy statement/prospectus, before
voting in favor of approval of the merger. In addition, you are strongly urged
to consider the risk factors set forth elsewhere in or incorporated by reference
into this proxy statement/prospectus. This proxy statement/prospectus contains
forward-looking statements which involve risks and uncertainties. Our actual
results may differ significantly from the results discussed in the
forward-looking statements. Factors that might cause these differences include,
but are not limited to, the risk factors set forth below.
YOU WILL RECEIVE 1.3 SHARES OF TEXAS INSTRUMENTS COMMON STOCK FOR EACH SHARE OF
BURR-BROWN COMMON STOCK OWNED DESPITE CHANGES IN THE MARKET VALUE OF TEXAS
INSTRUMENTS COMMON STOCK OR BURR-BROWN COMMON STOCK.
Upon completion of the merger, each share of Burr-Brown common stock will
be exchanged for 1.3 shares of Texas Instruments common stock. There will be no
adjustment for changes in the market price of either Texas Instruments common
stock or Burr-Brown common stock. Texas Instruments and Burr-Brown are not
permitted to abandon the merger nor is Burr-Brown permitted to resolicit the
vote of its stockholders solely because of changes in the market price of Texas
Instruments common stock. Accordingly, the specific dollar value of Texas
Instruments common stock to be received upon completion of the merger will
depend on the market value of Texas Instruments common stock at the time of
completion of the merger. The share price of Texas Instruments common stock is
by nature subject to general fluctuations in the market for publicly traded
securities and has experienced significant volatility. No prediction can be made
as to the market price of Texas Instruments common stock at the completion of
the merger or as to the market price of Texas Instruments common stock after the
completion of the merger.
BURR-BROWN OFFICERS AND DIRECTORS HAVE CONFLICTS OF INTEREST THAT MAY INFLUENCE
THEM TO SUPPORT OR RECOMMEND THE MERGER.
The officers and directors of Burr-Brown participate in arrangements that
provide them with interests in the merger that are different from, or are in
addition to, yours. Pursuant to the existing option plan, stock options held by
Burr-Brown's non-employee directors will vest as a result of the merger. In
addition, Syrus P. Madavi, Chief Executive Officer of Burr-Brown, has entered
into an agreement with Texas Instruments that provides for, among other things,
payment of a transition bonus of $3.5 million if Mr. Madavi is still employed by
Texas Instruments through the first anniversary of closing of the merger or if
Texas Instruments terminates Mr. Madavi prior to the first anniversary of
closing of the merger. Texas Instruments has also agreed to provide transition
bonuses to certain officers and other employees of Burr-Brown, including J.
Scott Blouin and Kenneth G. Wolf. Furthermore, Texas Instruments has agreed to
indemnify the officers and directors of Burr-Brown for their acts and omissions
as officers and directors of Burr-Brown prior to the merger to the maximum
extent permitted by Delaware law. See the section entitled "The
Merger -- Interests of Certain Persons in the Merger" on page 38 for more
information.
As a result of these interests, these officers and directors could be more
likely to support or recommend to Burr-Brown stockholders the approval of the
merger than if they did not have these interests. Burr-Brown stockholders should
consider whether these interests may have influenced these officers and
directors to support or recommend the approval of the merger.
TEXAS INSTRUMENTS MAY HAVE DIFFICULTY INTEGRATING BURR-BROWN'S OPERATIONS AND
RETAINING IMPORTANT EMPLOYEES OF BURR-BROWN.
There can be no guarantee that management will be able to successfully
integrate Burr-Brown's employees and operations following the merger and there
is the risk that Texas Instruments will be unable to retain all of Burr-Brown's
key employees for a number of reasons, including the risk that the cultures of
the companies will not blend. There also can be no assurance that any
contemplated synergies from the integration of the businesses will be realized.
14
<PAGE> 23
THE INTEGRATION OF BURR-BROWN WILL REQUIRE SUBSTANTIAL TIME AND EFFORT OF KEY
MANAGERS OF TEXAS INSTRUMENTS, WHICH COULD DIVERT THE ATTENTION OF THOSE
MANAGERS FROM OTHER MATTERS.
The merger will place significant demands on key managers of Texas
Instruments. Risks exist in the consolidation of the systems, operations and
administrative functions of Burr-Brown and Texas Instruments. Managing the
growth of the Burr-Brown business may limit the time available for those
managers of Texas Instruments to attend to other operational, financial and
strategic issues.
BURR-BROWN STOCKHOLDERS SHOULD NOT PLACE UNDUE RELIANCE ON FORWARD-LOOKING
INFORMATION.
Information contained in this proxy statement/prospectus may contain
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which can be
identified by the use of forward-looking terminology like "may," "will,"
"expect," "intend," "anticipate," "believe," "estimate," "continue" or "pro
forma" or the negative or other variations of those words or comparable
terminology.
All forward-looking statements contained in this proxy statement/prospectus
are expressly qualified in their entirety by the cautionary statements set forth
in this proxy statement/prospectus and the documents incorporated by reference.
Stockholders of Burr-Brown are cautioned not to place undue reliance on these
forward-looking statements which speak only as of the date of this proxy
statement/prospectus. Neither Texas Instruments nor Burr-Brown undertakes any
responsibility to update you on the occurrence of any anticipated events which
may cause actual results to differ from those expressed or implied by the
forward-looking statements contained in this proxy statement/prospectus or in
documents incorporated by reference in this proxy statement/prospectus.
We urge you to carefully consider the following important factors that
could cause actual results to differ materially from the expectations of Texas
Instruments or its management:
- market demand for semiconductors, particularly for digital signal
processors and analog integrated circuits in key markets, such as
telecommunications and computers;
- Texas Instruments' ability to develop, manufacture and market innovative
products in a rapidly changing technological environment;
- Texas Instruments' ability to compete in products and prices in an
intensely competitive industry;
- Texas Instruments' ability to maintain and enforce a strong intellectual
property portfolio and obtain needed licenses from third parties;
- timely completion and successful integration of announced acquisitions;
- global economic, social and political conditions in the countries in
which Texas Instruments and its customers and suppliers operate,
including fluctuations in foreign currency exchange rates;
- losses or curtailments of purchases from key customers;
- Texas Instruments' ability to recruit and retain skilled personnel; and
- availability of raw materials and critical manufacturing equipment.
For a more detailed discussion of these factors, see the text under the
heading "Cautionary Statements Regarding Future Results of Operations" in Item 1
of Texas Instruments' most recent Form 10-K.
15
<PAGE> 24
TEXAS INSTRUMENTS
UNAUDITED PRO FORMA COMBINED
FINANCIAL INFORMATION
The following unaudited pro forma combined financial information gives
effect to the merger using the "pooling of interests" method of accounting,
after giving effect to the pro forma adjustments described in the accompanying
notes. The unaudited pro forma combined financial information should be read in
conjunction with the audited historical consolidated financial statements and
related notes of Texas Instruments and Burr-Brown, which are incorporated by
reference into this proxy statement/prospectus.
The unaudited pro forma combined balance sheet gives effect to the merger
as if it had occurred on the balance sheet date. The unaudited pro forma
combined balance sheet combines Texas Instruments' March 31, 2000 unaudited
consolidated balance sheet with Burr-Brown's April 1, 2000 unaudited
consolidated balance sheet. The unaudited pro forma combined statements of
operations give effect to the merger as if it had occurred at the beginning of
the periods presented. The unaudited pro forma combined statements of operations
combine Texas Instruments' historical operating results for the three months
ended March 31, 2000 and 1999 and for the fiscal years ended December 31, 1999,
1998 and 1997 with the corresponding Burr-Brown historical operating results for
the three months ended April 1, 2000 and April 3, 1999 and for the fiscal years
ended December 31, 1999, 1998 and 1997, respectively.
For purposes of the preparation of the unaudited pro forma combined balance
sheet, merger-related expenses (which the companies anticipate will be
approximately $30 million on a pre-tax basis) were included. The estimate of
merger-related expenses is preliminary and subject to change.
Certain financial statement balances of Burr-Brown have been reclassified
to conform with the Texas Instruments financial statement presentation.
The unaudited pro forma combined financial information is presented for
illustrative purposes only and does not purport to be indicative of the
operating results or financial position that would have actually occurred if the
merger had been in effect on the dates indicated, nor is it necessarily
indicative of future operating results or financial position of the merged
companies. The pro forma adjustments are based on the information and
assumptions available as of the date of this proxy statement/prospectus. The
unaudited pro forma combined financial statements do not give effect to any cost
savings or synergies that may result from the integration of Texas Instruments'
and Burr-Brown's operations.
16
<PAGE> 25
TEXAS INSTRUMENTS
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF MARCH 31, 2000
IN MILLIONS
<TABLE>
<CAPTION>
HISTORICAL
------------------------------
TEXAS
INSTRUMENTS BURR-BROWN PRO FORMA PRO FORMA
MARCH 31, 2000 APRIL 1, 2000 ADJUSTMENTS COMBINED
-------------- ------------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents...................... $ 675 $399 $ $ 1,074
Short-term investments......................... 1,755 32 1,787
Accounts receivable, net....................... 1,911 68 1,979
Inventories.................................... 937 53 990
Prepaid expenses............................... 113 9 122
Deferred income taxes.......................... 583 10 593
------- ---- --- -------
Total current assets................... 5,974 571 6,545
Property, plant and equipment, net............... 4,216 99 4,315
Investments...................................... 6,364 1 6,365
Goodwill and other acquisition-related
intangibles.................................... 500 -- 500
Deferred income taxes............................ 39 -- 39
Other assets..................................... 407 10 417
------- ---- --- -------
Total assets........................... $17,500 $681 $ $18,181
======= ==== === =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Loans payable and current portion long term
debt........................................ $ 385 $ 14 $ 399
Accounts payable............................... 853 23 876
Accrued and other current liabilities.......... 1,280 38 $30(a) 1,348
------- ---- --- -------
Total current liabilities.............. 2,518 75 30 2,623
Long term debt................................... 991 252 1,243
Accrued retirement costs......................... 741 1 742
Deferred income taxes............................ 1,724 5 1,729
Deferred credits and other liabilities........... 327 -- 327
Stockholders' equity............................. 11,199 348 (30)(a) 11,517
------- ---- --- -------
Total liabilities and stockholders'
equity............................... $17,500 $681 $-- $18,181
======= ==== === =======
</TABLE>
17
<PAGE> 26
TEXAS INSTRUMENTS
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2000
IN MILLIONS, EXCEPT PER-SHARE DATA
<TABLE>
<CAPTION>
HISTORICAL
------------------------------
TEXAS BURR-BROWN
INSTRUMENTS THREE
THREE MONTHS MONTHS
ENDED ENDED PRO FORMA PRO FORMA
MARCH 31, 2000 APRIL 1, 2000 ADJUSTMENTS COMBINED
-------------- ------------- ------------ ----------
<S> <C> <C> <C> <C>
Net revenues............................... $ 2,653 $ 91 $ $ 2,744
Operating costs and expenses:
Cost of revenues......................... 1,370 41 1,411
Research and development................. 373 13 386
Marketing, general and administrative.... 388 13 401
---------- ------- ------- ----------
Total............................ 2,131 67 2,198
---------- ------- ------- ----------
Profit from operations..................... 522 24 546
Other income (expense), net................ 124 3 127
Interest on loans.......................... 19 1 20
---------- ------- ------- ----------
Income from continuing operations before
provision for income taxes............... 627 26 653
Provision for income taxes................. 201 8 209
---------- ------- ------- ----------
Income from continuing operations.......... $ 426 $ 18 $ $ 444
========== ======= ======= ==========
Diluted earnings per common share from
continuing operations.................... $ 0.25 $ 0.31 $ 0.25
========== ======= ==========
Basic earnings per common share from
continuing operations.................... $ 0.26 $ 0.33 $ 0.26
========== ======= ==========
Weighted average common shares outstanding
(in thousands):
Diluted.................................. 1,703,236(b) 60,605 1,782,023(c)
Basic.................................... 1,632,114(b) 55,816 1,704,675(c)
</TABLE>
18
<PAGE> 27
TEXAS INSTRUMENTS
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1999
IN MILLIONS, EXCEPT PER-SHARE DATA
<TABLE>
<CAPTION>
HISTORICAL
----------------------------------
TEXAS INSTRUMENTS BURR-BROWN
THREE MONTHS THREE MONTHS
ENDED MARCH 31, ENDED APRIL 3, PRO FORMA PRO FORMA
1999 1999 ADJUSTMENTS COMBINED
----------------- -------------- ----------- ----------
<S> <C> <C> <C> <C>
Net revenues............................ $ 2,081 $ 61 $ $ 2,142
Operating costs and expenses:
Cost of revenues...................... 1,133 30 1,163
Research and development.............. 311 10 321
Marketing, general and
administrative..................... 331 11 342
---------- ------- -------- ----------
Total......................... 1,775 51 1,826
---------- ------- -------- ----------
Profit (loss) from operations........... 306 10 316
Other income (expense), net............. 88 -- 88
Interest on loans....................... 18 -- 18
---------- ------- -------- ----------
Income from continuing operations before
provision for income taxes............ 376 10 386
Provision for income taxes.............. 121 3 124
---------- ------- -------- ----------
Income from continuing operations....... $ 255 $ 7 $ $ 262
========== ======= ======== ==========
Diluted earnings per common share from
continuing operations................. $ 0.15 $ 0.13 $ 0.15
========== ======= ==========
Basic earnings per common share from
continuing operations................. $ 0.16 $ 0.14 $ 0.16
========== ======= ==========
Weighted average common shares
outstanding (in thousands):
Diluted............................ 1,649,333(b) 57,372 1,723,916(c)
Basic.............................. 1,598,679(b) 55,038 1,670,228(c)
</TABLE>
19
<PAGE> 28
TEXAS INSTRUMENTS
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
IN MILLIONS, EXCEPT PER-SHARE DATA
<TABLE>
<CAPTION>
HISTORICAL
-------------------------------------
TEXAS INSTRUMENTS BURR-BROWN
YEAR ENDED YEAR ENDED PRO FORMA PRO FORMA
DECEMBER 31, 1999 DECEMBER 31, 1999 ADJUSTMENTS COMBINED
----------------- ----------------- ----------- ----------
<S> <C> <C> <C> <C>
Net revenues......................... $ 9,468 $ 291 $ $ 9,759
Operating costs and expenses:
Cost of revenues................... 4,931 138 5,069
Research and development........... 1,333 46 1,379
Marketing, general and
administrative.................. 1,508 47 1,555
---------- ------- -------- ----------
Total...................... 7,772 231 8,003
---------- ------- -------- ----------
Profit from operations............... 1,696 60 1,756
Other income (expense), net.......... 398 3 401
Interest on loans.................... 75 -- 75
---------- ------- -------- ----------
Income from continuing operations
before provision for income
taxes.............................. 2,019 63 2,082
Provision for income taxes........... 613 17 630
---------- ------- -------- ----------
Income from continuing operations.... $ 1,406 $ 46 $ $ 1,452
========== ======= ======== ==========
Diluted earnings per common share
from continuing operations......... $ 0.84 $ 0.78 $ 0.83
========== ======= ==========
Basic earnings per common share from
continuing operations.............. $ 0.87 $ 0.83 $ 0.86
========== ======= ==========
Weighted average common shares
outstanding (in thousands):
Diluted............................ 1,673,519(b) 58,570 1,749,660(c)
Basic.............................. 1,608,397(b) 55,296 1,680,282(c)
</TABLE>
20
<PAGE> 29
TEXAS INSTRUMENTS
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
IN MILLIONS, EXCEPT PER-SHARE DATA
<TABLE>
<CAPTION>
HISTORICAL
-------------------------------------
TEXAS INSTRUMENTS BURR-BROWN
YEAR ENDED YEAR ENDED PRO FORMA PRO FORMA
DECEMBER 31, 1998 DECEMBER 31, 1998 ADJUSTMENTS COMBINED
----------------- ----------------- ----------- ----------
<S> <C> <C> <C> <C>
Net revenues.......................... $ 8,617 $ 258 $ $ 8,875
Operating costs and expenses:
Cost of revenues.................... 5,479 125 5,604
Research and development............ 1,225 40 1,265
Marketing, general and
administrative................... 1,501 48 1,549
---------- ------- ---------- ----------
Total....................... 8,205 213 8,418
---------- ------- ---------- ----------
Profit from operations................ 412 45 457
Other income (expense), net........... 295 4 299
Interest on loans..................... 75 1 76
---------- ------- ---------- ----------
Income from continuing operations
before provision for income taxes... 632 48 680
Provision for income taxes............ 216 12 228
---------- ------- ---------- ----------
Income from continuing operations..... $ 416 $ 36 $ $ 452
========== ======= ========== ==========
Diluted earnings per common share from
continuing operations............... $ 0.25 $ 0.62 $ 0.26
========== ======= ==========
Basic earnings per common share from
continuing operations............... $ 0.26 $ 0.65 $ 0.27
========== ======= ==========
Weighted average common shares
outstanding (in thousands):
Diluted............................. 1,636,500(b) 57,419 1,711,145(c)
Basic............................... 1,593,800(b) 55,005 1,665,307(c)
</TABLE>
21
<PAGE> 30
TEXAS INSTRUMENTS
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
IN MILLIONS, EXCEPT PER-SHARE DATA
<TABLE>
<CAPTION>
HISTORICAL
-------------------------------------
TEXAS INSTRUMENTS BURR-BROWN
YEAR ENDED YEAR ENDED PRO FORMA PRO FORMA
DECEMBER 31, 1997 DECEMBER 31, 1997 ADJUSTMENTS COMBINED
----------------- ----------------- ----------- ----------
<S> <C> <C> <C> <C>
Net revenues......................... $ 9,972 $ 252 $ $ 10,224
Operating costs and expenses:
Cost of revenues................... 6,179 125 6,304
Research and development........... 1,556 34 1,590
Marketing, general and
administrative.................. 1,571 49 1,620
---------- ------- ------- ----------
Total...................... 9,306 208 9,514
---------- ------- ------- ----------
Profit (loss) from operations........ 666 44 710
Other income (expense), net.......... 199 3 202
Interest on loans.................... 94 -- 94
---------- ------- ------- ----------
Income from continuing operations
before provision for income taxes
and extraordinary item............. 771 47 818
Provision for income taxes........... 432 14 446
---------- ------- ------- ----------
Income (loss) from continuing
operations before extraordinary
item............................... $ 339 $ 33 $ $ 372
========== ======= ======= ==========
Diluted earnings (loss) per common
share from continuing operations
before extraordinary item.......... $ 0.21 $ 0.57 $ 0.22
========== ======= ==========
Basic earnings (loss) per common
share from continuing operations
before extraordinary item.......... $ 0.21 $ 0.60 $ 0.23
========== ======= ==========
Weighted average common shares
outstanding (in thousands):
Diluted............................ 1,623,672(b) 56,902 1,697,644(c)
Basic.............................. 1,571,282(b) 54,081 1,641,587(c)
</TABLE>
22
<PAGE> 31
TEXAS INSTRUMENTS
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The unaudited pro forma combined financial information reflects the merger,
and gives effect to the following:
(a) It is expected that approximately $30 million will be incurred for
direct costs of the merger, consisting primarily of transaction costs for
investment banking, legal and accounting fees. The unaudited pro forma
combined balance sheet gives effect to $30 million of direct costs of the
merger as if they had been incurred as of March 31, 2000, but the unaudited
pro forma combined statements of operations do not give effect to any
merger related costs.
(b) In May, 2000, Texas Instruments effected a two-for-one stock split
in the form of a 100 percent stock dividend. Accordingly, all data shown in
the accompanying unaudited pro forma combined financial information has
been retroactively adjusted to reflect the May stock split.
(c) Unaudited pro forma combined basic and diluted earnings per share
is based on the combined weighted average shares of both Texas Instruments
and Burr-Brown, with Burr-Brown shares included based upon the exchange
ratio of 1.3 shares of Texas Instruments common stock for each share of
Burr-Brown common stock.
23
<PAGE> 32
THE BURR-BROWN SPECIAL MEETING
GENERAL
We are furnishing this proxy statement/prospectus to you in connection with
the solicitation of proxies by the Burr-Brown board of directors for use at the
Burr-Brown special meeting of stockholders. This proxy statement/prospectus, the
attached notice of special meeting of stockholders and the enclosed proxy card
are first being mailed to the stockholders of Burr-Brown on or about July 25,
2000.
MATTERS TO BE CONSIDERED AT THE BURR-BROWN SPECIAL MEETING
At the Burr-Brown special meeting, Burr-Brown stockholders will consider
and vote on the proposal to approve and adopt the merger agreement and approve
the related merger, and any other business as may properly come before the
special meeting.
A copy of the merger agreement is attached as Annex A to this proxy
statement/prospectus. We urge you to read carefully the merger agreement.
AFTER CAREFUL CONSIDERATION, THE BURR-BROWN BOARD OF DIRECTORS HAS
UNANIMOUSLY DETERMINED THAT THE MERGER IS ADVISABLE AND IS FAIR TO, AND IN THE
BEST INTERESTS OF, BURR-BROWN AND ITS STOCKHOLDERS. THE BURR-BROWN BOARD OF
DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER AND THE MERGER AGREEMENT AND
UNANIMOUSLY RECOMMENDS THAT HOLDERS OF BURR-BROWN COMMON STOCK VOTE "FOR" THE
APPROVAL AND ADOPTION OF THE MERGER AGREEMENT AND APPROVAL OF THE MERGER.
DATE, TIME AND PLACE
The Burr-Brown special meeting is scheduled to be held at 9:00 a.m., local
time, on Thursday, August 24, 2000, at Burr-Brown's principal offices located at
6730 South Tucson Boulevard, Tucson, Arizona 85706.
PLEASE COMPLETE THE ENCLOSED PROXY CARD AND MAIL IT IN THE ENCLOSED PREPAID
RETURN ENVELOPE OR PROVIDE YOUR PROXY BY TELEPHONE OR OVER THE INTERNET AS SOON
AS POSSIBLE SO THAT YOUR SHARES MAY BE REPRESENTED AND VOTED AT THE SPECIAL
MEETING.
You should not send your Burr-Brown stock certificates with your proxy. A
transmittal form with instructions for the surrender of your Burr-Brown common
stock certificates will be mailed to you as soon as practicable after completion
of the merger.
RECORD DATE; QUORUM
The Burr-Brown board of directors has fixed the close of business on July
19, 2000 as the record date for the determination of the stockholders entitled
to notice of, and to vote at, the Burr-Brown special meeting. On that date,
Burr-Brown had 56,648,677 shares of common stock outstanding. The holders of
these shares will be entitled to one vote per share on the merger.
A quorum is present at a special meeting if a majority of the shares of
Burr-Brown common stock entitled to vote at the meeting is represented in person
or by proxy. Shares of Burr-Brown common stock represented at the special
meeting, but for which the holders have abstained from voting, will be treated
as present at the special meeting for purposes of determining the presence or
absence of a quorum for the transaction of business.
VOTES REQUIRED
Approval and adoption of the merger agreement and approval of the merger
requires the affirmative vote of at least a majority of the outstanding shares
of Burr-Brown common stock.
24
<PAGE> 33
VOTING BY BURR-BROWN'S EXECUTIVE OFFICERS AND DIRECTORS
To induce Texas Instruments to enter into the merger agreement, certain of
Burr-Brown's officers and directors committed, by entering into a voting
agreement and without any additional consideration being paid to them, to vote a
total of 16,787,528 shares of Burr-Brown common stock, representing
approximately 29.6% of the total outstanding voting power of Burr-Brown common
stock as of the record date, held by them in favor of approval of the merger at
the Burr-Brown special meeting. A copy of the voting agreement is attached as
Annex B to this proxy statement/prospectus.
VOTING OF PROXIES; REVOCABILITY OF PROXIES
Shares of Burr-Brown common stock represented by properly executed proxies
received in advance of the special meeting will, unless these proxies have been
properly revoked, be voted in accordance with the instructions indicated on such
proxies or, if no instructions have been indicated, will be voted in favor of
approval of the merger, and, in the discretion of the individuals named in the
accompanying proxy card, on any other matters which may properly come before the
Burr-Brown special meeting. Abstentions may be specified with respect to the
approval of the merger by properly marking the "ABSTAIN" box on the proxy card
for such proposal.
You may also authorize the proxies to vote your shares by a toll-free
telephone call from the U.S. and Canada or over the Internet. The telephone and
Internet voting procedures are designed to authenticate stockholders'
identities, to allow stockholders to authorize the proxies to vote their shares
and to confirm that their voting instructions have been properly recorded.
Burr-Brown has been advised by counsel that the procedures that have been put in
place are consistent with the requirements of applicable law. The enclosed proxy
information contains specific instructions to be followed by you if you are
interested in proxy voting by telephone or over the Internet.
Any proxy may be revoked by the stockholder giving it, at any time prior to
its being exercised, by filing a notice of revocation with the Secretary of
Burr-Brown at the address given on the notice of stockholders' meeting
accompanying this proxy statement/prospectus, by submitting a duly executed
proxy card bearing a later date or by proxy voting by telephone or over the
Internet on a later date than an earlier-submitted proxy. Any proxy may also be
revoked by the stockholder's attendance at the Burr-Brown special meeting and
voting in person. A notice of revocation need not be on any specific form, but
must be in writing.
Only shares affirmatively voted for the approval of the merger, including
properly executed proxies that do not contain voting instructions, will be
counted as favorable votes for that proposal. If a Burr-Brown stockholder
abstains from voting or does not vote, either in person or by proxy, it will
have the same effect as if that Burr-Brown stockholder had voted against the
approval of the merger. Brokers who hold shares of Burr-Brown common stock in
street name for customers who are the beneficial owners of such shares may not
authorize a proxy to vote those customers' shares in the absence of specific
instructions from those customers. These non-voted shares are referred to as
"broker non-votes" and have the effect of votes against the approval of the
merger.
The persons named as proxies by a stockholder may propose and vote for one
or more adjournments of the special meeting, including adjournments to permit
further solicitations of proxies. No proxy voted against the proposal to approve
the merger will be voted in favor of any such adjournment or postponement.
Burr-Brown does not expect that any matter other than the proposal to
approve the merger will be brought before the special meeting. If, however, the
Burr-Brown board of directors properly presents other matters, the persons named
as proxies will vote in accordance with their discretion.
SOLICITATION OF PROXIES AND EXPENSES
Proxies are being solicited by and on behalf of the Burr-Brown board of
directors. Burr-Brown will bear the costs relating to the solicitation of
proxies. In addition to solicitation by mail, Burr-Brown's
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directors, officers and employees, without additional remuneration, may solicit
proxies by telephone, facsimile machine and personal interviews. Burr-Brown
retained Georgeson Shareholder Communications Inc. to aid in the solicitation of
proxies and to verify records relating to the solicitations. Georgeson will
receive customary fees and expenses for reimbursement for these services.
Following the original mailing of the proxies and other soliciting materials,
Burr-Brown will request that brokers, custodians, nominees and other record
holders of Burr-Brown shares forward copies of the proxy and other soliciting
materials to persons for whom they hold shares and request authority for the
exercise of proxies. In these cases, Burr-Brown will reimburse the record
holders for their reasonable expenses if they ask Burr-Brown to do so.
THE MERGER
BACKGROUND
The merger agreement between Texas Instruments and Burr-Brown resulted from
discussions between the two companies initiated by Texas Instruments in the
first quarter of 2000.
On March 14, 2000, Thomas J. Engibous, the Chairman, President and Chief
Executive Officer of Texas Instruments, contacted Syrus P. Madavi, the Chairman,
President and Chief Executive Officer of Burr-Brown, to schedule a meeting to
introduce himself to Mr. Madavi.
On March 23, 2000, Mr. Engibous and Mr. Madavi had a dinner meeting in
Tucson, Arizona at which Mr. Engibous expressed Texas Instruments' interest in
exploring an acquisition of Burr-Brown. Mr. Madavi expressed his confidence in
Burr-Brown's stand-alone growth strategy, but also noted the possible strategic
benefits to Burr-Brown of such a transaction and agreed to pursue further
exploratory discussions. At that time, Mr. Engibous and Mr. Madavi did not
discuss any substantive terms of a possible combination. Following this meeting,
Mr. Madavi advised Burr-Brown's directors of his discussions with Mr. Engibous.
From late March to early May, Messrs. Engibous and Madavi had discussions
by telephone of various issues relating to a possible transaction, including
discussions regarding the businesses and prospects of and the possible synergies
between Texas Instruments and Burr-Brown. During this period, at the request of
management, Texas Instruments' financial advisors, Morgan Stanley & Co.,
Incorporated, prepared for Texas Instruments financial analyses of Burr-Brown
and of a possible transaction between Texas Instruments and Burr-Brown.
At the regularly scheduled meeting of the board of directors of Burr-Brown
on April 28, 2000, Mr. Madavi updated the Burr-Brown board on Texas Instruments'
interest in a possible business combination and reviewed with the board his
recent discussions with Texas Instruments, and also reviewed with the board
Burr-Brown's alternative strategy of remaining independent and pursuing
acquisitions of other entities. The board instructed Mr. Madavi to continue
exploration of the possible business combination with Texas Instruments.
On May 16, Mr. Engibous, Texas Instruments Executive Vice President and
Chief Operating Officer, Richard K. Templeton, and Texas Instruments Vice
President, Danny W. Reynolds, met Mr. Madavi in Tucson, Arizona to discuss Texas
Instruments' continuing interest in an acquisition of Burr-Brown. Mr. Madavi
provided an overview of Burr-Brown's business and operations.
In anticipation of the May 16 meeting, the two companies executed a letter
agreement relating to confidential treatment of information, certain
restrictions on Texas Instruments relating to solicitation or hiring of
Burr-Brown employees, and an agreement restricting Texas Instruments' ability to
acquire Burr-Brown securities outside of a negotiated transaction with
Burr-Brown.
At a meeting on May 24, Mr. Engibous reviewed with the Texas Instruments
board of directors the strategic rationale for the transaction between Texas
Instruments and Burr-Brown, potential financial terms of the transaction, and
the status of discussions between the companies. Representatives of Morgan
Stanley participated in the briefing.
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<PAGE> 35
Later on May 24, Mr. Engibous met with Mr. Madavi in Tucson, Arizona. Mr.
Engibous made a verbal, nonbinding proposal for a merger at an exchange ratio of
1.3 shares of Texas Instruments common stock for each share of Burr-Brown common
stock.
The board of directors of Burr-Brown had a teleconference on May 26, 2000,
during which Mr. Madavi briefed the board on Texas Instruments' proposal and the
status of the discussions between Mr. Madavi and Texas Instruments, and the
board instructed him to continue exploring the matter.
On May 30, Mr. Madavi and the founder, Chairman Emeritus and a significant
stockholder of Burr-Brown, Thomas R. Brown, Jr., traveled to Dallas to meet with
Messrs. Engibous, Templeton and Reynolds, as well as Senior Vice President,
Treasurer and Chief Financial Officer, William A. Aylesworth, Senior Vice
President, Teresa L. West and Senior Vice President and Controller, M. Samuel
Self. Texas Instruments' management delivered a presentation on Texas
Instruments' business, including its semiconductor group organizational
structure and Burr-Brown's potential strategic fit within Texas Instruments.
On May 31, the Burr-Brown board of directors had a teleconference and
Messrs. Madavi and Brown briefed the other board members on their visit to Texas
Instruments.
During the first two weeks of June there were a number of conversations
among Texas Instruments and Burr-Brown management and their respective advisors
regarding key terms to be addressed in a potential transaction, including the
rationale for the exchange ratio proposed by Texas Instruments for the
transaction.
On June 2, pursuant to a letter agreement, Burr-Brown engaged Broadview
International LLC to assist it in evaluating Texas Instruments' proposal to
acquire Burr-Brown.
On June 6, the Burr-Brown board of directors held a special meeting at the
San Francisco offices of Broadview, with Broadview representatives present, to
discuss the proposal, as well as Burr-Brown's prospects as an independent
company, and the board authorized management to continue to pursue discussions
with Texas Instruments.
On June 7, Burr-Brown received a due diligence request list from Texas
Instruments outlining the primary due diligence topics that Texas Instruments
wanted to review in connection with a potential transaction.
On June 8, Texas Instruments sent Burr-Brown a nonbinding term sheet for a
possible acquisition of Burr-Brown. It reflected Texas Instruments' proposal of
a tax-free, stock-for-stock merger using a fixed exchange ratio of 1.3 shares of
Texas Instruments common stock for each share of Burr-Brown common stock.
From June 9 through June 12, Burr-Brown management and its advisors,
Broadview and the law firm of Snell & Wilmer L.L.P., negotiated the framework of
the potential transaction with Texas Instruments and its advisors, Morgan
Stanley and the law firm of Weil Gotshal & Manges LLP, including the per share
exchange ratio, break-up fee provisions, a stock option agreement and voting
agreement, and employee retention arrangements. On June 12, Texas Instruments
delivered a revised, nonbinding term sheet to Burr-Brown. On June 13, the Texas
Instruments' team delivered to Burr-Brown and its advisors first drafts of the
merger agreement, voting agreement and stock option agreement for their
consideration.
From June 9 through June 13, the Burr-Brown management team collected
information responsive to the due diligence request list, and provided this
information to Texas Instruments on June 14.
During the period from June 14 through June 16, representatives of Texas
Instruments conducted a due diligence review of information and materials
supplied by Burr-Brown at the offices of Burr-Brown's legal counsel. Between
June 17 and June 21, Burr-Brown delivered to Texas Instruments' offices
additional materials and information in connection with Texas Instruments'
continuing due diligence review.
On June 15, Texas Instruments management updated the Texas Instruments
board of directors on the status of discussions and again reviewed the rationale
for and possible financial terms of an acquisition of
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Burr-Brown. In addition, representatives of Morgan Stanley advised the board of
directors that it had reviewed the proposed acquisition and that, based on the
current relative stock prices of Texas Instruments and Burr-Brown, and barring
any material changes in the terms of the acquisition, the exchange ratio was
fair to the stockholders of Texas Instruments from a financial point of view.
The Texas Instruments board of directors approved the proposed acquisition of
Burr-Brown subject to certain limitations and authorized Texas Instruments
management to take steps to complete a transaction within these limitations.
On June 16, Mr. Aylesworth and representatives of Morgan Stanley, in
connection with Broadview's preparation of a fairness opinion, briefed
Burr-Brown and Broadview representatives regarding the business and operations
of Texas Instruments.
Representatives of Burr-Brown and Texas Instruments negotiated the merger
agreement and related agreements from June 15 through June 21. On June 21, the
Burr-Brown board of directors met along with members of Burr-Brown's senior
management, representatives of Snell & Wilmer, and representatives of Broadview.
At this meeting, Burr-Brown management and Snell & Wilmer attorneys outlined the
proposed transaction, the terms of the definitive agreements and the Board's
fiduciary responsibilities. In addition, Broadview informed the board of
Broadview's opinion that, based upon market, economic, financial and other
conditions as they existed on that date, the proposed terms of the merger were
fair, from a financial point of view, to the Burr-Brown stockholders. Broadview
responded to various questions raised by members of the board regarding
Broadview's opinion. The Burr-Brown board of directors reviewed the merger
agreement, the voting agreement, the stock option agreement, the proposed
employee retention program and related documents, and Snell & Wilmer responded
to questions regarding those documents from the directors. The Burr-Brown board
of directors then appointed a special committee, consisting of all directors
other than Messrs. Brown and Madavi, to consider approval and adoption of the
merger agreement and the transactions contemplated by the merger agreement.
After considering the terms of the proposed transaction and the opinion of
Broadview, both the special committee and the full Burr-Brown board of directors
determined that the merger agreement and the merger were advisable and fair to,
and in the best interests of, Burr-Brown and its stockholders. Both the special
committee and the full Burr-Brown board of directors then each unanimously
approved the merger agreement and the transactions contemplated thereby,
including the merger, and unanimously approved the exhibits to the merger
agreement, including the forms of the stock option agreement and voting
agreement, and unanimously resolved to recommend that the stockholders of
Burr-Brown vote in favor of the approval and adoption of the merger agreement
and approval of the merger.
Following the approval of the merger, the merger agreement and related
matters by the Burr-Brown board of directors, Burr-Brown and Texas Instruments
finalized, executed and delivered the merger agreement, the voting agreement,
the stock option agreement and related documents.
On that same day, Burr-Brown and Texas Instruments issued a joint press
release announcing the merger agreement and the terms of the merger, and senior
management of Texas Instruments traveled to Tucson to meet with Burr-Brown's
senior management, staff and employees.
REASONS FOR THE MERGER
Texas Instruments' Reasons for the Merger.
Texas Instruments believes that the combination of Burr-Brown's
capabilities as a designer and manufacturer of high-performance analog products
with Texas Instruments' position in analog products will strengthen Texas
Instruments' portfolio of catalog analog products and enhance its ability to
offer customers complete solutions to their signal-processing needs. Burr-Brown
is a leading supplier of high-performance analog-digital and digital-analog data
converters and precision amplifiers to a large and highly diverse customer base.
Burr-Brown's products complement Texas Instruments' catalog products and address
attractive end-product applications such as telecommunications and the Internet
infrastructure. In addition, Burr-Brown has considerable analog design and
process development expertise, which will assist Texas Instruments in expanding
its core analog design and manufacturing processes into new product areas.
Because of its greater manufacturing resources, Texas Instruments believes that
it can achieve
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manufacturing efficiencies that have been unachievable by Burr-Brown. With
worldwide sales capabilities and a leading position in digital signal
processors, Texas Instruments also believes that it will be able to offer
Burr-Brown products to an even broader customer base than Burr-Brown has been
able to serve. Texas Instruments also believes that the combination with
Burr-Brown will give Texas Instruments greater access to customer accounts in
certain end-equipment areas, such as precision instruments and industrial
controls, in which Burr-Brown has stronger relationships than Texas Instruments.
Burr-Brown's Reasons for the Merger and Factors Considered by the Burr-Brown
Board of Directors
In making its determination that the merger on the terms and conditions set
forth in the merger agreement is advisable and to recommend approval of the
merger by the Burr-Brown stockholders, the Burr-Brown board of directors
consulted with its management team and professional advisors and independently
considered the proposed merger agreement and the transactions contemplated by
the merger agreement. The Burr-Brown board of directors considered the following
factors as reasons that the merger will be beneficial to Burr-Brown and its
stockholders:
- the complementary nature of the companies' product offerings and possible
synergies from combining Burr-Brown and Texas Instruments, particularly
synergies relating to Texas Instruments' lower manufacturing costs and
broader distribution channels;
- the trend toward increasing consolidation in, and the highly competitive
nature of, the market in which Burr-Brown operates and the competitive
benefits of combining with a large, diversified company such as Texas
Instruments;
- Texas Instruments' established relationships with large strategic
customers, some of whom are also Burr-Brown customers, which is expected
to enable the companies to introduce their product offerings to a broader
customer base;
- the potential of the combined companies to offer customers a more
complete solution by combining Burr-Brown's data converter and
amplifier/comparator/regulator expertise with Texas Instruments' strength
in digital signal processing, power management ICs, process technology
and packaging;
- Texas Instruments' established foundry capabilities and stable wafer
supply relationships, which will enable Burr-Brown to lessen its
dependence on outside wafer suppliers and the risks of rising foundry
costs and decreased operating margins, especially in a market
increasingly characterized by tightening wafer capacity and increased
costs;
- the terms and conditions of the merger agreement, including the fact that
the exchange ratio is fixed at 1.3 shares of Texas Instruments common
stock for each outstanding share of Burr-Brown common stock;
- the expected qualification of the merger as a reorganization under
Section 368(a) of the Internal Revenue Code; and
- the opinion of Burr-Brown's financial advisor, Broadview, that, as of the
date of the merger agreement and subject to the considerations in
Broadview's opinion addressed to the Burr-Brown board of directors, the
exchange ratio is fair, from a financial point of view, to the Burr-Brown
stockholders.
In the course of deliberations, the Burr-Brown board of directors also
considered a number of additional factors relevant to the merger, including:
- information relating to the business, assets, management, competitive
position, operating performance and prospects of each of Burr-Brown and
Texas Instruments, including the prospects of Burr-Brown if it were to
continue as an independent company and/or pursue growth through
acquisitions of other companies;
- the stock option agreement between Burr-Brown and Texas Instruments;
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- termination fees payable under the merger agreement;
- current industry, market and economic conditions;
- conditions to the closing of the merger agreement;
- the possibility of strategic alternatives to the merger for enhancing
long-term stockholder value;
- the impact of the merger on Burr-Brown's and Texas Instruments'
customers, suppliers and employees; and
- the likelihood that the merger would be completed.
The Burr-Brown board of directors also identified and considered a number
of potentially negative factors in its deliberations concerning the merger,
including:
- the risk that the operations of Burr-Brown and Texas Instruments might
not be successfully integrated;
- a recognition that Texas Instruments common stock has traded at high
multiples, and the risk that these multiples might not be sustained in
the future;
- the fact that the exchange ratio is fixed at 1.3 shares of Texas
Instruments common stock for each outstanding share of Burr-Brown common
stock, with no price protection or collar mechanisms if the price of
Texas Instrument's common stock were to decline significantly prior to
the closing of the merger;
- the risk that, despite the efforts of Burr-Brown and Texas Instruments
after the merger, key employees might leave Burr-Brown; and
- the risk that the potential benefits of the merger might not be fully
realized.
The Burr-Brown board of directors believed that some of these risks were
unlikely to occur, that Burr-Brown and Texas Instruments could likely avoid or
mitigate others, and that, overall, these risks were outweighed by the potential
benefits of the merger.
In view of the variety of factors considered in connection with its
evaluation of the merger agreement and the merger, the Burr-Brown board of
directors considered the factors as a whole and did not find it practicable to,
and did not, quantify or otherwise assign relative weight to the specific
factors considered in reaching its determination. In addition, individual
members of the Burr-Brown board of directors may have given different weight to
different factors.
RECOMMENDATION OF THE BOARD OF DIRECTORS OF BURR-BROWN
After careful consideration, both a special committee of the Burr-Brown
board of directors and the full Burr-Brown board of directors have unanimously
determined that the terms of the merger agreement and the merger on the terms
and conditions set forth in the merger agreement are advisable and are fair to,
and in the best interests of, Burr-Brown and its stockholders. The Burr-Brown
board of directors has approved the merger agreement and the merger and
unanimously recommends that the stockholders of Burr-Brown vote "for" the
approval and adoption of the merger agreement and approval of the merger.
OPINION OF FINANCIAL ADVISOR TO THE BOARD OF DIRECTORS OF BURR-BROWN
Pursuant to a letter agreement dated as of June 2, 2000, Broadview was
engaged to act as financial advisor to Burr-Brown in connection with
Burr-Brown's pursuit of a transaction with Texas Instruments. The Burr-Brown
board of directors selected Broadview to act as financial advisor based on
Broadview's reputation and experience in the information technology,
communication and media sectors and the semiconductor industry in particular.
Broadview focuses on providing merger and acquisition advisory services to
information technology, communications and media companies. In this capacity,
Broadview is
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continually engaged in valuing these businesses and maintains an extensive
database of information technology, communications and media mergers and
acquisitions for comparative purposes. At the meeting of the Burr-Brown board of
directors on June 21, 2000, Broadview rendered its opinion that, as of June 21,
2000, based upon and subject to the various factors and assumptions described in
the Broadview opinion, the exchange ratio provided in the merger agreement was
fair, from a financial point of view, to Burr-Brown stockholders.
BROADVIEW'S OPINION, WHICH DESCRIBES THE ASSUMPTIONS MADE, MATTERS
CONSIDERED AND LIMITATIONS ON THE REVIEW UNDERTAKEN BY BROADVIEW, IS ATTACHED AS
ANNEX D TO THIS PROXY STATEMENT/PROSPECTUS. BURR-BROWN STOCKHOLDERS ARE URGED
TO, AND SHOULD, READ THE BROADVIEW OPINION CAREFULLY AND IN ITS ENTIRETY. THE
BROADVIEW OPINION IS DIRECTED TO THE BURR-BROWN BOARD OF DIRECTORS AND ADDRESSES
ONLY THE FAIRNESS OF THE EXCHANGE RATIO FROM A FINANCIAL POINT OF VIEW TO THE
HOLDERS OF SHARES OF BURR-BROWN COMMON STOCK AS OF THE DATE OF THE OPINION. THE
BROADVIEW OPINION DOES NOT ADDRESS ANY OTHER ASPECT OF THE MERGER AND DOES NOT
CONSTITUTE A RECOMMENDATION TO ANY HOLDER OF BURR-BROWN COMMON STOCK AS TO HOW
TO VOTE AT THE BURR-BROWN SPECIAL MEETING. THE SUMMARY OF THE BROADVIEW OPINION
SET FORTH IN THIS PROXY STATEMENT/PROSPECTUS, ALTHOUGH MATERIALLY COMPLETE, IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF SUCH OPINION.
In connection with rendering its opinion, Broadview, among other things:
- reviewed the terms of the merger agreement furnished to Broadview by Weil
Gotshal on June 20, 2000;
- reviewed publicly available financial statements and other information of
Burr-Brown and Texas Instruments, respectively;
- reviewed financial projections for Burr-Brown prepared and provided to
Broadview by Burr-Brown management;
- participated in discussions with Burr-Brown and Texas Instruments
management concerning the operations, business strategy, financial
performance and prospects for Burr-Brown and Texas Instruments,
respectively;
- discussed the strategic rationale for the merger with Burr-Brown and
Texas Instruments management, respectively;
- reviewed the recent reported closing prices and trading activity for
Burr-Brown common stock and Texas Instruments common stock;
- compared aspects of the financial performance of Burr-Brown and Texas
Instruments with other comparable public companies;
- analyzed available information, both public and private, concerning other
comparable mergers and acquisitions;
- reviewed recent equity research analyst reports covering Burr-Brown and
Texas Instruments;
- analyzed the anticipated effect of the merger on the future financial
performance of Texas Instruments;
- assisted in negotiations and discussions related to the merger among
Burr-Brown, Texas Instruments and their respective financial and legal
advisors; and
- conducted other financial studies, analyses and investigations as
Broadview deemed appropriate for purposes of its opinion.
In rendering its opinion, Broadview relied, without independent
verification, on the accuracy and completeness of all the financial and other
information, including without limitation the representations and warranties
contained in the merger agreement, that was publicly available or furnished to
Broadview by Burr-Brown, Texas Instruments or advisors of Texas Instruments.
With respect to the financial
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projections examined by Broadview, Broadview assumed that they were reasonably
prepared and reflected the best available estimates and good faith judgments of
the management of Burr-Brown as to the future performance of Burr-Brown.
Broadview also assumed that neither Burr-Brown nor Texas Instruments is
currently involved in any material transaction as of the date of Broadview's
opinion other than the merger, other publicly announced transactions and those
activities undertaken in the ordinary course of conducting their respective
businesses.
Broadview did not make or obtain any independent appraisal or valuation of
any of Burr-Brown's assets. Broadview's opinion is necessarily based upon
market, economic, financial and other conditions as they existed and could be
evaluated as of June 21, 2000, and any change in such conditions since that date
would require a reevaluation of Broadview's opinion. The Broadview opinion did
not express any opinion as to the price at which Texas Instruments common stock
will trade at any time.
The following is a brief summary of some of the sources of information and
valuation methodologies employed by Broadview in rendering its opinion. These
analyses were presented to the Burr-Brown board of directors at its meeting on
June 21, 2000. This summary includes the financial analyses used by Broadview
and deemed to be material, but does not purport to be a complete description of
analyses performed by Broadview in arriving at its opinion. Broadview did not
explicitly assign any relative weights to the various factors of analyses
considered. This summary of financial analyses includes information presented in
tabular format. In order to fully understand the financial analyses used by
Broadview, the tables must be read together with the text of each summary. The
tables alone do not constitute a complete description of the financial analyses.
Burr-Brown Stock Performance Analysis
Broadview compared the recent stock performance of Burr-Brown with that of
the NASDAQ Composite, the S&P 500 and the Burr-Brown Comparable Index. The
Burr-Brown Comparable Index is comprised of public companies that Broadview
deemed comparable to Burr-Brown. Broadview selected companies competing in the
analog/mixed-signal semiconductor industry with revenues between $100 million
and $1 billion for the last reported 12 months. The Burr-Brown Comparable Index
consists of the following companies: Linear Technology Corp.; Maxim Integrated
Products, Inc.; Micrel, Inc.; Semtech Corp.; Dallas Semiconductor Corp.; Power
Integrations, Inc.; and Integrated Circuit Systems, Inc.
Public Company Comparable Analysis
Broadview considered ratios of share price and market capitalization,
adjusted for cash and debt when necessary, to selected historical and projected
operating results in order to derive multiples placed on a company in a
particular market segment. In order to perform this analysis, Broadview compared
financial information of Burr-Brown with publicly available information for the
companies comprising the Burr-Brown Comparable Index. For this analysis, as well
as other analyses, Broadview examined publicly available information, as well as
a range of estimates based on securities research analyst reports.
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The following table presents, as of June 20, 2000, the median multiples and
the range of multiples for the Burr-Brown Comparable Index of total market
capitalization (defined as equity market capitalization plus total debt minus
cash and cash equivalents), equity market capitalization and share price divided
by selected operating metrics:
<TABLE>
<CAPTION>
MEDIAN MULTIPLE RANGE OF MULTIPLES
--------------- ------------------
<S> <C> <C>
Total Market Capitalization to Last 12 Months
Revenue............................................. 12.49x 3.60x - 33.24x
Equity Market Capitalization to Last 12 Months Income
Before Taxes........................................ 45.35x 13.52x - 60.11x
Share Price to Last 12 Months Earnings Per Share...... 74.44x 15.83x - 97.37x
Total Market Capitalization to Projected Calendar Year
2000 Revenue........................................ 9.91x 3.10x - 25.40x
Share Price to Projected Calendar Year 2000 Earnings
Per Share........................................... 54.34x 26.00x - 71.27x
Total Market Capitalization to Projected Calendar Year
2001 Revenue........................................ 7.44x 2.53x - 18.51x
Share Price to Projected Calendar Year 2001 Earnings
Per Share........................................... 39.19x 20.74x - 63.17x
</TABLE>
The following table presents, as of June 20, 2000, the median implied per
share values and the range of implied per share values of Burr-Brown's common
stock, calculated by using the multiples shown above and the appropriate
Burr-Brown operating metric:
<TABLE>
<CAPTION>
MEDIAN IMPLIED RANGE OF IMPLIED
VALUE VALUES
-------------- ----------------
<S> <C> <C>
Total Market Capitalization to Last 12 Months
Revenue............................................. $66.93 $21.17 - $173.72
Equity Market Capitalization to Last 12 Months Income
Before Taxes........................................ $57.04 $17.00 - $75.61
Share Price to Last 12 Months Earnings Per Share...... $71.15 $15.13 - $93.07
Total Market Capitalization to Projected Calendar Year
2000 Revenue........................................ $66.11 $22.49 - $165.38
Share Price to Projected Calendar Year 2000 Earnings
Per Share........................................... $73.36 $35.10 - $96.22
Total Market Capitalization to Projected Calendar Year
2001 Revenue........................................ $61.48 $22.67 - $148.97
Share Price to Projected Calendar Year 2001 Earnings
Per Share........................................... $64.66 $34.22 - $104.23
</TABLE>
No company utilized in the public company comparables analysis as a
comparison is identical to Burr-Brown. In evaluating the comparables, Broadview
made numerous assumptions with respect to semiconductor industry performance and
general economic conditions, many of which are beyond the control of Burr-Brown.
Mathematical analysis, such as determining the median, average or range, is not
in itself a meaningful method of using comparable company data.
Transaction Comparables Analysis
Broadview considered ratios of equity purchase price, adjusted for the
seller's cash and debt when appropriate, to selected historical operating
results in order to indicate multiples strategic and financial acquirers have
been willing to pay for companies in a particular market segment. In order to
perform this analysis, Broadview reviewed a number of transactions that they
considered similar to the merger. Broadview selected recent transactions
involving sellers in the semiconductor integrated circuit industry, excluding
equity investments, with revenues greater than $100 million in the last reported
12 months before the acquisition. For this analysis, as well as other analyses,
Broadview examined publicly available information, as well as information from
Broadview's proprietary database of published and confidential
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merger and acquisition transactions in the information technology, communication
and media industries. These transactions consisted of the acquisition of:
- DSP Communications, Inc. by Intel Corp.;
- Level One Communications, Inc. by Intel Corp.;
- Unitrode Corp. by Texas Instruments Incorporated;
- Advanced Micro Devices, Inc. (Vantis Corp.) by Lattice Semiconductor
Corp.;
- Cherry Corp. (Cherry Semiconductor Corp.) by SCG Holding Corp. (ON
Semiconductor);
- VLSI Technology Inc. by Royal Philips Electronics NV;
- Integrated Circuit Systems, Inc. by Bain Capital Inc. and Bear, Sterns &
Co. Inc.;
- Samsung Electronics Co. Ltd. (Power Device Division) by Fairchild
Semiconductor Corp.;
- Harris Corp. (90% of Semiconductor Business) by Sterling Holding Company
LLC (Intersil Corp.);
- Hyundai Electronics Industries Co. Ltd. (Hyundai Electronics
America -- Symbios, Inc.) by LSI Logic Corp.;
- Motorola, Inc. (Semiconductor Components Group) by Texas Pacific Group;
and
- The Semiconductor Memory Business of Texas Instruments Incorporated by
Micron Technology, Inc.
The following table presents, as of June 20, 2000, the median multiple and
the range of multiples of adjusted price (defined as equity price plus total
debt minus cash and cash equivalents) divided by the seller's revenue in the
last reported 12 months prior to acquisition for the transactions listed above:
<TABLE>
<CAPTION>
MEDIAN MULTIPLE RANGE OF MULTIPLES
--------------- ------------------
<S> <C> <C>
Adjusted Price to Last Reported 12 Months Revenue..... 1.65x 0.70x - 8.97x
Price to Last Reported 12 Months Income Before
Taxes............................................... 25.21x 5.47x - 53.26x
</TABLE>
The following table presents, as of June 20, 2000, the median implied per
share value and the range of implied per share values of Burr-Brown's common
stock, calculated by multiplying the multiples shown above by the appropriate
Burr-Brown operating metric for the 12 months ended March 31, 2000:
<TABLE>
<CAPTION>
MEDIAN IMPLIED
VALUE RANGE OF IMPLIED VALUES
-------------- -----------------------
<S> <C> <C>
Adjusted Price to Last Reported 12 Months
Revenue.......................................... $11.12 $6.26 - $48.81
Price to Last Reported 12 Months Income Before
Taxes............................................ $31.70 $6.88 - $66.98
</TABLE>
No transaction utilized as a comparable in the transaction comparables
analysis is identical to the merger. In evaluating the comparables, Broadview
made numerous assumptions with respect to the semiconductor industry's
performance and general economic conditions, many of which are beyond the
control of Burr-Brown or Texas Instruments. Mathematical analysis, such as
determining the average, median or range, is not in itself a meaningful method
of using comparable transaction data.
Transaction Premiums Paid Analysis
Broadview considered the premiums paid above a seller's share price in
order to determine the additional value that strategic and financial acquirers,
when compared to public stockholders, are willing to pay for companies in a
particular market segment. In order to perform this analysis, Broadview reviewed
a number of transactions involving publicly-held hardware companies which
include companies in the following industries: communications equipment, test
equipment, components, semiconductors, peripherals
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<PAGE> 43
and subsystems. Broadview selected these transactions from its proprietary
database by choosing recent transactions with an equity purchase price greater
than $1 billion. These transactions consisted of the acquisition of:
- Oak Industries, Inc. by Corning, Inc.;
- E-Tek Dynamics, Inc. by JDS Uniphase Corp.;
- Etec Systems, Inc. by Applied Materials, Inc.;
- Smart Modular Technologies, Inc. by Solectron Corp.;
- DSC Communications Corp. by Alcatel Alsthom SA;
- Netoptix Corp. by Corning, Inc.;
- Fore Systems, Inc. by General Electric Company, p.l.c. (Marconi
Communications p.l.c.);
- Optical Coating Laboratory, Inc. by JDS Uniphase Corp.;
- Xylan Corp. by Alcatel Alsthom SA;
- Berg Electronics Corp. by Framatome SA;
- Ortel Corp. by Lucent Technologies, Inc.;
- DSP Communications, Inc. by Intel Corp.;
- Digital Equipment Corp. by Compaq Computer Corp.;
- JDS Fitel Inc. by Uniphase Corp.;
- RELTEC Corp. by General Electric Company, p.l.c. (Marconi Communications
p.l.c.);
- Pairgain Technologies, Inc. by ADC Telecommunications Inc.;
- Seagate Technology, Inc. by Veritas Software Corp. and Silver Lake
Partners;
- Ascend Communications Inc. by Lucent Technologies, Inc.;
- Sundstrand Corp. by United Technologies Corp.;
- Ancor Communications, Inc. by QLogic Corp.;
- Bay Networks, Inc. by Northern Telecom Ltd.;
- Raychem Corp. by Tyco International Ltd.;
- Unitrode Corp. by Texas Instruments Incorporated;
- Level One Communications, Inc. by Intel Corp.;
- Excel Switching Corp. by Lucent Technologies, Inc.;
- AMP Inc. by Tyco International Ltd.;
- Arrowpoint Communications, Inc. by Cisco Systems, Inc.;
- Data General Corp. by EMC Corp.; and
- General Instrument, Corp. by Motorola, Inc.
The following table presents, as of June 20, 2000, the median premium and
the range of premiums for these transactions calculated by dividing:
(1) the offer price per share minus the closing share price of the
seller's common stock 20 trading days or one trading day prior to the
public announcement of the transaction, by
(2) the closing share price of the seller's common stock 20 trading
days or one trading day prior to the public announcement of the
transaction:
<TABLE>
<CAPTION>
MEDIAN PREMIUM RANGE OF PREMIUMS
-------------- -----------------
<S> <C> <C>
Premium Paid to Seller's Share Price One Trading Day
Prior to Announcement.............................. 35.0% 0.9% - 79.8%
Premium Paid to Seller's Share Price 20 Trading Days
Prior to Announcement.............................. 59.5% 12.5% - 159.2%
</TABLE>
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<PAGE> 44
The following table presents the median implied value and the range of
implied values of Burr-Brown's stock, calculated by using the premiums shown
above and Burr-Brown's share price 20 trading days and one trading day prior to
June 20, 2000:
<TABLE>
<CAPTION>
MEDIAN IMPLIED VALUE RANGE OF IMPLIED VALUES
-------------------- -----------------------
<S> <C> <C>
Premium Paid to Seller's Share Price One
Trading Day Prior to Announcement........... $101.76 $76.04 - $135.52
Premium Paid to Seller's Share Price 20
Trading Days Prior to Announcement.......... $ 86.61 $61.25 - $141.11
</TABLE>
No transaction utilized as a comparable in the transaction premiums paid
analysis is identical to the merger. In evaluating the comparables, Broadview
made numerous assumptions with respect to hardware industry performance and
general economic conditions, many of which are beyond the control of Burr-Brown
or Texas Instruments. Mathematical analysis, such as determining the average,
median or range is not in itself a meaningful method of using comparable
transaction data.
Present Value of Projected Share Price Analysis
Broadview calculated the present value of potential future share prices of
Burr-Brown common stock on a stand-alone basis using analyst estimates for
Burr-Brown for the 12 months ending December 31, 2001. The implied share price
calculated using the median price to last 12 months earnings multiple for the
Burr-Brown Comparable Index and a discount rate determined by the Capital Asset
Pricing Model with the risk implied by the past stock performance of the
Burr-Brown Comparable Index was $97.88. The implied share price calculated using
the price to last 12 months earnings multiple for Burr-Brown and a discount rate
determined by the Capital Asset Pricing Model with the risk implied by the past
stock performance of Burr-Brown was $96.64.
Exchange Ratio Analysis
Broadview reviewed the ratios of the closing prices of Burr-Brown common
stock divided by the corresponding prices of Texas Instruments common stock over
the period from June 22, 1999 through June 20, 2000 and from June 23, 1995
through June 20, 2000 in contrast with the exchange ratio defined in the merger
agreement. Based on this analysis, the historical exchange ratio for the daily
1-year and weekly 5-year periods has ranged from 0.5322 to 0.9425 with an
average of 0.6864 and from 0.5217 to 1.4104 with an average of 0.9176,
respectively.
Texas Instruments Stock Performance Analysis
Broadview compared the recent stock performance of Texas Instruments with
that of the S&P 500 and the Texas Instruments Comparable Index. The Texas
Instruments Comparable Index is comprised of public companies that Broadview
deemed comparable to Texas Instruments. Broadview selected companies competing
in the semiconductor industry, with the following financial characteristics:
- revenues greater than $1 billion for the last reported 12 months; and
- positive operating margins for the last reported 12 months.
The Texas Instruments Comparable Index consists of the following companies:
Analog Devices, Inc.; Intel Corporation; STMicroelectronics NV; Infineon
Technologies AG; LSI Logic Corporation; Conexant Systems, Inc.; and Atmel
Corporation.
Evaluation of Texas Instruments Equity
Broadview compared financial information of Texas Instruments with publicly
available information for companies comprising the Texas Instruments Comparable
Index. For this analysis, as well as other
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<PAGE> 45
analyses, Broadview examined publicly available information, as well as a range
of estimates based on securities research analyst reports.
Pro Forma Combination Analysis
Broadview calculated the pro forma impact of the merger on the combined
entity's projected earnings per share for the calendar years ending December 31,
1999 and December 31, 2000 taking into consideration various financial effects
which will result from consummation of the merger. This analysis relies upon
certain financial and operating assumptions provided by equity research analysts
and publicly available data about Texas Instruments and Burr-Brown. Broadview
assumed that the merger would be treated as a "pooling of interests" for
accounting purposes and that no opportunities for cost savings or revenue
enhancements exist. Based on this analysis, the pro forma pooling model
indicates marginal earnings-per-share dilution, excluding acquisition expenses,
for both calendar years ending December 31, 2000 and December 31, 2001.
Broadview also examined the effects of potential cost savings and revenue
enhancements, and the incremental accretion related to potential cost savings
and revenue enhancements.
Consideration of the Discounted Cash Flow Methodology
While discounted cash flow is a commonly used valuation methodology,
Broadview did not employ such an analysis for the purposes of its opinion.
Discounted cash flow analysis is most appropriate for companies that exhibit
relatively steady or somewhat predictable streams of future cash flow. For a
rapidly growing company such as Burr-Brown with significant and highly volatile
cash flows, in a cyclical and rapidly-evolving industry, a preponderance of the
value in a valuation based on discounted cash flow will be in the terminal value
of the entity, which is extremely sensitive to assumptions about the sustainable
long-term growth rate of the company. Given the uncertainty in estimating both
the future cash flows and a sustainable long-term growth rate for Burr-Brown, as
well as the cyclical nature of Burr-Brown's chosen market, Broadview considered
a discounted cash flow analysis inappropriate for valuing Burr-Brown.
The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to partial analysis or summary description. In arriving
at its opinion, Broadview considered the results of all of its analyses as a
whole and did not attribute any particular weight to any analysis or factor
considered by it. Furthermore, Broadview believes that selecting any portion of
its analyses, without considering all analyses, would create an incomplete view
of the process underlying its opinion.
In performing its analyses, Broadview made numerous assumptions with
respect to industry performance and general business and economic conditions and
other matters, many of which are beyond the control of Burr-Brown or Texas
Instruments. The analyses performed by Broadview are not necessarily indicative
of actual values or actual future results, which may be significantly more or
less favorable than suggested by such analyses. The exchange ratio pursuant to
the merger agreement and other terms of the merger agreement were determined
through arm's length negotiations between Burr-Brown and Texas Instruments, and
were approved by the Burr-Brown board of directors. Broadview provided advice to
the Burr-Brown board of directors during such negotiations. However, Broadview
did not recommend any specific consideration to the Burr-Brown board of
directors or that any specific consideration constituted the only appropriate
consideration for the merger. In addition, Broadview's opinion and presentation
to the Burr-Brown board of directors was one of many factors taken into
consideration by the Burr-Brown board of directors in making its decision to
approve the merger. Consequently, the Broadview analyses as described above
should not be viewed as determinative of the opinion of the Burr-Brown board of
directors with respect to the value of Burr-Brown or of whether the Burr-Brown
board of directors would have been willing to agree to a different
consideration.
Upon consummation of the merger, Burr-Brown will be obligated to pay
Broadview a transaction fee of $5,000,000. Burr-Brown has already paid Broadview
a fairness opinion fee of $750,000. The fairness opinion fee will be credited
against the transaction fee payable by Burr-Brown upon completion of the merger.
In addition, Burr-Brown has agreed to reimburse Broadview for its reasonable
expenses, including fees and expenses of its counsel, and to indemnify Broadview
and its affiliates against certain liabilities and
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<PAGE> 46
expenses related to their engagement, including liabilities under the federal
securities laws. The terms of the fee arrangement with Broadview, which
Burr-Brown and Broadview believe are customary in transactions of this nature,
were negotiated at arm's length between Burr-Brown and Broadview, and the
Burr-Brown board of directors was aware of the nature of the fee arrangement,
including the fact that a significant portion of the fees payable to Broadview
is contingent upon completion of the merger.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
In considering the recommendation of the Burr-Brown board of directors to
approve and adopt the merger, stockholders of Burr-Brown should be aware that
some members of the management and the board of directors of Burr-Brown have
interests in the merger that are different from, or in addition to, the
interests of stockholders of Burr-Brown generally.
Stock Options
All directors and executive officers of Burr-Brown are holders of stock
options to purchase Burr-Brown common stock. Pursuant to the existing option
plan, stock options held by Burr-Brown's non-employee directors will vest as a
result of the merger. Pursuant to the merger agreement, all stock options of
Burr-Brown will be assumed by Texas Instruments and will be deemed to constitute
options to acquire shares of Texas Instruments common stock with appropriate
adjustments in share amounts and exercise price to reflect the exchange ratio in
the merger. See the discussion under the section entitled "The Merger
Agreement -- Treatment of Stock Options."
Indemnification of Officers and Directors
Texas Instruments has agreed to indemnify the officers and directors of
Burr-Brown for their acts and omissions as officers and directors of Burr-Brown
prior to the merger to the maximum extent permitted by Delaware law, and to
provide and maintain insurance coverage for such purposes for a period of at
least six years after the consummation of merger.
Retention
Burr-Brown is a party to a Change in Control Severance Benefit Agreement
dated October 30, 1996, a Severance Benefit Agreement dated October 30, 1996,
and a Letter Agreement dated August 31, 1998 (referred to herein as severance
agreements) with Syrus P. Madavi, Chairman of the Board, President and Chief
Executive Officer.
In recognition of the continuance of the noncompetition and nonsolicitation
provisions in the Change in Control Severance Benefit Agreement and the
Severance Benefit Agreement, Texas Instruments and Mr. Madavi entered into an
agreement with the following provisions, subject to the consummation of the
merger:
- Mr. Madavi's employment with either Burr-Brown or Texas Instruments will
continue until the first anniversary of the merger;
- Mr. Madavi is entitled to receive a transition bonus equal to $3.5
million; and
- Mr. Madavi's existing severance agreements will remain in effect.
In addition, Texas Instruments has agreed to pay transition bonuses equal
to one times annual base salary in effect at closing to certain Burr-Brown
executives and key employees, including J. Scott Blouin and Kenneth G. Wolf, if
they continue their employment for a predetermined transition period, ranging
from six to nine months. The bonus will be paid in the first pay period
following the transition period and is in addition to base salary. These
executives and employees will also receive specified surplus benefits if their
positions are eliminated during the eighteen months following the merger.
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<PAGE> 47
EMPLOYEE BENEFIT PLANS
Pursuant to the merger agreement, Texas Instruments will honor the
obligations of Burr-Brown and its subsidiaries under Burr-Brown's employee
benefit plans. The employees of Burr-Brown, including the executive officers,
will be eligible to participate in Texas Instruments' applicable employee
benefit plans as soon as administratively convenient following the merger.
Service with Burr-Brown and its affiliates will be treated as service with Texas
Instruments for some purposes to the same extent such service was counted under
the corresponding Burr-Brown benefit plan, if any; provided that such service
will not be recognized to the extent that it would result in a duplication of
benefits.
NO DISSENTERS' APPRAISAL RIGHTS
Because Burr-Brown's common stock is traded on the Nasdaq and Texas
Instruments' common stock is traded on the NYSE, holders of Burr-Brown common
stock will not be entitled under the Delaware General Corporation Law to
exercise dissenting stockholders' appraisal rights with respect to their shares
of Burr-Brown common stock.
ACCOUNTING TREATMENT
The merger is intended to qualify as a "pooling of interests" for financial
reporting purposes under generally accepted accounting principles. Under this
method of accounting, the recorded assets and liabilities of Texas Instruments
and Burr-Brown will be carried forward to the combined company at their recorded
amounts. The operating results of the combined company will include operating
results of Texas Instruments and Burr-Brown for the periods subsequent to the
combination and, to the extent material, the combined recorded operating results
of the separate companies for periods prior to the combination on a restated
basis.
FEDERAL SECURITIES LAWS CONSEQUENCES
All shares of Texas Instruments common stock received by Burr-Brown
stockholders in the merger will be freely transferable, except that shares of
Texas Instruments common stock received by persons who are deemed to be
"affiliates," as such term is defined under the Securities Act, of Burr-Brown
prior to the merger may be resold by them only in transactions permitted by the
resale provisions of Rule 145 promulgated under the Securities Act or as
otherwise permitted under the Securities Act. Persons who are affiliates of
Burr-Brown generally include individuals or entities that control, are
controlled by, or are under common control with, Burr-Brown and may include
officers and directors of Burr-Brown as well as principal stockholders of
Burr-Brown. All current "affiliates" of Burr-Brown have delivered to Texas
Instruments a letter agreement to the effect that he or she will not offer or
sell or otherwise dispose of any of the shares of Texas Instruments common stock
issued to him or her in or in connection with the merger in violation of the
Securities Act or the rules and regulations promulgated by the Commission under
such Act.
COMPARISON OF RIGHTS OF STOCKHOLDERS OF TEXAS INSTRUMENTS AND BURR-BROWN
Texas Instruments and Burr-Brown are incorporated under the laws of the
State of Delaware. Upon the completion of the merger, the holders of Burr-Brown
common stock will become holders of Texas Instruments common stock. The rights
of Texas Instruments stockholders are governed by Texas Instruments' restated
certificate of incorporation and bylaws, each as amended, and Delaware law,
including the Delaware General Corporation Law or DGCL. The rights of Burr-Brown
stockholders are governed by its restated certificate of incorporation and
restated bylaws, each as amended, and Delaware law, including the DGCL.
The following is a summary of the material differences between the rights
of the holders of Burr-Brown common stock and the rights of holders of Texas
Instruments common stock. The following summary does not purport to be a
complete statement of the rights of Texas Instruments stockholders under
Delaware law, Texas Instruments' restated certificate of incorporation and Texas
Instruments'
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<PAGE> 48
bylaws as compared with the rights of the Burr-Brown stockholders under Delaware
law, Burr-Brown's certificate of incorporation and bylaws, and does not purport
to be a complete description of the specific provisions referred to below. The
identification of specific differences is not meant to indicate that other
equally or more significant differences do not exist. This summary is qualified
in its entirety by reference to the governing corporate instruments of Texas
Instruments incorporated by reference to the registration statement of which
this proxy statement/prospectus is a part, to which stockholders are referred.
The material terms of Texas Instruments common stock are described under the
heading "Description of Capital Stock of Texas Instruments" on page 65.
Number of Directors
Burr-Brown. Under the Burr-Brown bylaws, the number of directors of
Burr-Brown is determined by the vote of a majority of the entire board of
directors or by the stockholders at an annual meeting; provided, however, that
the number of directors shall not be less than three nor more than nine. There
are currently five directors of Burr-Brown.
Texas Instruments. Under the Texas Instruments bylaws, the maximum number
of directors of Texas Instruments is 15 until changed by resolution of the board
of directors. There are currently 10 directors serving on the Texas Instruments
board of directors.
Amendment to Certificate of Incorporation
The DGCL provides that the certificate of incorporation of a corporation
may be amended upon adoption by the board of directors of a resolution setting
forth the proposed amendment and declaring its advisability, followed by the
affirmative vote of a majority of the outstanding shares entitled to vote. It
also provides that a certificate of incorporation may provide for a greater or
lesser vote than would otherwise be required by the DGCL.
Burr-Brown. The Burr-Brown certificate of incorporation provides that
Article Tenth, regarding business combinations, may not be replaced, altered or
amended and no provision to the certificate of incorporation may be adopted that
is inconsistent with Article Tenth, unless the amendment is approved by either:
- the holders of at least 90% of the voting stock of Burr-Brown; or
- two-thirds of the Burr-Brown board of directors and two-thirds of the
directors in place prior to any business combination.
On all other matters, the Burr-Brown certificate of incorporation may be
amended by the majority of the shares entitled to vote to amend the certificate
of incorporation at a meeting of the stockholders.
Texas Instruments. The certificate of incorporation of Texas Instruments
does not contain a provision requiring a vote greater or lesser than that
specified in the DGCL to amend the certificate of incorporation.
Advance Notice Provisions for Stockholder Proposals and Nominations
Burr-Brown. The Burr-Brown bylaws provide that in order for a stockholder
to nominate a candidate for election as a director at an annual meeting of
Burr-Brown stockholders or propose business for consideration at such meeting,
notice must generally be given in writing to the Secretary of Burr-Brown no less
than 80 days prior to the annual meeting.
Texas Instruments. Under the Texas Instruments bylaws, for stockholders to
nominate persons for election to the board of directors at the annual meeting of
stockholders or to properly introduce business to be transacted at the annual
meeting, a stockholder must deliver timely notice in a proper written form to
Texas Instruments' principal executive offices. To be timely, the notice must be
delivered or mailed and
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<PAGE> 49
received by Texas Instruments not less than 90 days prior to the first
anniversary of the preceding year's annual meeting.
Stockholder Action Without a Meeting
Under the DGCL, unless otherwise provided in the certificate of
incorporation, actions may be taken by the stockholders of a Delaware
corporation by written consent, provided that the written consent is signed by
the holders of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take the action at a meeting at
which all shares entitled to vote on the matter were present and voted.
Burr-Brown. The Burr-Brown certificate of incorporation does not prohibit
Burr-Brown stockholders from acting by written consent.
Texas Instruments. The certificate of incorporation of Texas Instruments
does not permit stockholder action without a meeting.
Business Combinations
Burr-Brown. Under the Burr-Brown certificate of incorporation, "business
combinations," including a merger, consolidation, share exchange or, in certain
circumstances, an asset transfer or issuance or reclassification of equity
securities, with a Burr-Brown related person or any affiliate of a related
person, require the affirmative vote of 90% of the outstanding shares of voting
stock. A Burr-Brown related person means:
- any person who beneficially owns 10% or more of the voting power of the
Burr-Brown's outstanding voting stock; or
- an affiliate or an associate of the related person, who, at any time
within the two-year period before the date in question, was the
beneficial owner of 10% or more of the voting power of the Burr-Brown's
outstanding voting stock.
These provisions of the Burr-Brown certificate of incorporation do not apply to
business combinations that are approved or exempted by two-thirds of the board
of directors, of the corporation before the related person becomes a related
person or all of the following conditions are met:
- the cash to be paid as consideration in the business combination is not
less than the higher of
(1) the highest price paid by the related person in acquiring shares
of Burr-Brown capital stock,
(2) the fair market value per share of Burr-Brown capital stock as of
the date of the business combination or
(3) the book value per share in the case of common stock and the
higher preferential amount per share in the case of the preferred
stock;
- a proxy or information statement complying with the Exchange Act that
describes the business combination complying with the Exchange Act is
mailed by the related person to stockholders at least 30 days before the
closing of the business combination; and
- all consideration to be paid to Burr-Brown stockholders is in cash.
Both a special committee of the Burr-Brown board of directors and the full
board of directors unanimously approved the merger, thereby making the foregoing
provisions inapplicable to the merger.
Texas Instruments. Texas Instruments does not have a similar provision in
its certificate of incorporation.
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<PAGE> 50
Anti-Greenmail Provisions
Burr-Brown. The Burr-Brown certificate of incorporation contains a
provision that prohibits Burr-Brown from purchasing the Burr-Brown capital stock
held for less than two years by any stockholder that is an "interested
stockholder" unless a majority of the holders of voting stock, other than the
"interested stockholder," approve the purchase. Under this provision, an
"interested stockholder" is defined as any person who is the beneficial owner of
more than 5% of the class of Burr-Brown stock to be purchased.
Texas Instruments. Texas Instruments does not have a similar provision in
its certificate of incorporation.
Stockholder Rights Plan
Burr-Brown. The Burr-Brown rights plan provides for the distribution of a
dividend of one preferred stock purchase right for each outstanding share of
Burr-Brown common stock. Each Burr-Brown right entitles the registered holder to
purchase from Burr-Brown one-thousandth of a share of Series A Junior
Participating Preferred Stock of Burr-Brown at a price of $220.00 per
one-thousandth of a share of Series A Junior Participating Preferred Stock,
subject to adjustment. The Burr-Brown rights plan provides that, until the
distribution date, which is the date on which the rights become exercisable, or
earlier redemption or expiration of the rights, the Burr-Brown rights will be
transferred with and only with shares of Burr-Brown common stock. Generally, the
Burr-Brown rights will be automatically exchangeable into Burr-Brown common
stock and become exercisable on the first date of public announcement that a
person or group has acquired, or ten days following commencement of or
announcement of an intent to commence a tender offer that would result in a
person or group acquiring, beneficial ownership of 15% or more of Burr-Brown's
shares. In the event that a person becomes an acquiring person, each holder of a
Burr-Brown right, other than the acquiring person, will have the right to
receive, upon exercise, Burr-Brown common shares, or in some circumstances,
cash, property or other securities of Burr-Brown, having a value equal to twice
the then-current purchase price. In the event that Burr-Brown is acquired in a
merger or other business combination transaction or 50% or more of its
consolidated assets or earning power are sold after a person or group has become
an acquiring person, each holder of a Burr-Brown right, other than the acquiring
person, will have the right to receive, upon exercise, the number of shares of
common stock of the acquiring company having a value of two times the then
current purchase price of the Burr-Brown right. The Burr-Brown rights, which can
be redeemed or exchanged by Burr-Brown's board of directors in certain
circumstances, expire by their terms on August 9, 2009.
As a condition to entering into the merger agreement, Burr-Brown amended
the rights plan so that none of the transactions associated with the merger
agreement or the merger will trigger the rights under the plan. The amendment
further provides that the plan will terminate upon the consummation of the
merger.
Texas Instruments. Texas Instruments has adopted a rights plan that is
described under the heading "Description of Capital Stock of Texas Instruments
-- The Rights Plan" on page 66. As described in that section, the rights plan
may have antitakeover effects.
Authorized Capital
Burr-Brown. The authorized stock of Burr-Brown consists of 240,000,000
shares of Burr-Brown common stock, of which there were 56,648,677 shares
outstanding as of the record date, and 2,000,000 shares of preferred stock, none
of which were outstanding as of the record date.
Texas Instruments. The authorized capital stock of Texas Instruments
consists of 2,400,000,000 shares of Texas Instruments common stock, of which
there were 1,641,639,095 shares outstanding as of July 19, 2000, and 10,000,000
shares of Texas Instruments preferred stock, none of which were outstanding as
of July 19, 2000.
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<PAGE> 51
U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
The following is a discussion of the material federal income tax
consequences of the merger to the holders of Burr-Brown common stock and to
Texas Instruments, Burma Acquisition and Burr-Brown, and is based on the
opinions of Weil Gotshal, counsel to Texas Instruments, and Snell & Wilmer,
counsel to Burr-Brown. The opinions are based upon current provisions of the
Internal Revenue Code, existing regulations promulgated under the Code and
current administrative rulings and court decisions, all of which are subject to
change. No attempt has been made to comment on all federal income tax
consequences of the merger that may be relevant to particular holders, including
holders subject to special tax rules, for example, dealers in securities,
pass-through entities, foreign persons, mutual funds, insurance companies,
tax-exempt entities, holders who do not hold their shares as capital assets and
holders who acquired their shares upon the exercise of employee stock options or
otherwise as compensation. HOLDERS OF BURR-BROWN COMMON STOCK ARE ADVISED TO
CONSULT THEIR OWN TAX ADVISORS REGARDING THE FEDERAL INCOME TAX CONSEQUENCES OF
THE MERGERS IN LIGHT OF THEIR PERSONAL CIRCUMSTANCES AND THE CONSEQUENCES UNDER
APPLICABLE STATE, LOCAL AND FOREIGN TAX LAWS.
Texas Instruments has received from its counsel, Weil Gotshal, an opinion
to the effect that
- the merger will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code and
- each of Texas Instruments, Burma Acquisition and Burr-Brown will be a
party to the reorganization within the meaning of Section 368(b) of the
Code.
Burr-Brown has received from its counsel, Snell & Wilmer, an opinion to the
effect that
- the merger will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code and
- each of Texas Instruments, Burma Acquisition and Burr-Brown will be a
party to the reorganization within the meaning of Section 368(b) of the
Code.
In rendering their opinions, counsel to each of Texas Instruments and
Burr-Brown have relied upon representations made by Texas Instruments and
Burr-Brown.
Assuming the merger is treated as a reorganization within the meaning of
Section 368(a) of the Code, no gain or loss will be recognized for federal
income tax purposes by Texas Instruments, Burma Acquisition or Burr-Brown as a
result of the merger. A holder of Burr-Brown common stock will not recognize
gain or loss on the exchange of shares of Burr-Brown common stock for Texas
Instruments common stock pursuant to the merger. The aggregate tax basis of the
Texas Instruments common stock received by a holder of Burr-Brown common stock
will be the same as the aggregate tax basis of the Burr-Brown common stock
surrendered therefor. The holding period of the Texas Instruments common stock
will include the holding period of the Burr-Brown common stock surrendered
therefor, provided that the shares of Burr-Brown common stock are held as
capital assets at the effective time.
Cash received by a holder of Burr-Brown common stock in lieu of a
fractional share of Texas Instruments common stock will be treated as received
in exchange for such fractional share interest, and gain or loss will be
recognized for federal income tax purposes, measured by the difference between
the amount of cash received and the portion of the basis of the Burr-Brown
common stock allocable to the fractional share interest. The gain or loss will
be capital gain or loss provided that the shares of Burr-Brown common stock were
held as capital assets, and will be long term capital gain or loss if the Burr-
Brown common stock had been held for more than one year at the effective time.
Under the Code, a holder of Burr-Brown common stock may be subject, under
certain circumstances, to backup withholding at a rate of 31% with respect to
the amount of cash, if any, received in lieu of fractional share interests
unless the holder provides proof of an applicable exemption or a correct
taxpayer identification number, and otherwise complies with applicable
requirements of the backup withholding rules. Any amounts withheld under the
backup withholding rules are not an additional tax and may be
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refunded or credited against the holder's federal income tax liability, provided
the required information is furnished to the Internal Revenue Service.
REGULATORY MATTERS
Antitrust Laws
The Antitrust Division of the Department of Justice, the Federal Trade
Commission, appropriate foreign regulatory agencies and others may challenge the
merger on antitrust grounds either before or after the expiration of the
applicable waiting periods. Accordingly, at any time before or after the
completion of the merger, the Antitrust Division of the Department of Justice,
the Federal Trade Commission, appropriate foreign regulatory agencies or others
could take action under the applicable antitrust laws as they deem necessary or
desirable in the public interest, including without limitation seeking to enjoin
the consummation of the merger or permitting such consummation subject to
certain regulatory concessions or conditions. There can be no assurance that a
challenge to the merger will not be made or that, if a challenge is made, that
such challenge will not prevail.
United States. The merger is subject to the requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules promulgated
thereunder by the Federal Trade Commission, which prevent certain transactions
from being completed until required information and materials are furnished to
the Antitrust Division of the Department of Justice and the Federal Trade
Commission and waiting periods expire. The parties filed premerger notifications
with the Antitrust Division of the Department of Justice and the Federal Trade
Commission on July 6, 2000. The waiting period is scheduled to expire on August
7, 2000, unless a request for additional information or documentary material is
made by the reviewing agency prior to that time or the parties' request for
early termination of the waiting period is granted.
Germany. Pursuant to the German Act Against Restraints of Competition,
Texas Instruments filed a notification of the merger with the Federal Cartel
Office on July 14, 2000. The waiting period is scheduled to expire on August 14,
2000, unless the Federal Cartel Office notifies Texas Instruments of its intent
to commence an examination of the merger prior to that time.
State Takeover Laws
A number of states throughout the United States, including Delaware where
Burr-Brown is incorporated and Arizona where Burr-Brown has its headquarters,
have enacted takeover statutes that purport, in varying degrees, to be
applicable to attempts to acquire securities of corporations that are
incorporated or have assets, stockholders, executive offices or places of
business in those states. To the extent that provisions of these state takeover
statutes purport to apply to the merger, Texas Instruments and Burr-Brown
believe that, except in the case of DGCL Section 203, such laws conflict with
federal law and constitute an unconstitutional burden on interstate commerce. In
Edgar v. MITE Corp., the Supreme Court of the United States invalidated on
constitutional grounds the Illinois Business Takeover Act, which, as a matter of
state securities law, made certain corporate acquisitions more difficult. In CTS
Corp. v. Dynamics Corp. of America, however, the Supreme Court of the United
States held that Indiana may, as a matter of corporate law and, in particular,
in the context of those laws concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a domestic target
corporation without prior approval of the remaining stockholders. Subsequently,
in TLX Acquisition Corp. v. Telex Corp., a Federal district court in Oklahoma
ruled that the Oklahoma takeover statutes were unconstitutional insofar as they
apply to corporations incorporated outside Oklahoma in that they would subject
such corporations to inconsistent regulations. Similarly, in Tyson Foods, Inc.
v. McReynolds, a Federal district court in Tennessee ruled that four Tennessee
takeover statutes were unconstitutional as applied to corporations incorporated
outside Tennessee. This decision was affirmed by the United States Court of
Appeals for the Sixth Circuit.
Arizona Revised Statutes Sections 10-2701 et seq. were adopted by the
Arizona legislature in an attempt to prevent corporate "greenmail" and restrict
the ability of a potential suitor to acquire a publicly-
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held corporation that is incorporated under Arizona law or that has its
principal place of business or principal executive office, assets with a fair
market value of at least $1 million and more than 500 employees in the State of
Arizona. By their terms, these statutes generally apply to Burr-Brown. However,
because Burr-Brown is organized under the laws of Delaware, in the view of Texas
Instruments and Burr-Brown based on the authority discussed above, these
statutes are unconstitutional as applied to Burr-Brown and the transactions
contemplated by the merger agreement.
The board of directors, and a special committee of the board of directors,
of Burr-Brown have taken all action required to render the business combination
provisions of DGCL Section 203 and Arizona Revised Statute Section 10-2741
inapplicable to the merger and the transactions contemplated by the merger
agreement. Other than as described in this proxy statement/prospectus, neither
Texas Instruments nor Burr-Brown has attempted to comply with any state takeover
statutes in connection with the merger. Texas Instruments and Burr-Brown reserve
the right to challenge the validity or applicability of any state law allegedly
applicable to the merger, and nothing in this proxy statement/prospectus nor any
action taken in connection herewith is intended as a waiver of that right. In
the event that it is asserted that one or more state takeover statutes apply to
the merger, and it is not determined by an appropriate court that such statute
or statutes do not apply or are invalid as applied to the merger, as applicable,
Texas Instruments may be required to receive additional stockholder approval or
to file certain documents with, or receive approvals from, the relevant state
authorities, and Texas Instruments might be prevented from or delayed in
consummating the merger.
THE MERGER AGREEMENT
The following is a summary of the material provisions of the merger
agreement, dated as of June 21, 2000, among Burr-Brown, Texas Instruments and
Burma Acquisition, a copy of which is attached as Annex A to this proxy
statement/prospectus and incorporated by reference. Burr-Brown stockholders
should read carefully the merger agreement. The following summary is qualified
in its entirety by reference to the text of the merger agreement.
GENERAL
The merger agreement provides that, following the approval of the merger by
the stockholders of Burr-Brown and the satisfaction or waiver of the other
conditions to the merger:
- Burma Acquisition will merge with and into Burr-Brown; and
- Burma Acquisition will cease to exist and Burr-Brown will continue as the
surviving corporation and as a wholly owned subsidiary of Texas
Instruments following the merger.
As a result of the merger, and as of the effective time of the merger,
Burr-Brown will succeed to and assume all of the rights and obligations of Burma
Acquisition, in accordance with the DGCL.
COMPLETION AND EFFECTIVENESS OF THE MERGER
The merger agreement provides that, subject to the requisite approval of
the stockholders of Burr-Brown and the satisfaction or waiver of other
conditions, the merger will be consummated by the filing of a certificate of
merger and any other appropriate documents, in accordance with the relevant
provisions of the DGCL, with the Secretary of State of the State of Delaware.
CONVERSION OF SHARES OF BURR-BROWN COMMON STOCK
Upon the consummation of the merger:
- each share of Burr-Brown common stock issued and outstanding immediately
prior to the merger will be converted into and become exchangeable for
the right to receive 1.3 shares of Texas Instruments common stock,
together with any associated right to acquire shares of Series B
Participating Cumulative Preferred Stock of Texas Instruments under Texas
Instruments' stockholder rights plan. However, in the event of changes in
Texas Instruments common stock prior to the merger, such as stock
dividends or stock splits, the exchange ratio and the price of Texas
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Instruments common stock used to calculate the exchange ratio will be
adjusted in accordance with the merger agreement to the extent necessary
to reflect the change; and
- each share of common stock of Burma Acquisition outstanding immediately
prior to the merger will be converted into one share of common stock of
the surviving corporation.
No fractional shares of Texas Instruments common stock will be issued in
the merger. A holder of Burr-Brown common stock who would otherwise be entitled
to receive fractional shares of Texas Instruments common stock as a result of
the merger will receive, in lieu of fractional shares, cash in an amount equal
to the closing price per share of Texas Instruments common stock on the date of
the merger multiplied by the fraction to which the holder would otherwise be
entitled. Texas Instruments will make available to Computershare Investor
Services, LLC, as exchange agent, from time to time sufficient cash amounts to
satisfy payment for fractional shares and Computershare will distribute such
proceeds, without interest, to the holders of the fractional interests.
TREATMENT OF STOCK OPTIONS
Upon the consummation of the merger, subject to certain conditions and
limitations contained in the merger agreement, each outstanding option to
purchase shares of Burr-Brown common stock will be assumed by Texas Instruments
and converted into an option, or a new substitute option will be granted, to
purchase the number of shares of Texas Instruments common stock equal to the
number of shares of Burr-Brown common stock subject to the original option
multiplied by the exchange ratio in the merger agreement and then:
- in the case of any "incentive stock option" for U.S. federal income tax
purposes, truncated to the nearest whole share; and
- in the case of all other options, rounded up to the nearest whole share.
The exercise price per share of Texas Instruments common stock under the
new option will be equal to the former exercise price per share of Burr-Brown
common stock under the option immediately prior to the merger divided by the
exchange ratio, and then:
- in the case of any "incentive stock option," rounded up to the nearest
penny; and
- in the case of all other options, truncated to the nearest penny.
All other terms of the options, including the vesting schedule, will remain
unchanged.
The conversion of any option to purchase shares of Burr-Brown common stock
that is deemed to be an "incentive stock option" may involve further adjustment
for the conversion to comply with certain U.S. federal income tax laws.
EXCHANGE PROCEDURES
As soon as reasonably practical after the merger, the exchange agent will
mail a letter of transmittal and instructions to each record holder of
certificates that, immediately prior to the merger, represented outstanding
shares of Burr-Brown common stock that were converted to Texas Instruments
common stock in the merger. After receipt of the transmittal form, each holder
should surrender his, her or its Burr-Brown stock certificates to the exchange
agent, together with the letter of transmittal duly executed and completed in
accordance with the instructions provided by the exchange agent. Upon surrender
of the certificates to and acceptance of the certificates by the exchange agent,
each holder will be entitled to receive:
- certificates of Texas Instruments common stock evidencing the whole
number of shares of Texas Instruments common stock to which the holder is
entitled; and
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- a check in the amount equal to the cash that the holder has the right to
receive pursuant to the merger agreement, including cash in lieu of any
dividends and other distributions with respect to the shares represented
by the Texas Instruments stock certificates and cash in lieu of
fractional shares.
If any shares of Texas Instruments common stock are to be issued in a name
other than that in which the certificate representing Burr-Brown common stock
surrendered in exchange for shares of Texas Instruments common stock is
registered, the certificate surrendered must be properly endorsed or otherwise
be in proper form for transfer and the person requesting the exchange must pay
to the exchange agent any applicable stock transfer taxes or must establish to
the satisfaction of the exchange agent that the taxes have been paid or are not
applicable. No interest will be paid on any merger consideration.
No holder of a certificate will be entitled to receive any dividend or
other distribution from Texas Instruments until the holder surrenders his, her
or its Burr-Brown stock certificate for a certificate representing shares of
Texas Instruments common stock. Upon surrender, the holder will receive the
amount of any dividends or other distributions that, after the consummation of
the merger, became payable with respect to the number of whole shares of Texas
Instruments common stock into which the shares of Burr-Brown common stock were
converted. No interest will be paid on the dividends or other distributions.
Any portion of the merger consideration, including any certificates of
Texas Instruments common stock, any dividends or distributions, or any cash owed
in lieu of fractional shares of Texas Instruments common stock, that has not
been distributed to the holders of Burr-Brown common stock within 12 months
after the merger will be delivered to the surviving corporation. At the end of
that 12 month period, any holders who have not surrendered their certificates in
accordance with the relevant provisions of the merger agreement may look only to
the surviving corporation and Texas Instruments for payment of their claims for
any merger consideration and any dividends or distributions with respect to the
shares of Texas Instruments common stock to which they are entitled.
None of Texas Instruments, Burma Acquisition, Burr-Brown, the surviving
corporation or the exchange agent or any of their respective directors,
officers, employees or agents will be liable for any merger consideration
delivered to a public official under applicable abandoned property, escheat or
similar law.
BURR-BROWN STOCKHOLDERS SHOULD NOT SEND THEIR BURR-BROWN STOCK CERTIFICATES TO
TEXAS INSTRUMENTS OR BURR-BROWN. BURR-BROWN STOCK CERTIFICATES WILL ONLY BE
EXCHANGED FOR CERTIFICATES OF SHARES OF TEXAS INSTRUMENTS COMMON STOCK FOLLOWING
THE CONSUMMATION OF THE MERGER IN ACCORDANCE WITH INSTRUCTIONS WHICH BURR-BROWN
OR THE EXCHANGE AGENT WILL SEND TO BURR-BROWN STOCKHOLDERS AFTER THE MERGER.
DIRECTORS AND OFFICERS
The board of directors of the surviving corporation after the merger will
consist of the directors of Burma Acquisition immediately prior to the merger.
The officers of the surviving corporation after the merger will be the officers
of Burma Acquisition immediately prior to the merger.
Each director and officer of the surviving corporation will hold office
from the effective time of the merger until his or her respective successor is
duly elected or appointed and qualified in the manner provided in the charter or
bylaws of the surviving corporation, or as otherwise provided by the DGCL.
CHARTER AND BYLAWS
The charter of Burma Acquisition in effect immediately prior to the merger
will be the charter of the surviving corporation until it is amended in
accordance with its terms or as provided by the DGCL. The bylaws of Burma
Acquisition in effect immediately prior to the merger will be the bylaws of the
surviving corporation until they are amended in accordance with their terms or
as provided by the DGCL.
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REPRESENTATIONS AND WARRANTIES
The merger agreement contains various customary representations and
warranties of Burr-Brown relating to:
- its organization, standing and similar corporate matters;
- its capital structure and the capital structure of its subsidiaries;
- authorization, execution, delivery, performance and enforceability of the
merger agreement;
- documents filed by Burr-Brown with the Commission and financial
statements;
- the absence of undisclosed liabilities of Burr-Brown and its
subsidiaries;
- the absence of material adverse changes or events relating to Burr-Brown
and its subsidiaries;
- the accuracy of information supplied by Burr-Brown in connection with the
registration statement filed with the Commission by Texas Instruments and
this proxy statement/prospectus;
- regulatory consents or approvals required in connection with the merger;
- the absence of any material violation of the charter, bylaws, any
material agreement or any law, rule or regulation entered by a
governmental entity, which violation would prevent or materially delay
the performance of the merger agreement by Burr-Brown or would reasonably
be expected to have a material adverse effect on Burr-Brown or its
subsidiaries, taken as a whole;
- real property;
- the absence of any pending or threatened litigation against Burr-Brown or
any of its subsidiaries;
- permits and licenses;
- employee arrangements and benefit plans;
- labor matters;
- environmental matters;
- tax matters;
- the absence of any unlawful payments made by Burr-Brown, its subsidiaries
or any director, officer or employee of Burr-Brown or any of its
subsidiaries;
- material contracts;
- subsidies between or among Burr-Brown or any of its subsidiaries and any
governmental entity or other person;
- intellectual property;
- receipt by Burr-Brown of an opinion from Broadview, its financial
advisor;
- the absence of any broker's, finder's or investment banker's fees owed in
connection with the merger, except for that of Broadview;
- accounting matters regarding the treatment of the merger as a "pooling of
interests";
- product recalls;
- exemption of the merger agreement from the Delaware takeover statute; and
- the inapplicability of Burr-Brown's stockholders rights plan to the
transactions contemplated by the merger agreement.
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The merger agreement also contains various representations and warranties
of Texas Instruments and Burma Acquisition relating to:
- their organization, standing and similar corporate matters;
- authorization, execution, delivery, performance and enforceability of the
merger agreement;
- documents filed by Texas Instruments with the Commission and financial
statements;
- the absence of undisclosed liabilities of Texas Instruments and its
subsidiaries;
- the capital structure of Texas Instruments;
- the accuracy of information supplied by Texas Instruments or Burma
Acquisition in connection with the registration statement filed with the
Commission by Texas Instruments and this proxy statement/prospectus;
- regulatory consents or approvals required in connection with the merger;
- the absence of any pending or threatened litigation against Texas
Instruments or any of its subsidiaries;
- compliance with applicable law;
- the absence of any liability or obligation or engagement in any business
activity by Burma Acquisition, except in connection with the merger
agreement;
- the absence of any broker's, finder's or investment banker's fees owed in
connection with the merger, except for that of Morgan Stanley; and
- accounting matters regarding the treatment of the merger as a "pooling of
interests."
CONDUCT OF BUSINESS BEFORE COMPLETION OF THE MERGER
During the period from the date of the merger agreement until the date of
consummation of the merger, Burr-Brown has agreed to:
- conduct its operations in the ordinary and usual course of business
consistent with past practice; and
- use its reasonable best efforts to:
(1) preserve intact its current business organizations;
(2) keep available the service of its current officers and employees;
and
(3) preserve its relationships with customers, suppliers and others
having business dealings with it.
Further, Burr-Brown has agreed that, among other things and subject to
various conditions and exceptions, it and its subsidiaries will not, without the
prior written consent of Texas Instruments:
- amend its charter or bylaws or amend, modify or terminate its stockholder
rights plan;
- authorize for issuance, issue, sell, deliver or agree to commit to issue,
sell or deliver any stock of any class or any other securities
convertible into or exchangeable for any stock or any equity equivalents
except for limited grants of stock options to new employees or the
issuance of Burr-Brown common stock pursuant to outstanding stock
options;
- split, combine or reclassify any shares of its capital stock;
- declare, set aside or pay any dividend or other distribution in respect
of its capital stock;
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- make any other actual, constructive or deemed distribution in respect of
any shares of its capital stock or otherwise make payments to
stockholders in their capacity as stockholders;
- redeem, repurchase or otherwise acquire any of its securities or any
securities of any of its subsidiaries;
- adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization of
Burr-Brown or any of its subsidiaries;
- alter through merger, liquidation, reorganization, restructuring or in
any other fashion the corporate structure or ownership of any subsidiary
of Burr-Brown;
- incur or assume any long-term or short-term debt or issue any debt
securities except in the ordinary and usual course of business consistent
with past practice or in connection with any permitted acquisition or
capital expenditures;
- assume, guarantee, endorse or otherwise become liable or responsible for
the obligations of any other person except in the ordinary and usual
course of business consistent with past practice, and except for
obligations of the wholly owned subsidiaries of Burr-Brown;
- make any loans, advances or capital contributions to, or investments in,
any other person, other than in connection with a permitted acquisition,
to the wholly owned subsidiaries of Burr-Brown, customary loans or
advances to employees in the ordinary and usual course of business
consistent with past practice or extensions of credit to customers in the
ordinary course of business consistent with past practice;
- pledge or otherwise encumber shares of capital stock of Burr-Brown or its
subsidiaries;
- mortgage or pledge any of its material tangible or intangible assets or
create or suffer to exist any material lien upon those assets other than
in the ordinary course of business consistent with past practice;
- except as permitted by the merger agreement or as required under existing
agreements, increase in any manner the compensation or fringe benefits of
any director, officer or employee or pay any benefit not required by any
plan and arrangement as in effect as of the date of the merger agreement,
including, the granting of any completion bonuses or change of control
payments in respect of the merger or that will be affected by the merger;
- except in the ordinary and usual course of business consistent with past
practice, promote or change the classification or status of or hire any
employee or individual;
- make any contributions to any trust that is not qualified under Section
501(a) of the Internal Revenue Code;
- acquire, sell, lease or dispose of any material assets outside the
ordinary and usual course of business consistent with past practice or
any assets which in the aggregate are material to Burr-Brown and its
subsidiaries taken as a whole, or grant any exclusive distribution rights
other than extensions or renewals in the ordinary course of business
consistent with past practice;
- except as may be required as a result of a change in law or in generally
accepted accounting principles, change any of its accounting principles
or practices;
- revalue in any material respect any of its assets, including writing down
the value of inventory or writing off notes or accounts receivable other
than in the ordinary and usual course of business consistent with past
practice or as required by generally accepted accounting principles;
- acquire, by merger, consolidation or acquisition of stock or assets, any
corporation, partnership or other business organization or division of
them or any equity interest in them;
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- enter into any material contract or agreement, other than in the ordinary
and usual course of business consistent with past practice, or amend in
any material respect any material contracts or agreements;
- authorize any new capital expenditure or expenditures which are not
provided for in Burr-Brown's current capital expenditure plan and which,
individually, is in excess of $300,000 or, in the aggregate, are in
excess of $750,000;
- enter into or amend any contract, agreement, commitment or arrangement
providing for the taking of any action that would be prohibited by the
merger agreement;
- make or revoke any tax election, or settle or compromise any tax
liability, or change, or make a request to any taxing authority to
change, any aspect of Burr-Brown or any of its subsidiaries' method of
accounting for tax purposes;
- pay, discharge or satisfy any material claims, liabilities or
obligations, other than the payment, discharge or satisfaction in the
ordinary and usual course of business consistent with past practice or in
accordance with their terms of liabilities reflected, or reserved
against, in the consolidated financial statements of Burr-Brown and its
subsidiaries or incurred since the date of those financial statements or
waive the benefits of, or agree to modify in any manner, any
confidentiality, standstill or similar agreement to which Burr-Brown or
any of its subsidiaries is a party;
- settle or compromise any pending or threatened suit, action or claim
relating to the transactions contemplated by the merger agreement;
- take any action that would prevent or impede the merger from qualifying
as a "pooling of interests" for accounting purposes or as a
reorganization under Section 368 of the Internal Revenue Code;
- enter into any agreement or arrangement that limits or otherwise
restricts Burr-Brown or any of its subsidiaries or any successor to them
or that could, after the merger, limit or restrict the surviving
corporation and its affiliates, including Texas Instruments or any of its
successors, from engaging or competing in any line of business or in any
geographic area;
- fail to comply in any material respect with any law applicable to
Burr-Brown, its subsidiaries or their respective assets;
- enter into any direct or indirect arrangements for financial subsidies;
- adopt, enter into, amend, alter or terminate, partially or completely,
any of Burr-Brown's benefit plans or employee arrangements except as
contemplated by the merger agreement or to the extent required by
applicable law;
- enter into any contract with an officer, director, employee, agent, or
other similar representative of Burr-Brown or any of its subsidiaries
that is not terminable, without penalty or other liability, upon less
than 60 calendar days' notice; or
- take, propose to take, or agree to take, any of the foregoing actions or
any action which would make any of the representations or warranties of
Burr-Brown contained in the merger agreement untrue, incomplete or
incorrect.
Texas Instruments has agreed that, among other things and subject to
various conditions and exceptions, it will not and will cause its subsidiaries
not to, without the prior consent of Burr-Brown:
- amend its certificate of incorporation or bylaws;
- take any action that would or would reasonably be expected to prevent,
impair or materially delay the ability of Burr-Brown or Texas Instruments
to consummate the transactions contemplated by the merger agreement;
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- take any action that would prevent or impede the merger from qualifying
as a "pooling of interests" for accounting purposes or as a
reorganization under Section 368 of the Internal Revenue Code; or
- take, propose to take, or agree to take, any of the foregoing actions or
any action which would make any of the representations or warranties of
Texas Instruments or Burma Acquisition contained in the merger agreement
untrue, incomplete or incorrect.
CONDITIONS TO THE COMPLETION OF THE MERGER
The respective obligations of Burma Acquisition, Texas Instruments and
Burr-Brown to consummate the merger are subject to the satisfaction or waiver of
certain conditions, including that:
- the holders of at least a majority of the voting power of all outstanding
shares of Burr-Brown common stock have approved the merger;
- any waiting periods applicable to the merger under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 have expired or been terminated or any
waiting periods or consents under any comparable foreign antitrust laws
shall have expired or been obtained;
- there is no law of any governmental entity of competent jurisdiction in
effect restraining, enjoining or otherwise preventing consummation of the
merger and no governmental entity shall have instituted any proceeding
which continues to be pending seeking any such law;
- the Commission has declared the registration statement, of which this
proxy statement/prospectus is a part and filed by Texas Instruments in
connection with the registration under the Securities Act of shares of
Texas Instruments common stock to be issued in the merger, effective and
the registration statement is still effective at the time of the merger,
with no stop order suspending its effectiveness having been issued and no
action, suit, proceeding or investigation by the Commission to suspend
its effectiveness having been initiated and be continuing; and
- the Texas Instruments common stock required to be issued under the merger
agreement has been approved for listing on the New York Stock Exchange,
subject only to official notice of issuance.
The obligations of Texas Instruments and Burma Acquisition to consummate
the merger are further subject to satisfaction or waiver of the following
conditions:
- the representations and warranties of Burr-Brown contained in the merger
agreement are and shall have been true when made and on and as of the
date of the merger as though made on and as of that date, except where
the failure to be true, individually or in the aggregate, has not had or
is not reasonably expected to have a Material Adverse Effect (as defined
below) on Burr-Brown and its subsidiaries taken as a whole;
- Burr-Brown has performed or complied in all material respects with all
agreements and conditions contained in the merger agreement required to
be performed or complied with by it prior to or at the time of the
merger;
- Burr-Brown has delivered to Texas Instruments a certificate, dated the
date of the merger, signed by the President or any Vice President of
Burr-Brown, certifying as to the fulfillment of the conditions specified
in the preceding two bullets;
- Burr-Brown has received and delivered to Texas Instruments a letter from
Ernst & Young LLP dated the date of the merger, stating that Burr-Brown
qualifies as a combining company in accordance with the provisions of APB
16 and the applicable Commission rules and regulations and Texas
Instruments has received a letter from Ernst & Young LLP, dated the date
of the merger, stating that treatment of the merger as a "pooling of
interests" for accounting purposes is appropriate if the merger is
consummated as contemplated by the merger agreement;
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- Texas Instruments has received an opinion of its tax counsel, Weil
Gotshal, dated the date of the merger, to the effect that:
(1) the merger will qualify as a reorganization within the meaning of
Section 368(a) of the Code; and
(2) each of Texas Instruments, Burma Acquisition and Burr-Brown will be
a party to the reorganization within the meaning of Section 368(b)
of the Code.
- all authorizations, consents or approvals of any domestic or foreign
governmental entity, other than any authorizations, consents or approvals
required under Hart-Scott-Rodino Act or any comparable foreign antitrust
laws, required in connection with the execution and delivery of the
merger agreement and the performance of the obligations under the merger
agreement have been made or obtained, without any limitation, restriction
or condition that is reasonably expected to have a Material Adverse
Effect on Burr-Brown and its subsidiaries taken as a whole, or an effect
on Texas Instruments and its subsidiaries that, were that effect applied
to Burr-Brown and its subsidiaries, is reasonably expected to have a
Material Adverse Effect on Burr-Brown and its subsidiaries taken as a
whole, except for any authorizations, consents or approvals, the failure
of which to have been made or obtained is not reasonably expected to have
a Material Adverse Effect on Burr-Brown and its subsidiaries taken as a
whole, or an effect on Texas Instruments and its subsidiaries that, were
that effect applied to Burr-Brown and its subsidiaries, is reasonably
expected to have a Material Adverse Effect on Burr-Brown; and
- at least 45 days prior to the date of Burr-Brown's special stockholders
meeting, Texas Instruments has received an affiliate letter from each
person who is an "affiliate" of Burr-Brown for purposes of Rule 145 under
the Securities Act.
The obligations of Burr-Brown to consummate the merger are further subject
to satisfaction or waiver of the following conditions:
- the representations and warranties of Texas Instruments and Burma
Acquisition contained in the merger agreement shall have been true when
made and on and as of the date of the merger as though made on and as of
that date, except where the failure to be true, individually or in the
aggregate, has not had or is not reasonably expected to have a Material
Adverse Effect on Texas Instruments and its subsidiaries taken as a
whole;
- Texas Instruments has performed or complied in all material respects with
all agreements and conditions contained in the merger agreement required
to be performed or complied with by it prior to or at the time of the
merger;
- Texas Instruments has delivered to Burr-Brown a certificate, dated the
date of the merger, signed by the President or any Vice President of
Texas Instruments, certifying as to the fulfillment of the conditions
specified in the preceding two bullets; and
- Burr-Brown has received an opinion of its tax counsel, Snell & Wilmer,
dated the date of the merger, to the effect that:
(1) the merger will qualify as a reorganization within the meaning of
Section 368(a) of the Code; and
(2) each of Texas Instruments, Burma Acquisition and Burr-Brown will be
a party to the reorganization within the meaning of Section 368(b)
of the Code.
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"Material Adverse Effect" is defined as, with respect to any entity, any
material adverse effect on:
- the assets, properties, financial condition or results of operations of
that entity and its subsidiaries taken as a whole, other than any change,
circumstance, effect or development:
(1) relating to the economy in general in any country in which that
entity operates or owns assets;
(2) relating to the semiconductor industry (but not excluding, with
respect to either Texas Instruments or Burr-Brown, any change,
circumstance, effect or development relating to the semiconductor
industry that materially disproportionately impacts Texas
Instruments or Burr-Brown);
(3) arising out of or resulting from actions contemplated by the parties
in connection with, or which is attributable to, the announcement of
the merger agreement and the transactions contemplated by the merger
agreement, including loss of customers or suppliers or the delay or
cancellation of orders for products; or
(4) any shareholder litigation or litigation by any governmental entity,
in each case brought or threatened against that entity or any member
of its board of directors in respect of the merger agreement or the
transactions contemplated by the merger agreement;
provided that neither:
(a) any change in the market price or trading volume of the Burr-Brown
common stock or Texas Instruments common stock; nor
(b) a failure by Burr-Brown or Texas Instruments to meet the revenue or
earnings predictions of equity analysts for any period ending on or
after the date of the merger agreement
will, in and of itself, constitute a Material Adverse Effect (although
this proviso, as it relates to paragraph (b) above, does not exclude any
underlying change, circumstance, effect or development which resulted in
the failure to meet the predictions); or
- the ability of that entity to consummate the transactions contemplated by
the merger agreement.
ADDITIONAL COVENANTS OF BURR-BROWN AND TEXAS INSTRUMENTS
Each of Texas Instruments, Burma Acquisition and Burr-Brown also agreed,
among other things and subject to various conditions and exceptions, that:
- as soon as practicable following the date of the merger agreement, Texas
Instruments and Burr-Brown will jointly prepare this proxy
statement/prospectus in connection with the vote of the stockholders of
Burr-Brown in respect of the merger and Texas Instruments will file with
the Commission a registration statement, of which this proxy
statement/prospectus is a part, in connection with the registration under
the Securities Act of the shares of Texas Instruments common stock to be
issued in connection with the merger;
- Burr-Brown will use all reasonable best efforts to cause Ernst & Young
LLP to deliver a customary "comfort" letter dated the date on which the
registration statement filed by Texas Instruments becomes effective and
addressed to Texas Instruments;
- Texas Instruments will use all reasonable best efforts to cause Ernst &
Young LLP to deliver a customary "comfort" letter dated the date on which
the registration statement becomes effective and addressed to Burr-Brown;
- Burr-Brown will:
(1) hold a special meeting of its stockholders as soon as practicable
after the effective date of this proxy statement/prospectus for the
purpose of voting on the approval and adoption of the merger and
related matters; and
(2) solicit proxies from its stockholders to obtain the requisite vote
for that approval;
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- the Burr-Brown board of directors will recommend approval of the merger
by Burr-Brown's stockholders and will not withdraw, amend or modify in a
manner adverse to Texas Instruments such recommendation, or announce
publicly its intention to do so;
- each party will use its reasonable best efforts to take, or cause to be
taken, all actions and do, or cause to be done, all things necessary,
proper or advisable under applicable laws to consummate the merger;
- each party will use its reasonable best efforts to obtain all requisite
approvals and authorizations for the merger, including, without
limitation, those required under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 or any comparable foreign antitrust laws;
- each party will use its reasonable best efforts to resolve any objections
asserted by a governmental entity or other person in respect of the
merger under any antitrust law;
- Burr-Brown will inform Texas Instruments of any litigation brought
against Burr-Brown or its directors relating to the merger and will
consult with and obtain Texas Instruments' prior written consent before
entering into any settlement or compromise of any such litigation;
- Burr-Brown will provide, and will cause its respective subsidiaries to
provide, Texas Instruments and Burma Acquisition and their authorized
representatives reasonable access to all employees, plants, offices,
warehouses and other facilities and to all books and records of
Burr-Brown and its subsidiaries;
- each party will consult with each of the others before issuing any press
release or otherwise making any public statements in respect of the
merger;
- each party will give prompt notice to each of the others of the
occurrence or nonoccurrence of an event that would cause a representation
or warranty to be untrue or inaccurate or any material failure by a party
to the merger agreement to satisfy a covenant, condition or agreement;
- each party will, and will cause its respective subsidiaries to, use its
reasonable best efforts to cause the merger to qualify as a tax-free
reorganization within the meaning of Section 368(a) of the Code and to be
accounted for as a "pooling of interest" for accounting purposes;
- Burr-Brown will discontinue the Burr-Brown Employee Stock Purchase Plan
as of the last business day prior to the closing date and will not grant
any additional purchase rights under the Employee Stock Purchase Plan
after the date of the merger agreement; provided that all currently
outstanding purchase rights under the Employee Stock Purchase Plan will
remain in effect subject to the terms of the Employee Stock Purchase
Plan;
- Burr-Brown will, at Texas Instruments' request, terminate the Burr-Brown
Future Investment Plan prior to the closing date or, if necessary, amend
the Future Investment Plan to permit Texas Instruments common stock as an
investment option under the Future Investment Plan, subject to directions
from plan participants;
- Burr-Brown will, at Texas Instruments' request, issue a written notice
pursuant to Section 204(h) of the Employee Retirement Income Security Act
of 1974, as amended, to cease further benefit accruals under the
Burr-Brown Corporation Employee Retirement Income Plan effective as of a
date designated by Texas Instruments which is on or after the closing
date;
- Texas Instruments and Burma Acquisition will honor the obligations of
Burr-Brown under the provisions of all employment, consulting,
termination, severance, change of control, individual compensation
indemnification agreements and certain other benefits arrangements;
- at least 45 days prior to the date of Burr-Brown's special meeting,
Burr-Brown will deliver to Texas Instruments an affiliate letter from
each person who is an "affiliate" of Burr-Brown for purposes of Rule 145
under the Securities Act;
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- Texas Instruments will take all action necessary to cause Burma
Acquisition to perform its obligations under the merger agreement and to
consummate the merger on the terms and conditions set forth in the merger
agreement;
- whether or not the merger is completed, each party agrees to bear its own
expenses in connection with the merger, provided that:
(1) each party will share equally in any expenses incurred in connection
with the filing, printing and mailing of this proxy
statement/prospectus;
(2) each party will share equally in any filings required under the
Hart-Scott-Rodino Act; and
(3) Burr-Brown will be solely responsible for the payment of any
termination fees;
- if any state takeover statute is or may become applicable to the merger
or the stock option agreement, each of Texas Instruments and Burr-Brown
shall use their reasonable best efforts to consummate the transactions
contemplated by the merger agreement and the stock option agreement as
promptly as practicable and will otherwise act to eliminate or minimize
the effects of any state takeover statute on the merger or the option
agreement;
- Texas Instruments will cause the shares of Texas Instruments common stock
to be issued in connection with the merger to be listed on the New York
Stock Exchange, subject only to official notice of issuance.
Burr-Brown has also further agreed not to, and not to permit its
subsidiaries to, nor authorize or permit any officer, director or employee of or
any investment banker, attorney, accountant or other advisor or representative
of Burr-Brown or any of its subsidiaries to, directly or indirectly:
- solicit, initiate or encourage the submission of any Acquisition Proposal
(as defined below); or
- participate in any discussions or negotiations regarding, or furnish to
any person any information in respect of, or take any other action to
facilitate, any Acquisition Proposal or any inquiries or the making of
any proposal that constitutes, or may reasonably be expected to lead to,
any Acquisition Proposal.
However, in response to an unsolicited Acquisition Proposal, Burr-Brown may
take any of the actions described in the second bullet above if, and only to the
extent that:
- the special meeting of Burr-Brown stockholders to approve the merger has
not occurred;
- the Burr-Brown board of directors, after consultation with outside legal
counsel, determines in good faith that the failure to take such action
would be inconsistent with its fiduciary duties to Burr-Brown's
stockholders under applicable law;
- the Burr-Brown board of directors determines in good faith that the
Acquisition Proposal, if accepted, is reasonably likely to be consummated
after taking into account all legal, financial, regulatory and other
aspects of the proposal and the person making the proposal, and believes
in good faith, after consultation with its financial advisor and after
taking into account the strategic benefits to be derived from the merger
and the long-term prospects of Texas Instruments and its subsidiaries,
that the Acquisition Proposal would, if consummated, result in a
transaction more favorable to Burr-Brown's stockholders than the merger
(any such Acquisition Proposal that the Burr-Brown board of directors has
determined to be more favorable to Burr-Brown stockholders than the
merger is referred to as a "Superior Proposal"); and
- prior to taking action, Burr-Brown:
(1) provides reasonable notice to Texas Instruments that it is taking
action; and
(2) receives from the person making the Acquisition Proposal an executed
confidentiality/standstill agreement in reasonably customary form
and containing terms at least as stringent as those contained in the
confidentiality agreement entered into between Texas Instruments and
Burr-Brown in connection with the merger.
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Burr-Brown will notify Texas Instruments of its receipt of any Acquisition
Proposal as promptly as practicable.
Subject to certain exceptions, Burr-Brown's board of directors will not
withdraw or modify, or propose to withdraw or modify its approval or
recommendation of the merger in a manner adverse to Texas Instruments, unless
the Burr-Brown board of directors, after consultation with outside legal
counsel, determines in good faith that a failure to withdraw or modify its
approval or recommendation would be inconsistent with the Burr-Brown board of
directors' fiduciary duties. The Burr-Brown board of directors may not approve
or recommend, and in connection with that approval or recommendation, withdraw
or modify its approval or recommendation of the merger, unless an Acquisition
Proposal is a Superior Proposal and the board of directors has first consulted
with outside legal counsel and determined that the failure to take such action
would be inconsistent with the Burr-Brown board of directors' fiduciary duties
to Burr-Brown's stockholders under applicable law.
"Acquisition Proposal" means any inquiry, offer or proposal regarding any
of the following, other than the transactions contemplated by the merger
agreement, involving Burr-Brown or any of its subsidiaries:
- any merger, consolidation, share exchange, recapitalization, business
combination or other similar transaction;
- any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of all or substantially all the assets of Burr-Brown and its
subsidiaries, taken as a whole, in a single transaction or series of
related transactions;
- any tender offer or exchange offer for 20% or more of the outstanding
capital stock of Burr-Brown or the filing of a registration statement
under the Securities Act in connection with any such tender or exchange
offer; or
- any public announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing.
TERMINATION OF THE MERGER AGREEMENT
Termination by either Burr-Brown or Texas Instruments
The merger agreement may be terminated, and the merger abandoned, at any
time prior to the merger by mutual written consent of Burr-Brown and Texas
Instruments. The merger agreement may also be terminated by either Burr-Brown or
Texas Instruments if:
- the merger is not consummated by December 31, 2000; except that either
Burr-Brown or Texas Instruments may extend the termination date if it
reasonably determines in good faith that additional time is necessary in
connection with obtaining any required governmental consent or approval,
provided that the termination date may not be extended beyond February
28, 2001;
- the required approval of the stockholders of Burr-Brown has not been
obtained at the special meeting or any adjournment or postponement of the
special meeting;
- any law permanently restraining, enjoining or otherwise prohibiting the
consummation of the merger has become final and non-appealable; or
- any governmental entity has failed to issue an order, decree or ruling or
to take any other action which is necessary to fulfill certain conditions
to the consummation of the merger, and that denial of a request to issue
such order, decree or ruling or to take such other action is final and
non-appealable.
However, the right of either party to terminate the merger agreement is not
available to a party that has breached, in any material respect, its obligations
to consummate the merger set forth in the merger agreement in any manner that
has proximately contributed to the failure of the merger to be consummated.
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Termination by Burr-Brown
The merger agreement may be terminated, and the merger abandoned, by
Burr-Brown at any time prior to the merger if each of the following occurs:
- Burr-Brown is not in breach of its obligations with respect to
Acquisition Proposals, as set forth above;
- the merger has not been approved by Burr-Brown's stockholders;
- Burr-Brown's board of directors authorizes Burr-Brown, subject to
complying with the terms of the merger agreement, to enter into a binding
written agreement concerning a transaction that constitutes a Superior
Proposal and Burr-Brown notifies Texas Instruments in writing that it
intends to enter into that agreement, attaching the most current version
of that agreement to the notice; and
- during the three business day period after that notice:
(1) Burr-Brown negotiates with, and causes its financial and legal
advisors to negotiate with, Texas Instruments to attempt to make
commercially reasonable adjustments in the terms and conditions of
the merger agreement as would enable Burr-Brown to proceed with the
transactions contemplated by the merger agreement; and
(2) Burr-Brown's board of directors concludes, after considering the
results of these negotiations, that the Superior Proposal giving
rise to Burr-Brown's notice continues to be a Superior Proposal.
The merger agreement may also be terminated, and the merger abandoned, by
Burr-Brown at any time prior to the merger if there is a breach by Texas
Instruments or Burma Acquisition of any representation, warranty, covenant or
agreement contained in the merger agreement that cannot be cured and would
prevent certain conditions to the consummation of the merger from being
satisfied before December 31, 2000.
Termination by Texas Instruments
The merger agreement may be terminated, and the merger abandoned, by Texas
Instruments at any time prior to the merger if:
- Burr-Brown enters into a binding agreement for a Superior Proposal or
Burr-Brown's board of directors withdraws or adversely modifies its
approval or recommendation of the merger; or
- there is a breach by Burr-Brown of any representation, warranty, covenant
or agreement contained in the merger agreement that cannot be cured and
would prevent certain conditions to the consummation of the merger from
being satisfied before December 31, 2000.
Effect of Termination
If the merger agreement is terminated:
- because a bona fide Acquisition Proposal has been made or any person has
publicly announced an intention, whether or not conditional, to make a
bona fide Acquisition Proposal in respect of Burr-Brown or any of its
subsidiaries and the merger agreement is subsequently terminated (1) by
either Texas Instruments or Burr-Brown because Burr-Brown's stockholders
have not approved the merger or (2) by Texas Instruments because
Burr-Brown materially breaches its covenant not to solicit, initiate or
encourage the submission of any Acquisition Proposal or participate in
any discussions or negotiations regarding, or furnish to any person any
information in respect of, or take any other action to facilitate, any
Acquisition Proposal or any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Acquisition
Proposal and, in the case of termination under clause (1) or (2), within
nine months of the termination of the merger
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agreement any Acquisition Proposal by a third party is entered into,
agreed to or consummated by Burr-Brown;
- by Burr-Brown in the manner described in the first paragraph under
"Termination by Burr-Brown" above;
- by Texas Instruments because Burr-Brown enters into a binding agreement
for a Superior Proposal; or
- by Texas Instruments because Burr-Brown's board of directors withdraws or
adversely modifies its approval or recommendation of the merger and
within nine months of the termination of the merger agreement any
Acquisition Proposal by a third party is entered into, agreed to or
consummated by Burr-Brown;
then Burr-Brown has agreed to pay Texas Instruments a termination fee of
$223,203,810 on the date of the termination, except in the case of the first and
fourth bullets above, for which the termination fee will be payable on the
earlier of the date an agreement is entered into in respect of an Acquisition
Proposal or an Acquisition Proposal is consummated. However, notwithstanding the
foregoing, Burr-Brown will not pay Texas Instruments a termination fee with
respect to a termination described in the first and fourth bullets above under
the following circumstances:
- Burr-Brown or any of its subsidiaries acquires a third party pursuant to
a merger, consolidation, recapitalization, share exchange or similar
transaction in which Burr-Brown survives and the shareholders of that
acquired third party receive shares of Burr-Brown common stock which,
immediately following consummation of the acquisition, represent no more
than 45% of the issued and outstanding shares of Burr-Brown common stock
or securities convertible or exchangeable into, or exercisable for
Burr-Brown common stock, whether upon the passage of time or otherwise;
and
- the acquired third party, or any of its affiliates, was not the subject
of an Acquisition Proposal at any time after the date of the merger
agreement and prior to the termination of the merger agreement.
INDEMNIFICATION OF BURR-BROWN'S DIRECTORS AND OFFICERS
Burr-Brown and Texas Instruments have agreed to indemnify the present and
former directors and officers of Burr-Brown and its subsidiaries against all
losses, claims, damages, costs, expenses, liabilities or amounts that are paid
in connection with any claim based on or arising out of or pertaining to the
fact that such person is or was a director or officer of Burr-Brown or any of
its subsidiaries, or based on or arising out of any of the transactions
contemplated by the merger agreement, and to provide and maintain insurance
coverage for such purposes for a period of six years commencing on the effective
date of the merger.
AMENDMENT OF THE MERGER AGREEMENT
The merger agreement may be amended at any time in writing signed by all
parties to the merger agreement before or after the approval of the merger by
the Burr-Brown stockholders but, after their approval, the merger agreement may
not be amended without the approval of the Burr-Brown stockholders if their
approval is required under any applicable law.
EXTENSION AND WAIVER
At any time before the merger, each party to the merger agreement may
extend the time for performance of any obligation or act of another party, waive
any inaccuracies in the representations and warranties of another party or waive
compliance by the other party with any of the agreements or conditions contained
in the merger agreement.
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VOTING AGREEMENT
The following description of certain terms of the voting agreement is only
a summary of the material provisions of the described agreement and does not
purport to be complete. Stockholders should read carefully the voting agreement.
The voting agreement is attached to this proxy statement/prospectus as Annex B.
In order to induce Texas Instruments to enter into the merger agreement,
certain Burr-Brown's officers and directors entered into a voting agreement with
Texas Instruments on June 21, 2000. Those stockholders who signed the voting
agreement have agreed to vote an aggregate of 16,787,528 shares of Burr-Brown
common stock, representing approximately 29.6% of the total outstanding voting
power as of the record date, in favor of approval and adoption of the merger.
The voting agreement provides that, during the period commencing on the
date of the voting agreement and continuing until the earlier of the effective
time of the merger or the termination of the merger agreement in accordance with
its terms, at any meeting of Burr-Brown stockholders, or at any adjournment of
that meeting or pursuant to action by written consent, called to approve the
merger, the stockholders party to the voting agreement will vote the shares held
by such stockholder and subject to the voting agreement in favor of approval of
the merger. In addition, each stockholder party to the voting agreement will not
enter into any other voting agreement or grant a proxy or power of attorney with
respect to Burr-Brown common stock held by such stockholder and subject to the
voting agreement in a manner inconsistent with the stockholder's obligations
under the voting agreement.
STOCK OPTION AGREEMENT
The following description of certain terms of the option agreement is only
a summary of the material provisions of the described agreement and does not
purport to be complete. Stockholders should read carefully the stock option
agreement. The stock option agreement is attached to this proxy statement/
prospectus as Annex C.
GENERAL
In order to induce Texas Instruments to enter into the merger agreement,
Burr-Brown and Texas Instruments entered into a stock option agreement pursuant
to which Burr-Brown granted Texas Instruments an irrevocable option to purchase
up to 11,236,702 shares of Burr-Brown common stock at a purchase price of
$112.94 per share, subject to adjustment as set forth in the stock option
agreement. The shares granted in the option represented 19.9% of the Burr-Brown
common stock issued and outstanding at the time of the grant of the option. The
option is intended to increase the likelihood that the merger will be completed
in accordance with the terms of the merger agreement. Consequently, certain
aspects of the option agreement may have the effect of discouraging persons who
might now or at any time prior to the completion of the merger be interested in
acquiring all or a significant interest in Burr-Brown or its assets.
EXERCISE OF THE OPTION; PROFIT LIMITATIONS
The stock option agreement allows Texas Instruments to exercise the option
with respect to any or all of the option shares at any time, or from time to
time, when Texas Instruments is entitled to receive a termination fee under the
merger agreement by sending prior written notice to Burr-Brown specifying the
number of shares Texas Instruments wishes to purchase. The purchase price and
number of shares exercisable under the option are subject to adjustment in the
event of certain changes in the number of issued and outstanding shares. In lieu
of exercising the option, Texas Instruments may elect to receive cash in an
amount equal to the excess, if any, over the purchase price of the option of the
higher of:
- the highest price of Burr-Brown common stock paid or proposed to be paid
under any other definitive acquisition agreement executed by Burr-Brown;
and
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- the average closing price, for the five trading day period ending on the
trading day immediately prior to the date Texas Instruments gives notice
of such exercise, of Burr-Brown common stock as reported on the Nasdaq.
The stock option agreement provides, however, that Texas Instruments'
profit from:
- the sale of Burr-Brown common stock received pursuant to exercises made
under the stock option agreement;
- the receipt of cash from cash exercises made under the stock option
agreement; and
- the receipt of cash from termination fees payable under the merger
agreement
may not exceed $255,090,070 in the aggregate.
TERMINATION OF THE OPTION
The stock option agreement specifies that the agreement, and Texas
Instruments' option, will terminate upon the earliest of:
- the effective time of the merger;
- 90 days after the occurrence of an event that unconditionally entitles
Texas Instruments to receive the termination fee under the merger
agreement; or
- the termination of the merger agreement in accordance with its terms, so
long as Texas Instruments has not received, or is no longer entitled to
receive, a termination fee under the merger agreement, in which case the
option will terminate on the later of 90 days following the time such
termination fee becomes unconditionally payable or the expiration of the
period in which a termination fee could become payable pursuant to the
merger agreement.
Texas Instruments is, however, still entitled to purchase the shares with
respect to which it has exercised the option in accordance with the terms of the
stock option agreement prior to termination of the option.
OTHER PROVISIONS
The stock option agreement contains other provisions regarding transfer
restrictions, notice requirements, registration rights and representations and
warranties made by Texas Instruments and Burr-Brown.
BUSINESS OF TEXAS INSTRUMENTS
Texas Instruments is a global semiconductor company and the world's leading
designer and supplier of digital signal processors and analog integrated
circuits, the engines driving the digitalization of electronics. These two types
of semiconductor products work together in digital electronic devices such as
digital cellular phones. Analog technology converts analog signals like sound,
light, temperature and pressure into the digital language of zeros and ones,
which can then be processed in real-time by a digital signal processor. Analog
integrated circuits also translate digital signals back to analog. Digital
signal processors and analog integrated circuits enable a wide range of new
products and features for Texas Instruments' more than 30,000 customers in
commercial, industrial and consumer markets.
Texas Instruments is also a world leader in the design and manufacturing of
other semiconductor products. Those products include standard logic,
application-specific integrated circuits, reduced instruction-set computing
microprocessors, microcontrollers and digital imaging devices.
The semiconductor business comprised 84% of Texas Instruments' 1999
revenues. Texas Instruments' semiconductor products are used in a diverse range
of electronic systems, including digital cell phones, computers, printers, hard
disk drives, modems, networking equipment, digital cameras and video recorders,
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motor controls, autos and home appliances. Products are sold primarily to
original-equipment manufacturers and through distributors. Texas Instruments'
semiconductor patent portfolio has been established as an ongoing contributor to
semiconductor revenues. Revenues generated from sales to Texas Instruments' top
four semiconductor customers accounted for approximately 23% of total
semiconductor revenues in 1999.
In addition to semiconductors, Texas Instruments has two other principal
segments. The largest, representing 11% of Texas Instruments' 1999 revenues, is
Materials & Controls (M&C). This business sells electrical and electronic
controls, electronic connectors, sensors, radio-frequency identification systems
and clad metals into commercial and industrial markets. Typically the top
supplier in targeted product areas, M&C faces strong multinational and regional
competitors. The primary competitive factors in this business are product
reliability, manufacturing costs and engineering expertise. The products of this
business are sold directly to original-equipment manufacturers and through
distributors. Revenues generated from sales to Texas Instruments' top four M&C
customers accounted for approximately 16% of total M&C revenues in 1999.
Educational & Productivity Solutions (E&PS) represents 5% of Texas
Instruments' 1999 revenues and is a leading supplier of educational and graphing
calculators. This business sells primarily through retailers and to schools
through instructional dealers. Texas Instruments' principal competitors in this
business are Japan- and U.S.-based companies. Technology expertise, price and
infrastructure for education and market understanding are primary competitive
factors in this business. Revenues generated from sales to Texas Instruments'
top four E&PS customers accounted for approximately 35% of total E&PS revenues
in 1999.
Texas Instruments' restated certificate of incorporation and bylaws provide
for the indemnification of directors and officers in the event they become
parties to legal proceedings arising in connection with their positions with
Texas Instruments. The Commission has expressed its position that the
indemnification of directors, officers and controlling persons against
liabilities arising under the Securities Act is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
All of the current directors and executive officers of Texas Instruments
will be the directors and executive officers of Texas Instruments following the
merger. For information regarding these directors and executive officers and
executive compensation, see Texas Instruments' definitive annual meeting proxy
statement referenced below under "Incorporation by Reference to Other
Documents."
INCORPORATION BY REFERENCE TO OTHER DOCUMENTS
As allowed by the rules of the Commission, this proxy statement/prospectus
does not contain all of the information you can find in the registration
statement or the exhibits to the registration statement. Specifically, the
Commission allows Texas Instruments to "incorporate by reference" information
into this proxy statement/prospectus, which means that Texas Instruments can
disclose important information to you by referring you to another document filed
separately by it with the Commission. The information incorporated in this proxy
statement/prospectus by reference is deemed to be part of this proxy statement/
prospectus, except for any information superseded by information that we include
in this proxy statement/ prospectus. This proxy statement/prospectus
incorporates by reference the documents set forth below that have previously
been filed with the Commission. These documents contain important information
about Texas Instruments and its finances.
<TABLE>
<CAPTION>
DOCUMENT FILED PERIOD OR DATE FILED
-------------- --------------------
<S> <C>
Annual Report on Form 10-K for Fiscal Year ended December
31, 1999 (as amended on Form 10-K/A)...................... Filed on March 3, 2000
(March 23, 2000)
Quarterly Report on Form 10-Q for three months ended March Filed on April 21,
31, 2000.................................................. 2000
Current Report on Form 8-K.................................. Filed on July 6, 2000
Annual Meeting Definitive Proxy Statement on Schedule 14A... Filed on March 2, 2000
</TABLE>
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Texas Instruments is also incorporating by reference any additional
documents that it may file with the Commission pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act between the date of this proxy
statement/prospectus and the date of the special meeting of Burr-Brown
stockholders.
WHERE YOU CAN FIND MORE INFORMATION ABOUT TEXAS INSTRUMENTS
Texas Instruments (File No. 1-3761) files annual, quarterly and current
reports, proxy statements and other information with the Commission. You may
read and copy any reports, statements and other information filed by Texas
Instruments at the Commission's public reference room, at 450 Fifth Street,
N.W., Washington, D.C. 20549, as well as at public reference rooms in New York,
New York, and Chicago, Illinois. Please call (800) SEC-0330 for further
information on the public reference rooms. Texas Instruments' filings are also
available to the public from commercial document retrieval services and at the
Internet web site maintained by the Commission at http://www.sec.gov.
Texas Instruments has filed a registration statement on Form S-4 to
register with the Commission the Texas Instruments common stock to be issued to
stockholders of Burr-Brown in the merger. This proxy statement/prospectus is
part of that registration statement and constitutes a prospectus of Texas
Instruments in addition to being a proxy statement of Burr-Brown for its special
meeting of stockholders.
Texas Instruments has supplied all information contained or incorporated by
reference in this proxy statement/prospectus relating to Texas Instruments or
Burma Acquisition.
BUSINESS OF BURR-BROWN
Burr-Brown is a global leader in the development, manufacturing and
marketing of high performance analog and mixed signal integrated circuits that
detect, measure and control real world properties, such as temperature,
pressure, speed, flow, humidity, sound and light. Through its proprietary design
expertise and specialized application knowledge, Burr-Brown delivers more than
1,400 innovative products to 25,000 customers worldwide. Burr-Brown's major
customers are among the world's leading electronics manufacturers. Burr-Brown
targets high growth segments of the communications, consumer, computing and
industrial markets.
Burr-Brown sells both standard linear integrated circuits (SLICs), which
can be used as precision building blocks across many applications, as well as
application specific standard products (ASSPs), which are targeted to the unique
requirements of emerging, high volume applications. Since 1993, sales of ASSPs
have grown from 5% of Burr-Brown's revenue to approximately 35% in 1999.
Analog Integrated Circuits
Analog signal processing integrated circuits are used to process and
transmit analog data signals prior to conversion to digital signals and after
conversion from digital signals. These components are used in communications
equipment, automatic test equipment, analytical instruments, medical instruments
and systems, industrial controls, personal computing and computer peripherals.
Burr-Brown's analog circuits include operational, power, instrumentation,
programmable gain and isolation amplifiers, current transmitters and other
analog signal processing components.
Operational Amplifiers. The operational amplifier is the fundamental
building block in analog and digital systems design. Operational amplifiers are
used to detect and amplify weak (low level) analog signals. Burr-Brown's high
performance operational amplifiers are generally capable of amplifying typical
analog signals in the micro-volt range up to 100,000 times. In addition,
operational amplifiers can perform mathematical functions such as integration
and differentiation. These high performance amplifiers are required to treat
signals generated in numerous applications, including satellite and cable TV
systems, audio and video systems, robotics, magnetic resonance and
computer-aided tomography (CAT) body scanning systems.
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Amplifier Based Products. Burr-Brown manufactures a number of other
amplifier based products, including instrumentation amplifiers, programmable
gain amplifiers and isolation amplifiers. Among other uses, these components
permit the measurement of weak signals in the presence of unwanted "noise" and
protection of sensitive instruments from the effects of transient,
high-magnitude and potentially damaging voltages caused by sources such as
lightning or the switching of high voltage equipment. These amplifiers are used
in many diverse applications, including temperature measurement in industrial
processes, protection of sensitive medical instruments and isolation of
electrical power line disturbances and faults.
Other Analog Signal Processing Components. Burr-Brown manufactures a
variety of other analog signal processing components, including mathematical
function circuits, current transmitters and voltage-to-frequency converters.
Isolation Products. Burr-Brown's isolation products include isolation
amplifiers, isolated digital couplers and DC-to-DC voltage converters. These
products are used in the industrial process control, communication and medical
instrumentation markets, among others, to perform a variety of analog circuit
functions while protecting people and equipment from potentially damaging
voltages.
Mixed Signal Products
Burr-Brown's mixed signal products are integrated circuit devices that
contain both analog and digital circuits on a single integrated circuit. In most
cases, these devices convert analog signals to digital form or convert digital
signals to analog form. This conversion is necessary in virtually all
applications in which digital computers or processors measure and control the
analog signals from a physical, "real world" process.
Precision Data Conversion Products. The majority of Burr-Brown's mixed
signal components revenue is derived from moderate speed, high resolution and
high accuracy converters. These general purpose converters are used primarily in
process control instrumentation, electronic test instrumentation, automatic test
systems, and communications systems.
High Speed Data Conversion Products. High speed converters are used in a
variety of applications such as wireless communications systems, image
processing, digital oscilloscopes, ultrasound, radar and sonar, as well as the
front end of other advanced systems using digital signal processing (DSP)
technology.
Digital Audio and Video Products. Burr-Brown also offers high precision,
single chip, digital-to-analog (D/A) converters, analog-to-digital (A/D)
converters, codecs and video signal processing devices for the digital audio and
video market. Burr-Brown's pulse-code-modulated (PCM) product line plays an
essential role in digital audio systems, such as compact disc (CD) players, that
use laser technology to achieve high performance audio reproduction.
Burr-Brown's presence in the CD market facilitated its early entry into the DVD
and multimedia markets. Burr-Brown's PCM converters have now been designed into
musical instruments, computer games, automobile sound systems, CD-ROMs for
multimedia applications, set top box tuners for cable and satellite TV, DVD
players and PC add-in cards. Burr-Brown's high speed A/D converters are used in
charge coupled device (CCD) imaging applications such as camcorders, digital
cameras and scanners to convert the CCD analog signal to digital for processing
in the system DSP. In addition, Burr-Brown makes complete "front-end" video
ASSPs, combining A/D converters with other circuitry to handle all the signal
processing between the CCD sensor and the system's digital processor.
Burr-Brown is headquartered in Tucson, Arizona and has manufacturing or
technical facilities in Tucson, Atsugi, Japan and Livingston, Scotland. In 1994,
Burr-Brown established business units in these locations to bring greater focus
to their respective served markets and accelerate new product development. At
July 19, 2000, Burr-Brown employed 1,552 people worldwide.
INCORPORATION BY REFERENCE TO OTHER DOCUMENTS
As allowed by the rules of the Commission, this proxy statement/prospectus
does not contain all of the information you can find in the registration
statement or the exhibits to the registration statement. Specifically, the
Commission allows Burr-Brown to "incorporate by reference" information into this
proxy
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statement/prospectus, which means that Burr-Brown can disclose important
information to you by referring you to another document filed separately by it
with the Commission. The information incorporated in this proxy
statement/prospectus by reference is deemed to be part of this proxy statement/
prospectus, except for any information superseded by information that we include
in this proxy statement/ prospectus. This proxy statement/prospectus
incorporates by reference the documents set forth below that have previously
been filed with the Commission. These documents contain important information
about Burr-Brown and its finances.
<TABLE>
<CAPTION>
DOCUMENT FILED PERIOD OR DATE FILED
-------------- --------------------
<S> <C>
Annual Report on Form 10-K for Fiscal Year ended
December 31, 1999........................................ Filed on February 9, 2000
Quarterly Report on Form 10-Q for three months ended
April 1, 2000............................................ Filed on May 16, 2000
Current Reports on Form 8-K................................ Filed on February 25, 2000
and June 22, 2000
Annual Meeting Definitive Proxy Statement on Schedule
14A...................................................... Filed on March 18, 2000
</TABLE>
Burr-Brown is also incorporating by reference any additional documents that
Burr-Brown may file with the Commission pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act between the date of this proxy statement/prospectus
and the date of the special meeting of Burr-Brown stockholders.
WHERE YOU CAN FIND MORE INFORMATION ABOUT BURR-BROWN
Burr-Brown (File No. 0-11438) files annual, quarterly and current reports,
proxy statements and other information with the Commission. You may read and
copy any reports, statements and other information filed by Burr-Brown at the
Commission's public reference room, at 450 Fifth Street, N.W., Washington, D.C.
20549, as well as at public reference rooms in New York, New York, and Chicago,
Illinois. Please call (800) SEC-0330 for further information on the public
reference rooms. Burr-Brown's filings are also available to the public from
commercial document retrieval services and at the Internet web site maintained
by the Commission at http://www.sec.gov.
Burr-Brown has supplied all information contained or incorporated by
reference in this proxy statement/prospectus relating to Burr-Brown.
DESCRIPTION OF CAPITAL STOCK OF TEXAS INSTRUMENTS
GENERAL
The authorized capital stock of Texas Instruments consists of 2,400,000,000
shares of common stock, $1.00 par value per share, and 10,000,000 shares of
preferred stock, $25.00 par value. As of July 19, 2000, there were 1,642,569,454
issued shares of common stock, of which 930,359 were treasury shares and
1,641,639,095 were outstanding, and Texas Instruments had no preferred stock
issued or outstanding. The following summary of the terms of Texas Instruments'
capital stock does not purport to be complete and is qualified in its entirety
by reference to the applicable provisions of Delaware law and Texas Instruments'
restated certificate of incorporation, as amended.
THE COMMON STOCK
The holders of shares of Texas Instruments common stock, subject to the
preferential rights of the holders of any shares of preferred stock of Texas
Instruments, are entitled to dividends when and as declared by the Texas
Instruments board of directors. The holders of the Texas Instruments common
stock have one vote per share on all matters submitted to a vote of the
stockholders, and the right to share pro rata in the net assets of Texas
Instruments in liquidation after payment of any amounts due to creditors and in
respect of any preferred stock of Texas Instruments. Holders of shares of Texas
Instruments common stock are not entitled as a matter of right to any preemptive
or subscription rights and are not
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entitled to cumulative voting for directors. All outstanding shares of Texas
Instruments common stock are, and the shares of Texas Instruments common stock
issued upon any conversion or exchange of any debt securities or preferred stock
providing for such conversion or exchange will be, fully paid and nonassessable.
The bylaws of Texas Instruments provide that the annual meeting of
stockholders shall be held on the third Thursday in April each year or on such
other date as may be fixed by the Texas Instruments board of directors and as
stated in a written notice, which must be mailed or delivered to each
stockholder at least 10 days prior to any stockholder meeting.
Texas Instruments is authorized to issue additional shares of common stock
without further stockholder approval, except as may be required by applicable
law or stock exchange regulations.
The transfer agent and registrar for Texas Instruments' common stock is
Computershare Investor Services, LLC, 2 North LaSalle Street, 3rd Floor,
Chicago, Illinois 60602.
THE PREFERRED STOCK
Under its restated certificate of incorporation, Texas Instruments is
authorized to issue up to 10,000,000 shares of preferred stock, in one or more
series, with such designations and such relative voting, dividend, liquidation,
conversion and other rights, preferences and limitations as are stated in the
restated certificate of incorporation, or any certificate of designation
establishing such series adopted by the Texas Instruments board of directors.
The 10,000,000 authorized but unissued shares of preferred stock may be issued
pursuant to resolution of the Texas Instruments board of directors without the
vote of the holders of any capital stock of Texas Instruments.
THE RIGHTS PLAN
On June 18, 1998, the Texas Instruments board of directors declared a
dividend of one preferred stock purchase right for each outstanding share of
Texas Instruments common stock. The dividend was paid on June 30, 1998 to
holders of record of Texas Instruments common stock as of the close of business
on that date. As a result of two-for-one stock splits effective in August 1999
and in May 2000, each share of Texas Instruments common stock is now associated
with one-quarter of a right. The terms and conditions of the purchase rights are
set forth in a Rights Agreement dated as of June 19, 1998 between Texas
Instruments and Harris Trust and Savings Bank, as rights agent, as amended. The
rights will expire on June 18, 2008, unless earlier exchanged or redeemed.
Prior to the distribution date, as defined below, the rights will be
evidenced by the certificates for and will be transferred with the Texas
Instruments common stock, and the registered holders of the Texas Instruments
common stock will be deemed to be the registered holders of the rights. After
the distribution date, the rights agent will mail separate certificates
evidencing the rights to each record holder of the common stock as of the close
of business on the distribution date, and thereafter the rights will be
transferable separately from the common stock. The "distribution date" generally
means the earlier of:
- the close of business on the 10th day after the date of the first public
announcement that a person, other than Texas Instruments or any of its
subsidiaries or any employee benefit plan of Texas Instruments or any
such subsidiary, has acquired beneficial ownership of 20% or more of the
outstanding shares of common stock, referred to in this section as the
"acquiring person;" and
- the close of business on the 10th business day, or such later day as may
be designated by the Texas Instruments board of directors before any
person has become an acquiring person, after the date of the commencement
of a tender or exchange offer by any person which would, if consummated,
result in such person becoming an acquiring person.
Prior to the distribution date, the rights are not exercisable. After the
distribution date, each right will be exercisable to purchase, for $200,
referred to herein as the "purchase price," one one-thousandth of a share of
Series B Participating Cumulative Preferred Stock.
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At any time after any person has become an acquiring person, but before the
occurrence of any of the events described in the second succeeding sentence,
each right, other than rights beneficially owned by the acquiring person and
certain affiliated persons, will entitle the holder to purchase, for the
purchase price, a number of shares of Texas Instruments common stock having a
market value of twice the purchase price. At any time after any person has
become an acquiring person, but before any person becomes the beneficial owner
of 50% or more of the outstanding shares of Texas Instruments common stock or
the occurrence of any of the events described in the next sentence, the Texas
Instruments board of directors may exchange all or part of the purchase rights,
other than rights beneficially owned by an acquiring person and certain
affiliated persons, for shares of Texas Instruments common stock at an exchange
ratio of one share of Texas Instruments common stock per right. If, after any
person has become an acquiring person;
- Texas Instruments is involved in a merger or other business combination
in which Texas Instruments is not the surviving corporation or its common
stock is exchanged for other securities or assets; or
- Texas Instruments and/or one or more of its subsidiaries sell or
otherwise transfer assets or earning power aggregating more than 50% of
the assets or earning power of Texas Instruments and its subsidiaries,
taken as a whole;
then each right, other than rights beneficially owned by an acquiring person and
certain affiliated persons, will entitle the holder to purchase, for the
purchase price, a number of shares of common stock of the other party to such
business combination or sale, or in certain circumstances, an affiliate, having
a market value of twice the purchase price.
The Texas Instruments board of directors may redeem all of the rights at a
price of $.01 per right at any time before any person has become an acquiring
person. For so long as the rights are redeemable, the Rights Agreement may be
amended in any respect. At any time when the rights are no longer redeemable,
the Rights Agreement may be amended in any respect that does not adversely
affect purchase rights holders, other than any acquiring person and certain
affiliated persons, cause the Rights Agreement to become amendable other than as
described in this sentence or cause the rights again to become redeemable.
Rights holders have no rights as holders of Texas Instruments common stock,
including the right to vote and to receive dividends.
The Rights Agreement includes antidilution provisions designed to prevent
efforts to diminish the effectiveness of the rights.
Each outstanding share of Texas Instruments common stock on June 30, 1998
received one right. Shares of common stock issued after June 30, 1998 and prior
to the distribution date have been and will be issued with a right attached so
that all shares of Texas Instruments common stock outstanding prior to the
distribution date will have rights attached. As a result of the two-for-one
stock splits effective in August 1999 and in May 2000, each share of Texas
Instruments common stock is now associated with one-quarter of a right.
The rights may have antitakeover effects. The rights may cause substantial
dilution to a person that attempts to acquire Texas Instruments without a
condition to such an offer that a substantial number of the rights be acquired
or that the rights be redeemed or declared invalid. The rights should not
interfere with any merger or other business combination approved by the Texas
Instruments board of directors since the rights may be redeemed by Texas
Instruments as described above.
This description of the Rights Agreement is qualified in its entirety by
reference to the full text of the Rights Agreement and Amendment No. 1 to the
Rights Agreement, which are included as exhibits to documents filed with the
Commission and incorporated by reference.
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LEGAL MATTERS
The validity of the shares of Texas Instruments common stock to be issued
in the merger and certain United States federal income tax consequences of the
merger will be passed upon by Weil, Gotshal & Manges LLP, Dallas, Texas and New
York, New York.
Certain United States federal income tax consequences of the merger will be
passed upon by Snell & Wilmer L.L.P., Phoenix, Arizona.
INDEPENDENT AUDITORS
The consolidated financial statements of Texas Instruments for the year
ended December 31, 1999, appearing in its proxy statement for the 2000 annual
meeting of stockholders and incorporated by reference in its annual report on
Form 10-K for the year ended December 31, 1999, and the related financial
statement schedule, as amended, included in Form 10-K/A, have been audited by
Ernst & Young LLP, independent auditors, as set forth in their reports thereon
incorporated by reference and included therein and incorporated by reference in
this proxy statement/prospectus. The consolidated financial statements (and
related financial statement schedule) of Burr-Brown appearing in its annual
report on Form 10-K for the year ended December 31, 1999 have also been audited
by Ernst & Young LLP, independent auditors, as set forth in their reports
thereon included therein and incorporated by reference in this proxy statement/
prospectus. These financial statements are incorporated by reference in this
proxy statement/prospectus in reliance upon the reports of Ernst & Young LLP
given on the authority of such firm as experts in accounting and auditing.
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ANNEX A
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
DATED AS OF JUNE 21, 2000
AMONG
BURR-BROWN CORPORATION
TEXAS INSTRUMENTS INCORPORATED
AND
BURMA ACQUISITION CORP.
--------------------------------------------------------------------------------
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<PAGE> 78
TABLE OF CONTENTS
<TABLE>
<CAPTION>
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<S> <C> <C>
ARTICLE I
THE MERGER
Section 1.1 The Merger.................................................. A-2
Section 1.2 Effective Time.............................................. A-2
Section 1.3 Closing of the Merger....................................... A-2
Section 1.4 Effects of the Merger....................................... A-2
Section 1.5 Certificate of Incorporation and Bylaws..................... A-2
Section 1.6 Directors................................................... A-2
Section 1.7 Officers.................................................... A-2
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Shares........................................ A-3
Section 2.2 Stock Options and 4 1/4% Notes.............................. A-3
Section 2.3 Exchange Fund............................................... A-4
Section 2.4 Exchange Procedures......................................... A-4
Section 2.5 Distributions with Respect to Unsurrendered Certificates.... A-5
Section 2.6 No Further Ownership Rights in Company Common Stock......... A-5
Section 2.7 No Fractional Shares of Parent Common Stock................. A-5
Section 2.8 Termination of Exchange Fund................................ A-5
Section 2.9 No Liability................................................ A-6
Section 2.10 Investment of the Exchange Fund............................. A-6
Section 2.11 Lost Certificates........................................... A-6
Section 2.12 Withholding Rights.......................................... A-6
Section 2.13 Stock Transfer Books........................................ A-6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1 Organization and Qualification; Subsidiaries................ A-6
Section 3.2 Capitalization of the Company and Its Subsidiaries.......... A-7
Section 3.3 Authority Relative to This Agreement........................ A-8
Section 3.4 SEC Reports; Financial Statements........................... A-8
Section 3.5 No Undisclosed Liabilities.................................. A-9
Section 3.6 Absence of Changes.......................................... A-9
Section 3.7 Information Supplied........................................ A-10
Section 3.8 Consents and Approvals...................................... A-11
Section 3.9 No Default.................................................. A-11
Section 3.10 Real Property............................................... A-11
Section 3.11 Litigation.................................................. A-13
Section 3.12 Compliance with Applicable Law; Permits..................... A-13
Section 3.13 Employee Plans.............................................. A-13
Section 3.14 Labor Matters............................................... A-15
Section 3.15 Environmental Matters....................................... A-16
Section 3.16 Tax Matters................................................. A-18
Section 3.17 Absence of Questionable Payments............................ A-20
Section 3.18 Material Contracts.......................................... A-20
Section 3.19 Subsidies................................................... A-20
Section 3.20 Intellectual Property....................................... A-21
Section 3.21 Opinion of Financial Advisor................................ A-22
Section 3.22 Brokers..................................................... A-22
</TABLE>
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<S> <C> <C>
Section 3.23 Accounting Matters.......................................... A-22
Section 3.24 Recalls..................................................... A-22
Section 3.25 DGCL sec. 203............................................... A-23
Section 3.26 Amendment to the Company Rights Agreement................... A-23
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Section 4.1 Organization................................................ A-23
Section 4.2 Authority Relative to This Agreement........................ A-23
Section 4.3 SEC Reports; Financial Statements........................... A-24
Section 4.4 Undisclosed Liabilities..................................... A-24
Section 4.5 Capitalization of Parent.................................... A-24
Section 4.6 Information Supplied........................................ A-25
Section 4.7 Consents and Approvals; No Violations....................... A-25
Section 4.8 Litigation.................................................. A-25
Section 4.9 Compliance with Applicable Law.............................. A-25
Section 4.10 No Prior Activities......................................... A-26
Section 4.11 Brokers..................................................... A-26
Section 4.12 Accounting Matters.......................................... A-26
ARTICLE V
COVENANTS RELATED TO CONDUCT OF BUSINESS
Section 5.1 Conduct of Business of the Company.......................... A-26
Section 5.2 Conduct of Business of Parent............................... A-28
Section 5.3 Access to Information....................................... A-28
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Preparation of S-4 and the Proxy Statement.................. A-29
Section 6.2 Letter of Accountants....................................... A-29
Section 6.3 Meeting..................................................... A-30
Section 6.4 Reasonable Best Efforts..................................... A-30
Section 6.5 Acquisition Proposals....................................... A-31
Section 6.6 Public Announcements........................................ A-32
Section 6.7 Indemnification............................................. A-33
Section 6.8 Notification of Certain Matters............................. A-34
Tax-Free Reorganization Treatment; Pooling of Interest
Section 6.9 Accounting.................................................. A-34
Section 6.10 Employee Matters............................................ A-34
Section 6.11 Company Affiliate Agreements................................ A-35
Section 6.12 SEC and Other Filings....................................... A-35
Section 6.13 Fees and Expenses........................................... A-35
Section 6.14 Obligations of Merger Sub................................... A-35
Section 6.15 Listing of Stock............................................ A-35
Section 6.16 Antitakeover Statutes....................................... A-35
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
Conditions to Each Party's Obligations to Effect the
Section 7.1 Merger...................................................... A-36
Section 7.2 Conditions to the Obligations of Parent and Merger Sub...... A-36
Section 7.3 Conditions to the Obligations of the Company................ A-37
</TABLE>
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ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
Section 8.1 Termination by Mutual Agreement............................. A-38
Section 8.2 Termination by Either Parent or the Company................. A-38
Section 8.3 Termination by the Company.................................. A-38
Section 8.4 Termination by Parent....................................... A-39
Section 8.5 Effect of Termination and Abandonment....................... A-39
Section 8.6 Amendment................................................... A-40
Section 8.7 Extension; Waiver........................................... A-40
ARTICLE IX
MISCELLANEOUS
Section 9.1 Entire Agreement; Assignment................................ A-40
Section 9.2 Nonsurvival of Representations and Warranties............... A-40
Section 9.3 Notices..................................................... A-41
Section 9.4 Governing Law............................................... A-41
Section 9.5 Descriptive Headings........................................ A-42
Section 9.6 Parties in Interest......................................... A-42
Section 9.7 Severability................................................ A-42
Section 9.8 Specific Performance........................................ A-42
Section 9.9 Counterparts................................................ A-42
Section 9.10 Interpretation.............................................. A-42
Section 9.11 Definitions................................................. A-43
</TABLE>
<TABLE>
<S> <C>
EXHIBITS
Voting Agreement A
Company Affiliate Agreement B
Option Agreement C
Company Certificate D
Parent Certificate E
</TABLE>
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GLOSSARY OF DEFINED TERMS
<TABLE>
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DEFINED IN
DEFINED TERMS SECTION
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<S> <C>
4 1/4% Notes................................................ 3.2(a)
Acquisition Proposal........................................ 6.5(a)
Antitrust Law............................................... 6.4(a)
Assumed Stock Option........................................ 2.2(a)
beneficial ownership........................................ 9.11(a)
beneficially own............................................ 9.11(a)
Benefit Plans............................................... 3.13(a)(i)
Benefits Integration Date................................... 6.10
business day................................................ 9.11(b)
CERCLA...................................................... 3.15(a)(i)
Certificate of Merger....................................... 1.2
Certificates................................................ 2.4
Closing..................................................... 1.3
Closing Date................................................ 1.3
Code........................................................ Recitals
Company..................................................... Preamble
Company Affiliate Agreements................................ Recitals
Company Balance Sheet....................................... 3.4
Company Balance Sheet Date.................................. 3.4
Company Board............................................... 3.3(b)
Company Common Stock........................................ 2.1(b)
Company Disclosure Schedule................................. Article III
Company Employees........................................... 6.10
Company Option Plans........................................ 2.2
Company Permits............................................. 3.12
Company Requisite Vote...................................... 3.3(b)
Company Rights Agreement.................................... 3.26
Company SEC Reports......................................... 3.4
Company Securities.......................................... 3.2(a)
Company Stock Option........................................ 2.2
Company Stockholder Meeting................................. 6.3
Confidentiality Agreement................................... 5.3(c)
DGCL........................................................ 1.1
DOJ......................................................... 6.4(b)
Effective Time.............................................. 1.2
Employee Arrangements....................................... 3.13(a)(ii)
Environmental Law........................................... 3.15(a)(i)
ERISA....................................................... 3.13(a)(i)
Exchange Act................................................ 3.4
Exchange Agent.............................................. 2.3
Exchange Fund............................................... 2.3
Exchange Ratio.............................................. 2.1(b)
Exempt Acquired Person...................................... 8.5(b)
Expenses.................................................... 6.13
FI Plan..................................................... 6.10(a)
Financial Advisor........................................... 3.21
FTC......................................................... 6.4(b)
GAAP........................................................ 3.4
Governmental Entity......................................... 3.8
</TABLE>
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<TABLE>
<CAPTION>
DEFINED IN
DEFINED TERMS SECTION
------------- ----------
<S> <C>
Hazardous Material.......................................... 3.15(a)(ii)
HSR Act..................................................... 3.8
Indemnified Party(ies)...................................... 6.7(a)
Intellectual Property....................................... 3.20(a)
IRS......................................................... 3.13(b)
know........................................................ 9.11(c)
knowledge................................................... 9.11(c)
Law......................................................... 3.9
Leased Facilities........................................... 3.10(a)
Lien........................................................ 3.2(b)
Material Adverse Effect..................................... 9.11(d)
Material Contracts.......................................... 3.18(a)
Merger...................................................... 1.1
Merger Consideration........................................ 2.1(b)
Merger Sub.................................................. Preamble
NYSE........................................................ 2.7(b)
Option Agreement............................................ Recitals
Owned Facilities............................................ 3.10(a)
Parent...................................................... Preamble
Parent Balance Sheet........................................ 4.3
Parent Balance Sheet Date................................... 4.3
Parent Board................................................ 4.2(b)
Parent Common Stock......................................... Recitals
Parent Disclosure Schedule.................................. Article IV
Parent Plan................................................. 6.10
Parent Rights Agreement..................................... Recitals
Parent SEC Reports.......................................... 4.3
Parent Shares............................................... 4.5
person...................................................... 9.11(e)
Product..................................................... 3.24
Proxy Statement............................................. 3.7
Real Property Lease......................................... 3.10(c)
Release..................................................... 3.15(a)(iii)
Remedial Action............................................. 3.15(a)(iv)
Retirement Plan............................................. 6.10(a)
Rights...................................................... 3.26(a)(i)
S-4......................................................... 3.7
SAR......................................................... 2.2(d)
SEC......................................................... 2.2(d)
Secretary................................................... 1.2
Securities Act.............................................. 3.4
Share(s).................................................... 2.1(b)
subsidiary.................................................. 9.11(f)
Superior Proposal........................................... 6.5(a)
Surviving Corporation....................................... 1.1
Tax(es)..................................................... 3.16
Tax Return(s)............................................... 3.16
Termination Date............................................ 8.2(a)
Voting Agreement............................................ Recitals
WARN........................................................ 3.14(d)
</TABLE>
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of June 21, 2000, is among
Burr-Brown Corporation, a Delaware corporation (the "COMPANY"), Texas
Instruments Incorporated, a Delaware corporation ("PARENT"), and Burma
Acquisition Corp., a Delaware corporation and a direct wholly owned subsidiary
of Parent ("MERGER SUB"). Certain capitalized and non-capitalized terms used
herein are defined in Section 9.11.
RECITALS
WHEREAS, the boards of directors of the Company, Parent and Merger Sub each
have, in light of and subject to the terms and conditions set forth herein,
approved this Agreement and the transactions contemplated hereby, including the
Merger, and the boards of directors of the Company and Merger Sub have declared
the Merger advisable and fair to, and in the best interests of, their respective
stockholders;
WHEREAS, pursuant to the Merger, among other things, and subject to the
terms and conditions of this Agreement, all of the issued and outstanding shares
of stock of the Company shall be converted into shares of common stock, par
value $1.00 per share, of Parent (together with any associated rights to acquire
shares of Cumulative Preferred Stock of Parent pursuant to the Rights Agreement
dated as of June 18, 1998, as amended (the "PARENT RIGHTS AGREEMENT"), between
Parent and Harris Trust and Savings Bank, as Rights Agent) (collectively,
"PARENT COMMON STOCK");
WHEREAS, as an inducement to Parent and Merger Sub to enter into this
Agreement, certain stockholders of the Company have concurrently herewith
entered into (i) a voting agreement in the form attached hereto as EXHIBIT
A("VOTING AGREEMENT") pursuant to which, among other things, such stockholders
have agreed to vote the shares of Company Common Stock (as hereinafter defined)
owned by them in favor of the Merger, subject to the terms of the Voting
Agreement, and (ii) Company Affiliate Agreements in the form attached hereto as
EXHIBIT B ("COMPANY AFFILIATE AGREEMENTS") pursuant to which, among other
things, such stockholders have agreed to refrain from selling shares of Company
Common Stock or Parent Common Stock during a specified period prior to and
following consummation of the Merger;
WHEREAS, as an inducement to Parent and Merger Sub to enter into this
Agreement, the Company has entered into a stock option agreement in the form
attached hereto as EXHIBIT C ("OPTION AGREEMENT") pursuant to which the Company
has granted to Parent an option to purchase from the Company, upon the terms and
conditions described in the Option Agreement, Shares (as hereinafter defined);
WHEREAS, for U.S. federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "CODE"), and that this
Agreement shall be, and is hereby, adopted as a plan of reorganization for
purposes of Section 368(a) of the Code;
WHEREAS, for accounting purposes, it is intended that the Merger shall be
accounted for as a "pooling of interests"; and
WHEREAS, the Company, Parent and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger as set forth in this Agreement.
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NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements herein contained, and intending to be
legally bound hereby, the Company, Parent and Merger Sub hereby agree as
follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. At the Effective Time and upon the terms and
subject to the conditions of this Agreement and in accordance with the General
Corporation Law of the State of Delaware (the "DGCL"), Merger Sub shall be
merged with and into the Company (the "MERGER"). Following the Merger, the
Company shall continue as the surviving corporation (the "SURVIVING
CORPORATION") and the separate corporate existence of Merger Sub shall cease.
Section 1.2 Effective Time. Subject to the provisions of this Agreement,
Parent, Merger Sub and the Company shall cause the Merger to be consummated by
filing a Certificate of Merger (the "CERTIFICATE OF MERGER") with the Secretary
of State of the State of Delaware (the "SECRETARY") in such form as required by,
and executed in accordance with, the relevant provisions of the DGCL, as soon as
practicable on or after the Closing Date (as hereinafter defined). The Merger
shall become effective upon the filing of such Certificate of Merger with the
Secretary or at such later time as agreed in writing by Parent and the Company
and specified in the Certificate of Merger (the "EFFECTIVE TIME").
Section 1.3 Closing of the Merger. The closing of the Merger (the
"CLOSING") will take place at a time and on a date to be specified by the
parties (the "CLOSING DATE"), which shall be no later than the second business
day after satisfaction or waiver of the conditions set forth in Article VII
(other than those conditions that by their nature are to be satisfied at the
Closing, but subject to the fulfillment or waiver of those conditions), at the
offices of Weil, Gotshal & Manges LLP, 100 Crescent Court, Suite 1300, Dallas,
Texas 75201, or at such other time, date or place as agreed to in writing by the
parties hereto.
Section 1.4 Effects of the Merger. The Merger shall have the effects set
forth in the DGCL. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all of the properties, rights, privileges,
powers and franchises of the Company and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and Merger Sub
shall become the debts, liabilities and duties of the Surviving Corporation.
Section 1.5 Certificate of Incorporation and Bylaws. Effective immediately
following the Merger, the certificate of incorporation of Merger Sub, as in
effect immediately prior to the Effective Time, shall be the certificate of
incorporation of the Surviving Corporation until amended in accordance with
applicable Law (as hereinafter defined); provided, however, that at the
Effective Time, Article I of the certificate of incorporation of the Surviving
Corporation shall be amended to read: "The name of the corporation is Burr-Brown
Corporation." Effective immediately following the Merger, the bylaws of Merger
Sub, as in effect immediately prior to the Effective Time, shall be the bylaws
of the Surviving Corporation until amended in accordance with applicable Law.
Section 1.6 Directors. The directors of Merger Sub immediately prior to
the Effective Time shall be the initial directors of the Surviving Corporation
and shall hold office from the Effective Time in accordance with the charter and
bylaws of the Surviving Corporation until their successors are duly elected or
appointed and qualified or until their earlier death, resignation or removal.
Section 1.7 Officers. The officers of Merger Sub immediately prior to the
Effective Time shall be the initial officers of the Surviving Corporation and
shall hold office from the Effective Time in accordance with the charter and
bylaws of the Surviving Corporation until their successors are duly elected or
appointed and qualified or until their earlier death, resignation or removal.
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ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Shares.
(a) At the Effective Time, each issued and outstanding share of the common
stock, par value $.01 per share, of Merger Sub shall, by virtue of the Merger
and without any action on the part of Parent, Merger Sub or the Company, be
converted into one fully paid and non-assessable share of common stock of the
Surviving Corporation.
(b) At the Effective Time, each share of common stock, par value $.01 per
share, of the Company, including the associated Rights (as hereinafter defined)
("COMPANY COMMON STOCK"), issued and outstanding immediately prior to the
Effective Time (individually, a "SHARE" and collectively, the "SHARES") (other
than (i) Shares held by the Company and (ii) Shares held by Parent or Merger
Sub) shall, by virtue of the Merger and without any action on the part of
Parent, Merger Sub, the Company or any holder thereof, be converted into the
right to receive 1.3 shares of Parent Common Stock (referred to herein as the
"EXCHANGE RATIO," and all such shares of Parent Common Stock issued pursuant to
this Section 2.1(b), together with any cash in lieu of fractional shares of
Parent Common Stock to be paid pursuant to Section 2.7, being referred to herein
as the "MERGER CONSIDERATION").
(c) At the Effective Time each Share of Company Common Stock held by the
Company, Parent or Merger Sub shall be cancelled and extinguished without any
consideration therefor.
(d) The Exchange Ratio shall be adjusted to reflect appropriately the
effect of any stock split, stock dividend (including any dividend or
distribution of securities convertible into Parent Common Stock or Company
Common Stock) reorganization, recapitalization, reclassification or other like
change with respect to Parent Common Stock or Company Common Stock occurring on
or after the date hereof and prior to the Effective Time.
Section 2.2 Stock Options and 4 1/4% Notes.
(a) As soon as practicable following the date of this Agreement, Parent and
the Company (or, if appropriate, any committee of the Board of Directors of the
Company administering the Company's stock option plans or arrangements
(collectively, the "COMPANY OPTION PLANS")) shall take such action, and the
Company shall obtain all such agreements and consents, if any, as may be
required to effect the following provisions of this Section 2.2. The outstanding
purchase rights under the Company's Employee Stock Purchase Plan shall be
exercised and shares of the Company Common Stock acquired thereby shall be
issued prior to the Closing Date. As of the Effective Time each outstanding
option to purchase shares of Company Common Stock pursuant to the Company Option
Plans (a "COMPANY STOCK OPTION") shall, at Parent's election with respect to
each such option, either (i) be assumed by Parent and converted into an option
to purchase shares of Parent Common Stock or (ii) be replaced by a new
substitute option to purchase shares of Parent Common Stock granted under the
terms of Parent's stock option plan (in each case, an "ASSUMED STOCK OPTION") as
follows:
(b) In the case of any Company Stock Option to which Section 421 of the
Code applies by reason of its qualification under Section 422 of the Code, (x)
the number of shares of Parent Common Stock subject to the Assumed Stock Option
shall be the product (truncated to the nearest whole share) of the number of
shares of Common Stock subject to the Company Stock Option multiplied by the
Exchange Ratio, and (y) the exercise price per share of Parent Common Stock
under the Assumed Stock Option shall be the quotient (rounded up to the nearest
$.01) of the exercise price per share of Company Common Stock under the Company
Stock Option immediately prior to the Effective Time divided by the Exchange
Ratio.
(c) In the case of any other Company Stock Option, (x) the number of shares
of Parent Common Stock subject to the Assumed Stock Option shall be the product
(rounded up to the nearest whole share) of the number of shares of Company
Common Stock subject to the Company Stock Option multiplied by the Exchange
Ratio, and (y) the exercise price per share under the Assumed Stock Option shall
be the
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quotient (truncated to the nearest $.01) of the exercise price per share of
Company Common Stock under the Company Stock Option immediately prior to the
Effective Time divided by the Exchange Ratio.
(d) Each Assumed Stock Option shall be subject to the same expiration date
and vesting provisions as were applicable to the relevant Company Stock Option
immediately prior to the Effective Time. Within 2 business days of the Effective
Time, Parent shall prepare and file with the Securities and Exchange Commission
(the "SEC") a registration statement on Form S-8 or other appropriate form with
respect to shares of Parent Common Stock subject to the Assumed Stock Options
and to maintain the effectiveness of such registration statement or registration
statements covering such Assumed Stock Options (and maintain the current status
of the prospectus or prospectuses contained therein) for so long as such Assumed
Stock Options remain outstanding. Parent shall take all corporate action
necessary to reserve for issuance a sufficient number of shares of Parent Common
Stock for delivery upon exercise of the options described above.
(e) In accordance with the terms of the indenture and registration rights
agreement relating to the Company's 4 1/4% Notes (as hereinafter defined), (i)
Parent and the Surviving Corporation shall execute and deliver a supplemental
indenture and such other documents as may be required by the related indenture,
(ii) Parent or the Surviving Corporation, as the case may be, shall prepare and
file with the SEC a registration statement, or amendment or supplement thereto,
on Form S-3 or other appropriate form to register the resale of the 4 1/4% Notes
and Parent Common Stock that will become issuable upon conversion thereof, and
maintain the effectiveness thereof, in accordance with the terms of the
registration rights agreement relating to the 4 1/4% Notes, and (iii) Parent
shall take all corporate action necessary to reserve for issuance pursuant to
such indenture and 4 1/4% Notes a sufficient number of shares of Parent Common
Stock for delivery upon conversion.
Section 2.3 Exchange Fund. Prior to the Effective Time, Parent shall
appoint a commercial bank or trust company reasonably acceptable to the Company
to act as exchange agent hereunder for the purpose of exchanging Shares for the
Merger Consideration (the "EXCHANGE AGENT"). At or prior to the Effective Time,
Parent shall deposit with the Exchange Agent, in trust for the benefit of
holders of Shares, certificates representing the Parent Common Stock issuable
pursuant to Section 2.1 in exchange for outstanding Shares. Parent agrees to
make available to the Exchange Agent from time to time as needed, sufficient
cash amounts payable in lieu of fractional shares of Parent Common Stock
pursuant to Section 2.7 and any dividends and other distributions payable
pursuant to Section 2.5. Any cash and certificates of Parent Common Stock,
together with any dividends or distributions with respect thereto, deposited
with the Exchange Agent shall hereinafter be referred to as the "EXCHANGE FUND."
Section 2.4 Exchange Procedures. Promptly after the Effective Time, the
Surviving Corporation shall cause the Exchange Agent to mail to each holder of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding Shares (the "CERTIFICATES") whose shares were converted
pursuant to Section 2.1(b) into Parent Common Stock (i) a letter of transmittal
which shall specify that delivery shall be effective, and risk of loss and title
to the Certificates shall pass, only upon delivery of the Certificates to the
Exchange Agent, and which letter shall be in customary form and have such other
provisions as Parent and the Company may reasonably specify; and (ii)
instructions for effecting the surrender of such Certificates in exchange for
the Merger Consideration. Upon surrender of a Certificate to the Exchange Agent
together with such letter of transmittal, duly executed and completed in
accordance with the instructions thereto, and such other documents as may
reasonably be required by the Exchange Agent, the holder of such Certificate
shall be entitled to receive in exchange therefor (A) a certificate or
certificates representing that number of shares of Parent Common Stock
representing, in the aggregate, the whole number of shares that such holder has
the right to receive pursuant to Section 2.1 and (B) a check in the amount equal
to the cash that such holder has the right to receive pursuant to the provisions
of this Article II, including cash in lieu of any dividends and other
distributions made in accordance with Section 2.5 and cash in lieu of fractional
shares pursuant to Section 2.7, and the Certificate so surrendered shall
forthwith be cancelled. No interest will be paid or will accrue on any cash
payable pursuant to Section 2.5 or Section 2.7. In the event of a transfer of
ownership of Company Common Stock which is not registered in the transfer
records of the Company, certificates evidencing, in
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the aggregate, the proper number of shares of Parent Common Stock, a check in
the proper amount of cash in lieu of any fractional shares of Parent Common
Stock pursuant to Section 2.7 and any dividends or other distributions to which
such holder is entitled pursuant to Section 2.5, may be issued with respect to
such Shares to such a transferee if the Certificate representing such Shares is
presented to the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer and to evidence that any applicable stock
transfer Taxes have been paid.
Section 2.5 Distributions with Respect to Unsurrendered Certificates. No
dividends or other distributions declared or made with respect to shares of
Parent Common Stock with a record date after the Effective Time shall be paid to
the holder of any unsurrendered Certificate with respect to the shares of Parent
Common Stock that such holder would be entitled to receive upon surrender of
such Certificate, and no cash payment in lieu of fractional shares of Parent
Common Stock shall be paid to any such holder pursuant to Section 2.7 until such
holder shall surrender such Certificate in accordance with Section 2.4. Subject
to the effect of applicable Laws, following surrender of any such Certificate,
there shall be paid to such holder of shares of Parent Common Stock issuable in
exchange therefor, without interest, (a) promptly after the time of such
surrender, the amount of any cash payable in lieu of fractional shares of Parent
Common Stock to which such holder is entitled pursuant to Section 2.7 and the
amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such whole shares of Parent
Common Stock, and (b) at the appropriate payment date, the amount of dividends
or other distributions with a record date after the Effective Time but prior to
such surrender and a payment date subsequent to such surrender, payable with
respect to such shares of Parent Common Stock.
Section 2.6 No Further Ownership Rights in Company Common Stock. All
shares of Parent Common Stock issued and cash paid upon conversion of the Shares
in accordance with the terms of Article I and this Article II (including any
cash paid pursuant to Sections 2.5 and 2.7) shall be deemed to have been issued
or paid in full satisfaction of all rights under the DGCL pertaining to the
Shares.
Section 2.7 No Fractional Shares of Parent Common Stock.
(a) No certificates or scrip of shares of Parent Common Stock representing
fractional shares of Parent Common Stock or book-entry credit of the same shall
be issued upon the surrender for exchange of Certificates and such fractional
share interests will not entitle the owner thereof to vote or to have any rights
of a stockholder of Parent or a holder of shares of Parent Common Stock.
(b) Notwithstanding any other provision of this Agreement, each holder of
Shares exchanged pursuant to the Merger who would otherwise have been entitled
to receive a fraction of a share of Parent Common Stock (after taking into
account all Certificates delivered by such holder) shall receive, in lieu
thereof, cash (without interest) in an amount equal to the product of (i) such
fractional part of a share of Parent Common Stock multiplied by (ii) the closing
price on the New York Stock Exchange ("NYSE") (as reported in the New York City
edition of the Wall Street Journal or, if not reported thereby, another
nationally recognized source) for a share of Parent Common Stock on the date of
the Effective Time. As promptly as practicable after the determination of the
aggregate amount of cash to be paid to holders of fractional interests, the
Exchange Agent shall notify Parent and Parent shall cause the Surviving
Corporation to deposit such amount with the Exchange Agent and shall cause the
Exchange Agent to forward payments to such holders of fractional interests
subject to and in accordance with the terms hereof.
Section 2.8 Termination of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the holders of Certificates for twelve months
after the Effective Time shall be delivered to the Surviving Corporation or
otherwise on the instruction of the Surviving Corporation, and any holders of
the Certificates who have not theretofore complied with this Article II shall
thereafter look only to the Surviving Corporation and Parent for the Merger
Consideration with respect to the Shares formerly represented thereby to which
such holders are entitled pursuant to Section 2.1 and Section 2.4, any cash in
lieu of fractional shares of Parent Common Stock to which such holders are
entitled pursuant to
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Section 2.7 and any dividends or distributions with respect to shares of parent
Common Stock to which such holders are entitled pursuant to Section 2.5.
Section 2.9 No Liability. None of Parent, Merger Sub, the Company, the
Surviving Corporation or the Exchange Agent, or any directors, officers,
employees or agents of each of the foregoing shall be liable to any person in
respect of any Parent Common Stock, any dividends or distributions with respect
thereto, any cash in lieu of fractional shares of Parent Common Stock or any
cash from the Exchange Fund delivered to a public official pursuant to any
applicable abandoned property, escheat or similar Law.
Section 2.10 Investment of the Exchange Fund. The Exchange Agent shall
invest any cash included in the Exchange Fund as directed by Parent on a daily
basis. Any interest and other income resulting from such investments promptly
shall be paid to Parent.
Section 2.11 Lost Certificates. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if reasonably
required by the Surviving Corporation, the posting by such person of a bond in
such reasonable amount as the Surviving Corporation may direct as indemnity
against any claim that may be made against it with respect to such Certificate,
the Exchange Agent will deliver in exchange for such lost, stolen or destroyed
Certificate the applicable Merger Consideration with respect to the Shares
formerly represented thereby, any cash in lieu of fractional shares of Parent
Common Stock and unpaid dividends and distributions on shares of Parent Common
Stock deliverable in respect thereof, pursuant to this Agreement.
Section 2.12 Withholding Rights. Each of the Surviving Corporation, Parent
and the Exchange Agent shall be entitled to deduct and withhold from the Merger
Consideration otherwise payable pursuant to this Agreement to any holder of
Shares such amounts as it is required to deduct and withhold with respect to the
making of such payment under the Code and the rules and regulations promulgated
thereunder, or any applicable Law. To the extent that amounts are so withheld by
the Surviving Corporation, Parent or the Exchange Agent, as the case may be,
such withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the holder of the Shares in respect to which such deduction
and withholding was made by the Surviving Corporation, Parent or the Exchange
Agent, as the case may be.
Section 2.13 Stock Transfer Books. The stock transfer books of the Company
shall be closed immediately upon the Effective Time and there shall be no
further registration of transfers of Shares thereafter on the records of the
Company. On or after the Effective Time, any Certificates presented to the
Exchange Agent or Parent for any reason shall be converted into the Merger
Consideration with respect to the Shares formerly represented thereby, any cash
in lieu of fractional shares of Parent Common Stock to which the holders thereof
are entitled pursuant to Section 2.7 and any dividends or other distributions to
which the holders thereof are entitled pursuant to Section 2.5 and the
Certificates so presented shall be cancelled.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedule delivered by the Company to
Parent prior to the execution of this Agreement (the "COMPANY DISCLOSURE
SCHEDULE") or as set forth in the Company SEC Reports (as defined in Section
3.4) filed prior to the date hereof, the Company hereby represents and warrants
to each of Parent and Merger Sub as follows:
Section 3.1 Organization and Qualification; Subsidiaries.
(a) The Company and each of its subsidiaries is, or will be as of the
Effective Time, a corporation or legal entity duly organized, validly existing
and in good standing under the applicable Laws of the jurisdiction of its
incorporation or organization and has all requisite corporate, partnership or
similar power
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and authority to own, lease and operate its properties and to carry on its
businesses as now being conducted.
(b) Exhibit 21 to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1999 sets forth a list of all subsidiaries of the
Company. Except as listed therein or in Section 3.1 of the Company Disclosure
Schedule, the Company does not own, directly or indirectly, beneficially or of
record, any shares of capital stock or other securities of any other entity or
any other investment in any other entity.
(c) The Company is, and each of its subsidiaries is or will be as of the
Effective Time, duly qualified or licensed and in good standing to do business
in each jurisdiction in which the property owned, leased, or operated by it or
the nature of the business conducted by it makes such qualification or licensing
necessary, except where the failure to be so duly qualified or licensed and in
good standing is not reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company and its subsidiaries taken
as a whole.
(d) The Company has heretofore delivered to Parent accurate and complete
copies of the certificate of incorporation and bylaws, as currently in effect,
of the Company. The Company will deliver to Parent accurate and complete copies
of the charter or certificate of incorporation and bylaws (or other similar
organizational and governing documents), as currently in effect, of each of its
subsidiaries.
Section 3.2 Capitalization of the Company and Its Subsidiaries.
(a) The authorized stock of the Company consists of: (i) 240,000,000 shares
of Company Common Stock, of which 56,465,838 shares are issued and outstanding
as of the date hereof and 2,105,372 shares are held by the Company in treasury,
and (ii) 2,000,000 shares of Preferred Stock, par value $.01 per share, of which
100,000 shares are designated as Series A Junior Participating Preferred Stock,
no shares of which are outstanding. All of the issued and outstanding Shares
have been validly issued, and are duly authorized, fully paid, non-assessable
and free of preemptive rights. As of the date hereof, 7,092,273 Shares are
reserved for issuance and issuable upon or otherwise deliverable in connection
with the exercise of outstanding Company Stock Options issued pursuant to the
Company Option Plans and 4,326,757 Shares are reserved for issuance upon
conversion of the Company's 4 1/4% Convertible Subordinated Notes due 2007 (the
"4 1/4% NOTES"). Except as set forth above and except for the Option Agreement,
the 4 1/4% Notes and the Company Rights Agreement (as hereinafter defined), as
of the date hereof, there are no outstanding (i) shares of stock or other voting
securities of the Company; (ii) securities of the Company or any of its
subsidiaries convertible into or exchangeable for shares of stock or voting
securities of the Company; (iii) options or other rights to acquire from the
Company or any of its subsidiaries, and no obligations of the Company or any of
its subsidiaries to issue, any stock, voting securities, or securities
convertible into or exchangeable for stock or voting securities of the Company;
or (iv) equity equivalents, interests in the ownership or earnings of the
Company, or other similar rights (including stock appreciation rights)
(collectively, "COMPANY SECURITIES"). Except for the Option Agreement and the
4 1/4% Notes, there are no outstanding obligations of the Company or any of its
subsidiaries to repurchase, redeem or otherwise acquire any Company Securities.
There are no stockholder agreements, voting trusts or other agreements or
understandings to which the Company or any of its subsidiaries is a party or to
which it is bound relating to the voting of any shares of capital stock of the
Company (other than the Voting Agreement).
(b) All of the outstanding capital stock of the Company's subsidiaries is
owned by the Company, directly or indirectly, free and clear of any Lien or any
other limitation or restriction (including, any restriction on the right to vote
or sell the same) except as may be provided as a matter of Law. There are no
securities of the Company or its subsidiaries convertible into or exchangeable
for, no options or other rights to acquire from the Company or its subsidiaries,
and no other contract, understanding, arrangement, or obligation (whether or not
contingent) providing for the issuance or sale, directly or indirectly of, any
capital stock or other ownership interests in, or any other securities of, any
subsidiary of the Company. There are no outstanding contractual obligations of
the Company or its subsidiaries to repurchase, redeem, or otherwise acquire any
outstanding shares of capital stock or other ownership interests in any
subsidiary
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of the Company. None of the Company's subsidiaries owns any capital stock of the
Company. For purposes of this Agreement, "LIEN" means, in respect of any asset
(including any security) any mortgage, lien, pledge, charge, security interest,
or encumbrance of any kind in respect of such asset.
Section 3.3 Authority Relative to This Agreement.
(a) The Company has all necessary corporate power and authority to execute
and deliver this Agreement and the Option Agreement and to consummate the
transactions contemplated hereby. No other corporate proceedings on the part of
the Company are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby and thereby (other than, in respect of the
Merger and this Agreement, the Company Requisite Vote (as hereinafter defined)).
This Agreement and the Option Agreement have been duly and validly executed and
delivered by the Company and constitute valid, legal, and binding agreements of
the Company, enforceable against the Company in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar Laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).
(b) As of the date hereof, the Board of Directors of the Company (the
"COMPANY BOARD") has, by unanimous vote of those present (who constituted 100%
of the directors then in office), duly and validly authorized the execution and
delivery of this Agreement and the Option Agreement and approved the
consummation of the transactions contemplated hereby and thereby, taken all
corporate actions required to be taken by the Company Board for the consummation
of the transactions, including the Merger, contemplated hereby and has resolved
(i) this Agreement and the transactions contemplated hereby, including the
Merger, taken together, to be advisable and fair to, and in the best interests
of, the Company and its stockholders; and (ii) to recommend that the
stockholders of the Company approve and adopt this Agreement and approve the
Merger. The Company Board has directed that this Agreement be submitted to the
stockholders of the Company for their approval and adoption. The affirmative
approval of the holders of Shares representing a majority of the votes that may
be cast by the holders of all outstanding Shares (voting as a single class) as
of the record date for the Company (the "COMPANY REQUISITE VOTE") is the only
vote of the holders of any class or series of stock of the Company necessary to
approve and adopt this Agreement and approve the Merger. Holders of Shares do
not have dissenters' or appraisal rights in connection with the Merger.
Section 3.4 SEC Reports; Financial Statements. Since January 1, 1997, the
Company has filed all forms, reports and documents with the SEC required to be
filed by it under the Securities Act of 1933, as amended (the "SECURITIES ACT"),
and the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT" and the
"COMPANY SEC REPORTS", respectively), each of which complied in all material
respects with all applicable requirements of the Securities Act and the Exchange
Act, each as in effect on the dates such Company SEC Reports were filed. None of
the Company SEC Reports contained, when filed, any untrue statement of a
material fact or omitted to state a material fact required to be stated or
incorporated by reference therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except to the extent amended prior to the date hereof by a
subsequently filed Company SEC Report. The consolidated financial statements of
the Company included in the Company SEC Reports complied as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC in respect thereof and fairly presented, in
conformity with United States generally accepted accounting principles applied
on a consistent basis during the periods involved ("GAAP") (except as may be
indicated in the notes thereto), the consolidated financial position of the
Company and its consolidated subsidiaries, in each case as of the dates thereof
and their consolidated results of operations and changes in financial position
for the periods then ended (subject, in the case of the unaudited interim
financial statements, to the absence of footnote disclosure and to normal
year-end adjustments). For purposes of this Agreement, "COMPANY BALANCE SHEET"
means the consolidated balance sheet of the Company as of April 1, 2000, as set
forth in the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended April 1, 2000, and "COMPANY BALANCE SHEET DATE" means April 1, 2000. Since
the Company Balance Sheet Date, there has not been
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any change, or any application or request for any change, by the Company or any
of its subsidiaries in accounting principles, methods or policies for financial
accounting or Tax purposes, other than as a result of any changes under GAAP or
other relevant accounting principles or changes required by any applicable Tax
rule or regulation.
Section 3.5 No Undisclosed Liabilities. There are no material liabilities
of the Company or any of its subsidiaries of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, which are
required to be reflected in its financial statements (or in the notes thereto)
in accordance with GAAP, other than: (a) liabilities disclosed, provided for or
reserved against in the Company Balance Sheet or in the notes thereto; (b)
liabilities arising in the ordinary course of business after the date of the
Company Balance Sheet; (c) liabilities disclosed in the Company SEC Reports
prior to the date hereof; and (d) liabilities arising under this Agreement and
(e) liabilities disclosed in the Company Disclosure Schedule.
Section 3.6 Absence of Changes. Except as contemplated by this Agreement
or as set forth in Section 3.6 of the Company Disclosure Schedule and except as
and to the extent publicly disclosed in the Company SEC Reports prior to the
date hereof, since the Company Balance Sheet Date, the Company and its
subsidiaries have conducted their business in the ordinary and usual course
consistent with past practice and there has not been:
(a) any event, occurrence or development which had or is reasonably
expected to have, individually or in the aggregate, a Material Adverse
Effect on the Company and its subsidiaries taken as a whole;
(b) any declaration, setting aside or payment of any dividend or other
distribution in respect of any shares of capital stock of the Company or
(except to the Company or other subsidiaries) any subsidiary, any split,
combination or reclassification of any shares of capital stock of the
Company or any subsidiary, or any repurchase, redemption or other
acquisition by the Company or any of its subsidiaries of any Company or
subsidiary securities;
(c) any amendment or change to the certificate of incorporation or
bylaws of the Company or any amendment of any term of any outstanding
security of the Company or any of its subsidiaries that would materially
increase the obligations of the Company or any such subsidiary under such
security;
(d) (i) any incurrence or assumption by the Company or any subsidiary
of any indebtedness for borrowed money other than under existing credit
facilities (or any renewals, replacements or extensions that do not
increase the aggregate commitments thereunder) except (A) in the ordinary
and usual course of business consistent with past practice or (B) in
connection with any acquisition or capital expenditure permitted by Section
5.1, or (ii) any guarantee, endorsement, or other incurrence or assumption
of liability (whether directly, contingently or otherwise) by the Company
or any of its subsidiaries for the obligations of any other person (other
than any wholly owned subsidiary of the Company), other than in the
ordinary and usual course of business consistent with past practice;
(e) any creation or assumption by the Company or any of its
subsidiaries of any Lien on any material asset of the Company or any of its
subsidiaries other than in the ordinary and usual course of business
consistent with past practice;
(f) any making of any loan, advance or capital contribution to or
investment in any person by the Company or any of its subsidiaries other
than (i) any acquisition permitted by Section 5.1, (ii) loans, advances or
capital contributions to or investments in wholly owned subsidiaries of the
Company, (iii) loans or advances to employees of the Company or any of its
subsidiaries in the ordinary course of business consistent with past
practice or (iv) extensions of credit to customers in the ordinary course
of business consistent with past practice;
(g) any contract or agreement entered into by the Company or any of
its subsidiaries on or prior to the date hereof relating to any material
acquisition or disposition of any assets or business, other
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than contracts or agreements in the ordinary and usual course of business
consistent with past practice and those contemplated by this Agreement;
(h) any modification, amendment, assignment, termination or
relinquishment by the Company or any of its subsidiaries of any contract,
license or other right (including any insurance policy naming it as a
beneficiary or a loss payable payee) that is reasonably expected to have a
Material Adverse Effect on the Company and its subsidiaries taken as a
whole;
(i) any material change in any method of accounting or accounting
principles or practice by the Company or any of its subsidiaries, except
for any such change required by reason of a change in GAAP;
(j) any (i) grant of any severance or termination pay to any director,
officer or employee of the Company or any of its subsidiaries exceeding the
amounts set forth in the Company's severance plans or agreements listed in
Sections 3.13(a) or 3.18 of the Company Disclosure Schedule; (ii) entering
into of any employment, deferred compensation, severance, consulting,
termination or other similar agreement (or any amendment to any such
existing agreement) with any director, officer or employee of the Company
or any of its subsidiaries whose annual cash compensation exceeds $100,000;
(iii) increase in benefits payable under any existing severance or
termination pay policies or employment agreements; or (iv) increase in
compensation, bonus or other benefits payable to directors, officers or
employees of the Company or any of its subsidiaries other than, in the case
of clause (iv) only, increases prior to the date hereof in compensation,
bonus or other benefits payable to directors, officers or employees of the
Company or any of its subsidiaries in the ordinary and usual course of
business consistent with past practice or merit increases in salaries of
employees at regularly scheduled times in customary amounts consistent with
past practices;
(k) any change or amendment of the contracts, salaries, wages or other
compensation of any officer, director, employee, agent or other similar
representative of the Company or any of its subsidiaries whose annual cash
compensation exceeds $100,000 other than changes or amendments that do not
and will not result in increases of more than five percent in the salary,
wages or other compensation of any such person;
(l) any adoption, entering into, amendment, alteration or termination
of (partially or completely) any Benefit Plan or Employee Arrangement
except as contemplated by this Agreement or to the extent required by
applicable Law or GAAP;
(m) any entering into of any contract with an officer, director,
employee, agent or other similar representative of the Company or any of
its subsidiaries that is not terminable, without penalty or other
liability, upon not more than 60 calendar days' notice; or
(n) any (i) making or revoking of any material election relating to
Taxes, (ii) settlement or compromise of any material claim, action, suit,
litigation, proceeding, arbitration, investigation, audit or controversy
relating to Taxes, or (iii) change to any material methods of reporting
income or deductions for federal income tax purposes.
Section 3.7 Information Supplied. None of the information supplied or to
be supplied by the Company specifically for inclusion or incorporation by
reference in (i) the registration statement on Form S-4 to be filed with the SEC
by Parent in connection with the issuance of Parent Common Stock as required by
the terms of this Agreement pursuant to the Merger (the "S-4"), at the time the
S-4 is filed with the SEC and at the time it becomes effective under the
Securities Act, will contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, and (ii) the proxy statement relating to the
Company Stockholder Meeting to be held in connection with the Merger (the "PROXY
STATEMENT") will, at the date mailed to stockholders and at the time of the
Company Stockholder Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. If at any time prior to the Effective Time any
event in respect of the Company, its officers and
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directors or any of its subsidiaries should occur which is required to be
described in an amendment of, or a supplement to, the S-4 or the Proxy
Statement, the Company shall promptly so advise Parent and such event shall be
so described, and such amendment or supplement (which Parent shall have a
reasonable opportunity to review) shall be promptly filed with the SEC and, as
required by Law, disseminated to the stockholders of the Company. The Proxy
Statement, insofar as it relates to the Company Stockholder Meeting, will comply
as to form in all material respects with the provisions of the Exchange Act and
the rules and regulations thereunder. No representation is made under this
Section 3.7 with respect to any statements made or incorporated by reference in
the S-4 or the Proxy Statement based on information supplied by the Parent
specifically for inclusion or incorporation by reference therein.
Section 3.8 Consents and Approvals. Except for filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of, the Securities Act, state securities or blue sky
Laws, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR ACT") and any comparable requirements of foreign Governmental Entities (as
defined below), the filing and acceptance for record of the Certificate of
Merger as required by the DGCL, and such other filings, permits, consents and
approvals which, if not obtained or made, are not reasonably expected to have a
Material Adverse Effect on the Company and its subsidiaries taken as a whole, no
filing with or notice to, and no permit, authorization, consent or approval of,
any court or tribunal or administrative, governmental or regulatory body, agency
or authority, whether domestic or foreign (a "GOVERNMENTAL ENTITY") is necessary
for the execution and delivery by the Company of this Agreement or the Option
Agreement or the consummation by the Company of the transactions contemplated
hereby or thereby.
Section 3.9 No Default. Neither the Company nor any of its subsidiaries is
in violation of any term of (i) its charter, certificate or articles of
incorporation or bylaws (or other similar organizational or governing
documents), (ii) any agreement or instrument related to indebtedness for
borrowed money or any other agreement to which it is a party or by which it is
bound, or (iii) any domestic or foreign law, order, writ, injunction, decree,
ordinance, award, stipulation, statute, judicial or administrative doctrine,
rule or regulation entered by a Governmental Entity ("LAW") applicable to the
Company, its subsidiaries or any of their respective assets or properties, the
consequence of which violation is reasonably expected to (A) have, individually
or in the aggregate, a Material Adverse Effect on the Company and its
subsidiaries taken as a whole or (B) prevent or materially delay the performance
of this Agreement by the Company. The execution, delivery and performance of
this Agreement and the Option Agreement and the consummation of the transactions
contemplated hereby and thereby will not (A) result in any violation of or
conflict with, constitute a default under (with or without due notice or lapse
of time or both), require any consent, waiver or notice under any term of, or
result in the reduction or loss of any benefit or the creation or acceleration
of any right or obligation (including any termination rights) under, (i) the
charter, certificate or articles of incorporation or bylaws (or other similar
organizational or governing documents) of the Company or any of its
subsidiaries, (ii) any material agreement, note, bond, mortgage, indenture,
contract, lease, Company Permit or other obligation or right to which the
Company or any of its subsidiaries is a party or by which any of the assets or
properties of the Company or any of its subsidiaries is bound, or (iii) any
applicable Law, except in the case of clause (ii) and (iii) where any of the
foregoing is not reasonably expected to have, individually or in the aggregate,
a Material Adverse Effect on the Company and its subsidiaries taken as a whole,
or (B) result in the creation of (or impose any obligation on the Company or any
of its subsidiaries to create) any Lien upon any of the material assets or
properties of the Company or any of its subsidiaries pursuant to any such term.
Section 3.10 Real Property.
(a) The Company will provide Parent with the address, general use of, and
period of ownership or occupancy of all of the real property owned in fee by the
Company and its subsidiaries (the "OWNED FACILITIES") and all of the real
property the Company and its subsidiaries use or occupy or have the right to use
or occupy, now or in the future, pursuant to any lease, sublease, or other
occupancy agreement (the "LEASED FACILITIES"). No real property is owned, leased
or used by the Company or its current subsidiaries in the course of their
respective businesses other than the Owned Facilities and Leased Facilities.
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(b) With respect to each Owned Facility and except as set forth on the
Company Balance Sheet or in the SEC Reports:
(i) the Company or its subsidiary has good and marketable title to
Owned Facilities free and clear of all Liens, except (x) Taxes and general
and special assessments not in default and payable without penalty and
interest, and (y) Liens, easements, covenants and other restrictions or
imperfections of title that do not materially impair the current use,
occupancy, or value in excess of any indebtedness secured by such Lien, or
the marketability of title of such Owned Facilities;
(ii) to the Company's knowledge, there are no pending or threatened
condemnation proceedings, lawsuits or administrative actions relating to
any Owned Facility or other matters affecting materially and adversely the
current use, occupancy or value thereof;
(iii) there are no leases, subleases, licenses, concessions or other
agreements, written or oral, granting to any party or parties (other than
wholly-owned subsidiaries of the Company) the right of use or occupancy of
any portion of any Owned Facility that materially adversely affect the
Company's use of the property;
(iv) there are no outstanding options or rights of first refusal to
purchase any Owned Facility, or any portion thereof or interest therein;
(v) there are no parties (other than the Company or its subsidiaries)
in possession of any Owned Facility, other than tenants under any leases to
be provided to Parent who are in possession of space to which they are
entitled; and
(vi) all facilities located on Owned Facilities are now, and will be
at the time of Closing, in good operating condition and repair, and
structurally sound and free of known defects, with no material alterations
or repairs required thereto (other than ordinary and routine maintenance
and repairs) under applicable Laws, Company Permits or insurance company
requirements. To the Company's knowledge, all such Owned Facilities have
been operated and maintained in all material respects in accordance with
applicable Laws and Company Permits. All such Owned Facilities are supplied
with utilities and other services, including gas, electricity, water,
telephone, sanitary sewer and storm sewer, all of which services are
adequate for the uses to which such Owned Facility is being put and are
provided via public roads or via permanent, irrevocable, appurtenant
easements benefiting the parcel of real property.
(c) With respect to each Leased Facility:
(i) the Company will make available to Parent a true, correct, and
complete copy of the lease, sublease or other occupancy agreement for such
Leased Facility (and all modifications, amendments, and supplements thereto
and all side letters to which Company or any of its subsidiaries is a party
affecting the obligations of any party thereunder) (each such agreement is
referred to herein as a "REAL PROPERTY LEASE");
(ii) to the Company's knowledge, the Company or its subsidiary has a
good and valid leasehold interest in such Leased Facility free and clear of
all Liens, except (x) Taxes and general and special assessments not in
default and payable without penalty and interest, and (y) easements,
covenants and other restrictions that do not materially impair the current
use, occupancy or value, or the marketability of the Company's or its
subsidiary's interest in such real property;
(iii) to the Company's knowledge, each Real Property Lease constitutes
the valid and legally binding obligation of the parties thereto,
enforceable in accordance with its terms, and is in full force and effect;
(iv) all rent and other sums and charges payable by the Company or its
subsidiary as tenant under the Real Property Lease covering the Leased
Facility are current, no termination event or condition or uncured default
on the part of the tenant or, to the Company's knowledge, the landlord,
exists under any Real Property Lease. No party to such Real Property Lease
has given written notice
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to the Company or its subsidiary or made a claim in writing against the
Company or its subsidiary in respect of any breach or default thereunder;
(v) neither the Company nor its subsidiary has assigned, transferred,
conveyed, mortgaged, deeded in trust or encumbered its leasehold interest
in the Leased Facility; and
(vi) the Company's Leased Facilities located in Atsugi, Japan are now,
and will be at the time of Closing, in good operating condition and repair,
and structurally sound and free of known defects, with no material
alterations or repairs required thereto (other than ordinary and routine
maintenance and repairs) under applicable Laws, Company Permits or
insurance company requirements. To the Company's knowledge, all such
Atsugi, Japan leased facilities have been operated and maintained in all
material respects in accordance with applicable Laws and Company Permits.
All such facilities are supplied with utilities and other services,
including gas, electricity, water, telephone, sanitary sewer, and storm
sewer, all of which services are adequate for the uses to which such
facilities are being put.
Section 3.11 Litigation. Except as disclosed in Section 3.11 of the
Company Disclosure Schedule, there is no other suit, claim, action, proceeding
or, to the Company's knowledge, investigation, pending or, to the Company's
knowledge, threatened which is reasonably expected to have, individually and in
the aggregate, a Material Adverse Effect on the Company and its subsidiaries
taken as a whole. Except as disclosed in Section 3.11 of the Company Disclosure
Schedule, none of the Company or its subsidiaries is subject to any outstanding
order, writ, injunction or decree which is reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company and
its subsidiaries taken as a whole. To the Company's knowledge, there is no
action, suit, proceeding or investigation pending or threatened against any
current or former officer, director, employee or agent of the Company or any of
its subsidiaries (in his or her capacity as such) which is reasonably expected
to give rise to a claim for contribution or indemnification against the Company
or any of its subsidiaries. Notwithstanding the foregoing, any shareholder
litigation or litigation by any Governmental Entity, in each case brought or
threatened against the Company or any officer, director, employee or agent of
the Company in any respect of this Agreement or the transactions contemplated
hereby, shall not be deemed to have a Material Adverse Effect on the Company and
its subsidiaries taken as a whole.
Section 3.12 Compliance with Applicable Law; Permits. The Company and its
subsidiaries hold all permits, licenses, variances, exemptions, orders, and
approvals of all Governmental Entities necessary for the lawful conduct of their
respective businesses (the "COMPANY PERMITS"), except for failures to hold such
permits, licenses, variances, exemptions, orders and approvals which are not
reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company and its subsidiaries taken as a whole. The Company
and its subsidiaries are in compliance with the terms of the Company Permits,
except where the failure to comply is not reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company and
its subsidiaries taken as a whole. The businesses and operations of the Company
and its subsidiaries comply in all respects with all Laws applicable to the
Company or its subsidiaries, except where the failure to so comply is not
reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company and its subsidiaries taken as a whole.
Section 3.13 Employee Plans
(a) Section 3.13(a) of the Company Disclosure Schedule sets forth a true,
correct, and complete list of:
(i) all material "employee benefit plans," as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), under which the Company or any of its subsidiaries has any
obligation or liability, contingent or otherwise, including, but not
limited to, (i) all severance plans or arrangements other than any such
plan or arrangement (x) under which severance benefits do not exceed two
weeks' salary for each year of employment or, in the case of employees
whose annual cash compensation exceeds $100,000, three months' salary, or
(y) which is legally mandated by applicable non-U.S. law; and (ii) all
supplemental or U.S. non-qualified
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retirement plans or arrangements which provide benefits to any employee
whose annual cash compensation exceeds $100,000 or benefits in excess of
$5,000 for each year of employment (the "BENEFIT PLANS"); and
(ii) all employment, consulting, termination, severance or individual
compensation agreements (other than any such agreement which is terminable
within 90 days without liability or at any time without liability exceeding
two weeks' salary for each year of employment or, in the case of employees
whose annual cash compensation exceeds $100,000, three months' salary, or
is legally mandated by applicable non-U.S. law); all stock award, stock
option, stock purchase or other equity-based (including phantom stock or
stock appreciation rights) plans or arrangements; all material bonus or
other incentive compensation plans or agreements (including, but not
limited to, any such plan or agreement covering any officer or employee
whose annual cash compensation exceeds $100,000); all material salary
continuation or deferred compensation plans or agreements (including, but
not limited to, any such plan or agreement covering any current or former
officer or employee whose annual cash compensation exceeds $100,000; in
each case, as to which the Company or any of its subsidiaries has any
obligation or liability (contingent or otherwise) (the "EMPLOYEE
ARRANGEMENTS").
(b) A complete and correct copy of each Employee Arrangement, including the
forms of stock option grant agreements generally used to make grants under the
Company Option Plans, has been provided to Parent. In respect of each Benefit
Plan, a complete and correct copy of each of the following documents (if
applicable) has been or will be provided to Parent: (i) the most recent plan and
related trust documents, and all amendments thereto; (ii) the most recent
summary plan description, and all related summaries of material modifications
thereto; (iii) the most recent Form 5500 (including, schedules and attachments);
(iv) the most recent Internal Revenue Service ("IRS") determination letter; and
(v) the most recent actuarial reports (including for purposes of Financial
Accounting Standards Board report nos. 87, 106 and 112).
(c) Except as disclosed in Section 3.13(c) of the Company Disclosure
Schedule, none of the Benefit Plans or Employee Arrangements is subject to Title
IV of ERISA, constitutes a defined benefit retirement plan or is a
multi-employer plan described in Section 3(37) of ERISA, and the Company and its
subsidiaries do not have any material obligation or liability (contingent or
otherwise) in respect of any such plans. The Company and its subsidiaries are
not members of a group of trades or businesses (other than that consisting of
the Company and its subsidiaries) under common control or treated as a single
employer pursuant to Section 414 of the Code.
(d) The Benefit Plans and their related trusts intended to qualify under
Sections 401 and 501(a) of the Code, respectively, have received a favorable
determination letter from the IRS and the Company has no knowledge that any
event has occurred since the date of such letter that could cause the IRS to
revoke such determination. Any voluntary employee benefit association which
provides benefits to current or former employees of the Company and its
subsidiaries, or their beneficiaries, is and has been qualified under Section
501(c)(9) of the Code.
(e) In all material respects, all contributions or other payments required
to have been made by the Company and its subsidiaries to or under any Benefit
Plan or Employee Arrangement by applicable Law or the terms of such Benefit Plan
or Employee Arrangement (or any agreement relating thereto) have been timely and
properly made or have been accrued in the Company's financial statements.
(f) The Benefit Plans and Employee Arrangements have been maintained and
administered in accordance with their terms and applicable Laws and no
individual who has performed services for the Company or any of its subsidiaries
has been improperly excluded from participation in any Benefit Plan or Employee
Arrangement, except where the failure to so maintain and administer such Benefit
Plans or the exclusion of any such individuals is not reasonably expected to
have, individually or in the aggregate, a Material Adverse Effect on the Company
and its subsidiaries taken as a whole.
(g) There are no pending or, to the Company's knowledge, threatened
actions, claims, or proceedings against or relating to any Benefit Plan or
Employee Arrangement (other than routine benefit claims by
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persons claiming benefits thereunder), and, to the knowledge of the Company,
there are no facts or circumstances which could form a reasonable basis for any
of the foregoing, except for such actions, claims or proceedings which are not
reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company and its subsidiaries taken as a whole.
(h) The Company and its subsidiaries do not have any material obligation or
liability (contingent or otherwise) to provide post-retirement life insurance or
health benefits coverage for current or former officers, directors, or employees
of the Company or any of its subsidiaries except (i) as may be required under
Part 6 of Title I of ERISA at the sole expense of the participant or the
participant's beneficiary, (ii) a medical expense reimbursement account plan
pursuant to Section 125 of the Code, or (iii) through the last day of the
calendar month in which the participant terminates employment with the Company
or any subsidiary of the Company.
(i) Except as set forth in Section 3.13(i) of the Company Disclosure
Schedule, none of the assets of any Benefit Plan is stock of the Company or any
of its affiliates, or property leased to or jointly owned by the Company or any
of its affiliates.
(j) Except as disclosed in Section 3.13(j) of the Company Disclosure
Schedule or in connection with equity compensation, neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will (i) result in any payment becoming due to any employee (current,
former, or retired) of the Company or any of its subsidiaries, (ii) increase any
benefits under any Benefit Plan or Employee Arrangement (determined without
regard to the "materiality" limits set forth in the definitions of such terms),
or (iii) result in the acceleration of the time of payment of, vesting of, or
other rights in respect of any such benefits.
(k) Except as disclosed in Section 3.13(k) of the Company Disclosure
Schedule, each of the Benefit Plans covering employees outside of the United
States is funded in all material respects through adequate reserves on the
financial statements of the Company or its subsidiaries, insurance contracts,
annuity contracts, trust funds or similar arrangements. The benefits and
compensation under the Benefit Plans and Employee Arrangements covering
employees outside of the United States are no more than customary and reasonable
for the country in which such employees work and the industry in which the
Company and its subsidiaries conduct their business.
(l) The aggregate number of shares of Company Common Stock purchasable
under all outstanding purchase rights under the Burr-Brown Employee Stock
Purchase Plan does not exceed the maximum number of shares remaining available
for issuance under such plan. The aggregate amount of the current payroll
deductions for a payroll period under the Burr-Brown Employee Stock Purchase
Plan is set forth in Section 3.13(l) of the Company Disclosure Schedule.
Section 3.14 Labor Matters.
(a) The Company and its subsidiaries are not parties to any labor or
collective bargaining agreement, and no employees of the Company or any of its
subsidiaries are represented by any labor organization. There are no
representation or certification proceedings, or petitions seeking a
representation proceeding, pending or, to the Company's knowledge, threatened in
writing to be brought or filed with the National Labor Relations Board or any
other labor relations tribunal or authority. Within the last twelve months, to
the Company's knowledge, there have been no organizing activities involving the
Company or any of its subsidiaries in respect of any group of employees of the
Company or any of its subsidiaries.
(b) There are no strikes, work stoppages, slowdowns, lockouts, material
arbitrations or material grievances or other material labor disputes pending or
threatened in writing against or involving the Company or any of its
subsidiaries. There are no unfair labor practice charges, grievances or
complaints pending or, to the Company's knowledge, threatened in writing by or
on behalf of any employee or group of employees of the Company or any of its
subsidiaries which, if individually or collectively resolved against the Company
or any of its subsidiaries, would reasonably be expected to have a Material
Adverse Effect on the Company and its subsidiaries taken as a whole.
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(c) There are no complaints, charges or claims against the Company or any
of its subsidiaries pending or, to the Company's knowledge, threatened to be
brought or filed with any Governmental Entity or arbitrator based on, arising
out of, in connection with, or otherwise relating to the employment or
termination of employment of any individual by the Company or any of its
subsidiaries which, if individually or collectively resolved against the Company
or any of its subsidiaries, would reasonably be expected to have a Material
Adverse Effect on the Company and its subsidiaries taken as a whole, and, to the
knowledge of the Company, there are no facts or circumstances which could form a
reasonable basis for any of the foregoing.
(d) There has been no "mass layoff" or "plant closing" as defined by the
Worker Adjustment and Retraining Notification Act, as amended ("WARN"), in
respect of the Company or any of its subsidiaries within the six months prior to
the Effective Time.
(e) All employees of the Company and its subsidiaries possess all
applicable passports, visas, permits and other authorizations required by all
applicable immigration or similar Laws to be employed by and to perform services
for and on behalf of the Company and its subsidiaries, except where the failure
to possess such passports, visas, permits or other authorizations would not,
individually or in the aggregate, reasonably be expected to materially affect
the conduct of business by the Company or its subsidiaries. The Company and its
subsidiaries, and their employees, have complied in all material respects with
all applicable immigration and similar Laws.
Section 3.15 Environmental Matters.
(a) For purposes of this Agreement:
(i) "ENVIRONMENTAL LAW" means all federal, state, local or foreign
Law, or other legal requirement regulating or prohibiting Releases of
Hazardous Materials into the indoor or outdoor environment, or pertaining
to the protection of natural resources or wildlife, the environment or
public and employee health and safety or pollution or the exposure to
Hazardous Materials, including the Comprehensive Environmental Response,
Compensation, and Liability Act ("CERCLA") (42 U.S.C. Section 9601 et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section 1801
et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section
6901 et seq.), the Clean Water Act (33 U.S.C. Section 1251 et seq.), the
Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances
Control Act (15 U.S.C. Section 7401 et seq.), the Atomic Energy Act (42
U.S.C. Section 2014 et seq.), the Federal Insecticide, Fungicide, and
Rodenticide Act (7 U.S.C. Section 136 et seq.), the Communications Act (47
U.S.C. Section 151 et seq.), and the Occupational Safety and Health Act (29
U.S.C. Section 651 et seq.) ("OSHA"), as such laws or other legal
requirements have been and may be amended or supplemented through the
Closing Date;
(ii) "HAZARDOUS MATERIAL" means any substance, material or waste which
is regulated pursuant to any applicable Environmental Law as a "hazardous
waste," "hazardous material," "hazardous substance," "extremely hazardous
waste," "restricted hazardous waste," "contaminant," "toxic waste," "toxic
substance," "source material," "special nuclear material," "byproduct
material," "high-level radioactive waste," "low-level radioactive waste,"
"spent nuclear material" or "radio frequency" and includes petroleum,
petroleum products and petroleum by-products and waste;
(iii) "RELEASE" means any release, spill, emission, leaking, pumping,
dumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment, or into or out of any
property currently or formerly owned, operated or leased by the applicable
party or its subsidiaries; and
(iv) "REMEDIAL ACTION" means all actions, including any capital
expenditures, required by a Governmental Entity or required under or taken
pursuant to any Environmental Law, or voluntarily undertaken to (A) clean
up, remove, treat, remediate or address any Hazardous Materials in the
indoor or outdoor environment; (B) prevent the Release or threat of
Release, or minimize the further Release of any Hazardous Material so it
does not endanger or threaten to endanger the public or
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employee health or welfare or the indoor or outdoor environment; (C)
perform pre-remedial studies and investigations or post-remedial monitoring
and care pertaining or relating to a Release.
(b) Except as set forth in Section 3.15 of the Company Disclosure Schedule:
(i) The operations of the Company and its subsidiaries are in material
compliance with all Environmental Laws, and the Company is not aware of any
facts, circumstances or conditions which, without significant capital
expenditures, would prevent material compliance in the future;
(ii) To the Company's knowledge, the Company and its subsidiaries have
obtained all Company Permits, required under applicable Environmental Laws
for the continued operations of their respective businesses; the Company
and its subsidiaries have made all material filings, reports and notices
required under any Environmental Law for the past and future operations of
their respective businesses;
(iii) The Company and its subsidiaries are not subject to any
outstanding written orders or material contracts or agreements with any
Governmental Entity or other person respecting (A) Environmental Laws, (B)
any Remedial Action, (C) any Release or threatened Release of a Hazardous
Material, or (D) an assumption of responsibility for environmental claims
of another person or entity;
(iv) The Company and its subsidiaries have not received any written
communication alleging, in respect of any such party, the material
violation of or liability (real or potential) under any Environmental Law;
or requesting, with respect to any such party, information with respect to
an investigation pursuant to CERCLA, or any foreign or state counterpart
thereto, or any other Environmental Law;
(v) To the Company's knowledge, neither the Company nor any of its
subsidiaries has any material contingent liability in connection with any
Remedial Action or the Release of any Hazardous Material (whether on-site
or off-site) or employee or third party exposure to Hazardous Materials;
(vi) To the Company's knowledge, the operations of the Company and its
subsidiaries involving the generation, transportation, treatment, storage
or disposal of Hazardous Materials are in material compliance with
applicable Environmental Laws and, to the Company's knowledge, there has
been no disposal by the Company or its subsidiaries of any Hazardous
Materials on or in any site listed or formally proposed to be listed on the
National Priorities List promulgated pursuant to CERCLA or any foreign or
state remedial priority list promulgated or maintained pursuant to
comparable foreign or state law, except where such disposal would not
reasonably be expected to create a material adverse liability for the
Company;
(vii) To the Company's knowledge, there is not now nor has there been
in the past, on, in or at any Owned Facility, Leased Facility, Former
Facility (defined as all of the real property formerly owned, leased or
used, other than those used solely for office or administrative purposes,
by the Company or any of its current or former subsidiaries or corporate
predecessors in interest at any time in the past), or any other facility
for which the Company or its subsidiaries has assumed responsibility for
environmental claims, any of the following: (A) any underground storage
tanks; (B) landfills, dumps or surface impoundments; (C) any planned,
ongoing or completed Remedial Action; (D) any asbestos-containing
materials; or (E) any polychlorinated biphenyls;
(viii) There is not now, nor to the Company's knowledge, has there
been in the past, on, in or at any Owned Facility, Leased Facility, Former
Facility, or any other facility for which the Company or its subsidiaries
has assumed responsibility for environmental claims, any site on or
nominated for the National Priority List promulgated pursuant to CERCLA or
any foreign or state remedial priority list promulgated or published
pursuant to any comparable foreign or state law; and
(ix) No judicial or administrative proceedings are pending or, to the
Company's knowledge, threatened against the Company or its subsidiaries
alleging the material violation of or seeking to impose material liability
pursuant to any Environmental Law and, to the Company's knowledge, there
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are no investigations pending or threatened against the Company or any of
its subsidiaries under Environmental Laws.
(c) The Company will make available to Parent copies of all material
environmentally related assessments, audits, investigations, or similar reports
(and, upon reasonable specific request, sampling reports) in its possession or
control and which were prepared in the last five years (and, upon reasonable
specific request, earlier information) relating to the Company or its
subsidiaries or any real property currently or formerly owned, operated or
leased by or for the Company or its subsidiaries, including any Owned Facility,
Leased Facility, or Former Facility.
Section 3.16 Tax Matters.
(a) Each of the Company and its subsidiaries has timely filed (or has had
timely filed) all Tax Returns required to be filed by it (or on its behalf). All
such Tax Returns are complete and correct in all material respects. The Company
and its subsidiaries have paid all Taxes due for the periods covered by such Tax
Returns. The most recent Company SEC Reports reflect an adequate reserve for all
Taxes payable by the Company and its subsidiaries for all Taxable periods and
portions thereof through the date of such Company SEC Reports. The Company has
previously delivered (or, in the case of foreign Tax Returns and audit reports,
will deliver) to Parent copies of (i) all federal, state, local and foreign
income and franchise Tax Returns filed by the Company and its subsidiaries
relating to any taxable periods of the Company or any of its subsidiaries that
remains subject to audit under applicable statutes of limitations; and (ii) any
audit report issued within the last three years (or otherwise in respect of any
audit or investigation in progress) relating to Taxes due from or in respect of
the Company or its subsidiaries.
(b) No material deficiencies for any Taxes have been proposed, asserted, or
assessed against the Company or its subsidiaries that have not been fully paid
or adequately provided for in the appropriate financial statements of the
Company, no requests for waivers of the time to assess any Taxes are pending,
and no power of attorney in respect of any Taxes has been executed or filed with
any taxing authority. No material issues relating to Taxes have been raised by
the relevant taxing authority during any presently pending audit or examination.
All income and franchise Tax Returns filed by or on behalf of the Company and
its subsidiaries for the taxable years ended on or prior to December 31, 1997
have been reviewed by the relevant taxing authority or the statute of
limitations with respect to such Tax Returns has expired.
(c) No material Liens for Taxes exist in respect of any assets or
properties of the Company or its subsidiaries, except for statutory Liens for
Taxes not yet due.
(d) Neither the Company nor any of its subsidiaries is a party to or is
bound by any Tax sharing agreement, Tax indemnity obligation, or similar
agreement, arrangement, or practice in respect of Taxes (whether or not written)
(including any advance pricing agreement, closing agreement, or other agreement
relating to Taxes with any taxing authority).
(e) Neither the Company nor any of its subsidiaries (i) has ever been a
member of an affiliated group within the meaning of Section 1504(a) of the Code
(or any similar or analogous group defined under a similar or analogous state,
local or foreign Law) other than an affiliated group the common parent of which
is the Company, or (ii) has any liability under Treasury Regulation Section
1.1502-6 (or any predecessor or successor thereof or analogous or similar
provision under state, local or foreign Law), as a transferee or successor, by
contract or otherwise for Taxes of any affiliated group of which the Company is
not the common parent.
(f) Neither the Company nor any of its subsidiaries has taken or agreed to
take any action that would prevent the Merger from constituting a reorganization
qualifying under the provisions of Section 368(a) of the Code.
(g) Except as set forth in Section 3.16(g) of the Company Disclosure
Schedule, there are no employment, severance, or termination agreements or other
compensation arrangements currently in effect which provide for the payment of
any amount (whether in cash or property or the vesting of property) as a result
of any of the transactions contemplated by this Agreement that individually or
collectively (either
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alone or upon the occurrence of any additional or subsequent event), could give
rise to a payment which is nondeductible by reason of Section 280G of the Code.
(h) The Company and its subsidiaries have complied in all material respects
with all Laws applicable to the payment and withholding of Taxes and have duly
and timely withheld from employee salaries, wages and other compensation and
have paid over to the appropriate taxing authority all amounts required to be so
withheld and paid over for all periods under all applicable Laws.
(i) No federal, state, local, or foreign audits or other administrative
proceedings or court proceedings are presently pending in respect of any Taxes
or Tax Returns of the Company or its subsidiaries and neither the Company nor
its subsidiaries have received a written notice of any pending audit or
proceeding.
(j) Except as set forth in Section 3.16(i) of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries has agreed to or is
required to make any adjustment under Section 481(a) of the Code or any similar
provision of state, local or foreign Law by reason of a change in accounting
method initiated by the Company or its subsidiaries or has any knowledge that a
taxing authority has proposed any such adjustment or change in accounting
method, or has any application pending with any taxing authority requesting
permission for any changes in accounting methods that relate to the business or
operations of the Company or its subsidiaries.
(k) Except as set forth in Section 3.16(k) of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries is a party to any
contract, agreement, or other arrangement which could result in the payment of
amounts that could be nondeductible by reason of Section 162(m) of the Code,
provided that no representation or warranty is made as to performance-based or
equity-based compensation.
(l) Neither the Company nor any of its subsidiaries has received any
private letter rulings from the IRS or comparable rulings from other taxing
authorities.
(m) Neither the Company nor any of its subsidiaries has constituted either
a "distributing corporation" or a "controlled corporation" (within the meaning
of Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying for
tax-free treatment under Section 355 of the Code (i) in the two years prior to
the date of this Agreement or (ii) in a distribution which could otherwise
constitute part of a "plan" or "series of related transactions" (within the
meaning of Section 355(e) of the Code) in conjunction with the Merger.
(n) Neither the Company nor any of its subsidiaries (i) engaged in any
"intercompany transactions" in respect of which gain was and continues to be
deferred pursuant to Treasury Regulation Section 1.1502-13 or any predecessor or
successor thereof or analogous or similar provision under state, local or
foreign Law; or (ii) has "excess loss accounts" in respect of the stock of any
subsidiary pursuant to Treasury Regulation Section 1.1502-19, or any predecessor
or successor thereof or analogous or similar provision under state, local or
foreign Law.
For purposes of this Agreement, "TAX" or "TAXES" means all federal, state,
local or foreign Taxes, charges, fees, imposts, duties, levies, gaming or other
assessments, including, all net income, gross receipts, capital, sales, use, ad
valorem, value added, transfer, franchise, profits, inventory, capital stock,
license, withholding, payroll, employment, social security, unemployment,
excise, severance, stamp, occupation, property, and estimated Taxes, customs
duties, fees, assessments and charges of any kind whatsoever, together with any
interest and any penalties, fines, additions to Tax or additional amounts
imposed by any taxing authority (domestic or foreign) and shall include any
transferee liability in respect of Taxes, any liability in respect of Taxes
imposed by contract, Tax sharing agreement, Tax indemnity agreement or any
similar agreement. "TAX RETURNS" means any report, return, document,
declaration, or any other information or filing required to be supplied to any
taxing authority or jurisdiction (domestic or foreign) in respect of Taxes,
including, information returns, any document in respect of or accompanying
payments or estimated Taxes, or in respect of or accompanying requests for the
extension of time in which to file any such report, return document,
declaration, or other information, including amendments thereof and attachments
thereto.
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Section 3.17 Absence of Questionable Payments. To the Company's knowledge,
neither the Company nor any of its subsidiaries nor any director, officer,
agent, employee or other person acting on behalf of the Company or any of its
subsidiaries, has used any corporate or other funds for unlawful contributions,
payments, gifts or entertainment, or made any unlawful expenditures relating to
political activity to government officials or others or established or
maintained any unlawful or unrecorded funds in violation of the Foreign Corrupt
Practices Act of 1977, as amended, or any other domestic or foreign Law. To the
Company's knowledge, neither the Company nor any of its subsidiaries nor any
director, officer, agent, employee or other person acting on behalf of the
Company or any of its subsidiaries has accepted or received any unlawful
contributions, payments, gifts or expenditures.
Section 3.18 Material Contracts.
(a) The Company has heretofore made available to Parent true, correct and
complete copies of all written contracts and agreements (and all amendments,
modifications and supplements thereto and all side letters to which the Company
or any of its subsidiaries is a party affecting the obligations of any party
thereunder) to which the Company or any of its subsidiaries is a party or by
which any of its assets or properties are bound that are material to the
business, assets or properties of the Company and its subsidiaries taken as a
whole, including, to the extent any of the following are, individually or in the
aggregate, material to the business, assets or properties of the Company and its
subsidiaries taken as a whole, all: (i) employment, severance, product design or
development, personal services, consulting, non-competition or indemnification
contracts (including, any contract to which the Company or any of its
subsidiaries is a party involving employees of the Company), but excluding
normal indemnification provisions under license or sale contracts; (ii)
licensing, merchandising or distribution agreements involving the payment of
more than $5,000,000 per year; (iii) contracts granting a right of first refusal
or first negotiation involving in excess of $5,000,000; (iv) partnership or
joint venture agreements; (v) agreements for the acquisition, sale or lease of
material assets or properties of the Company (by merger, purchase or sale of
assets or stock or otherwise) entered into since January 1, 1999; (vi) contracts
or agreements with any Governmental Entity involving the payment of more than
$2,000,000 per year; (vii) loan or credit agreements, mortgages, indentures or
other agreements or instruments evidencing indebtedness for borrowed money by
the Company or any of its subsidiaries or any such agreement pursuant to which
indebtedness for borrowed money may be incurred, in each case involving in
excess of $2,000,000; (viii) agreements that purport to limit, curtail or
restrict the ability of the Company or any of its subsidiaries to compete in any
geographic area or line of business; (ix) foundry, wafer manufacturing or
fabricating agreements; (x) assembly (packaging), testing, or supply agreements,
in each case, involving in excess of $3,000,000; and (xi) commitments and
agreements to enter into any of the foregoing (collectively, together with any
such contracts entered into in accordance with Section 5.1, the "MATERIAL
CONTRACTS"). Section 3.18 of the Company Disclosure Schedule sets forth a list
of all Material Contracts.
(b) To the Company's knowledge, each of the Material Contracts constitutes
the valid and legally binding obligation of the Company or its subsidiaries,
enforceable in accordance with its terms, and is in full force and effect. There
is no material default under any Material Contract either by the Company (or its
subsidiaries) or, to the Company's knowledge, by any other party thereto, and no
event has occurred that with the giving of notice, the lapse of time, or both
would constitute a default thereunder by the Company (or its subsidiaries) or,
to the Company's knowledge, any other party. As of the date hereof, no foundry
has notified the Company in writing that it intends to terminate or fail to
extend its contract with the Company within one year of the date of the
Agreement, except for any such termination or failure as would not have a
Material Adverse Effect on the Company and its subsidiaries taken as a whole.
(c) No party to any such Material Contract has given notice to the Company
of or made a claim against the Company in respect of any material breach or
default thereunder.
Section 3.19 Subsidies. Section 3.19 of the Company Disclosure Schedule
sets forth a list of all material grants, subsidies and similar arrangements
directly or indirectly between or among the Company or any of its subsidiaries,
on the one hand, and any domestic or foreign Governmental Entity or any other
person, on the other hand. Except as set forth on Section 3.19 of the Company
Disclosure Schedule,
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neither the Company nor any of its subsidiaries has requested, sought, applied
for or entered into any material grant, subsidy or similar arrangement directly
or indirectly from or with any domestic or foreign Governmental Entity or any
other person.
Section 3.20 Intellectual Property.
(a) As used herein, the term "INTELLECTUAL PROPERTY" means domestic and
foreign letters patent, patents, patent applications, patent licenses, know-how
licenses, trademark registrations and applications, service mark registrations
and applications and copyright registrations and applications, databases,
software licenses, trade names, trade secrets, technical knowledge, know-how,
confidential information, customer lists, proprietary processes, techniques,
formulae, "semiconductor chip product" and "mask works" (as such terms are
defined in 17 U.S.C. 901), and related ownership, use and other rights
(including rights of renewal and rights to sue for past, present and future
infringements or misappropriations thereof).
(b) To the Company's knowledge, and except as are not reasonably expected
to have a Material Adverse Effect on the Company and its subsidiaries taken as a
whole: (i) each item of Intellectual Property is in compliance with applicable
legal requirements relating to the enforceability or maintenance of such item
(including payment of filing, examination and maintenance fees and proofs of
working or use, as applicable) other than any requirement that if, not
satisfied, would not result in a revocation or otherwise materially affect the
enforceability of the item of Intellectual Property in question, and the Company
has taken reasonable steps to protect such Intellectual Property; (ii) the
Company and its subsidiaries own or have the right to use, free and clear of all
Liens, all Intellectual Property necessary for the operation of the businesses
of the Company and its subsidiaries as presently conducted and as presently
proposed to be conducted; (iii) each material item of Intellectual Property
owned or used by the Company and its subsidiaries immediately prior to the
Effective Time will be owned or available for use by Parent and the Surviving
Corporation immediately subsequent to the Effective Time; (iv) the Company and
its subsidiaries have taken all action deemed by the Company or the relevant
subsidiary to be necessary or reasonable, but in no event less than all
commercially reasonable action, to protect and preserve the confidentiality of
all technical Intellectual Property not otherwise protected by patents, patent
applications or copyrights; (v) the Company has had and continues to have a
requirement that all employees of the Company and its subsidiaries must execute
a non-disclosure agreement which includes an agreement to assign to the Company
or its subsidiaries all rights to Intellectual Property originated or invented
by such employee relating to the business of the Company and its subsidiaries;
and (vi) no trade secret or confidential know-how material to the business of
the Company or any of its subsidiaries as currently operated has been disclosed
or authorized to be disclosed to any third party, other than pursuant to a
non-disclosure agreement that protects the Company's or such subsidiary's
proprietary interests in and to such trade secrets and confidential know-how.
(c) Except as set forth in Section 3.20(c) of the Company Disclosure
Schedule, to the Company's knowledge, neither the Company nor any of its
subsidiaries has interfered with, infringed upon, misappropriated or otherwise
come into conflict with any Intellectual Property rights of third parties, and
neither the Company nor any of its subsidiaries has received any charge,
complaint, claim or notice alleging any such interference, infringement,
misappropriation or violation that remains unresolved and, if decided adversely
to the Company, would be reasonably likely to have a Material Adverse Effect on
the Company and subsidiaries taken as a whole. No third party has, to the
Company's knowledge, interfered with, infringed upon, misappropriated or
otherwise come into conflict with any Intellectual Property rights of the
Company or its subsidiaries, except where such actions are not reasonably
expected to have a Material Adverse Effect on the Company and its subsidiaries
taken as a whole.
(d) Section 3.20(d) of the Company Disclosure Schedule identifies each
material item of Intellectual Property that any third party owns and that the
Company or any of its subsidiaries uses pursuant to license, sublicense,
agreement or permission that either (i) if such license, sublicense, agreement
or permission were denied, would reasonably be expected to have a Material
Adverse Effect on the Company or its Subsidiaries taken as a whole, or (ii)
includes any unsatisfied obligation to pay any royalty amount or any obligation
to pay a royalty, whether fixed or determined based on usage, following the
Effective
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Date in excess of $250,000. To the Company's knowledge, in respect of each such
item of used Intellectual Property:
(i) the license, sublicense, agreement or permission covering the item
is legal, valid, binding, enforceable and in full force and effect;
(ii) the licenses, sublicenses, agreements or permissions will in all
material respects continue to be legal, valid, binding, enforceable and in
full force and effect on identical terms following the Effective Time;
(iii) no party to the license, sublicense, agreement or permission is
in breach or default, and no event has occurred which with notice or lapse
of time would constitute a breach or default or permit termination,
modification or acceleration thereunder such as would have a Material
Adverse Effect on the Company and its subsidiaries taken as a whole; and
(iv) no party to the license, sublicense, agreement or permission has
repudiated any provision thereof.
(e) Except as set forth in Section 3.20(e) of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries has granted (i) any
exclusive licenses (other than implied patent licenses in the ordinary course of
business) in any patents owned by the Company or any of its subsidiaries or (ii)
any exclusive licenses in any other Intellectual Property owned by the Company
or any of its subsidiaries to any third party.
(f) Except as may have been given in connection with patent licenses set
forth in Section 3.20(e) of the Company Disclosure Schedule or given in the
ordinary course of business within the scope of the Company's standard terms and
conditions of sale, neither the Company nor any of its subsidiaries has entered
into any material agreement to indemnify any other person against any charge of
infringement or misappropriation of any Intellectual Property.
(g) The execution, delivery and performance by the Company of this
Agreement, and the consummation of the transactions contemplated hereby, will
not (i) result in the loss or impairment of, or give rise to any right of any
third party to terminate or alter, any of the Company's or any of its
subsidiaries' rights to own any of its Intellectual Property except as are not
reasonably expected to have a Material Adverse Effect on the Company and its
Subsidiaries taken as a whole, nor (ii) require the consent of any Governmental
Entity or third party in respect of any such Intellectual Property that, if not
obtained, is reasonably expected to have a Material Adverse Effect on the
Company and its subsidiaries taken as a whole.
Section 3.21 Opinion of Financial Advisor. Broadview International LLC
(the "FINANCIAL ADVISOR") has delivered to the Company Board its opinion, dated
the date of this Agreement, to the effect that, as of such date, the Exchange
Ratio is fair to the stockholders of the Company from a financial point of view,
and such opinion has not been withdrawn or modified.
Section 3.22 Brokers. No broker, finder, investment banker or other person
(other than the Financial Advisor, a true and correct copy of whose engagement
letter has been provided to Parent) is entitled to any brokerage, finder's or
other fee or commission or expense reimbursement in connection with the
transactions contemplated by this Agreement based upon arrangements made by and
on behalf of the Company or any of its affiliates.
Section 3.23 Accounting Matters. Neither the Company nor, to the Company's
knowledge, any of its affiliates, has taken or agreed to take any action or is
aware of any fact or circumstance that would prevent the Merger from qualifying
as a "pooling of interests" under APB 16 and the applicable SEC rules and
regulations.
Section 3.24 Recalls. Except as set forth on Section 3.24 of the Company
Disclosure Schedule, (i) there has not been any recall made broadly to customers
since December 31, 1998 of any product designed, manufactured, shipped, sold or
otherwise introduced into the stream of commerce by or on
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behalf of the Company or any of its past or present subsidiaries ("PRODUCT"),
and (ii) to the Company's knowledge, there are currently no material defects in
design, manufacturing, materials or workmanship which involve any Product that
accounts for a material portion of the Company's sales.
Section 3.25 DGCL sec. 203. The Company Board has taken all action
required so that the restrictions contained in Section 203 of the DGCL
applicable to a "business combination" (as defined in DGCL sec. 203) will not
apply to the execution, delivery or performance of this Agreement, the Voting
Agreement or the Option Agreement or the consummation of the Merger. No other
antitakeover Laws of any state are applicable to this Agreement, the Voting
Agreement, the Option Agreement or the transactions contemplated hereby or
thereby.
Section 3.26 Amendment to the Company Rights Agreement. The Company Board
has taken all necessary action (including, any amendment thereof) under the
Amended and Restated Rights Agreement, dated as of August 9, 1999, between the
Company and Harris Trust and Savings Bank, as Rights Agent (the "COMPANY RIGHTS
AGREEMENT"), so that (a) none of the execution or delivery of this Agreement,
the Voting Agreements or the Option Agreement, the exchange of the shares of
Parent Common Stock for the Shares in accordance with Article II, or any other
transaction contemplated hereby or thereby will cause (i) the rights (the
"RIGHTS") issued pursuant to the Company Rights Agreement to become exercisable
under the Company Rights Agreement, (ii) Parent or Merger Sub to be deemed an
"Acquiring Person" (as defined in the Company Rights Agreement), or (iii) the
"Shares Acquisition Date" or "Distribution Date" (as such terms are defined in
the Company Rights Agreement) to occur upon any such event; and (b) the
"Expiration Date" (as defined in the Company Rights Agreement) of the Rights
shall occur immediately prior to the Effective Time. Copies of such amendments
to the Company Rights Agreement have been previously made available to Parent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Except as set forth in the disclosure schedule delivered by Parent to the
Company prior to the execution of this Agreement (the "PARENT DISCLOSURE
SCHEDULE"), Parent and Merger Sub hereby represent and warrant to the Company as
follows:
Section 4.1 Organization.
(a) Each of Parent and Merger Sub is a corporation duly organized, validly
existing and in good standing under the Laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its businesses as now being
conducted.
(b) Each of Parent and Merger Sub is duly qualified or licensed and in good
standing to do business in each jurisdiction in which the property owned, leased
or operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except where the failure to be so duly
qualified or licensed and in good standing is not reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect on Parent and its
subsidiaries taken as a whole.
(c) Parent has heretofore delivered to the Company accurate and complete
copies of the certificate of incorporation and bylaws of Parent and the charter
and bylaws of Merger Sub as currently in effect.
Section 4.2 Authority Relative to This Agreement.
(a) Each of Parent and Merger Sub has all necessary corporate power and
authority to execute and deliver this Agreement and the Option Agreement and to
consummate the transactions contemplated hereby and thereby. No other corporate
proceedings on the part of Parent or Merger Sub are necessary to authorize this
Agreement and the Option Agreement or to consummate the transactions
contemplated hereby or thereby. This Agreement and the Option Agreement have
been duly and validly executed and delivered by each of Parent and Merger Sub
and constitute valid, legal and binding agreements of each of Parent and Merger
Sub, enforceable against each of Parent and Merger Sub in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization,
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moratorium and similar Laws affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
(b) The Board of Directors of Parent (the "PARENT BOARD"), the Board of
Directors of Merger Sub and Parent as the sole stockholder of Merger Sub have
duly and validly authorized the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, and taken all corporate
actions required to be taken by such Boards of Directors and Parent as the sole
stockholder of Merger Sub for the consummation of the transactions.
Section 4.3 SEC Reports; Financial Statements. Since January 1, 1997,
Parent has filed all forms, reports and documents with the SEC required to be
filed by it under the Securities Act and the Exchange Act (the "PARENT SEC
REPORTS"), each of which complied in all material respects with all applicable
requirements of the Securities Act and the Exchange Act, each as in effect on
the dates such Parent SEC Reports were filed. None of the Parent SEC Reports
contained, when filed, any untrue statement of a material fact or omitted to
state a material fact required to be stated or incorporated by reference therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except to the extent
amended prior to the date hereof by a subsequently filed Parent SEC Report. The
consolidated financial statements of Parent included in the Parent SEC Reports
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC in respect
thereof and fairly presented, in conformity with GAAP on a consistent basis
(except as indicated in the notes thereto), the consolidated financial position
of Parent and its consolidated subsidiaries, in each case as of the dates
thereof and their consolidated results of operations and cash flows for the
periods then ended (subject, in the case of the unaudited interim financial
statements, to the absence of certain footnote disclosure and to normal year-end
adjustments). For purposes of this Agreement "PARENT BALANCE SHEET" means the
consolidated balance sheet of Parent as of March 31, 2000, and "PARENT BALANCE
SHEET DATE" means March 31, 2000. Except as and to the extent disclosed in the
Parent SEC Reports, since the Parent Balance Sheet Date, there has not been any
event, occurrence or development which is reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect on the Parent and
its subsidiaries taken as a whole.
Section 4.4 Undisclosed Liabilities. There are no material liabilities of
Parent or any of its subsidiaries of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, which are required
to be reflected in its financial statements (or in the notes thereto) in
accordance with GAAP, other than: (a) liabilities disclosed, provided for or
reserved against in the Parent Balance Sheet or in the notes thereto; (b)
liabilities arising in the ordinary course of business after the date of the
Parent Balance Sheet; (c) liabilities disclosed in the Parent SEC Reports prior
to the date hereof; and (d) liabilities under this Agreement.
Section 4.5 Capitalization of Parent. The authorized capital stock of
Parent consists of: (i) 2,400,000,000 shares of Common Stock, par value $1.00
per share (the "PARENT SHARES"), of which 1,640,911,212 shares are issued and
outstanding and 807,643 shares are held by Parent in treasury as of June 16,
2000, and (ii) 10,000,000 shares of Preferred Stock, par value $25.00 per share,
no shares of which are outstanding as of June 16, 2000. All of the issued and
outstanding Parent Shares have been validly issued, and are duly authorized,
fully paid, non-assessable and free of preemptive rights. As of June 16, 2000,
157,185,046 Parent Shares were available for issuance under Parent's option
plans, of which approximately 135,293,284 were issuable upon or otherwise
deliverable in connection with the exercise of options outstanding on such date.
Except as set forth above and any additional Parent Shares issued between June
16, 2000 and June 21, 2000 in connection with option exercises and except for
the Parent Rights Agreement, as of June 21, 2000, there are no outstanding (i)
shares of capital stock or other voting securities of Parent; (ii) securities of
Parent convertible into or exchangeable for shares of capital stock or voting
securities of Parent; (iii) options or other rights to acquire from Parent and
no obligations of Parent to issue, any capital stock, voting securities, or
securities convertible into or exchangeable for capital stock or voting
securities of Parent; or (iv) equity equivalents, interests in the ownership or
earnings of Parent, or other similar rights (including stock appreciation
rights).
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Section 4.6 Information Supplied. None of the information supplied or to
be supplied by Parent or Merger Sub specifically for inclusion or incorporation
by reference in (i) the S-4 will, at the time the S-4 is filed with the SEC and
at the time it becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading and
(ii) the Proxy Statement will, at the date mailed to stockholders of the Company
and at the time of the Company Stockholder Meeting, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. If at any time prior to
the Effective Time any event in respect of Parent, its officers and directors,
or any of its subsidiaries should occur which is required to be described in an
amendment of, or a supplement to, the S-4 or the Proxy Statement, Parent shall
promptly so advise the Company and such event shall be so described, and such
amendment or supplement (which the Company shall have a reasonable opportunity
to review) shall be promptly filed with the SEC. The S-4 will comply as to form
in all material respects with the provisions of the Securities Act and the rules
and regulations thereunder. No representation is made under this Section 4.6
with respect to any statements made or incorporated by reference in the S-4 or
the Proxy Statement based on information supplied by the Company specifically
for inclusion or incorporation by reference therein.
Section 4.7 Consents and Approvals; No Violations. Except for filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Securities Act, the Exchange Act, state
securities or blue sky Laws, the HSR Act, the filing and acceptance for record
of the Certificate of Merger as required by the DGCL, and such other filings,
permits, authorizations, consents and approvals which, if not obtained or made,
are not reasonably expected to have a Material Adverse Effect on Parent and its
subsidiaries taken as a whole, no filing with or notice to, and no permit,
authorization, consent or approval of, any Governmental Entity is necessary for
the execution and delivery by Parent or Merger Sub of this Agreement or the
Option Agreement or the consummation by Parent or Merger Sub of the transactions
contemplated hereby or thereby. The execution, delivery, and performance of this
Agreement and the Option Agreement by Parent or Merger Sub and the consummation
by Parent or Merger Sub of the transactions contemplated hereby and thereby will
not result in any violation of or conflict with, constitute a default under
(with or without due notice or lapse of time or both), require any consent,
waiver or notice under any term of, or result in the reduction or loss of any
benefit or the creation or acceleration of any right or obligation under, (i)
the respective certificate of incorporation or bylaws of Parent or Merger Sub,
(ii) any agreement, note, bond, mortgage, indenture, contract, lease, permit or
other obligation or right to which Parent or Merger Sub is a party or by which
any of their respective assets or properties is bound, or (iii) any Law, except
in the case of (ii) or (iii) where any of the foregoing is not reasonably
expected to have, individually or in the aggregate, a Material Adverse Effect on
Parent and its subsidiaries taken as a whole.
Section 4.8 Litigation. Except as disclosed in the Parent SEC Reports,
there is no other suit, claim, action, proceeding or, to Parent's knowledge,
investigation, pending or, to Parent's knowledge, threatened which is reasonably
expected to have, individually or in the aggregate, a Material Adverse Effect on
Parent and its subsidiaries taken as a whole. Except as disclosed in the Parent
SEC Reports, none of Merger Sub, Parent or its subsidiaries is subject to any
outstanding order, writ, injunction or decree which is reasonably expected to
have, individually or in the aggregate, a Material Adverse Effect on Parent and
its subsidiaries taken as a whole. Notwithstanding the foregoing, any
shareholder litigation or litigation by any Governmental Entity, in each case
brought or threatened against Parent, Merger Sub or any officer, director,
employee or agent of Parent or Merger Sub in any respect of this Agreement or
the transactions contemplated hereby shall not be deemed to have a Material
Adverse Effect on Parent and its subsidiaries taken as a whole.
Section 4.9 Compliance with Applicable Law. The businesses and operations
of Parent and Merger Sub comply in all respects with all Laws applicable to
Parent or its subsidiaries, except where the failure to comply is not reasonably
expected to have, individually or in the aggregate, a Material Adverse Effect on
Parent and its subsidiaries taken as a whole.
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Section 4.10 No Prior Activities. Except for obligations incurred in
connection with its incorporation or organization or the negotiation and
consummation of this Agreement and the transactions contemplated hereby, Merger
Sub has neither incurred any obligation or liability nor engaged in any business
or activity of any type or kind whatsoever or entered into any agreement or
arrangement with any person.
Section 4.11 Brokers. No broker, finder, investment banker or other person
(other than Morgan Stanley & Co.) is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by and on behalf of Parent, Merger Sub or
any of their affiliates.
Section 4.12 Accounting Matters. Neither Parent nor, to Parent's
knowledge, any of its affiliates, has taken or agreed to take any action or is
aware of any fact or circumstance that would prevent the Merger from qualifying
as a "pooling of interests" under APB 16 and the applicable SEC rules and
regulations.
ARTICLE V
COVENANTS RELATED TO CONDUCT OF BUSINESS
Section 5.1 Conduct of Business of the Company. Except as set forth in
Section 5.1 of the Company Disclosure Schedule, as consented to by Parent or as
contemplated by this Agreement, during the period from the date hereof to the
Effective Time, the Company will, and will cause each of its subsidiaries to,
conduct its operations in the ordinary and usual course of business consistent
with past practice and use reasonable best efforts to preserve intact its
current business organizations, keep available the service of its current
officers and key employees and preserve its relationships with customers,
suppliers and others having business dealings with it to the end that goodwill
and ongoing businesses shall be unimpaired at the Effective Time. Without
limiting the generality of the foregoing, and except as otherwise expressly
provided in this Agreement or in Section 5.1 of the Company Disclosure Schedule,
prior to the Effective Time, neither the Company nor any of its subsidiaries
will, without the prior written consent of Parent:
(a) amend its charter or bylaws (or other similar organizational or
governing instruments) or amend, modify or terminate the Company Rights
Plan;
(b) authorize for issuance, issue, sell, deliver or agree or commit to
issue, sell or deliver (whether through the issuance or granting of
options, warrants, commitments, subscriptions, rights to purchase or
otherwise) any stock of any class or any other securities convertible into
or exchangeable for any stock or any equity equivalents (including, any
stock options or stock appreciation rights), except for (x) the issuance of
Shares upon the exercise of outstanding Company Stock Options, and the
grant to newly hired officers, employees or agents (in the ordinary course
of business consistent with past practice) of additional Company Stock
Options after the date hereof to purchase up to 100,000 additional Shares
and the issuance of shares on the exercise thereof and (y) the conversion
of 4 1/4% Notes;
(c) (i) split, combine or reclassify any shares of its capital stock;
(ii) declare, set aside or pay any dividend or other distribution (whether
in cash, stock or property or any combination thereof) in respect of its
capital stock (other than any dividends or distributions payable to the
Company or its subsidiaries); (iii) make any other actual, constructive or
deemed distribution in respect of any shares of its capital stock or
otherwise make any payments to stockholders in their capacity as such
(other than any distributions or payments to the Company or its
subsidiaries); or (iv) redeem, repurchase or otherwise acquire any of its
securities or any securities of any of its subsidiaries (including
redeeming any Rights);
(d) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its subsidiaries (other than the
Merger);
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(e) alter through merger, liquidation, reorganization, restructuring
or in any other fashion the corporate structure or ownership of any
subsidiary of Company;
(f) (i) incur or assume any indebtedness for borrowed money other than
under existing credit facilities (or any renewals, replacements or
extensions that do not increase the aggregate commitments thereunder)
except (A) in the ordinary and usual course of business consistent with
past practice or (B) in connection with any acquisition or capital
expenditure permitted by this Section 5.1; (ii) assume, guarantee, endorse
or otherwise become liable or responsible (whether directly, contingently
or otherwise) for the obligations of any other person, except in the
ordinary and usual course of business consistent with past practice, and
except for obligations of the wholly owned subsidiaries of the Company;
(iii) make any loans, advances or capital contributions to, or investments
in, any other person (other than (A) any acquisition permitted by this
Section 5.1, (B) loans, advances or capital contributions to or investments
in wholly owned subsidiaries of the Company, (C) loans or advances to
employees of the Company or any of its subsidiaries in the ordinary course
of business consistent with past practice or (D) extensions of credit to
customers in the ordinary course of business consistent with past
practice); (iv) pledge or otherwise encumber shares of capital stock of the
Company or its subsidiaries; or (v) create or assume any Lien on any
material assets of the Company or any of its subsidiaries other than in the
ordinary and usual course of business consistent with past practice;
(g) (i) except as set forth in Section 5.1(g) of the Company
Disclosure Schedule or as required under existing agreements, increase in
any manner the compensation or fringe benefits of any director, officer or
employee except in the ordinary course of business consistent with past
practice or pay any benefit not required by any plan and arrangement as in
effect as of the date hereof or grant any completion bonuses or change of
control payments in respect of the Merger or that will be affected thereby;
(ii) except in the ordinary course of business consistent with past
practice, promote or change the classification or status in respect of or
hire any employee or individual; or (iii) make any contributions or other
deposits to any trust that is not qualified under Section 501(a) of the
Code;
(h) acquire, sell, lease or dispose of any material assets outside the
ordinary and usual course of business consistent with past practice or any
assets which in the aggregate are material to the Company and its
subsidiaries taken as a whole, or grant any exclusive distribution rights
other than extensions or renewals in the ordinary course of business
consistent with past practice;
(i) except as may be required as a result of a change in Law or in
GAAP, make any material change in any of the accounting principles or
practices used by it;
(j) revalue in any material respect any of its assets, including,
writing down the value of inventory or writing-off notes or accounts
receivable other than in the ordinary and usual course of business
consistent with past practice or as required by GAAP;
(k) (i) acquire (by merger, consolidation or acquisition of stock or
assets) any corporation, partnership or other business organization or
division thereof or any equity interest therein; (ii) other than in the
ordinary and usual course of business consistent with past practice, enter
into any material contract or agreement or amend in any material respect
any of the Material Contracts or the agreements referred to in Section
3.18; (iii) authorize any new capital expenditure or expenditures which are
not provided for in the Company's current capital expenditure plan and
which, individually, is in excess of $300,000 or, in the aggregate, are in
excess of $750,000; or (iv) enter into or amend any contract, agreement,
commitment or arrangement providing for the taking of any action that would
be prohibited hereunder;
(l) make or revoke any Tax election, or settle or compromise any
material Tax liability, or change (or make a request to any taxing
authority to change) any aspect of its method of accounting for Tax
purposes;
(m) pay, discharge or satisfy any material claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in
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the ordinary and usual course of business consistent with past practice or
in accordance with their terms of liabilities reflected, or reserved
against in, the consolidated financial statements of the Company and its
subsidiaries or incurred since the date of such financial statements or
waive the benefits of, or agree to modify in any manner, any
confidentiality, standstill or similar agreement to which the Company or
any of its subsidiaries is a party;
(n) settle or compromise any pending or threatened suit, action or
claim relating to the transactions contemplated hereby;
(o) take any action (including, any action otherwise permitted by this
Section 5.1) that would prevent or impede the Merger from qualifying as a
"pooling of interests" under APB 16 and the applicable SEC rules and
regulations or as a "reorganization" under Section 368 of the Code;
(p) enter into any agreement or arrangement that limits or otherwise
restricts the Company or any of its subsidiaries or any successor thereto
or that could, after the Effective Time, limit or restrict the Surviving
Corporation and its affiliates (including Parent) or any successor thereto,
from engaging or competing in any line of business or in any geographic
area;
(q) fail to comply in any material respect with any Law applicable to
the Company, its subsidiaries, or their respective assets;
(r) enter into any direct or indirect arrangements for financial
subsidies;
(s) adopt, enter into, amend, alter or terminate (partially or
completely) any Benefit Plan or Employee Arrangement except as contemplated
by this Agreement or to the extent required by applicable Law;
(t) enter into any contract with an officer, director, employee, agent
or other similar representative of the Company or any of its subsidiaries
that is not terminable, without penalty or other liability, upon not more
than 60 calendar days' notice; or
(u) take, propose to take, or agree in writing or otherwise to take,
any of the actions described in Sections 5.1(a) through 5.1(t) or any
action which would cause the condition set forth in Section 7.2(a) not to
be satisfied.
Section 5.2 Conduct of Business of Parent. Except as consented to by the
Company or as contemplated by this Agreement, during the period from the date
hereof to the Effective Time, neither Parent nor any of its subsidiaries will:
(a) amend Parent's certificate of incorporation or bylaws;
(b) take any action that would or would reasonably be expected to prevent,
impair or materially delay the ability of the Company or Parent to consummate
the transactions contemplated by this Agreement;
(c) take any action (including, any action otherwise permitted by this
Section 5.2) that would prevent or impede the Merger from qualifying as a
"pooling of interests" under APB 16 and the applicable SEC rules and regulations
or as a "reorganization" under Section 368 of the Code; or
(d) take, propose to take, or agree in writing or otherwise to take, any of
the actions described in Section 5.2(a) through 5.2(c) or any action which would
cause the condition set forth in Section 7.3(a) not to be satisfied.
Section 5.3 Access to Information.
(a) Between the date hereof and the Effective Time and subject to
applicable Law, the Company will give Parent and Merger Sub and their authorized
representatives (including counsel, financial advisors, environmental
consultants and auditors) reasonable access to all employees, plants, offices,
warehouses and other facilities and to all books and records of the Company and
its subsidiaries, will permit Parent and Merger Sub to make such inspections as
Parent and Merger Sub may reasonably require, including the right to conduct
sampling of surface water, groundwater, soil and outdoor air quality, and
building
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materials and will cause the Company's officers and those of its subsidiaries to
furnish Parent and Merger Sub with such financial and operating data and other
information in respect of the business, properties and personnel of the Company
and its subsidiaries as Parent or Merger Sub may from time to time reasonably
request, provided that no investigation pursuant to this Section 5.3(a) shall
affect or be deemed to modify any of the representations or warranties made by
the Company.
(b) Between the date hereof and the Effective Time, the Company shall
furnish to Parent and Merger Sub (i) within five business days after the
delivery thereof to management, such monthly financial statements and data as
are regularly prepared for distribution to Company management and (ii) at the
earliest time they are available, such quarterly and annual financial statements
as are prepared for the Company Board, which (in the case of this clause (ii))
shall be in accordance with the books and records of the Company.
(c) Each of Parent and the Company will hold and will cause its authorized
representatives to hold in confidence all documents and information furnished to
the other in connection with the transactions contemplated by this Agreement
pursuant to the terms of that certain Confidentiality Agreement entered into
between the Company and Parent dated May 16, 2000 (the "CONFIDENTIALITY
AGREEMENT"), which shall survive any termination of this Agreement in all
respects.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Preparation of S-4 and the Proxy Statement. Parent and the
Company will, as promptly as practicable, jointly prepare and (i) the Company
will file with the SEC the Proxy Statement in connection with the vote of the
stockholders of the Company in respect of the Merger and (ii) Parent will file
with the SEC the S-4 in connection with the registration under the Securities
Act of the shares of Parent Common Stock issuable upon conversion of the Shares
and the other transactions contemplated hereby. Parent and the Company will, and
will cause their accountants and lawyers to, use their reasonable best efforts
to have or cause the S-4 to be declared effective as promptly as practicable
after filing with the SEC, including causing their accountants to deliver
necessary or required instruments such as opinions, consents and certificates,
and will take any other action required or necessary to be taken under federal
or state securities Laws or otherwise in connection with the registration
process (other than qualifying to do business in any jurisdiction which it is
not now so qualified or filing a general consent to service of process in any
jurisdiction). The Company and Parent shall, as promptly as practicable after
the receipt thereof, provide to the other party copies of any written comments
and advise the other party of any oral comments in respect of the Proxy
Statement or the S-4 received from the staff of the SEC. The Company will
provide Parent with a reasonable opportunity to review and comment on any
amendment or supplement to the Proxy Statement prior to filing with the SEC and
will provide Parent with a copy of all such filings with the SEC. Parent will
provide the Company with a reasonable opportunity to review and comment on any
amendment or supplement on the S-4 prior to filing with SEC and will provide the
Company with a copy of all such filings with the SEC. Parent will advise the
Company, promptly after it receives notice thereof, of the time when the Form
S-4 has become effective or any supplement or amendment has been filed, the
issuance of any stop order, the suspension of the qualification of the Parent
Common Stock issuable in connection with the Merger for offering or sale in any
jurisdiction, or any request by the SEC for amendment of the Form S-4 or
comments thereon and responses thereto or requests by the SEC for additional
information. The Company will use its reasonable best efforts to cause the Proxy
Statement to be mailed to its stockholders at the earliest practicable date.
Section 6.2 Letter of Accountants.
(a) The Company shall use all reasonable best efforts to cause to be
delivered to Parent a letter of Ernst & Young LLP, the Company's independent
auditors, dated as of the date on which the S-4 shall become effective and
addressed to Parent, in form and substance reasonably satisfactory to Parent and
customary in scope and substance for letters delivered by independent public
accountants in connection with registration statements similar to the S-4.
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(b) Parent shall use all reasonable best efforts to cause to be delivered
to the Company a letter of Ernst & Young LLP, the Parent's independent auditors,
dated as of the date on which the S-4 shall become effective and addressed to
the Company, in form and substance reasonably satisfactory to the Company and
customary in scope and substance for letters delivered by independent public
accountants in connection with registration statements similar to the S-4.
Section 6.3 Meeting. The Company shall take all lawful action to (i) cause
a special meeting of its stockholders (the "COMPANY STOCKHOLDER MEETING") to be
duly called and held as soon as practicable after the effective date of the Form
S-4 for the purpose of voting on the approval and adoption of this Agreement and
approval of the Merger and related matters and (ii) subject to applicable Law,
solicit proxies from its stockholders to obtain the Company Requisite Vote for
the approval and adoption of this Agreement and approval of the Merger. Subject
to the provisions of Section 6.5(b), the Company Board shall recommend approval
and adoption of this Agreement and approval of the Merger by the Company's
stockholders and the Company Board shall not withdraw, amend or modify in a
manner adverse to Parent such recommendation (or announce publicly its intention
to do so).
Section 6.4 Reasonable Best Efforts.
(a) Subject to the terms and conditions of this Agreement and applicable
Law, each party will use its reasonable 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 to consummate the Merger and the other
transactions contemplated by this Agreement. In furtherance and not in
limitation of the foregoing, each party hereto shall (i) make an appropriate
filing of a Notification and Report Form pursuant to the HSR Act in respect of
the transactions contemplated hereby as promptly as practicable and in any event
within ten business days of the date hereof and to supply as promptly as
practicable any additional information and documentary material that may be
requested pursuant to the HSR Act and use its reasonable best efforts to take,
or cause to be taken, all other actions consistent with this Section 6.4
necessary to cause the expiration or termination of the applicable waiting
periods under the HSR Act as soon as practicable; and (ii) make appropriate
filings required under any other applicable Antitrust Law (as hereinafter
defined) in respect of the transactions contemplated hereby as promptly as
practicable and to supply as promptly as practicable any additional information
and documentary material that may be requested by the applicable Governmental
Entities administering such Laws and use its reasonable best efforts to take, or
cause to be taken, all other action consistent with this Section 6.4 necessary
to secure the applicable clearances or approvals under such Laws as soon as
practicable. For purposes of this Agreement, "ANTITRUST LAW" means the Sherman
Act, as amended, the Clayton Act, as amended, the HSR Act, the Federal Trade
Commission Act, as amended, and all other Laws that are designed or intended to
prohibit, restrict or regulate actions having the purpose or effect of
monopolization or restraint of trade or lessening of competition through merger
or acquisition.
(b) Each of Parent and the Company shall, in connection with the efforts
referenced in Section 6.4(a) to obtain all requisite approvals and
authorizations for the transactions contemplated by this Agreement under the HSR
Act or any other Antitrust Law, use its reasonable best efforts subject to
applicable Law to (i) cooperate in all respects with each other in connection
with any filing or submission and in connection with any investigation or other
inquiry, including any proceeding initiated by a private party; (ii) keep the
other party informed in all material respects of any material communication
received by such party from, or given by such party to, the Federal Trade
Commission (the "FTC"), the Antitrust Division of the Department of Justice (the
"DOJ") or any other Governmental Entity and of any material communication
received or given in connection with any proceeding by a private party, in each
case regarding any of the transactions contemplated hereby; and (iii) permit the
other party to review any material communication given by it to, and consult
with each other in advance of any meeting or conference with, the FTC, the DOJ
or any such other domestic or foreign Governmental Entity or, in connection with
any proceeding by a private party, with any other person, and to the extent
permitted by the FTC, the DOJ or such other applicable domestic or foreign
Governmental Entity or other person, give the other party the opportunity to
attend and participate in such meetings and conferences.
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(c) In furtherance and not in limitation of the covenants of the parties
contained in Sections 6.4(a) and (b), each of Parent and the Company shall,
subject to applicable Law, use its reasonable best efforts to resolve such
objections if any, as may be asserted by a Governmental Entity or other person
in respect of the transactions contemplated hereby under any Antitrust Law. In
connection with the foregoing, if any administrative or judicial action or
proceeding, including any proceeding by a private party, is instituted (or
threatened to be instituted) challenging any transaction contemplated by this
Agreement as violative of any Antitrust Law, each of Parent and the Company
shall cooperate in all respects with each other and use its respective
reasonable best efforts to contest and resist any such action or proceeding and
to have vacated, lifted, reversed or overturned any decree, judgment, injunction
or other order, whether temporary, preliminary or permanent, that is in effect
and that prohibits, prevents or restricts consummation of the transactions
contemplated by this Agreement. Notwithstanding the foregoing or any other
provision of this Agreement, nothing in this Section 6.4 shall (i) limit a
party's right to terminate this Agreement pursuant to Section 8.2 so long as
such party has up to then complied in all material respects with its obligations
under this Section 6.4, (ii) require Parent to dispose or hold separate any part
of its business or operations or agree not to compete in any geographic area or
line of business or (iii) require Parent to dispose or hold separate any part of
the Company's business or operations or agree to cause the Company not to
compete in any geographic area or line of business which would in any such case
impair in any material respect any of the benefits intended to be derived by
Parent after the Effective Time as a result of the Merger.
(d) The Company agrees that in connection with any litigation which may be
brought against the Company or its directors relating to the transactions
contemplated hereby, the Company will keep Parent, and any counsel which Parent
may retain at its own expense, informed of the course of such litigation, to the
extent Parent is not otherwise a party thereto. The Company agrees that it will
consult with Parent prior to entering into any settlement or compromise of any
such litigation, and that no such settlement or compromise will be entered into
without Parent's prior written consent, which consent shall not be unreasonably
withheld.
Section 6.5 Acquisition Proposals.
(a) The Company will not, nor will it permit any of its subsidiaries to,
nor will it authorize or permit any officer, director or employee of or any
investment banker, attorney, accountant or other advisor or representative of,
the Company or any of its subsidiaries to, directly or indirectly, (i) solicit,
initiate or encourage the submission of any Acquisition Proposal or (ii)
participate in any discussions or negotiations regarding, or furnish to any
person any information in respect of, or take any other action to facilitate,
any Acquisition Proposal or any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Acquisition Proposal,
provided, however, that nothing contained in this Section 6.5(a) shall prohibit
the Company Board from furnishing any information to, or entering into
discussions or negotiations with, any person that makes an unsolicited bona fide
Acquisition Proposal if, and only to the extent that (A) the Company Stockholder
Meeting shall not have occurred, (B) the Company Board, after consultation with
outside legal counsel, determines in good faith that the failure to take such
action would be inconsistent with its fiduciary duties to the Company's
stockholders under applicable Law, as such duties would exist in the absence of
any limitation in this Agreement, (C) the Company Board determines in good faith
that such Acquisition Proposal is reasonably likely to lead to a transaction
that, if accepted, is reasonably likely to be consummated taking into account
all legal, financial, regulatory and other aspects of the proposal and the
person making the proposal, and believes in good faith, after consultation with
its Financial Advisor and after taking into account the strategic benefits to be
derived from the Merger and the long-term prospects of Parent and its
subsidiaries, based on the information available to the Company Board at the
time, that such Acquisition Proposal would, if consummated, result in a
transaction more favorable to the Company's stockholders than the Merger (any
such more favorable Acquisition Proposal being referred to herein as a "SUPERIOR
PROPOSAL"), and (D) prior to taking such action, the Company (x) provides
reasonable notice to Parent to the effect that it is taking such action and (y)
receives from the person submitting such Acquisition Proposal an executed
confidentiality/standstill agreement in reasonably customary form and in any
event containing terms at
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least as stringent as those contained in the Confidentiality Agreement between
Parent and the Company. The Company shall notify Parent of any Acquisition
Proposal (including, the material terms and conditions thereof and the identity
of the person making it) as promptly as practicable (but in no case later than
24 hours) after its receipt thereof, and shall thereafter inform Parent on a
prompt basis of the status of any discussions or negotiations with such third
party, and any material changes to the terms and conditions of such Acquisition
Proposal, and shall promptly give Parent a copy of any information delivered to
such person which has not previously been reviewed by Parent. The Company has
ceased and terminated, and has caused its subsidiaries and affiliates, and their
respective officers, directors, employees, investment bankers, attorneys,
accountants and other agents and representatives to cease and terminate, any
existing activities, discussions or negotiations with any parties conducted
heretofore in respect of any possible Acquisition Proposal. The Company shall
take all necessary steps to promptly inform the individuals or entities referred
to in the first sentence of this Section 6.5 of the obligations undertaken in
this Section 6.5. "ACQUISITION PROPOSAL" means an inquiry, offer or proposal
regarding any of the following (other than the transactions contemplated by this
Agreement) involving the Company or any of its subsidiaries: (w) any merger,
consolidation, share exchange, recapitalization, business combination or other
similar transaction; (x) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition of all or substantially all the assets of the Company and
its subsidiaries, taken as a whole, in a single transaction or series of related
transactions; (y) any tender offer or exchange offer for 20% or more of the
outstanding Shares or the filing of a registration statement under the
Securities Act in connection therewith; or (z) any public announcement of a
proposal, plan or intention to do any of the foregoing or any agreement to
engage in any of the foregoing.
(b) The Company Board will not withdraw or modify, or propose to withdraw
or modify, in a manner adverse to Parent, its approval or recommendation of the
Merger unless the Company Board after consultation with outside legal counsel,
determines in good faith that the failure to take such action would be
inconsistent with its fiduciary duties to the Company's stockholders under
applicable Law; provided, however, that the Company Board may not approve or
recommend an Acquisition Proposal (and in connection therewith, withdraw or
modify its approval or recommendation of the Merger) unless such an Acquisition
Proposal is a Superior Proposal (and the Company shall have first complied with
its obligations set forth in Section 8.3(a) and the time referred to in the last
sentence of Section 8.3(a) has expired) and unless it shall have first consulted
with outside legal counsel, and have determined that the failure to take such
action would be inconsistent with its fiduciary duties to the Company's
stockholders. Nothing contained in this Section 6.5(b) shall prohibit the
Company from taking and disclosing to its stockholders a position contemplated
by Rule 14d-9 or Rule 14e-2(a) promulgated under the Exchange Act or from making
any disclosure to the Company's stockholders which, in the good faith reasonable
judgment of the Company Board, after consultation with outside legal counsel, is
required under applicable Law; provided, however, that except as otherwise
permitted in this Section 6.5(b), the Company does not withdraw or modify, or
propose to withdraw or modify, its position in respect of the Merger or approve
or recommend, or propose to approve or recommend, an Acquisition Proposal.
Notwithstanding anything contained in this Agreement to the contrary, any action
by the Company Board permitted by, and taken in accordance with, this Section
6.5(b) shall not constitute a breach of this Agreement by the Company. Nothing
in this Section 6.5(b) shall (i) permit the Company to terminate this Agreement
(except as provided in Article VIII hereof) or (ii) affect any other obligations
of the Company under this Agreement.
Section 6.6 Public Announcements. Each of Parent, Merger Sub and the
Company will consult with one another before issuing any press release or
otherwise making any public statements in respect of the transactions
contemplated by this Agreement, including, the Merger, and shall not issue any
such press release or make any such public statement prior to such consultation,
except as may be required by applicable Law or by obligations pursuant to any
listing agreement with the NYSE or the Nasdaq National Market, as determined by
Parent, Merger Sub or the Company, as the case may be.
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Section 6.7 Indemnification.
(a) From and after the Effective Time, the Surviving Corporation shall, and
Parent shall cause the Surviving Corporation to the fullest extent permitted by
applicable Law to, indemnify, defend, and hold harmless each person who is now,
or has been at any time prior to the date hereof, or who becomes prior to the
Effective Time, a director or officer of the Company or any subsidiary thereof,
and each such individual who served at the request of the Company or any of its
subsidiaries as a director, officer, trustee, partner, fiduciary, employee or
agent of another corporation, partnership, joint venture, trust, pension or
other employee benefit plan or other enterprise (each an "INDEMNIFIED PARTY"
and, collectively, the "INDEMNIFIED PARTIES") against all losses, expenses
(including, reasonable attorneys' fees and expenses), claims, damages, costs or
liabilities or, subject to the proviso of the next succeeding sentence, amounts
paid in settlement, in connection with any claim, action, suit, proceeding or
investigation, whether civil, administrative or investigative, arising out of
actions or omissions occurring at or prior to the Effective Time and whether
asserted, instituted or claimed prior to, at or after the Effective Time that
are in whole or in part (i) based on, or arising out of the fact that such
person is or was a director or officer or acting in such other capacity on
behalf of such party, subsidiary, plan or other enterprise or (ii) based on,
arising out of or pertaining to the transactions contemplated by this Agreement.
Without limiting the foregoing, in the event of any such loss, expense, claim,
damage, cost or liability (whether or not arising before the Effective Time),
(A) the Surviving Corporation shall pay the reasonable fees and expenses of
counsel selected by the Indemnified Parties, which counsel shall be reasonably
satisfactory to the Surviving Corporation, promptly after statements therefor
are received and otherwise advance to such Indemnified Party, upon request for
reimbursement, documented expenses reasonably incurred, in either case to the
extent not prohibited by the DGCL and upon receipt of any affirmation and
undertaking required by the DGCL, (B) the Surviving Corporation will cooperate
in the vigorous defense of any such matter and (C) any determination required to
be made in respect of whether an Indemnified Party's conduct complies with the
standards set forth under the DGCL and the Surviving Corporation's charter or
bylaws shall be made as provided by applicable Law, subject to the rights of the
Indemnified Party to have such determination made in a court proceeding;
provided, however, that the Surviving Corporation shall not be liable for any
settlement effected without its prior written consent (which consent shall not
be unreasonably withheld). The Indemnified Parties as a group may retain only
one law firm in respect of each related matter except to the extent there is, in
the opinion of counsel to an Indemnified Party, under applicable standards of
professional conduct, a conflict on any significant issue between positions of
any two or more Indemnified Parties.
(b) For a period of six years after the Effective Time, the Surviving
Corporation shall cause to be maintained in effect the policies of directors'
and officers' liability insurance maintained by the Company for the benefit of
those persons who are covered by such policies at the Effective Time (or the
Surviving Corporation may substitute therefor policies of at least the same
coverage and amounts containing terms that are in all material respects not less
advantageous to the insured parties in respect of matters occurring prior to the
Effective Time), to the extent that such liability insurance can be maintained
annually at a cost to the Surviving Corporation not greater than 200% of the
premium for the current Company directors' and officers' liability insurance;
provided, however, that if such insurance cannot be so maintained or obtained at
such costs, the Surviving Corporation shall maintain or obtain as much of such
insurance as can be so maintained or obtained at a cost equal to 200% of the
current annual premiums of the Company for such insurance.
(c) In the event the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity or such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any person, or otherwise dissolves or liquidates, then and in either such
case, proper provision shall be made so that the successors and assigns of the
Surviving Corporation (or Parent, in the case of a dissolution or liquidation)
shall assume the obligations set for in this Section 6.7.
(d) To the fullest extent permitted by Law, from and after the Effective
Time, all rights to liability limitation, exculpation or indemnification now
existing in favor of the employees, agents, directors or
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officers of the Company and its subsidiaries in respect of their activities or
omissions as such prior to the Effective Time, as provided in the Company's
charter or bylaws or in any applicable agreement, in effect on the date thereof
or otherwise in effect on the date hereof, shall survive the Merger and shall
continue in full force and effect thereafter.
(e) The provisions of this Section 6.7 are intended to be for the benefit
of, and shall be enforceable by, each Indemnified Party, his or her heirs, and
his or her representatives.
Section 6.8 Notification of Certain Matters. The Company shall give prompt
notice to Parent and Merger Sub, and Parent and Merger Sub shall give prompt
notice to the Company, of (i) the occurrence or nonoccurrence of any event the
occurrence or nonoccurrence of which would be likely to cause any representation
or warranty contained in this Agreement to be untrue or inaccurate at or prior
to the Effective Time so as to cause the conditions set forth in Article VII
hereof to fail to be satisfied, or (ii) any material failure of the Company,
Parent or Merger Sub, as the case may be, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder so as to cause the conditions set forth in Article VII hereof to fail
to be satisfied; provided, however, that the delivery of any notice pursuant to
this Section 6.8 shall not cure such breach or non-compliance or limit or
otherwise affect the remedies available hereunder to the party receiving such
notice.
Section 6.9 Tax-Free Reorganization Treatment; Pooling of Interest
Accounting. The parties hereto intend that the Merger will qualify as a
reorganization within the meaning of Section 368(a) of the Code. Each of the
parties hereto shall, and shall cause its respective subsidiaries to, use its
reasonable best efforts to cause the Merger to so qualify. The parties will use
their reasonable best efforts to cause the opinions of counsel contemplated by
Sections 7.2(e) and 7.3(d) to be timely delivered, including providing all
supporting representations reasonably requested by such counsel and customary in
scope and substance. The parties further intend that the Merger will be
accounted for as a "pooling of interests" under APB 16 and the applicable SEC
rules and regulations. The parties will use their reasonable best efforts to
establish the availability of such accounting treatment and to cause the letters
of accountants contemplated by Section 7.2(d) to be timely delivered, including
providing all supporting representations reasonably requested by such
accountants and customary in scope and substance.
Section 6.10 Employee Matters.
(a) The Company shall (i) discontinue the Burr-Brown Corporation Employee
Stock Purchase Plan as of the last business day prior to the Closing Date, and
no additional purchase rights shall be granted under such plan from and after
the date hereof, but all currently outstanding purchase rights shall remain in
effect subject to the terms of such plan, (ii) at Parent's request, terminate
the Burr-Brown Corporation Future Investment Plan ("FI PLAN") prior to the
Closing Date, and (iii) at Parent's request, issue a written notice pursuant to
section 204(h) of the Employee Retirement Income Security Act of 1974, as
amended, to cease further benefit accruals under the Burr-Brown Corporation
Employee Retirement Income Plan ("RETIREMENT PLAN") effective as of a date
designated by Parent which is on or after the Closing Date. The Company shall
provide to Parent for its prior review and comments a copy of all materials to
be provided to participants in the FI Plan regarding their right to direct the
voting or tendering of Company Common Stock allocated to their accounts under
the FI Plan. The FI Plan shall be amended, if necessary, to permit Parent Common
Stock as an investment option under such plan subject to participant directions.
(b) Except as contemplated by this Agreement, Parent will and will cause
the Surviving Corporation to honor the obligations of the Company or any of its
subsidiaries under the provisions of each Benefit Plan and Employee Arrangement;
provided that the Company shall have the right at any time to amend or terminate
any such Benefit Plan or Employee Arrangement in accordance with its terms. The
employees of the Company will be eligible to participate in Parent's applicable
employee benefit plans, as such plans may be in effect from time to time, as
soon as administratively convenient (as determined at Parent's sole discretion)
after the Effective Time and, at Parent's sole discretion, will become employees
of Parent or any of its subsidiaries. Until such time as employees of the
Company (the "COMPANY EMPLOYEES") become eligible to participate in Parent's
applicable employee benefit plans (the "BENEFITS INTEGRATION
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DATE"), Parent shall cause such employee benefits to be maintained for such
Company Employees that are, in the aggregate, no less favorable than those
provided to such Company Employees immediately prior to the Effective Time.
Following the Benefits Integration Date, with respect to each plan maintained by
Parent in which any Company Employee participates (each, a "PARENT PLAN") that
is an "employee benefit plan" as defined in Section 3(3) of ERISA, for purposes
of eligibility to participate, vesting and, solely with respect to severance and
vacation, level of benefit entitlement (but in no event for purposes of benefits
accrual), service with the Company and its affiliates (or predecessor employers
to the extent the Company and its affiliates provided past service credit) shall
be treated as service with Parent to the same extent such service was counted
under the corresponding Benefit Plan, if any; provided, however, that such
service shall not be recognized to the extent that such recognition would result
in a duplication of benefits. Such service also shall apply for purposes of
satisfying any waiting periods, evidence of insurability requirements, or the
application of any preexisting condition limitations. Each Parent Plan shall
waive preexisting condition limitations to the same extent waived under the
corresponding Benefit Plan. Company Employees shall be given credit under the
applicable Parent Plan for amounts paid under a corresponding Benefit Plan
during the same period as though such amounts had been paid in accordance with
the terms and conditions of the Parent Plan.
Section 6.11 Company Affiliate Agreements. Section 6.11 of the Company
Disclosure Schedule sets forth a list of all persons who are, and all persons
who to the Company's knowledge will be at the Closing Date, "affiliates" of the
Company for purposes of Rule 145 under the Securities Act. The Company will
cause such list to be updated promptly through the Closing Date. Not later than
45 days prior to the date of the Company Stockholder Meeting, the Company shall
cause its "affiliates" to deliver to Parent a Company Affiliate Agreement
substantially in the form attached as EXHIBIT B.
Section 6.12 SEC and Other Filings. Each of Parent and the Company shall
promptly provide the other party (or its counsel) with copies of all filings
made by the other party or any of its subsidiaries with the SEC or any other
state, federal or foreign Governmental Entity in connection with this Agreement
and the transactions contemplated hereby.
Section 6.13 Fees and Expenses. Whether or not the Merger is consummated,
all Expenses incurred in connection with this Agreement, the Option Agreement
and the transactions contemplated hereby and thereby shall be paid by the party
incurring such Expenses, except (a) Expenses incurred in connection with the
filing, printing and mailing of the Proxy Statement and the S-4, which shall be
shared equally by the Company and Parent, (b) the filing fees required under the
HSR Act, which shall be shared equally by the Company and Parent and (c) if
applicable, as provided in Section 8.5. As used in this Agreement, "EXPENSES"
includes all out-of-pocket expenses (including all fees and expenses of counsel,
accountants, investment bankers, experts and consultants to a party hereto and
its affiliates) incurred by a party or on its behalf in connection with, or
related to, the authorization, preparation, negotiation, execution and
performance of this Agreement and the transactions contemplated hereby,
including the preparation, filing, printing and mailing of the Proxy Statement
and the S-4 and the solicitation of stockholder approvals and all other matters
related to the transactions contemplated hereby.
Section 6.14 Obligations of Merger Sub. Parent will take all action
necessary to cause Merger Sub to perform its obligations under this Agreement
and to consummate the Merger on the terms and conditions set forth in this
Agreement.
Section 6.15 Listing of Stock. Parent shall cause the shares of Parent
Common Stock to be issued in connection with the Merger to be approved for
listing on the NYSE on or prior to the Closing Date, subject to official notice
of issuance.
Section 6.16 Antitakeover Statutes. If any Takeover Statute is or may
become applicable to the Merger or the Option Agreement, each of Parent and the
Company shall use their reasonable best efforts to permit the transactions
contemplated by this Agreement or the Option Agreement, as applicable, to be
consummated as promptly as practicable on the terms contemplated hereby and
otherwise act to eliminate or minimize the effects of any Takeover Statute on
the Merger or the Option Agreement.
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ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 7.1 Conditions to Each Party's Obligations to Effect the
Merger. The respective obligations of each party to consummate the transactions
contemplated by this Agreement are subject to the fulfillment at or prior to the
Effective Time of each of the following conditions, any or all of which may be
waived in whole or in part by the party being benefited thereby, to the extent
permitted by applicable Law:
(a) The Merger shall have been approved and adopted by the Company
Requisite Vote.
(b) Any waiting periods applicable to the Merger under the HSR Act
shall have expired or early termination thereof shall have been granted and
any waiting periods or consents under any comparable foreign antitrust Laws
shall have expired or been obtained.
(c) There shall not be in effect any Law of any Governmental Entity of
competent jurisdiction restraining, enjoining or otherwise preventing
consummation of the transactions contemplated by this Agreement and no
Governmental Entity shall have instituted any proceeding which continues to
be pending seeking any such Law.
(d) The S-4 shall have been declared effective by the SEC and shall be
effective at the Effective Time, and no stop order suspending effectiveness
shall have been issued and no action, suit, proceeding or investigation by
the SEC to suspend the effectiveness thereof shall have been initiated and
be continuing.
(e) The Parent Common Stock required to be issued hereunder shall have
been approved for listing on the NYSE, subject only to official notice of
issuance.
Section 7.2 Conditions to the Obligations of Parent and Merger Sub. The
respective obligations of Parent and Merger Sub to consummate the transactions
contemplated by this Agreement are subject to the fulfillment at or prior to the
Effective Time of each of the following additional conditions, any or all of
which may be waived in whole or part by Parent and Merger Sub, as the case may
be, to the extent permitted by applicable Law:
(a) The representations and warranties of the Company contained herein
shall have been true in all respects when made and on and as of the Closing Date
as though made on and as of the Closing Date (except for representations and
warranties made as of a specified date, which shall speak only as of the
specified date), except where the failure to be true, individually or in the
aggregate, has not had or is not reasonably expected to have a Material Adverse
Effect on the Company and its subsidiaries taken as a whole.
(b) The Company shall have performed or complied in all material respects
with all agreements and conditions contained herein required to be performed or
complied with by it prior to or at the time of the Closing.
(c) The Company shall have delivered to Parent a certificate, dated the
date of the Closing, signed by the President or any Vice President of the
Company (but without personal liability thereto), certifying as to the
fulfillment of the conditions specified in Sections 7.2(a) and 7.2(b).
(d) The Company shall have received and delivered to Parent a letter from
Ernst & Young LLP, auditors for the Company, dated as of the Closing Date,
stating that the Company qualifies as a combining company in accordance with the
provisions of APB 16 and the applicable SEC rules and regulations. Parent shall
have received a letter from Ernst & Young LLP, auditors for Parent, dated as of
the Closing Date, stating that accounting of the Merger as a "pooling of
interests" under APB 16 and the applicable SEC rules and regulations is
appropriate if the Merger is consummated as contemplated by this Agreement.
Notwithstanding the foregoing, the satisfaction of this Section 7.2(d) shall not
be a condition to the obligations of a party to effect the Merger if the failure
to satisfy this condition results from any action taken or agreed to be taken by
or on behalf of Parent.
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(e) Parent shall have received an opinion of its tax counsel, Weil, Gotshal
& Manges LLP, dated the Effective Time, to the effect that (i) the Merger will
qualify as a reorganization within the meaning of Section 368(a) of the Code;
and (ii) each of Parent, Merger Sub and the Company will be a party to the
reorganization within the meaning of Section 368(b) of the Code. The issuance of
such opinion shall be conditioned on the receipt by such tax counsel of
representation letters from each of the Parent, Merger Sub and the Company,
substantially in the forms attached hereto as EXHIBITS D and E. Each such
representation letter shall be dated on or before the date of such opinion and
shall not have been withdrawn or modified in any material respect.
(f) All authorizations, consents or approvals of a Governmental Entity
(other than those specified in Section 7.1(b)) required in connection with the
execution and delivery of this Agreement and the performance of the obligations
hereunder shall have been made or obtained, without any limitation, restriction
or condition that is reasonably expected to have a Material Adverse Effect on
the Company and its subsidiaries taken as a whole (or an effect on Parent and
its subsidiaries that, were such effect applied to the Company and its
subsidiaries, is reasonably expected to have a Material Adverse Effect on the
Company), except for such authorizations, consents or approvals, the failure of
which to have been made or obtained is not reasonably expected to have a
Material Adverse Effect on the Company and its subsidiaries taken as a whole (or
an effect on Parent and its subsidiaries that, were such effect applied to the
Company and its subsidiaries, is reasonably expected to have a Material Adverse
Effect on the Company).
(g) Not later than 45 days prior to the date of the Company Stockholder
Meeting, Parent shall have received from the Company's "affiliates" a Company
Affiliate Agreement substantially in the form attached as EXHIBIT B.
Section 7.3 Conditions to the Obligations of the Company. The obligations
of the Company to consummate the transactions contemplated by this Agreement are
subject to the fulfillment at or prior to the Effective Time of each of the
following conditions, any or all of which may be waived in whole or in part by
the Company to the extent permitted by applicable Law:
(a) The representations and warranties of Parent and Merger Sub contained
herein shall be true in all respects when made and on and as of the Closing Date
as though made on and as of the Closing Date (except for representations and
warranties made as of a specified date, which shall speak only as of the
specified date), except where the failure to be true, individually or in the
aggregate, has not had or is not reasonably expected to have a Material Adverse
Effect on Parent and its subsidiaries taken as a whole.
(b) Parent shall have performed or complied in all material respects with
all agreements and conditions contained herein required to be performed or
complied with by it prior to or at the time of the Closing.
(c) Parent shall have delivered to the Company a certificate, dated the
date of the Closing, signed by the President or any Vice President of Parent
(but without personal liability thereto), certifying as to the fulfillment of
the conditions specified in Sections 7.3(a) and 7.3(b).
(d) (i) The Company shall have received an opinion of its tax counsel,
Snell & Wilmer L.L.P., dated the Effective Time, to the effect that the Merger
will qualify as a reorganization within the meaning of Section 368(a) of the
Code; and (ii) each of Parent, Merger Sub and the Company will be a party to the
reorganization within the meaning of Section 368(b) of the Code. The issuance of
such opinion shall be conditioned on the receipt by such tax counsel of
representation letters from each of the Parent, Merger Sub and the Company, in
each case, in form and substance reasonably satisfactory to Snell & Wilmer
L.L.P. Each such representation letter shall be dated on or before the date of
such opinion and shall not have been withdrawn or modified in any material
respect.
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ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
Section 8.1 Termination by Mutual Agreement. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time, whether before or after the approval of the Merger by the Company
Requisite Vote referred to in Section 7.1(a), by mutual written consent of the
Company and Parent by action of their respective boards of directors.
Section 8.2 Termination by Either Parent or the Company. This Agreement
may be terminated and the Merger may be abandoned at any time prior to the
Effective Time by action of the board of directors of either Parent or the
Company if:
(a) the Merger shall not have been consummated by December 31, 2000,
whether such date is before or after the date of approval of the Merger by
the Company Requisite Vote (the "TERMINATION DATE"); provided, however,
that if either Parent or the Company reasonably determines in good faith
that additional time is necessary in connection with obtaining any consent,
registration, approval, permit or authorization required to be obtained
from any Governmental Entity, the Termination Date may be extended by
Parent or the Company from time to time by written notice to the other
party to a date not beyond February 28, 2001;
(b) the Company Requisite Vote shall not have been obtained at the
Company Stockholder Meeting or at any adjournment or postponement thereof;
(c) any Law permanently restraining, enjoining or otherwise
prohibiting consummation of the Merger shall become final and
non-appealable (whether before or after the approval of the Merger by the
Company Requisite Vote); or
(d) any Governmental Entity shall have failed to issue an order,
decree or ruling or to take any other action which is necessary to fulfill
the conditions set forth in Sections 7.1(b), 7.1(d) and 7.2(f), as
applicable, and such denial of a request to issue such order, decree or
ruling or take such other action shall have been final and nonappealable;
provided, however, that the right to terminate this Agreement pursuant to
this Section 8.2 shall not be available to any party that has breached in
any material respect its obligations under this Agreement in any manner
that shall have proximately contributed to the occurrence of the failure of
the Merger to be consummated.
Section 8.3 Termination by the Company. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time by
action of the Company Board:
(a) if (i) the Company is not in breach of Section 6.5, (ii) the
Merger shall not have been approved by the Company Requisite Vote, (iii)
the Company Board authorizes the Company, subject to complying with the
terms of this Agreement, to enter into a binding written agreement
concerning a transaction that constitutes a Superior Proposal and the
Company notifies Parent in writing that it intends to enter into such an
agreement, attaching the most current version of such agreement to such
notice, and (iv) during the three business day period after the Company's
notice, (A) the Company shall have negotiated with, and shall have caused
its respective financial and legal advisors to negotiate with, Parent to
attempt to make such commercially reasonable adjustments in the terms and
conditions of this Agreement as would enable the Company to proceed with
the transactions contemplated hereby and (B) the Company Board shall have
concluded, after considering the results of such negotiations, that any
Superior Proposal giving rise to the Company's notice continues to be a
Superior Proposal. The Company may not effect such termination unless
contemporaneously therewith the Company pays to Parent in immediately
available funds the fees required to be paid pursuant to Section 8.5. The
Company agrees (x) that it will not enter into a binding agreement referred
to in clause (iii) above until at least the day following the third
business day after it has provided the notice to Parent required thereby
and (y) to notify Parent promptly if its intention to enter into a written
agreement referred to in its notification shall change at any time after
giving such notification; or
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(b) if there is a breach by Parent or Merger Sub of any
representation, warranty, covenant or agreement contained in this Agreement
that cannot be cured and would cause a condition set forth in Section
7.3(a) or 7.3(b) to be incapable of being satisfied as of the Termination
Date.
Section 8.4 Termination by Parent. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time by Parent,
if:
(a) either (i) the Company enters into a binding agreement for a
Superior Proposal, or (ii) the Company Board shall have withdrawn or
adversely modified its approval or recommendation of the Merger; or
(b) there is a breach by the Company of any representation, warranty,
covenant or agreement contained in this Agreement that cannot be cured and
would cause a condition set forth in Section 7.2(a) or 7.2(b) to be
incapable of being satisfied as of the Termination Date.
Section 8.5 Effect of Termination and Abandonment.
(a) In the event of termination of this Agreement and the abandonment of
the Merger pursuant to this Article VIII, this Agreement (other than this
Section 8.5, Sections 5.3(c) and 6.13, and Article IX) shall become void and of
no effect with no liability on the part of any party hereto (or of any of its
directors, officers, employees, agents, legal and financial advisors, or other
representatives); provided, however, that except as otherwise provided herein,
no such termination shall relieve any party hereto of any liability or damages
resulting from any willful breach of this Agreement.
(b) In the event that (i) a bona fide Acquisition Proposal shall have been
made or any person shall have publicly announced an intention (whether or not
conditional) to make a bona fide Acquisition Proposal in respect of the Company
or any of its subsidiaries and thereafter this Agreement is terminated by either
Parent or the Company pursuant to Section 8.2(b) or by the Parent pursuant to
Section 8.4(b) as a result of a material breach by the Company of any of the
covenants set forth in Section 6.5 hereof (provided that within 9 months of the
termination of this Agreement any Acquisition Proposal by a third party is
entered into, agreed to, or consummated by the Company) or (ii) this Agreement
is terminated by the Company pursuant to Section 8.3(a), or (iii) this Agreement
is terminated by Parent pursuant to Section 8.4(a)(i), or (iv) this Agreement is
terminated by Parent pursuant to Section 8.4(a)(ii) and, within 9 months of such
termination, any Acquisition Proposal by any third party is entered into, agreed
to or consummated by the Company, then the Company shall pay Parent a
termination fee of $223,203,810 in same-day funds, on the date of such
termination, in the case of clause (ii) or (iii), or on the earlier of the date
an agreement is entered into in respect of an Acquisition Proposal or an
Acquisition Proposal is consummated in the case of clause (i) or (iv), provided,
however, that notwithstanding the foregoing, Parent will not be entitled to a
termination fee pursuant to clause (i) or (iv) above in the event the
Acquisition Proposal entered into, agreed to or consummated after such
termination is an Acquisition Proposal whereby (A) the Company or any of its
subsidiaries acquires a third party (the "EXEMPT ACQUIRED PERSON") pursuant to a
merger, consolidation, recapitalization, share exchange or similar transaction
in which the Company survives and the shareholders of the Exempt Acquired Person
receive shares of Company Common Stock which, immediately following consummation
of such merger, consolidation, recapitalization, share exchange or similar
transaction, will represent no more than 45% of the issued and outstanding
shares of Company Common Stock (or securities convertible or exchangeable into,
or exercisable for Company Common Stock, whether upon the passage of time or
otherwise) and (B) such Exempt Acquired Person, or any affiliate or affiliates
thereof, was or were not the subject of an Acquisition Proposal at any time
after the date hereof and prior to the termination of this Agreement.
(c) The Company acknowledges that the agreements contained in Section
8.5(b) are an integral part of the transactions contemplated by this Agreement,
and that, without these agreements, Parent and Merger Sub would not have entered
into this Agreement; accordingly, if the Company fails to promptly pay the
amount due pursuant to Section 8.5(b), and, in order to obtain such payment,
Parent commences a suit which results in a judgment against the Company for the
fee set forth in this Section 8.5, the Company shall pay to Parent its costs and
expenses (including, attorneys' fees) in connection with such
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suit, together with interest from the date of termination of this Agreement on
the amounts owed at the prime rate of Bank of America, N.A., in effect from time
to time during such period.
Section 8.6 Amendment. This Agreement may be amended by action taken by
the Company, Parent and Merger Sub at any time before or after approval of the
Merger by the Company Requisite Vote but, after any such approval, no amendment
shall be made which requires the approval of such stockholders under applicable
Law without such approval. This Agreement may not be amended except by an
instrument in writing signed on behalf of the parties hereto.
Section 8.7 Extension; Waiver. At any time prior to the Effective Time,
each party hereto (for these purposes, Parent and Merger Sub shall together be
deemed one party and the Company shall be deemed the other party) may (i) extend
the time for the performance of any of the obligations or other acts of the
other party, (ii) waive any inaccuracies in the representations and warranties
of the other party contained herein or in any document, certificate or writing
delivered pursuant hereto, or (iii) waive compliance by the other party with any
of the agreements or conditions contained herein. Any agreement on the part of
either party hereto to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party. The failure of
any party hereto to assert any of its rights hereunder shall not constitute a
waiver of such rights.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Entire Agreement; Assignment.
(a) This Agreement (including the documents and instruments referred to
herein) constitutes the entire agreement between the parties hereto in respect
of the subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, between the parties in respect of the
subject matter hereof, other than the Confidentiality Agreement (which shall
remain in effect).
(b) Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by operation of Law (including by merger or
consolidation) or otherwise without the prior written consent of the other
parties. Any assignment in violation of the preceding sentence shall be null and
void. Subject to the preceding sentence, this Agreement will be binding upon,
inure to the benefit of, and be enforceable by the parties and their respective
successors and permitted assigns.
Section 9.2 Nonsurvival of Representations and Warranties.
The representations and warranties made herein by the parties hereto shall
not survive the Effective Time. This Section 9.2 shall not limit any covenant or
agreement of the parties hereto which by its terms contemplates performance
after the Effective Time or after termination of this Agreement.
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Section 9.3 Notices. All notices, requests, instructions or other
documents to be given under this Agreement shall be in writing and shall be
deemed given (i) five business days following sending by registered or certified
mail, postage prepaid, (ii) when sent if sent by facsimile; provided, however,
that the facsimile is promptly confirmed by telephone confirmation thereof,
(iii) when delivered, if delivered personally to the intended recipient, and
(iv) one business day following sending by overnight delivery via a national
courier service, and in each case, addressed to a party at the following address
for such party:
<TABLE>
<S> <C>
if to Merger Sub or to
Parent, to: Texas Instruments Incorporated
7839 Churchill Way, M/S 3995
Dallas, Texas 75251
- or -
P.O. Box 650311, M/S 3995
Dallas, Texas 75265
Attention: Charles D. Tobin
Facsimile No.: (972) 917-3804
with copies to: Texas Instruments Incorporated
12500 TI Boulevard, M/S 8658
Dallas, Texas 75243
- or -
P.O. Box 660199, M/S 8658
Dallas, Texas 75266
Attention: Joseph F. Hubach
Facsimile No.: (972) 480-5061
and
Weil, Gotshal & Manges LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201-6950
Attention: R. Scott Cohen, Esq.
Facsimile: (214) 981-8338
if to the Company, to: Burr-Brown Corporation
6730 South Tucson Boulevard
Tucson, Arizona 85706
Attention: Syrus P. Madavi
Facsimile: (520) 746-7279
with a copy to: Snell & Wilmer, L.L.P.
One Arizona Center
Phoenix, Arizona 85004-2202
Attention: Steven D. Pidgeon, Esq.
Facsimile: (602) 382-6070
</TABLE>
or to such other address or facsimile number as the person to whom
notice is given may have previously furnished to the other in writing in
the manner set forth above.
Section 9.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Delaware, without giving
effect to the choice of Law principles thereof.
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Section 9.5 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
Section 9.6 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and its successors and
permitted assigns, and, except as provided in Section 6.7, nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any rights, benefits or remedies of any nature whatsoever under or by
reason of this Agreement.
Section 9.7 Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
Section 9.8 Specific Performance. The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any court of the
United States located in the State of Delaware or in Delaware state court, this
being in addition to any other remedy to which they are entitled at Law or in
equity. In addition, each of the parties hereto (a) consents to submit itself to
the personal jurisdiction of any federal court located in the State of Delaware
or any Delaware state court in the event any dispute arises out of this
Agreement or any of the transactions contemplated hereby, (b) agrees that it
will not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, and (c) agrees that it will not bring any
action relating to this Agreement or any of the transactions contemplated hereby
in any court other than a federal or state court sitting in the State of
Delaware.
Section 9.9 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
Section 9.10 Interpretation.
(a) The words "hereof," "herein," "herewith" and words of similar import
shall, unless otherwise stated, be construed to refer to this Agreement as a
whole and not to any particular provision of this Agreement, and article,
section, paragraph, exhibit, and schedule references are to the articles,
sections, paragraphs, exhibits, and schedules of this Agreement unless otherwise
specified. Whenever the words "include," "includes," or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation," the word "or" shall mean "and/or." All terms defined in this
Agreement shall have the defined meanings contained herein when used in any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein. The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms. Any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, qualified or supplemented, including (in
the case of agreements and instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and all attachments
thereto and instruments incorporated therein. References to a person are also to
its permitted successors and assigns.
(b) The phrases "the date of this Agreement," "the date hereof," and terms
of similar import, unless the context otherwise requires, shall be deemed to
refer to June 21, 2000. The phrase "made available" in
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<PAGE> 125
this Agreement shall mean that the information referred to has been actually
delivered to the party to whom such information is to be made available.
(c) The parties have participated jointly in the negotiation and drafting
of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
Section 9.11 Definitions. As used herein,
(a) "BENEFICIAL OWNERSHIP" or "BENEFICIALLY OWN" has the meaning provided
in Section 13(d) of the Exchange Act and the rules and regulations thereunder.
(b) "BUSINESS DAY" shall mean any day other than Saturday, Sunday or any
day on which banks in New York City, New York are required or authorized by Law
to be closed for business.
(c) "KNOW" or "KNOWLEDGE" means, in respect of any party, the actual
knowledge of the officers and employees of such party actively participating in
the negotiation of this agreement and related due diligence activities, without
any requirement to undertake an independent investigation, provided that, in the
case of the Company, such officers and employees shall be limited to those
persons named in Section 9.11(c) of the Company Disclosure Schedule.
(d) "MATERIAL ADVERSE EFFECT" means in respect of any entity, any material
adverse effect on (i) the assets, properties, financial condition or results of
operations of such entity and its subsidiaries taken as a whole, other than any
change, circumstance, effect or development (A) relating to the economy in
general in any country in which such entity operates or owns assets, (B)
relating to the semiconductor industry (it being understood that this clause (B)
shall not exclude, in the case of any Material Adverse Effect with respect to
either party, any change, circumstance, effect or development relating to the
semiconductor industry that materially disproportionately impacts such party),
(C) arising out of or resulting from actions contemplated by the parties in
connection with, or which is attributable to, the announcement of this Agreement
and the transactions contemplated hereby (including loss of customers, suppliers
or employees or the delay or cancellation of orders for products), or (D) any
shareholder litigation or litigation by any Governmental Entity, in each case
brought or threatened against such entity or any member of its board of
directors in respect of this Agreement or the transactions contemplated hereby;
provided that neither (x) any change in the market price or trading volume of
the Company Common Stock or Parent Common Stock nor (y) a failure by the Company
or Parent to meet the revenue or earnings predictions of equity analysts
reflected in the First Call consensus estimate, or any other revenue or earnings
predictions or expectations, for any period ending on or after the date of this
Agreement shall, in and of itself, constitute a Material Adverse Effect (it
being understood that this proviso, as it relates to (y), shall not exclude any
underlying change, circumstance, effect or development which resulted in such
failure to meet such estimates, predictions or expectations), or (ii) the
ability of such party to consummate the transactions contemplated by this
Agreement.
(e) "PERSON" means an individual, corporation, limited liability company,
partnership, association, trust, unincorporated organization, other entity or
group (as defined in the Exchange Act).
(f) "SUBSIDIARY" means, in respect of any party, any corporation,
partnership or other entity or organization, whether incorporated or
unincorporated, of which (i) such other party or any other subsidiary of such
party is a general partner (excluding such partnerships where such party or any
subsidiary of such party does not have a majority of the voting interest in such
partnership) or (ii) at least a majority of the securities or other interests
having by their terms ordinary voting power to elect a majority of the board of
directors or others performing similar functions in respect of such corporation
or other organization is directly or indirectly owned or controlled by such
party or by any one or more of its subsidiaries, or by such party and one or
more of its subsidiaries.
[THE REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 126
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed on its behalf as of the date first above written.
BURR-BROWN CORPORATION
By: /s/ SYRUS P. MADAVI
----------------------------------
Name: Syrus P. Madavi
Title: Chairman, President and CEO
TEXAS INSTRUMENTS INCORPORATED
By: /s/ M. SAMUEL SELF
----------------------------------
Name: M. Samuel Self
Title: Senior Vice President and
Controller
BURMA ACQUISITION CORP.
By: /s/ M. SAMUEL SELF
----------------------------------
Name: M. Samuel Self
Title: Treasurer
A-44
<PAGE> 127
ANNEX B
VOTING AGREEMENT
In consideration of Texas Instruments Incorporated, a Delaware corporation
("Parent"), Burma Acquisition Corp., a Delaware corporation ("Subsidiary"), and
Burr-Brown Corporation, a Delaware corporation (the "Company"), entering into on
the date hereof a Merger Agreement, dated as of the date hereof (the "Merger
Agreement"), pursuant to which Merger Sub, upon the terms and subject to the
conditions thereof, will merge with and into the Company (the "Merger"), and
each outstanding share of Company Common Stock will be converted into the right
to receive the Merger Consideration (as defined in the Merger Agreement) in
accordance with the terms of the Merger Agreement, each of the undersigned
holders (each, a "Stockholder") of shares of Company Common Stock agrees with
each of Parent, Merger Sub and the Company as follows:
1. During the period (the "Agreement Period") beginning on the date hereof
and ending on the earlier of (i) the Effective Time (as defined in the Merger
Agreement), and (ii) the date of termination of the Merger Agreement in
accordance with its terms, each Stockholder hereby agrees to vote the shares of
Company Common Stock set forth opposite its name in SCHEDULE A hereto (the
"Schedule A Securities") to approve and adopt the Merger Agreement and the
Merger (provided that the Stockholder shall not be required to vote in favor of
the Merger Agreement or the Merger if the Merger Agreement has, without the
consent of the Stockholder, been amended in any manner that is material and
adverse to such Stockholder) and any actions directly and reasonably related
thereto at any meeting or meetings of the stockholders of the Company, and at
any adjournment thereof or pursuant to action by written consent, at or by which
such Merger Agreement, or such other actions, are submitted for the
consideration and vote of the stockholders of the Company so long as such
meeting is held (including any adjournment thereof) or written consent adopted
prior to the termination of the Agreement Period.
2. During the Agreement Period, each Stockholder hereby agrees that such
Stockholder shall not enter into any voting agreement or grant a proxy or power
of attorney with respect to the Schedule A Securities in any manner inconsistent
with the obligations of such Stockholder under this Agreement.
3. Each Stockholder hereby represents and warrants to Parent and Merger Sub
that as of the date hereof:
(a) Such Stockholder (i) owns beneficially all of the shares of
Company Common Stock set forth opposite the Stockholder's name in SCHEDULE
A hereto, (ii) has the full and unrestricted legal power, authority and
right to enter into, execute and deliver this Voting Agreement without the
consent or approval of any other person, and (iii) has not entered into any
voting agreement or other similar agreement with or granted any person any
proxy (revocable or irrevocable) in respect of such shares (other than this
Voting Agreement).
(b) This Voting Agreement is the valid and binding agreement of such
Stockholder.
(c) No investment banker, broker or finder is entitled to a commission
or fee from such Stockholder or the Company in respect of this Voting
Agreement based upon any arrangement or agreement made by or on behalf of
the Stockholder.
4. If any provision of this Voting Agreement shall be invalid or
unenforceable under applicable law, such provision shall be ineffective to the
extent of such invalidity or unenforceability only, without in any way affecting
the remaining provisions of this Voting Agreement.
5. This Voting Agreement may be executed in two or more counterparts each
of which shall be an original with the same effect as if the signatures hereto
and thereto were upon the same instrument.
6. The parties hereto agree that if, for any reason, any party hereto shall
have failed to perform its obligations under this Voting Agreement, then the
party seeking to enforce this Voting Agreement against such non-performing party
shall be entitled to specific performance and injunctive and other equitable
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<PAGE> 128
relief, and the parties hereto further agree to waive any requirement for the
securing or posting of any bond in connection with the obtaining of any such
injunctive relief. This provision is without prejudice to any other rights or
remedies, whether at law or in equity, that any party hereto may have against
any other party hereto for any failure to perform its obligations under this
Voting Agreement.
7. This Voting Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
8. Each Stockholder will, upon request, execute and deliver any additional
documents deemed by Parent to be reasonably necessary or desirable to complete
and effectuate the covenants contained herein.
9. This Agreement shall terminate upon the termination of the Agreement
Period.
10. No Stockholder shall sell, assign, encumber or otherwise dispose of, or
enter into any contract, option or other arrangement or understanding in respect
of the direct or indirect sale, assignment, transfer, encumbrance or other
disposition of, any Schedule A Securities during the term of this Agreement
unless such Stockholder first provides written notice thereof to Parent and
obtains a written agreement of the proposed transferee to be bound by the terms
of this Agreement.
11. Parent, Merger Sub and the Company understand and agree that this
Agreement pertains only to each Stockholder and not to any of its affiliates, if
any, or advisers.
12. Parent, Merger Sub and the Company severally, but not jointly,
represent and warrant to each Stockholder that there is no agreement,
understanding or commitment, written or oral, to pay any consideration directly
or indirectly in connection with the Merger or otherwise to or for the benefit
of any holder of Company Common Stock or options thereon other than as set forth
in the Merger Agreement (except, in the case of directors, employees, agents,
customers, suppliers or contractors of the Company who are also holders, such
consideration as is payable by the Company in the ordinary course of business,
and except for amounts payable to officers, directors or employees in connection
with or pursuant to any options or option, stock purchase, stock ownership or
other employee benefit plans or agreements).
13. Neither Parent, Merger Sub nor the Company will enter into any
agreement with any other stockholder of the Company having a purpose or effect
substantially similar to that of this Voting Agreement on financial terms (in
respect of such other stockholder) more favorable than the terms of this Voting
Agreement.
14. Any Stockholder who is also a director or officer of the Company will
not, by execution of this Agreement, be precluded from exercising his fiduciary
duties under applicable Law in his capacity as a director or officer with
respect to the Company and nothing herein will limit or affect, or give rise to
any liability to a Stockholder by virtue of any actions taken by such
Stockholder in his or her capacity as a director or officer of the Company.
15. Nothing contained in this Voting Agreement shall be deemed to vest in
Parent, Merger Sub or the Company any direct or indirect ownership or incidence
of ownership of or with respect to any Schedule A Securities. All rights,
ownership and economic benefits of and relating to the Schedule A Securities
shall remain and belong to the applicable Stockholder and neither Parent, Merger
Sub nor the Company shall have any power or authority to direct any Stockholder
in the voting of any Schedule A Securities or the performance by any Stockholder
of its duties or responsibilities as a stockholder of the Company, except as
otherwise provided herein.
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<PAGE> 129
IN WITNESS WHEREOF, the parties hereto have executed this Voting Agreement
as of June 21, 2000.
TEXAS INSTRUMENTS INCORPORATED
By: /s/ M. SAMUEL SELF
----------------------------------
Name: M. Samuel Self
Title: Senior Vice President and
Controller
BURMA ACQUISITION CORP.
By: /s/ M. SAMUEL SELF
----------------------------------
Name: M. Samuel Self
Title: Treasurer
BURR-BROWN CORPORATION
By: /s/ SYRUS P. MADAVI
----------------------------------
Name: Syrus P. Madavi
Title: Chairman, President and
CEO
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<PAGE> 130
STOCKHOLDERS:
/s/ THOMAS R. BROWN, JR.
------------------------------------
Thomas R. Brown, Jr.*
/s/ SYRUS P. MADAVI
------------------------------------
Syrus P. Madavi
/s/ FRANCIS J. AGUILAR
------------------------------------
Francis J. Aguilar
/s/ JOHN S. ANDEREGG, JR.
------------------------------------
John S. Anderegg, Jr.
/s/ MARCELO A. GUMUCIO
------------------------------------
Marcelo A. Gumucio
/s/ KENNETH G. WOLF
------------------------------------
Kenneth G. Wolf
/s/ J. SCOTT BLOUIN
------------------------------------
J. Scott Blouin
* Individually and (i) as trustee of Trust Agreement dated October 3, 1998,
under the last will and testament of Helen M. Brown for the benefit of Mary B.
Brown, (ii) as trustee of Trust Agreement dated October 3, 1998, under the last
will and testament of Helen M. Brown for the benefit of Sarah M. Brown
Smallhouse and (iii) as general partner of Brown Investment Management Limited
Partnership.
B-4
<PAGE> 131
SCHEDULE A
TO
VOTING AGREEMENT
<TABLE>
<CAPTION>
STOCKHOLDER CLASS NUMBER OF SHARES
----------- ----- ----------------
<S> <C> <C>
Thomas R. Brown, Jr.*....................................... Common 16,527,631
John S. Anderegg, Jr. ...................................... Common 167,397
Francis J. Aguilar.......................................... Common 50,625
Syrus P. Madavi............................................. Common 40,000
Kenneth G. Wolf............................................. Common 1,875
Marcelo A. Gumucio.......................................... Common 0
J. Scott Blouin............................................. Common 0
</TABLE>
* Individually and (i) as trustee of Trust Agreement dated October 3, 1998,
under the last will and testament of Helen M. Brown for the benefit of Mary B.
Brown, (ii) as trustee of Trust Agreement dated October 3, 1998, under the last
will and testament of Helen M. Brown for the benefit of Sarah M. Brown
Smallhouse and (iii) as general partner of Brown Investment Management Limited
Partnership.
B-5
<PAGE> 132
ANNEX C
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of June 21, 2000 (the "STOCK OPTION
AGREEMENT"), between Texas Instruments Incorporated, a Delaware corporation
("PARENT"), and Burr-Brown Corporation, a Delaware corporation (the "COMPANY").
WHEREAS, Parent, Burma Acquisition Corp., a Delaware corporation and a
wholly owned subsidiary of Parent ("MERGER SUB"), and the Company are parties to
that certain Agreement and Plan of Merger, dated as of the date hereof (the
"MERGER AGREEMENT"), which provides, among other things, that Merger Sub, on the
terms and subject to the conditions thereof, will merge with and into the
Company with the Company surviving as a wholly owned subsidiary of Parent;
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, Parent has requested that the Company grant to Parent an option to
purchase up to 11,236,702 shares of common stock, par value $0.01 per share
("COMMON STOCK") of the Company, upon the terms and subject to the conditions
hereof; and
WHEREAS, in order to induce Parent to enter into the Merger Agreement, the
Company is willing to grant Parent the requested option.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, the parties hereto agree as follows:
1. The Option; Exercise; Adjustments.
(a) Subject to the other terms and conditions set forth herein, the Company
hereby grants to Parent an irrevocable option (the "OPTION") to purchase up to
11,236,702 shares of Common Stock (the "SHARES"). The purchase price per Share
(the "PURCHASE PRICE") shall be $112.94. The Purchase Price and the number of
Shares shall be subject to adjustment as provided in Section 1(c) hereof.
(b) Parent may exercise the Option with respect to any or all of the Option
Shares at any one time or from time to time, subject to the provisions of
Section 1(c) hereof, upon the occurrence of an Exercise Event (as defined
below). Subject to the last sentence of this Section 1(b), the Option will
terminate and be of no further force and effect upon the earliest to occur of
(i) the Effective Time (as defined in the Merger Agreement), (ii) 90 days after
the first occurrence of an Exercise Event, and (iii) the termination of the
Merger Agreement in accordance with its terms so long as, in the case of this
clause (iii), no Exercise Event has occurred or could still occur under Section
8.5(b) of the Merger Agreement, in which case the Option will terminate on the
later of (x) 90 days following the time such termination fee becomes
unconditionally payable and (y) the expiration of the period in which an
Exercise Event could occur pursuant to Section 8.5(b) of the Merger Agreement.
"Exercise Event" means any event as a result of which Parent is unconditionally
entitled to receive a termination fee pursuant to Section 8.5(b) of the Merger
Agreement. Notwithstanding the termination of the Option, Parent shall be
entitled to purchase the Shares with respect to which it has exercised the
Option in accordance with the terms hereof prior to the termination of the
Option.
(c) (i) In the event Parent is entitled to and wishes to exercise the
Option, Parent shall send a written notice to the Company (the "STOCK EXERCISE
NOTICE") specifying a date (subject to the HSR Act (as defined below)) not later
than 20 business days and not earlier than three business days following the
date such notice is given for the closing of such purchase and specifying the
number of Shares Parent wishes to purchase.
(ii) In the event of any change in the number of issued and outstanding
shares of Common Stock by reason of any stock dividend, stock split, split-up,
recapitalization, merger (other than the Merger) or other change in the
corporate or capital structure of the Company, the number of Shares subject to
this Option and the purchase price per Share shall be appropriately adjusted to
restore the Parent to its rights
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hereunder, including its right to purchase Shares representing approximately
19.9% of the common stock of the Company that is issued and outstanding on the
date hereof (after giving effect to the foregoing adjustments) at an aggregate
purchase price equal to the Purchase Price multiplied by 11,236,702.
(iii) In the event that Company shall enter into an agreement to: (A)
consolidate with or merge into any person, other than Parent or one of its
subsidiaries, and Company shall not be the continuing or surviving corporation
of such consolidation or merger; (B) permit any person, other than Parent or one
of its subsidiaries, to merge into Company and Company shall be the continuing
or surviving corporation, but, in connection with such merger, the
then-outstanding shares of Common Stock shall be changed into or exchanged for
stock or other securities of Company or any other person or cash or any other
property, or the outstanding shares of Common Stock immediately prior to such
merger shall after such merger represent less than 50% of the outstanding shares
and share equivalents of the merged company; or (C) sell or otherwise transfer
all or substantially all of its assets to any person, other than Parent or one
of its subsidiaries, then, and in each such case, the agreement governing such
transaction shall make proper provisions so that upon the consummation of any
such transaction, and upon the terms and conditions set forth herein, Parent
shall receive for each Share of Common Stock with respect to which the Option
has not been exercised in an amount of consideration in the form of and equal to
the per share amount of consideration that would be received by the holder of
one share of Common Stock less the Purchase Price to the extent the Option is
then exercisable in accordance with the terms and conditions hereof (and, in the
event of an election or similar arrangement with respect to the type of
consideration to be received by the holders of Common Stock, subject to the
foregoing, proper provision shall be made so that the holder of the Option would
have the same election or similar rights as would the holder of the number of
shares of Common Stock for which the Option is then exercisable).
(d) At any time the Option is exercisable pursuant to the terms of Section
1(b) hereof, Parent may elect, in lieu of exercising the Option to purchase
Shares provided in Section 1(a) hereof, to send a written notice to the Company
(the "CASH EXERCISE NOTICE") specifying a date not later than 20 business days
and not earlier than 10 business days following the date such notice is given on
which date the Company shall pay to Parent an amount in cash equal to the Spread
(as hereinafter defined) multiplied by all or such portion of the Shares subject
to the Option as Parent shall specify in such Cash Exercise Notice. As used
herein "SPREAD" shall mean the excess, if any, over the Purchase Price of the
higher of (i) if applicable, the highest price per share of Common Stock paid or
proposed to be paid by any person pursuant to a definitive agreement executed by
the Company with respect to an Acquisition Proposal (the "ALTERNATIVE PURCHASE
PRICE") or (ii) the average closing price, for the five trading days ending on
the trading day immediately preceding the date of the Cash Exercise Notice, per
share of Common Stock as reported on the Nasdaq National Market (the "CLOSING
PRICE"). If the Alternative Purchase Price includes any property other than
cash, the Alternative Purchase Price shall be the sum of (i) the fixed cash
amount, if any, included in the Alternative Purchase Price plus (ii) the fair
market value of such other property. If such other property consists of
securities with an existing public trading market, the average of the closing
prices (or the average of the closing bid and asked prices if closing prices are
unavailable) for such securities in their principal public trading market on the
five trading days ending on the trading day immediately preceding the date of
the Cash Exercise Notice shall be deemed to equal the fair market value of such
property. If such other property consists of something other than cash or
securities with an existing public trading market and, as of the payment date
for the Spread, agreement on the value of such other property has not been
reached between the parties hereto, the Alternative Purchase Price shall be
deemed to equal the Closing Price. Upon exercise of its right to receive cash
pursuant to the exercise of the Option, the obligations of the Company to
deliver Shares pursuant to Section 3 shall be terminated with respect to such
number of Shares for which Parent shall have elected to be paid the Spread.
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2. Conditions to Delivery of Shares. The Company's obligation to deliver
Shares upon exercise of the Option is subject only to the fulfillment of the
following conditions:
(i) No preliminary or permanent injunction or other order issued by
any federal or state court of competent jurisdiction in the United States
prohibiting the delivery of the Shares shall be in effect; and
(ii) Any applicable waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the "HSR ACT") shall have expired or
been terminated; and
(iii) All consents, approvals, orders, notifications, filings or
authorizations, the failure of which to make or obtain would have the
effect of making the issuance of Shares to Parent illegal ("OTHER REQUISITE
CONSENTS"), shall have been made or obtained.
3. The Closing.
(a) Any closing hereunder shall take place on the date specified by Parent
in its Stock Exercise Notice or Cash Exercise Notice, as the case may be, at
such reasonable time and place as may be indicated in the Stock Exercise Notice
or the Cash Exercise Notice, as applicable, or at the election of the Company at
10:00 A.M., local time, at the offices of Weil, Gotshal & Manges LLP, 100
Crescent Court, Suite 1300, Dallas, Texas, or, if the conditions set forth in
Section 2(i), 2(ii) or 2(iii) have not then been satisfied, on the second
business day following the satisfaction of such conditions, or at such other
time and place as the parties hereto may agree (the "CLOSING DATE"). On the
Closing Date, (i) in the event of a closing pursuant to Section 1(c) hereof, the
Company will deliver to Parent a certificate or certificates, duly endorsed (or
accompanied by duly executed stock powers), representing the Shares in the
denominations designated by Parent in its Stock Exercise Notice and Parent will
purchase such Shares from the Company at a cash price per Share equal to the
Purchase Price or (ii) in the event of a closing pursuant to Section 1(d)
hereof, the Company will deliver to Parent cash in an amount determined pursuant
to Section 1(d) hereof. Any payment of cash made by Parent to the Company, or by
the Company to Parent, pursuant to this Stock Option Agreement shall be made by
wire transfer of immediately available funds to a bank designated by the party
receiving such funds.
(b) The certificates representing the Shares may bear an appropriate legend
relating to the fact that such Shares have not been registered under the
Securities Act of 1933, as amended (the "SECURITIES ACT").
4. Representations and Warranties of the Company. The Company represents
and warrants to Parent that, except as contemplated by the Merger Agreement, (a)
the Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the requisite corporate
power and authority to enter into and perform this Stock Option Agreement; (b)
the execution and delivery of this Stock Option Agreement by the Company and the
consummation by it of the transactions contemplated hereby have been duly
authorized by the Board of Directors of the Company and this Stock Option
Agreement has been duly and validly executed and delivered by a duly authorized
officer of the Company and will constitute a valid and binding obligation of the
Company subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles; (c) the Company has taken
all necessary corporate action to authorize and reserve the Shares issuable upon
exercise of the Option and the Shares, when issued and delivered by the Company
upon exercise of the Option, will be duly authorized, validly issued, fully paid
and non-assessable and free of preemptive rights; (d) except as otherwise
required by the HSR Act or for the Other Requisite Consents, the execution and
delivery of this Stock Option Agreement by the Company and the consummation by
it of the transactions contemplated hereby do not require the consent, waiver,
approval or authorization of or any filing with any person or public authority
and will not violate, result in a breach of or the acceleration of any
obligation under, or constitute a default under, any provision of any charter or
bylaw, indenture, mortgage, lien, lease, agreement, contract, instrument, order,
law, rule, regulation, judgment, ordinance, or decree, or restriction by which
the Company or any of its subsidiaries or any of their respective properties or
assets is bound,
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except where the failure to obtain such consent, waiver, approval or
authorization or make such filing, or where such breach, acceleration or
default, is not reasonably expected to have a Material Adverse Effect (as
defined in the Merger Agreement) on the Company and its subsidiaries taken as a
whole or on the ability of the Company to consummate the transactions
contemplated hereby; and (e) the board of directors of the Company has taken all
action required so that the restrictions contained in Section 203 of the DGCL
applicable to a "business combination" (as defined in DGCL sec.203) will not
apply to the execution, delivery, or performance of this Agreement or the
consummation of the transactions contemplated by hereby.
5. Representations and Warranties of the Parent. Parent represents and
warrants to the Company that (a) Parent is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the requisite corporate power and authority to enter into and perform this Stock
Option Agreement; (b) the execution and delivery of this Stock Option Agreement
by Parent and the consummation by it of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of
Parent and this Stock Option Agreement has been duly and validly executed and
delivered by a duly authorized officer of Parent and will constitute a valid and
binding obligation of Parent enforceable in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles; and (c) Parent is acquiring the Option and, if
and when it exercises the Option, will be acquiring the Shares issuable upon the
exercise thereof for its own account and not with a view to distribution or
resale in any manner which would be in violation of the Securities Act.
6. Listing of Shares; HSR Act Filings; Governmental Consents. Subject to
applicable law and the rules and regulations of the Nasdaq National Market (or
any other national securities exchange or quotation system on which the Common
Stock is then listed) (as applicable, the "STOCK EXCHANGE"), when the Option
becomes exercisable hereunder, the Company will promptly file an application to
list the Shares on the Stock Exchange and will use all reasonable efforts to
effect all necessary filings by the Company under the HSR Act. Each of the
parties hereto will use all reasonable efforts to obtain consents of all third
parties and governmental authorities (including any Other Requisite Consents),
if any, necessary to the consummation of the transactions contemplated hereby.
7. Registration Rights.
(a) In the event that Parent shall desire to sell any of the Shares within
two years after the purchase of such Shares pursuant hereto, and such sale
requires, in the reasonable opinion of counsel to Parent, registration of such
Shares under the Securities Act, the Company will cooperate with Parent and any
underwriters in registering such Shares for resale, including, without
limitation, promptly filing a registration statement which complies with the
requirements of applicable federal and state securities laws, entering into an
underwriting agreement with such underwriters upon such terms and conditions as
are customarily contained in underwriting agreements with respect to secondary
distributions; provided that the Company shall not be required to have declared
effective more than two registration statements hereunder and shall be entitled
to delay the filing or effectiveness of any registration statement for up to 120
days if the offering would, in the good faith judgment of the Board of Directors
of the Company, require premature disclosure of any material corporate
development or otherwise interfere with or adversely affect any pending or
proposed offering of securities of the Company or any other material transaction
involving the Company. Parent shall use its reasonable efforts to cause, and to
cause any underwriters of any sale or disposition to cause, any sale or
disposition pursuant to such registration statement to be effected on a widely
disseminated basis so that upon consummation thereof no purchaser or transferee
will own beneficially more than 2.0% of the then outstanding voting power of the
Company.
(b) If the Common Stock is registered pursuant to the provisions of this
Section 7, the Company agrees (i) to furnish copies of the registration
statement and the prospectus relating to the Shares covered thereby in such
numbers as Parent may from time to time reasonably request and (ii) if any event
shall occur as a result of which it becomes necessary to amend or supplement any
registration statement or
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prospectus, to prepare and file under the applicable securities laws such
amendments and supplements as may be necessary to keep available for at least 90
days a prospectus covering the Common Stock meeting the requirements of such
securities laws, and to furnish Parent such numbers of copies of the
registration statement and prospectus as amended or supplemented as may
reasonably be requested. Parent will provide information reasonably requested by
the Company for inclusion in any registration statement to be filed pursuant to
this Section 7. The Company shall bear all costs of the registration, including,
but not limited to, all registration and filing fees, printing expenses, and
fees and disbursements of counsel and accountants for the Company, except that
Parent shall pay the fees and disbursements of its counsel, and the underwriting
fees and selling commissions applicable to the Shares sold by Parent. In
connection with any registration pursuant to this Section 7, Parent and the
Company shall provide each other and each underwriter of the offering with
customary representations, warranties and covenants, including indemnification
and contribution. If a requested registration pursuant to this Section 7
involves an underwritten offering, the underwriter or underwriters thereof shall
be a nationally recognized firm or firms selected by the Company, which firm or
firms shall be reasonably satisfactory to Parent.
8. Expenses. Each party hereto shall pay its own expenses incurred in
connection with this Stock Option Agreement.
9. Specific Performance. The Company acknowledges that if the Company fails
to perform any of its obligations under this Stock Option Agreement immediate
and irreparable harm or injury would be caused to Parent for which money damages
would not be an adequate remedy. In such event, the Company agrees that Parent
shall have the right, in addition to any other rights it may have, to specific
performance of this Stock Option Agreement. Accordingly, if Parent should
institute an action or proceeding seeking specific enforcement of the provisions
hereof, the Company hereby waives the claim or defense that Parent has an
adequate remedy at law and hereby agrees not to assert in any such action or
proceeding the claim or defense that such a remedy at law exists. The Company
further agrees to waive any requirements for the securing or posting of any bond
in connection with obtaining any such equitable relief.
10. Profit Limitation.
(a) Notwithstanding any other provision of this Stock Option Agreement, in
no event shall Parent's Total Profit (as hereinafter defined) exceed
$255,090,070 and, if it otherwise would exceed such amount, Parent, at its sole
election, shall either (a) deliver to the Company for cancellation Shares
previously purchased by Parent, (b) pay cash to the Company or (c) undertake any
combination thereof, so that Parent's Total Profit shall not exceed $255,090,070
after taking into account the foregoing actions.
(b) Notwithstanding any other provision of this Stock Option Agreement,
this Option may not be exercised for a number of Shares as would, as of the date
of the Stock Exercise Notice, result in a Notional Total Profit (as defined
below) of more than $255,090,070 and, if exercise of the Option otherwise would
exceed such amount, Parent, at its discretion, may increase the Purchase Price
for that number of Shares set forth in the Stock Exercise Notice so that the
Notional Total Profit shall not exceed $255,090,070; provided, however, that
nothing in this sentence shall restrict any exercise of the Option permitted
hereby on any subsequent date at the Purchase Price set forth in Section 1(a)
hereof.
(c) As used herein, the term "TOTAL PROFIT" shall mean the aggregate amount
(before taxes) of the following: (i) the amount of cash received by Parent
pursuant to Section 1(d), (ii) (x) the cash amounts or the fair market value of
any property received by Parent pursuant to the sale of Shares (or any other
securities into which such Shares are converted or exchanged), less (y) Parent's
Purchase Price for such Shares, and (iii) any fees received pursuant to Section
8.5(b) of the Merger Agreement.
(d) As used herein, the term "NOTIONAL TOTAL PROFIT" with respect to any
number of Shares as to which Parent may propose to exercise this Option shall be
the Total Profit determined as of the date of the Stock Exercise Notice assuming
that this Option were exercised on such date for such number of Shares and
assuming that such Shares, together with all other Shares held by Parent and its
affiliates as of such date, were sold for cash at the closing market price for
the Common Stock as of the close of business on the preceding trading day (less
customary brokerage commissions).
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11. Transfers. The Shares may not be sold, assigned, transferred, or
otherwise disposed of except (i) in an underwritten public offering as provided
in Section 7 hereof or (ii) to any purchaser or transferee who, to Parent's
knowledge, would immediately following such sale, assignment, transfer or
disposal, beneficially own more than 2.0% of the then outstanding voting power
of the Company; provided, however, that Parent shall be permitted to sell any
Shares if such sale is made pursuant to a tender or exchange offer.
12. Notice. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been fully given if
(i) delivered personally; (ii) sent by certified or registered mail, return
receipt requested; (iii) sent by overnight courier for delivery on the next
business day; or (iv) sent by confirmed facsimile, provided that a hard copy of
all such materials is thereafter sent within 24 hours in the manner described in
clauses (i), (ii) or (iii), to the parties at the following addresses or at such
other addresses as shall be specified by the parties by like notice:
If to Parent:
Texas Instruments Incorporated
7839 Churchill Way, M/S 3995
Dallas, Texas 75251
- or -
P.O. Box 650311, M/S 3995
Dallas, Texas 75265
Attention: Charles D. Tobin
Facsimile No.: (972) 917-3804
With copies to:
Texas Instruments Incorporated
12500 TI Boulevard, M/S 8658
Dallas, Texas 75243
- or -
P.O. Box 660199, M/S 8658
Dallas, Texas 75266
Attention: Joseph F. Hubach, Esq.
Facsimile No.: (972) 480-5061
and
Weil, Gotshal & Manges LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201
Attention: R. Scott Cohen
Facsimile No.: (214) 746-7777
If to the Company:
Burr-Brown Corporation
6730 South Tucson Boulevard
Tucson, Arizona 85706
Attention: Syrus P. Madavi
Facsimile No.: (520) 746-7279
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With a copy to:
Snell & Wilmer, L.L.P.
One Arizona Center
Phoenix, Arizona 85004-2202
Attention: Steven D. Pidgeon, Esq.
Facsimile No.: (602) 382-6070
Notices provided in accordance with this Section 12 shall be deemed
delivered (i) on the date of personal delivery, (ii) four business days after
deposit in the mail, (ii) one business day after delivery to an overnight
courier, or (iv) on the date of confirmation of the facsimile transmission, as
the case may be.
13. Parties in Interest. This Stock Option Agreement shall inure to the
benefit of and be binding upon the parties named herein and their respective
successors and permitted assigns; provided, however, that such successor in
interest or permitted assigns shall agree to be bound by the provisions of this
Stock Option Agreement. Nothing in this Stock Option Agreement, express or
implied, is intended to confer upon any person other than the Company or Parent,
or their successors or assigns, any rights or remedies under or by reason of
this Stock Option Agreement.
14. Entire Agreement; Amendments. This Stock Option Agreement, together
with the Merger Agreement and the other documents referred to therein, contains
the entire agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior and contemporaneous agreements and
understandings, oral or written, with respect to such transactions. This Stock
Option Agreement may not be changed, amended or modified orally, but may be
changed only by an agreement in writing signed by the party against whom any
waiver, change, amendment, modification or discharge may be sought.
15. Assignment. No party to this Stock Option Agreement may assign any of
its rights or obligations under this Stock Option Agreement without the prior
written consent of the other party hereto.
16. Headings. The section headings herein are for convenience only and
shall not affect the construction of this Stock Option Agreement.
17. Counterparts. This Stock Option Agreement may be executed in any number
of counterparts, each of which, when executed, shall be deemed to be an original
and all of which together shall constitute one and the same document.
18. Governing Law. This Stock Option Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without giving
effect to the choice of law principles thereof.
19. Severability. If any term, provision, covenant or restriction of this
Stock Option Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Stock Option Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Parent and the Company have caused this Stock
Option Agreement to be duly executed and delivered on the day and year first
above written.
TEXAS INSTRUMENTS INCORPORATED
By: /s/ M. SAMUEL SELF
----------------------------------
Name: M. Samuel Self
Title: Senior Vice President
and Controller
BURR-BROWN CORPORATION
By: /s/ SYRUS P. MADAVI
----------------------------------
Name: Syrus P. Madavi
Title: Chairman, President and
CEO
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ANNEX D
[SECONDARY HEAD]
CONFIDENTIAL
Board of Directors
Burr-Brown Corporation
6730 South Tucson Boulevard
Tucson, Arizona 85706
Dear Members of the Board:
We understand that Burr-Brown Corporation ("Burr-Brown" or "Company"),
Texas Instruments Incorporated ("TI" or "Parent") and Burma Acquisition Corp., a
wholly-owned subsidiary of Parent
[BROADVIEW SIDE LETTERHEAD]
June 21, 2000
("Merger Sub"), propose to enter into an Agreement and Plan of Merger (the
"Agreement") pursuant to which, through the Merger of Merger Sub with and into
the Company (the "Merger"), each outstanding share of Burr-Brown common stock
including the associated rights ("Company Common Stock") will be converted into
the right to receive 1.3 shares (the "Exchange Ratio") of the common stock of
Parent ("TI Common Stock"). The Merger is intended to qualify as a tax-free
reorganization within the meaning of Section 368(a) of the United States
Internal Revenue Code of 1986, as amended, and to be accounted for as a pooling
of interests pursuant to Opinion No. 16 of the Accounting Principles Board. The
terms and conditions of the above described Merger are more fully detailed in
the Agreement.
You have requested our opinion as to whether the Exchange Ratio is fair,
from a financial point of view, to Burr-Brown stockholders.
Broadview International LLC ("Broadview") focuses on providing merger and
acquisition advisory services to information technology ("IT"), communications
and media companies. In this capacity, we are continually engaged in valuing
such businesses, and we maintain an extensive database of IT, communications and
media mergers and acquisitions for comparative purposes. We are currently acting
as financial advisor to Burr-Brown's Board of Directors and will receive a fee
from Burr-Brown upon the successful conclusion of the Merger.
In rendering our opinion, we have, among other things:
1.) reviewed the terms of the Agreement in the form of the draft furnished
to us by Parent's legal counsel on June 20, 2000 (which, for the
purposes of this opinion, we have assumed, with your permission, to be
identical in all material respects to the agreement to be executed as
of the date of this opinion);
2.) reviewed Burr-Brown's annual report on Form 10-K for the fiscal year
ended December 31, 1999, including the audited financial statements
included therein, and Burr-Brown's quarterly report on Form 10-Q for
the period ended April 1, 2000, including the unaudited financial
statements included therein;
3.) reviewed certain internal financial and operating information,
including quarterly projections through December 31, 2000, relating to
Burr-Brown, prepared and furnished to us by Burr-Brown management;
[BROADVIEW FOOTING]
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[SECONDARY HEAD]
4.) participated in discussions with Burr-Brown management concerning the
operations, business strategy, current financial performance and
prospects for Burr-Brown;
5.) discussed with Burr-Brown management its view of the strategic
rationale for the Merger;
6.) reviewed the recent reported closing prices and trading activity for
Company Common Stock;
7.) compared certain aspects of the financial performance of Burr-Brown
with public companies we deemed comparable;
8.) analyzed available information, both public and private, concerning
other mergers and acquisitions we believe to be comparable in whole or
in part to the Merger;
9.) reviewed recent equity research analyst reports covering Burr-Brown;
10.) reviewed Texas Instruments' annual report on Form 10-K for the fiscal
year ended December 31, 1999, including the audited financial
statements included therein, and Texas Instruments' quarterly report
on Form 10-Q for the period ended March 31, 2000;
11.) participated in discussions with Texas Instruments management
concerning the operations, business strategy, financial performance
and prospects for Texas Instruments;
12.) reviewed the recent reported closing prices and trading activity for
Texas Instruments Common Stock;
13.) discussed with Texas Instruments management its view of the strategic
rationale for the Merger;
14.) compared certain aspects of the financial performance of Texas
Instruments with public companies we deemed comparable;
15.) considered the total number of shares of Texas Instruments Common
Stock outstanding and the average weekly trading volume of Texas
Instruments Common Stock;
16.) reviewed recent equity analyst reports covering Texas Instruments;
17.) analyzed the anticipated effect of the Merger on the future financial
performance of the consolidated entity;
18.) assisted in negotiations and discussions related to the Merger among
Burr-Brown, Texas Instruments and their respective financial and legal
advisors; and
19.) conducted other financial studies, analyses and investigations as we
deemed appropriate for purposes of this opinion.
In rendering our opinion, we have relied, without independent verification,
on the accuracy and completeness of all the financial and other information
(including without limitation the representations and warranties contained in
the Agreement) that was publicly available or furnished to us by Burr-Brown,
Texas Instruments or Texas Instruments' advisors. With respect to the financial
projections examined by us, we have assumed that they were reasonably prepared
and reflected the best available estimates and good faith judgments of the
management of Burr-Brown as to the future performance of Burr-Brown. We have
neither made nor obtained an independent appraisal or valuation of any of
Burr-Brown's assets.
Based upon and subject to the foregoing, we are of the opinion that the
Exchange Ratio is fair, from a financial point of view, to Burr-Brown
stockholders.
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[SECONDARY HEAD]
For purposes of this opinion, we have assumed that neither Burr-Brown nor
Texas Instruments is currently involved in any material transaction other than
the Merger, other publicly announced transactions and those activities
undertaken in the ordinary course of conducting their respective businesses. Our
opinion is necessarily based upon market, economic, financial and other
conditions as they exist and can be evaluated as of the date of this opinion,
and any change in such conditions would require a reevaluation of this opinion.
We express no opinion as to the price at which Texas Instruments Common Stock
will trade at any time.
This opinion speaks only as of the date hereof. It is understood that this
opinion is for the information of the Board of Directors of Burr-Brown in
connection with its consideration of the Merger and does not constitute a
recommendation to any Burr-Brown stockholder as to how such stockholder should
vote on the Merger. This opinion may not be published or referred to, in whole
or part, without our prior written permission, which shall not be unreasonably
withheld. Broadview hereby consents to references to and the inclusion of this
opinion in its entirety in the Prospectus and Proxy Statement to be distributed
to Burr-Brown stockholders in connection with the Merger.
Sincerely,
[Broadview International LLC]
Broadview International LLC
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<PAGE> 143
BURR-BROWN CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
<TABLE>
<S> <C> <C> <C> <C>
[ ]
1. Approve and adopt the Agreement and Plan of Merger, dated as of June
21, 2000, by and among Texas Instruments Incorporated, a Delaware
corporation ("Texas Instruments"), Burma Acquisition Corp., a Delaware For Against Abstain 2. To vote and otherwise
corporation and a wholly owned subsidiary of Texas Instruments ("Burma [ ] [ ] [ ] represent the undersigned
Acquisition"), and Burr-Brown Corporation, a Delaware corporation ("Burr- on any other matter that may
Brown"), and approve the related merger pursuant to which, among other properly come before the
things, (i) Burma Acquisition will be merged with and into Burr-Brown, with Special Meeting of the
Burr-Brown surviving the merger, and (ii) each share of Burr-Brown common Stockholders or any
stock, $.01 par value per share, issued and outstanding immediately prior adjournment or postponement
to the effective time of the merger will be converted into the right to thereof.
receive 1.3 shares of common stock, $1.00 par value per share, of Texas
Instruments, other than fractional shares which will be paid in cash. MARK HERE FOR ADDRESS
CHANGE AND NOTE AT LEFT [ ]
--------------------------------
Signature Date
--------------------------------
Signature Date
Please sign exactly as your name
or names appear hereon. If shares
are held jointly, each holder
should sign. When signing in a
fiduciary or representative
capacity, please give full title.
If the proxy is authorized by
a corporation, it should be
executed in the full corporate
name by a duly authorized
officer. If a partnership,
please sign in the partnership
name by an authorized person.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO DIRECTION IS INDICATED, THIS PLEASE COMPLETE, DATE AND SIGN
PROXY WILL BE VOTED FOR THE PROPOSAL STATED ABOVE. THE BOARD OF DIRECTORS THIS PROXY AND RETURN IT
RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL STATED ABOVE. PROMPTLY IN THE ENCLOSED
ENVELOPE WHETHER OR NOT YOU PLAN
TO ATTEND THE SPECIAL MEETING
ON AUGUST 24, 2000. IF YOU
ATTEND THE SPECIAL MEETING,
YOU MAY VOTE IN PERSON IF YOU
WISH, EVEN IF YOU HAVE PREVIOUSLY
RETURNED YOUR PROXY.
</TABLE>
-------------------------------------------------------------------------------
o FOLD AND DETACH HERE o
YOUR VOTE IS IMPORTANT.
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
5370--BURR-BROWN CORPORATION
<PAGE> 144
PROXY PROXY
BURR-BROWN CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF STOCKHOLDERS
ON AUGUST 24, 2000
The undersigned stockholder of Burr-Brown Corporation, a Delaware Corporation
(the "Company"), hereby appoints Syrus P. Madavi, J. Scott Blouin and Bradley
S. Paulson, or any of them, as proxies for the undersigned with full power of
substitution and resubstitution in each of them, to attend the Special Meeting
of the Stockholders of the Company to be held on August 24, 2000, at 9:00 a.m.,
local time, and any postponement or adjournment thereof, at the offices of the
Company at 6730 S. Tucson Boulevard, Tucson, Arizona 85706, to cast on behalf
of the undersigned all votes that the undersigned is entitled to cast at such
meeting and otherwise to represent the undersigned at the meeting with all the
powers possessed by the undersigned if personally present at the meeting. The
undersigned hereby acknowledges receipt of the accompanying Notice of Special
Meeting of Stockholders and Proxy Statement/Prospectus and revokes any proxy
heretofore given with respect to such meeting.
The votes entitled to be cast by the undersigned will be cast as instructed
below. If this Proxy is executed but no instruction is given, the votes
entitled to be cast by the undersigned will be cast "for" the proposal as
described in the Proxy Statement/Prospectus and in the discretion of the Proxy
holder on any other matter that may properly come before the meeting or any
adjournment or postponement thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
SEE REVERSE SEE REVERSE
SIDE SIDE
Continued and to be signed on reverse side.
<PAGE> 145
PART II
INFORMATION NOT REQUIRED IN PROXY STATEMENT/PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The General Corporation Law of the State of Delaware, at Section 145,
provides, in pertinent part, that a corporation may indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, other than an action by or in the right of the corporation, by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as the
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful. In
addition, the indemnification of expenses, including attorneys' fees, is allowed
in derivative actions, except no indemnification is allowed in respect to any
claim, issue or matter as to which any such person has been adjudged to be
liable to the corporation, unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought decides that
indemnification is proper. To the extent that any such person succeeds on the
merits or otherwise, he shall be indemnified against expenses, including
attorneys' fees, actually and reasonably incurred by him in connection
therewith. The determination that the person to be indemnified met the
applicable standard of conduct, if not made by a court, is made by the directors
of the corporation by a majority vote of the directors not party to such an
action, suit or proceeding even though less than a quorum, by a committee of
such directors designated by majority vote of such directors even though less
than a quorum, or, if there are no such directors, or if such directors so
direct, by independent legal counsel in a written opinion or by the
stockholders. Expenses may be paid in advance upon the receipt, in the case of
officers and directors, of undertakings to repay such amount if it shall
ultimately be determined that the person is not entitled to be indemnified by
the corporation as authorized in this section. A corporation may purchase
indemnity insurance.
The above described indemnification and advancement of expenses, unless
otherwise provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and inure to the benefit of
such person's heirs, executors and administrators. Article VI, Section 2 of the
Texas Instruments' Bylaws provides that Texas Instruments shall indemnify its
officers and directors for such expenses, judgments, fines and amounts paid in
settlement to the full extent permitted by the laws of the State of Delaware.
Section 102(b)(7) of the General Corporation Law of the State of Delaware, as
amended, permits a corporation to provide in its certificate of incorporation
that a director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability
- for any breach of the director's duty of loyalty to the corporation or
its stockholders,
- for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law,
- under Section 174 of the General Corporation Law of the State of
Delaware, or
- for any transaction from which the director derived an improper personal
benefit.
Article Seventh of Texas Instruments' Restated Certificate of Incorporation
contains such a provision.
II-1
<PAGE> 146
Under insurance policies of Texas Instruments, directors and officers of
Texas Instruments may be indemnified against certain losses arising from certain
claims, including claims under the Securities Act of 1933, which may be made
against such persons by reason of their being such directors or officers.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
EXHIBIT LIST
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
2 -- Agreement and Plan of Merger, dated as of June 21, 2000,
by and among Texas Instruments, Burr-Brown and Burma
Acquisition Corp.(1)
3(a) -- Restated Certificate of Incorporation of Texas
Instruments.(2)
3(b) -- Certificate of Amendment to Restated Certificate of
Incorporation of Texas Instruments.(2)
3(c) -- Certificate of Amendment to Restated Certificate of
Incorporation of Texas Instruments.(2)
3(d) -- Certificate of Amendment to Restated Certificate of
Incorporation of Texas Instruments.(3)
3(e) -- Certificate of Ownership and Merger Merging Texas
Instruments Automation Controls, Inc. into Texas
Instruments.(2)
3(f) -- Certificate of Elimination of Designations of Preferred
Stock of Texas Instruments.(2)
3(g) -- Certificate of Ownership and Merger Merging Tiburon
Systems, Inc. into Texas Instruments.(4)
3(h) -- Certificate of Ownership and Merger Merging Tartan, Inc.
into Texas Instruments.(4)
3(i) -- Certificate of Designation relating to Texas Instruments'
Participating Cumulative Preferred Stock.(5)
3(j) -- Certificate of Elimination of Designation of Preferred
Stock of Texas Instruments.(6)
3(k) -- Certificate of Ownership and Merger Merging Intersect
Technologies, Inc. into Texas Instruments.(7)
3(l) -- Certificate of Ownership and Merger Merging Soft
Warehouse, Inc. into Texas Instruments.(7)
3(m) -- Certificate of Ownership and Merger Merging Silicon
Systems, Inc. into Texas Instruments.(7)
3(n) -- Certificate of Amendment to Restated Certificate of
Incorporation of Texas Instruments.(15)
3(o) -- Bylaws of Texas Instruments.(7)
4(a)(i) -- Rights Agreement, dated as of June 18, 1998, between
Texas Instruments and Harris Trust and Savings Bank as
Rights Agent, which includes as Exhibit B the form of
Rights Certificate.(8)
4(a)(ii) -- Amendment, dated as of September 18, 1998, to the Rights
Agreement.(9)
4(b) -- Texas Instruments agrees to provide the Commission, upon
request, copies of instruments defining the rights of
Holders of long-term debt of Texas Instruments and its
subsidiaries.
5 -- Opinion of Weil, Gotshal & Manges LLP.*
</TABLE>
II-2
<PAGE> 147
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
8(a) -- Opinion of Weil, Gotshal & Manges LLP regarding certain
tax matters.*
8(b) -- Opinion of Snell & Wilmer L.L.P. regarding certain tax
matters.*
10(a)(i) -- Amended and Restated TI Deferred Compensation Plan.(7)
10(a)(ii) -- First Amendment to Restated TI Deferred Compensation
Plan.(7)
10(a)(iii) -- Second Amendment to Restated TI Deferred Compensation
Plan.(7)
10(b)(i) -- TI Employees Supplemental Pension Plan.(7)
10(b)(ii) -- First Amendment to TI Supplemental Pension Plan.(7)
10(c) -- Texas Instruments Long-term Incentive Plan.(2)
10(d) -- Texas Instruments 1996 Long-term Incentive Plan.(3)
10(e) -- Texas Instruments 2000 Long-term Incentive Plan.(15)
10(f) -- Texas Instruments Executive Officer Performance Plan.(10)
10(g) -- Texas Instruments Restricted Stock Unit Plan for
Directors.(11)
10(h) -- Texas Instruments Directors Deferred Compensation
Plan.(11)
10(i) -- Texas Instruments Stock Option Plan for Non-Employee
Directors.(6)
10(j) -- Asset Purchase Agreement dated as of January 4, 1997
between Texas Instruments and Raytheon Company (exhibits
and schedules omitted).(12)
10(k) -- Acquisition Agreement dated as of June 18, 1998 between
Texas Instruments and Micron Technology, Inc. (exhibit C
omitted).(13)
10(l) -- Second Amendment to Acquisition Agreement dated as of
September 30, 1998 between Texas Instruments and Micron
Technology, Inc.(14)
10(m) -- Securities Rights and Restrictions Agreement dated as of
September 30, 1998 between Texas Instruments and Micron
Technology, Inc.(6)
10(n) -- Voting Agreement, dated as of June 21, 2000, by and among
Texas Instruments, Burr-Brown, Burma Acquisition and the
stockholders party thereto.*
10(o) -- Stock Option Agreement, dated as of June 21, 2000, by and
between Texas Instruments and Burr-Brown.(15)
23(a) -- Consent of Ernst & Young LLP.*
23(b) -- Consent of Ernst & Young LLP.*
23(c) -- Consent of Weil, Gotshal & Manges LLP (included in
exhibits 5 and 8(a)).
23(d) -- Consent of Snell & Wilmer L.L.P. (included in exhibit
8(b)).
23(e) -- Consent of Broadview International LLC (included in the
opinion of Broadview International LLC attached as Annex
D to the proxy statement/prospectus).
24 -- Powers of Attorney.(15)
</TABLE>
---------------
* Filed herewith.
(1) Incorporated by reference to the Exhibits filed with Burr-Brown
Corporation's Current Report on Form 8-K dated June 22, 2000.
(2) Incorporated by reference to the Exhibits filed with Texas Instruments'
Annual Report on Form 10-K for 1993.
(3) Incorporated by reference to the Exhibits filed with Texas Instruments'
Quarterly Report on Form 10-Q for the quarter ended June 30, 1996.
(4) Incorporated by reference to the Exhibits filed with Texas Instruments'
Registration Statement No. 333-41919 on Form S-8 filed December 10, 1997.
II-3
<PAGE> 148
(5) Incorporated by reference to the Exhibits filed with Texas Instruments'
Quarterly Report on Form 10-Q for the quarter ended September 30, 1998.
(6) Incorporated by reference to the Exhibits filed with Texas Instruments'
Annual Report on Form 10-K for 1998.
(7) Incorporated by reference to the Exhibits filed with Texas Instruments
Annual Report on Form 10-K for 1999.
(8) Incorporated by reference to the Exhibits filed with Texas Instruments'
Registration Statement on Form 8-A dated June 23, 1998.
(9) Incorporated by reference to the Exhibit filed with Texas Instruments'
Amendment No. 1 to Registration Statement on Form 8-A, dated September 23,
1998.
(10) Incorporated by reference to the Exhibits filed with Texas Instruments'
Quarterly Report on Form 10-Q for the quarter ended March 31, 1997.
(11) Incorporated by reference to the Exhibits filed with Texas Instruments'
Quarterly Report on Form 10-Q for the quarter ended March 31, 1998.
(12) Incorporated by reference to the Exhibits filed with Texas Instruments'
Current Report on Form 8-K dated January 4, 1997.
(13) Incorporated by reference to the Exhibits filed with Texas Instruments'
Current Report on Form 8-K dated June 18, 1998.
(14) Incorporated by reference to the Exhibits filed with Texas Instruments'
Current Report on Form 8-K dated October 15, 1998.
(15) Incorporated by reference to the Exhibits filed with Texas Instruments'
Registration Statement on Form S-4 dated July 7, 2000.
ITEM 22. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(b) (1) The undersigned registrant hereby undertakes as follows: that prior
to any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(2) The registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (1) immediately preceding, or (ii) that purports to
meet the requirements of Section 10(a)(3) of the Securities Act of 1933 and
is used in connection with an offering of securities subject to Rule 415,
will be filed as a part of an amendment to the registration statement and
will not be used until such amendment is effective, and that, for purposes
of determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the provisions described under Item 20 above, or
otherwise, the registrant has been informed that in the opinion of the
Securities
II-4
<PAGE> 149
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expense incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted against the registrant by such director, officer
or controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
(d) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(e) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-5
<PAGE> 150
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in Dallas, Texas, on
July 20, 2000.
TEXAS INSTRUMENTS INCORPORATED
By: /s/ WILLIAM A. AYLESWORTH
----------------------------------
William A. Aylesworth
Senior Vice President, Treasurer
and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Director July 20, 2000
-----------------------------------------------------
James R. Adams
* Director July 20, 2000
-----------------------------------------------------
David L. Boren
* Director July 20, 2000
-----------------------------------------------------
James B. Busey IV
* Director July 20, 2000
-----------------------------------------------------
Daniel A. Carp
* Chairman of the Board; President; July 20, 2000
----------------------------------------------------- Chief Executive Officer; Director
Thomas J. Engibous
* Director July 20, 2000
-----------------------------------------------------
Gerald W. Fronterhouse
* Director July 20, 2000
-----------------------------------------------------
David R. Goode
* Director July 20, 2000
-----------------------------------------------------
Wayne R. Sanders
* Director July 20, 2000
-----------------------------------------------------
Ruth J. Simmons
* Director July 20, 2000
-----------------------------------------------------
Clayton K. Yeutter
</TABLE>
II-6
<PAGE> 151
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Senior Vice President; Treasurer; July 20, 2000
----------------------------------------------------- Chief Financial Officer
William A. Aylesworth
* Senior Vice President; Controller; July 20, 2000
----------------------------------------------------- Chief Accounting Officer
M. Samuel Self
*By: /s/ M. SAMUEL SELF
------------------------------------------------
M. Samuel Self,
Attorney-in-Fact
</TABLE>
II-7
<PAGE> 152
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
2 -- Agreement and Plan of Merger, dated as of June 21, 2000,
by and among Texas Instruments, Burr-Brown and Burma
Acquisition Corp.(1)
3(a) -- Restated Certificate of Incorporation of Texas
Instruments.(2)
3(b) -- Certificate of Amendment to Restated Certificate of
Incorporation of Texas Instruments.(2)
3(c) -- Certificate of Amendment to Restated Certificate of
Incorporation of Texas Instruments.(2)
3(d) -- Certificate of Amendment to Restated Certificate of
Incorporation of Texas Instruments.(3)
3(e) -- Certificate of Ownership and Merger Merging Texas
Instruments Automation Controls, Inc. into Texas
Instruments.(2)
3(f) -- Certificate of Elimination of Designations of Preferred
Stock of Texas Instruments.(2)
3(g) -- Certificate of Ownership and Merger Merging Tiburon
Systems, Inc. into Texas Instruments.(4)
3(h) -- Certificate of Ownership and Merger Merging Tartan, Inc.
into Texas Instruments.(4)
3(i) -- Certificate of Designation relating to Texas Instruments'
Participating Cumulative Preferred Stock.(5)
3(j) -- Certificate of Elimination of Designation of Preferred
Stock of Texas Instruments.(6)
3(k) -- Certificate of Ownership and Merger Merging Intersect
Technologies, Inc. into Texas Instruments.(7)
3(l) -- Certificate of Ownership and Merger Merging Soft
Warehouse, Inc. into Texas Instruments.(7)
3(m) -- Certificate of Ownership and Merger Merging Silicon
Systems, Inc. into Texas Instruments.(7)
3(n) -- Certificate of Amendment to Restated Certificate of
Incorporation of Texas Instruments.(15)
3(o) -- Bylaws of Texas Instruments.(7)
4(a)(i) -- Rights Agreement, dated as of June 18, 1998, between
Texas Instruments and Harris Trust and Savings Bank as
Rights Agent, which includes as Exhibit B the form of
Rights Certificate.(8)
4(a)(ii) -- Amendment, dated as of September 18, 1998, to the Rights
Agreement.(9)
4(b) -- Texas Instruments agrees to provide the Commission, upon
request, copies of instruments defining the rights of
Holders of long-term debt of Texas Instruments and its
subsidiaries.
5 -- Opinion of Weil, Gotshal & Manges LLP.*
8(a) -- Opinion of Weil, Gotshal & Manges LLP regarding certain
tax matters.*
8(b) -- Opinion of Snell & Wilmer L.L.P. regarding certain tax
matters.*
10(a)(i) -- Amended and Restated TI Deferred Compensation Plan.(7)
10(a)(ii) -- First Amendment to Restated TI Deferred Compensation
Plan.(7)
</TABLE>
II-8
<PAGE> 153
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
10(a)(iii) -- Second Amendment to Restated TI Deferred Compensation
Plan.(7)
10(b)(i) -- TI Employees Supplemental Pension Plan.(7)
10(b)(ii) -- First Amendment to TI Supplemental Pension Plan.(7)
10(c) -- Texas Instruments Long-term Incentive Plan.(2)
10(d) -- Texas Instruments 1996 Long-term Incentive Plan.(3)
10(e) -- Texas Instruments 2000 Long-term Incentive Plan.(15)
10(f) -- Texas Instruments Executive Officer Performance Plan.(10)
10(g) -- Texas Instruments Restricted Stock Unit Plan for
Directors.(11)
10(h) -- Texas Instruments Directors Deferred Compensation
Plan.(11)
10(i) -- Texas Instruments Stock Option Plan for Non-Employee
Directors.(6)
10(j) -- Asset Purchase Agreement dated as of January 4, 1997
between Texas Instruments and Raytheon Company (exhibits
and schedules omitted).(12)
10(k) -- Acquisition Agreement dated as of June 18, 1998 between
Texas Instruments and Micron Technology, Inc. (exhibit C
omitted).(13)
10(l) -- Second Amendment to Acquisition Agreement dated as of
September 30, 1998 between Texas Instruments and Micron
Technology, Inc.(14)
10(m) -- Securities Rights and Restrictions Agreement dated as of
September 30, 1998 between Texas Instruments and Micron
Technology, Inc.(6)
10(n) -- Voting Agreement, dated as of June 21, 2000, by and among
Texas Instruments, Burr-Brown, Burma Acquisition and the
stockholders party thereto.*
10(o) -- Stock Option Agreement, dated as of June 21, 2000, by and
between Texas Instruments and Burr-Brown.(15)
23(a) -- Consent of Ernst & Young LLP.*
23(b) -- Consent of Ernst & Young LLP.*
23(c) -- Consent of Weil, Gotshal & Manges LLP (included in
exhibits 5 and 8(a)).
23(d) -- Consent of Snell & Wilmer L.L.P. (included in exhibit
8(b)).
23(e) -- Consent of Broadview International LLC (included in the
opinion of Broadview International LLC attached as Annex
D to the proxy statement/prospectus).
24 -- Powers of Attorney.(15)
</TABLE>
---------------
* Filed herewith.
(1) Incorporated by reference to the Exhibits filed with Burr-Brown
Corporation's Current Report on Form 8-K dated June 22, 2000.
(2) Incorporated by reference to the Exhibits filed with Texas Instruments'
Annual Report on Form 10-K for 1993.
(3) Incorporated by reference to the Exhibits filed with Texas Instruments'
Quarterly Report on Form 10-Q for the quarter ended June 30, 1996.
(4) Incorporated by reference to the Exhibits filed with Texas Instruments'
Registration Statement No. 333-41919 on Form S-8 filed December 10, 1997.
(5) Incorporated by reference to the Exhibits filed with Texas Instruments'
Quarterly Report on Form 10-Q for the quarter ended September 30, 1998.
(6) Incorporated by reference to the Exhibits filed with Texas Instruments'
Annual Report on Form 10-K for 1998.
II-9
<PAGE> 154
(7) Incorporated by reference to the Exhibits filed with Texas Instruments
Annual Report on Form 10-K for 1999.
(8) Incorporated by reference to the Exhibits filed with Texas Instruments'
Registration Statement on Form 8-A dated June 23, 1998.
(9) Incorporated by reference to the Exhibit filed with Texas Instruments'
Amendment No. 1 to Registration Statement on Form 8-A, dated September 23,
1998.
(10) Incorporated by reference to the Exhibits filed with Texas Instruments'
Quarterly Report on Form 10-Q for the quarter ended March 31, 1997.
(11) Incorporated by reference to the Exhibits filed with Texas Instruments'
Quarterly Report on Form 10-Q for the quarter ended March 31, 1998.
(12) Incorporated by reference to the Exhibits filed with Texas Instruments'
Current Report on Form 8-K dated January 4, 1997.
(13) Incorporated by reference to the Exhibits filed with Texas Instruments'
Current Report on Form 8-K dated June 18, 1998.
(14) Incorporated by reference to the Exhibits filed with Texas Instruments'
Current Report on Form 8-K dated October 15, 1998.
(15) Incorporated by reference to the Exhibits filed with Texas Instruments'
Registration Statement on Form S-4 dated July 7, 2000.
II-10
