1
EXHIBIT (a)(1)(A)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
XIRCOM, INC.
AT
$25 NET PER SHARE
BY
ESR ACQUISITION CORPORATION
A DIRECT WHOLLY-OWNED SUBSIDIARY
OF
INTEL CORPORATION
THE OFFER (AS DEFINED HEREIN) AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00
P.M., NEW YORK CITY TIME, ON FRIDAY, MARCH 2, 2001 (THE "EXPIRATION DATE"),
UNLESS THE OFFER IS EXTENDED. SHARES (AS DEFINED HEREIN) WHICH ARE TENDERED
PURSUANT TO THE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER, DATED
AS OF JANUARY 15, 2001 (THE "MERGER AGREEMENT"), BY AND AMONG INTEL CORPORATION,
A DELAWARE CORPORATION ("INTEL"), ESR ACQUISITION CORPORATION, A DELAWARE
CORPORATION AND DIRECT WHOLLY-OWNED SUBSIDIARY OF INTEL ("PURCHASER"), AND
XIRCOM, INC., A CALIFORNIA CORPORATION (THE "COMPANY"). THE OFFER IS CONDITIONED
UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY TENDERED BY THE EXPIRATION
DATE AND NOT WITHDRAWN, OR OTHERWISE BENEFICIALLY OWNED BY INTEL OR PURCHASER, A
NUMBER OF SHARES OF THE COMMON STOCK OF THE COMPANY REPRESENTING AT LEAST A
MAJORITY OF THE SHARES ISSUED AND OUTSTANDING ON A FULLY-DILUTED BASIS
(INCLUDING FOR PURPOSES OF SUCH CALCULATION ALL SHARES ISSUABLE UPON EXERCISE OF
ALL VESTED COMPANY STOCK OPTIONS AND UNVESTED COMPANY STOCK OPTIONS THAT VEST,
OR UPON CONSUMMATION OF THE OFFER WILL VEST, PRIOR TO THE FINAL DATE (AS DEFINED
HEREIN)), (2) THE SATISFACTION OR WAIVER OF CERTAIN CONDITIONS TO THE
OBLIGATIONS OF PURCHASER AND THE COMPANY TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED BY THE MERGER AGREEMENT, INCLUDING RECEIPT BY PURCHASER AND THE
COMPANY OF CERTAIN GOVERNMENTAL AND REGULATORY APPROVALS, AND (3) COMPLIANCE BY
THE COMPANY WITH CERTAIN FINANCIAL AND BUSINESS CRITERIA.
AT A MEETING DULY CALLED AND HELD ON JANUARY 14, 2001, THE BOARD OF
DIRECTORS OF THE COMPANY, SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE
MERGER AGREEMENT, UNANIMOUSLY (1) DETERMINED THAT THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER (AS
DEFINED HEREIN), ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY AND ITS
SHAREHOLDERS; (2) APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER; AND (3) RESOLVED TO
RECOMMEND THAT THE SHAREHOLDERS OF THE COMPANY ACCEPT THE OFFER, TENDER THEIR
SHARES OF COMMON STOCK, PAR VALUE $0.001 PER SHARE (THE "SHARES"), OF THE
COMPANY THEREUNDER TO PURCHASER AND APPROVE AND ADOPT THE MERGER AGREEMENT AND
THE MERGER.
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IMPORTANT
Any shareholder of the Company desiring to tender all or any portion of his
Shares should either (1) complete and sign the Letter of Transmittal (as defined
herein), or a facsimile copy thereof, in accordance with the instructions in the
Letter of Transmittal, have such shareholder's signature thereon guaranteed if
required by the instructions to the Letter of Transmittal, mail or deliver it
and any other required documents to the Depositary (as defined herein) and
either deliver the certificates for such Shares to the Depositary along with the
Letter of Transmittal or tender such Shares pursuant to the procedure for
book-entry transfer set forth in this Offer to Purchase under the section
entitled "The Tender Offer -- 2. Procedure for Accepting the Offer and Tendering
Shares" or (2) request such shareholder's broker, dealer, commercial bank, trust
company or other nominee to effect the transaction for the shareholder.
Shareholders whose Shares are registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact such broker,
dealer, commercial bank, trust company or other nominee if they desire to tender
their Shares.
Shareholders of the Company who desire to tender Shares and whose
certificates for Shares are not immediately available, or who cannot comply with
the procedures for book-entry transfer described in this Offer to Purchase on a
timely basis, or who cannot deliver all required documents to the Depositary
prior to the Expiration Date, may tender such Shares by following the procedure
for guaranteed delivery set forth in this Offer to Purchase under the section
entitled "The Tender Offer -- 2. Procedure for Accepting the Offer and Tendering
Shares."
Questions and requests for assistance, or for additional copies of this
Offer to Purchase, the Letter of Transmittal or other tender offer materials,
may be directed to the Information Agent (as defined herein) at its address and
telephone numbers set forth on the back cover of this Offer to Purchase. Holders
of Shares may also contact brokers, dealers, commercial banks or trust companies
for assistance concerning the Offer.
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THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE FAIRNESS OR MERITS OF THIS TRANSACTION OR UPON THE ACCURACY OR ADEQUACY OF
THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY
IS UNLAWFUL.
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The Information Agent for the Offer is:
D.F. KING & CO., INC.
The date of this Offer to Purchase is January 29, 2001
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TABLE OF CONTENTS
PAGE
----
SUMMARY TERM SHEET.......................................... ii
INTRODUCTION................................................ 1
THE TENDER OFFER............................................ 4
1. Terms of the Offer; Expiration Date..................... 4
2. Procedure for Accepting the Offer and Tendering
Shares................................................... 5
3. Withdrawal Rights....................................... 8
4. Acceptance for Payment and Payment for Shares........... 8
5. Certain U.S. Federal Income Tax Consequences of the
Offer and Merger......................................... 9
6. Price Range of the Shares............................... 10
7. Certain Information Concerning the Company.............. 11
8. Certain Information Concerning Intel and Purchaser...... 16
9. Source and Amount of Funds.............................. 17
10. Certain Transactions between Intel and the Company...... 17
11. Contacts with the Company; Background of the Offer and
the Merger................................................ 18
12. Purpose of the Offer and the Merger Agreement........... 20
13. The Merger Agreement, the Stock Option Agreement and the
Tender and Voting Agreement............................... 21
14. Interests of Certain Persons in the Merger.............. 38
15. Going Private Transactions.............................. 39
16. Dividends and Distributions............................. 40
17. Effects of the Offer on the Market for the Shares;
Nasdaq National Market; Exchange Act Registration;
Margin Regulations...................................... 40
18. Certain Conditions of the Offer......................... 41
19. Certain Legal Matters; Regulatory Approvals............. 43
20. Fees and Expenses....................................... 45
21. Miscellaneous........................................... 45
SCHEDULE I.................................................. I-1
ANNEX A..................................................... A-1
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SUMMARY TERM SHEET
ESR Acquisition Corporation is offering to purchase any and all of the
outstanding common stock of Xircom, Inc. for $25 per share, net to you in cash,
subject to U.S. federal income tax or other applicable withholding requirements.
The following are some of the questions that you, as a shareholder of Xircom,
might have and answers to those questions. We urge you to read carefully the
remainder of this Offer to Purchase and the Letter of Transmittal because the
information in this summary term sheet is not complete. Additional important
information is contained in the remainder of this Offer to Purchase and the
Letter of Transmittal.
WHO IS OFFERING TO BUY MY SECURITIES?
Our name is ESR Acquisition Corporation. We are a Delaware corporation
formed by Intel Corporation for the purpose of making a tender offer for all of
the issued and outstanding common stock of Xircom. We have carried on no
activities other than in connection with the merger agreement among Xircom, us,
and Intel Corporation, a Delaware corporation. We are a direct wholly-owned
subsidiary of Intel Corporation. Intel Corporation designs, develops,
manufactures and markets microcomputer components and related products at
various levels of integration. Intel Corporation's principal components consist
of silicon-based semiconductors etched with complex patterns of transistors.
Many of these integrated circuits can perform the functions of millions of
transistors, diodes, capacitors and resistors. See the "Introduction" to this
Offer to Purchase and Section 9 entitled "Certain Information Concerning Intel
and Purchaser" for more detailed information.
WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER?
We are seeking to purchase any and all of the issued and outstanding shares
of common stock of Xircom. See the "Introduction" to this Offer to Purchase and
Section 1 entitled "Terms of the Offer; Expiration Date" for more detailed
information. This is the only class of outstanding capital stock of Xircom.
HOW MUCH ARE YOU OFFERING TO PAY? WHAT IS THE FORM OF PAYMENT? WILL I HAVE TO
PAY ANY FEES OR COMMISSIONS?
We are offering to pay $25 per share, net to you in cash, subject to U.S.
federal income tax or other applicable withholding requirements. If you are the
record owner of your shares and you tender your shares to us in the offer, you
will not have to pay brokerage fees or similar expenses. If you own your shares
through a broker or other nominee, and your broker or nominee tenders your
shares on your behalf, your broker or nominee may charge you a fee for doing so.
You should consult your broker or nominee to determine whether any charges will
apply. See the "Introduction" to this Offer to Purchase and Section 2 entitled
"Procedure for Accepting the Offer and Tendering Shares" for more detailed
information.
DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
Yes. Intel Corporation, our parent company, has sufficient cash and
cash-equivalent resources on hand to complete the offer and the merger. Intel
Corporation will provide us with sufficient funds to purchase all shares validly
tendered and not withdrawn in the offer and will provide funding for the merger,
which is expected to follow the successful completion of the offer in accordance
with the terms and conditions of the merger agreement. The offer is not
conditioned on obtaining any financing. See Section 9 to this Offer to Purchase
entitled "Source and Amount of Funds" for more detailed information.
IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
We do not think our financial condition is relevant to your decision
whether to tender in the offer because (1) the form of payment consists solely
of cash, which we have readily available, (2) the offer is not subject to any
financing condition, and (3) the offer is for any and all issued and outstanding
shares of Xircom. See Section 9 to this Offer to Purchase entitled "Source and
Amount of Funds" for more detailed information.
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HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
You will have until 5:00 p.m., New York City time, on Friday, March 2,
2001, to tender your shares in the offer. If you cannot deliver everything that
is required in order to make a valid tender by that time, you may be able to use
a guaranteed delivery procedure, which is described later in this Offer to
Purchase. See Section 1 to this Offer to Purchase entitled "Terms of the Offer;
Expiration Date" and Section 2 entitled "Procedures for Accepting the Offer and
Tendering Shares" for more detailed information.
CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?
We can extend the offer in accordance with the terms of the merger
agreement, and in some circumstances we must extend the offer. Under the merger
agreement, without the consent of Xircom's board of directors, we may:
- from time to time extend the offer, if at the scheduled expiration date
of the offer any of the conditions to the offer have not been satisfied
or waived, until such time as such conditions are satisfied or waived;
- extend the offer for any period required by any law, or by any rule,
regulation, interpretation or position of the Securities and Exchange
Commission or staff thereof applicable to the offer;
- if the first purchase of shares under the offer shall not have occurred
prior to March 31, 2001, extend the offer to the later of April 10, 2001
and the date on which all conditions to the offer are satisfied; and
- extend the offer for any reason on one or more occasions for an aggregate
period of not more than 10 business days beyond the latest expiration
date permitted above if on such expiration date the shareholders of
Xircom shall not have tendered at least 90% of the outstanding shares of
Xircom common stock.
We have also agreed with Xircom that if any one or more conditions to the
offer are not satisfied and particular events that would permit us not to accept
tendered shares have not occurred at the time of any scheduled expiration date,
then, if the conditions are reasonably capable of being satisfied, we will
extend the offer from time to time unless any of these conditions is no longer
reasonably capable of being satisfied or any of these events has occurred;
provided that we will not be required to extend the offer beyond March 31, 2001,
unless the condition relating to regulatory approval under the Hart-Scott-Rodino
Antitrust Improvements Act is not satisfied on such date and certain events that
would give us the right to terminate the offer have not occurred, in which case
the March 31, 2000 date will be extended to May 15, 2001. See Section 1 to this
Offer to Purchase entitled "Terms of the Offer; Expiration Date" for more
detailed information.
HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
If we extend the offer, we will inform Citibank, N.A., the depositary for
the offer, of that fact and will make a public announcement of the extension not
later than 9:00 a.m., New York City time, on the next business day after the day
on which the offer was previously scheduled to expire.
WILL THERE BE A SUBSEQUENT OFFERING PERIOD?
Maybe. Under the merger agreement, we have reserved the right to provide a
subsequent offering period of not less than three business days, following our
acceptance of and payment for shares in the offer. We are not required to
provide a subsequent offering period. Therefore, if you do not tender your
shares before the offer closes, you may not be able to tender your shares
pursuant to the offer. See Section 1 to this Offer to Purchase entitled "Terms
of the Offer; Expiration Date" for more detailed information.
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
The offer is conditioned upon, among other things:
- there being validly tendered by the expiration of the offer and not
withdrawn, or otherwise beneficially owned by Intel Corporation or ESR
Acquisition Corporation, a number of shares of the common stock
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of Xircom representing at least a majority of the shares issued and
outstanding on a fully-diluted basis (including for purposes of such
calculation all shares issuable upon exercise of all vested Xircom stock
options and unvested Xircom stock options that vest, or upon consummation
of the offer will vest, prior to May 15, 2001);
- the satisfaction or waiver of certain conditions to the obligations of
ESR Acquisition Corporation and Xircom to consummate the transactions
contemplated by the merger agreement, including receipt of certain
governmental and regulatory approvals; and
- compliance by Xircom with certain financial and business criteria.
The financial and business criteria referred to above relate to Xircom's
total cash and net working capital at the expiration of the offer, Xircom's
revenue for the quarter ended March 31, 2001 (if the offer extends through March
31, 2001), and compliance by Xircom with agreed manufacturing and engineering
plans and capital expenditure budgets. We have reserved the right to waive any
and all of our conditions to the offer at our discretion, subject to certain
limitations. See Section 1 to this Offer to Purchase entitled "Terms of the
Offer; Expiration Date" and Section 18 "Certain Conditions to the Offer" for
more detailed information on the conditions to the offer.
HOW DO I TENDER MY SHARES?
To tender shares, you must deliver the certificates representing your
shares, together with a completed letter of transmittal and any other documents
required by the letter of transmittal, to Citibank, N.A., the depositary for the
offer, not later than the time the offer expires. If your shares are held in
street name (i.e., through a broker, dealer or other nominee), the shares can be
tendered by your nominee through The Depository Trust Company. If you are unable
to deliver any required document or instrument to the depositary by the
expiration of the offer, you may gain some extra time by having a broker, a bank
or other fiduciary that is an eligible institution guarantee that the missing
items will be received by the depositary within three New York Stock Exchange
trading days. For your tender to be valid, however, the depositary must receive
the missing items within that three trading day period. See Section 2 to this
Offer to Purchase entitled "Procedure for Accepting the Offer and Tendering
Shares" for more detailed information.
UNTIL WHAT TIME MAY I WITHDRAW PREVIOUSLY TENDERED SHARES?
You may withdraw shares at any time until the offer has expired, and if we
have not accepted your shares for payment by Friday, March 30, 2001, you may
withdraw them at any time after that date until we accept your shares for
payment. See Section 1 to this Offer to Purchase entitled "Terms of the Offer;
Expiration Date" and Section 3 "Withdrawal Rights" for more detailed
information.
HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
To withdraw shares, you must deliver a written notice of withdrawal, or a
facsimile of one, with the required information to the depositary while you
still have the right to withdraw the shares. See Section 3 to this Offer to
Purchase entitled "Withdrawal Rights" for more detailed information.
WHAT DOES THE BOARD OF DIRECTORS OF XIRCOM THINK OF THE OFFER?
We are making the offer pursuant to the merger agreement, which has been
unanimously approved by the Xircom board of directors. The Xircom board of
directors has (1) determined that the merger agreement and the transactions
contemplated thereby, including the offer and the merger, are advisable and in
the best interests of the shareholders of Xircom, (2) approved the merger
agreement and the transactions contemplated thereby, and (3) recommended that
the shareholders of Xircom tender their shares pursuant to the offer. See the
"Introduction" to this Offer to Purchase for more detailed information.
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HAVE ANY SHAREHOLDERS AGREED TO TENDER THEIR SHARES?
Yes. Dirk I. Gates, the President, Chief Executive Officer and Chairman of
the Board of Xircom, who holds approximately 2.3% of the currently outstanding
shares of Xircom common stock, has agreed, pursuant to a Tender and Voting
Agreement, to tender his shares to us in the offer and to vote in favor of the
merger and against any competing acquisition proposal. See the "Introduction" to
this Offer to Purchase and Section 13 entitled "The Merger Agreement, the Stock
Option Agreement and the Tender and Voting Agreement" for more detailed
information. In addition, Intel currently holds 1,868,530, or approximately
6.2%, of the issued and outstanding shares.
IF FEWER THAN ALL OF THE SHARES ARE TENDERED AND ACCEPTED FOR PAYMENT, WILL
XIRCOM CONTINUE AS A PUBLIC COMPANY?
In such an event, Xircom would continue as a public company for only a
limited period of time. Following the purchase of shares in the offer, we expect
to consummate the merger. If the merger takes place, Xircom will become a direct
wholly-owned subsidiary of Intel Corporation and will no longer be publicly
owned. Even if for some reason the merger does not take place, if we purchase
all of the tendered shares, there may be so few remaining shareholders and
publicly held shares that Xircom common stock could become ineligible for
continued quotation on the Nasdaq National Market System. In addition, you
should be aware that there may not be an active public trading market (or,
possibly, that there may not be any public trading market of any kind) for
shares of Xircom common stock, and Xircom may cease making filings with the
Securities and Exchange Commission or otherwise cease being required to comply
with the Securities and Exchange Commission rules relating to publicly held
companies. See Section 17 to this Offer to Purchase entitled "Effects of the
Offer on the Market for the Shares; Nasdaq National Market; Exchange Act
Registration; Margin Regulations" for more detailed information.
WILL THE TENDER OFFER BE FOLLOWED BY A MERGER IF ALL SHARES OF XIRCOM ARE NOT
TENDERED IN THE OFFER?
If we accept for payment and pay for any of the shares of Xircom, we intend
to be merged with and into Xircom. If the merger takes place, Intel Corporation
will own all of the shares of Xircom, and all other persons who were
shareholders of Xircom immediately prior to the merger (except for dissenting
shareholders who have properly exercised their appraisal rights, if available)
will be entitled to receive $25 per share, net to them in cash, subject to U.S.
federal income tax or other applicable withholding requirements. See the
"Introduction" to this Offer to Purchase for more detailed information.
IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
If the merger described above takes place, shareholders not tendering in
the offer (except for dissenting shareholders who have properly exercised their
appraisal rights, if available) will receive the same amount of cash per share
that they would have received had they tendered their shares in the offer.
Therefore, if the merger takes place, the only difference to you between
tendering your shares and not tendering your shares is that you will be paid
earlier if you tender your shares. If the merger does not take place, however,
the number of shareholders and the number of shares of Xircom that are still in
the hands of the public may be so small that there may no longer be an active
public trading market (or, possibly, there may not be a public trading market of
any kind) for Xircom common stock. Also, as described above, Xircom may cease
making filings with the Securities and Exchange Commission or otherwise cease
being required to comply with the Securities and Exchange Commission rules
relating to publicly held companies. See the "Introduction" to this Offer to
Purchase and Section 17 entitled "Effects of the Offer on the Market for the
Shares; Nasdaq National Market; Exchange Act Registration; Margin Regulations"
for more detailed information.
WILL I HAVE ANY APPRAISAL OR DISSENTERS' RIGHTS IN CONNECTION WITH THE OFFER?
There are no appraisal or dissenters' rights in connection with the offer.
Dissenters' rights may be available in connection with the merger. See Section
12 to this Offer to Purchase entitled "Purpose of the Offer and the Merger
Agreement" for more detailed information.
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WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
On January 12, 2001, the last trading day before we announced the signing
of the merger agreement, the last reported sale price of Xircom common stock on
the Nasdaq National Market was $18.063 per share. On January 16, 2001, the next
trading day after we announced the execution of the merger agreement
contemplating the offer, the last reported sale price of Xircom common stock on
the Nasdaq National Market was $24.656 per share. On January 26, 2001, the last
trading day before commencement of the offer, the last reported sale price of
Xircom common stock on the Nasdaq National Market was $24.438 per share. We
encourage you to obtain a recent quotation for shares of Xircom common stock in
deciding whether to tender your shares. See Section 6 to this Offer to Purchase
entitled "Price Range of the Shares" for more detailed information.
WHAT ARE THE PRINCIPAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF TENDERING SHARES?
The receipt of cash for shares pursuant to the tender offer or the merger
will be a taxable transaction for U.S. federal income tax purposes and possibly
for state, local and foreign income tax purposes as well. In general, a
shareholder will recognize capital gain or loss for U.S. federal income tax
purposes equal to the difference, if any, between the amount of cash received
and the shareholder's adjusted tax basis in the shares sold. See Section 5 to
this Offer to Purchase entitled "Certain U.S. Federal Income Tax Consequences of
the Offer and the Merger" for more detailed information.
TO WHOM MAY I SPEAK IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?
You may call the information agent for the offer, D.F. King & Co., Inc., at
(800) 628-8528 (toll free). See the back cover of this Offer to Purchase for
more information.
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To the Holders of Common Stock of Xircom, Inc.:
INTRODUCTION
ESR Acquisition Corporation, a Delaware corporation ("Purchaser"), which is
a newly formed, direct wholly-owned subsidiary of Intel Corporation, a Delaware
corporation ("Intel"), hereby offers to purchase all of the issued and
outstanding shares of common stock, par value $0.001 per share (the "Shares" or
the "Company Common Stock"), of Xircom, Inc., a California corporation (the
"Company"), upon the terms and subject to the conditions set forth in this Offer
to Purchase and in the related Letter of Transmittal (which together constitute
the "Offer"), at the purchase price of $25 per Share, without interest (the
"Offer Price"), net to the tendering shareholder in cash.
The Offer is being made pursuant to the terms of the Agreement and Plan of
Merger, dated January 15, 2001 (the "Merger Agreement"), by and among the
Company, Purchaser and Intel. Among other things, the Merger Agreement provides
for the making of the Offer and that, following the purchase of Shares pursuant
to the Offer and promptly after the satisfaction or waiver of certain other
conditions, Purchaser will be merged with and into the Company (the "Merger").
The Company will continue as the surviving corporation and a direct wholly-owned
subsidiary of Intel after the Merger (the "Surviving Corporation"). At the
effective time of the Merger (the "Effective Time"), each outstanding Share
(except for Shares owned by the Company or Intel, or by any subsidiary of the
Company or Intel and shares held by shareholders exercising their appraisal
rights under the California Corporations Code (the "CCC") (collectively, the
"Excluded Shares")) will be converted into the right to receive the Offer Price,
net to the holder in cash.
AT A MEETING DULY CALLED AND HELD ON JANUARY 14, 2001, THE BOARD OF
DIRECTORS OF THE COMPANY (THE "COMPANY BOARD") (1) DETERMINED THAT THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE
MERGER, ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY AND ITS
SHAREHOLDERS; (2) APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER; AND (3) RESOLVED TO
RECOMMEND THAT THE SHAREHOLDERS OF THE COMPANY ACCEPT THE OFFER, TENDER THEIR
SHARES THEREUNDER TO PURCHASER AND APPROVE AND ADOPT THE MERGER AGREEMENT AND
THE MERGER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OR
WAIVER OF CERTAIN CONDITIONS TO THE OBLIGATIONS OF PURCHASER, INTEL AND THE
COMPANY TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT,
INCLUDING (1) THERE BEING VALIDLY TENDERED BY THE EXPIRATION DATE AND NOT
WITHDRAWN, OR OTHERWISE BENEFICIALLY OWNED BY INTEL OR PURCHASER, A NUMBER OF
SHARES REPRESENTING AT LEAST A MAJORITY OF THE SHARES ON A FULLY-DILUTED BASIS
(INCLUDING FOR PURPOSES OF SUCH CALCULATION ALL SHARES ISSUABLE UPON EXERCISE OF
ALL VESTED COMPANY STOCK OPTIONS AND UNVESTED COMPANY STOCK OPTIONS THAT VEST,
OR UPON CONSUMMATION OF THE OFFER WILL VEST, PRIOR TO THE FINAL DATE (AS DEFINED
HEREIN)) (THE "MINIMUM CONDITION"), (2) RECEIPT BY PURCHASER, INTEL AND THE
COMPANY OF CERTAIN GOVERNMENTAL AND REGULATORY APPROVALS, AND (3) COMPLIANCE BY
THE COMPANY WITH CERTAIN FINANCIAL AND BUSINESS CRITERIA. SEE "THE TENDER
OFFER -- 18. CERTAIN CONDITIONS OF THE OFFER" AND "-- 19. CERTAIN LEGAL MATTERS;
REGULATORY APPROVALS" FOR MORE DETAILED INFORMATION.
THE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY, MARCH 2,
2001, UNLESS EXTENDED.
Consummation of the Merger is subject to receipt of certain regulatory
approvals and satisfaction of a number of other conditions, including approval
by the shareholders of the Company if such approval is required by applicable
law. See "The Tender Offer -- 18. Certain Conditions of the Offer" and
"-- 19. Certain Legal Matters; Regulatory Approvals" for more detailed
information. If Purchaser acquires a majority of the outstanding Shares, it will
have sufficient voting power to approve and adopt the Merger Agreement and the
Merger without the vote of any other shareholder of the Company. If Purchaser
acquires at least ninety percent (90%) of the outstanding Shares, Purchaser
intends to approve and consummate the Merger without any action by, or any
further prior notice to, the other shareholders of the Company pursuant to the
short-form merger provisions of the CCC. In addition, Intel and the Company have
entered into a Stock Option Agreement dated as of January 15, 2001 (the "Stock
Option Agreement") that permits Intel to purchase,
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under certain circumstances, up to 5,954,325 Shares (or such other number of
Shares as equals 19.9% of the issued and outstanding Shares at the time of
exercise of the option) at an exercise price of $25 per Share. Among other
circumstances permitting Intel to exercise its option, Intel may exercise its
option to the extent necessary so that the number of Shares to be acquired
pursuant to the option plus the number of tendered Shares will, upon issuance of
the option shares, equal at least ninety percent (90%) of the issued and
outstanding shares of Company Common Stock. The option is also exercisable upon
a termination of the Merger Agreement in a manner obligating the Company to pay
Intel liquidated damages. See "The Tender Offer -- 13. The Merger Agreement, the
Stock Option Agreement and the Tender and Voting Agreement" for more detailed
information.
Intel and Purchaser have entered into a Tender and Voting Agreement (the
"Voting Agreement") with Dirk I. Gates, a shareholder of the Company and the
President, Chief Executive Officer and Chairman of the Board, who owns 674,333
Shares, representing approximately 2.3% of the issued and outstanding Shares.
Pursuant to the Voting Agreement, upon the terms and subject to the conditions
therein, Mr. Gates has agreed (1) promptly to tender to Purchaser all Shares
beneficially owned by him and (2) to vote such Shares in favor of approval of
the Merger Agreement and the transactions contemplated thereby.
Each holder (other than holders of Excluded Shares) of a certificate
representing any Shares will, from and after the consummation of the Merger,
cease to have any rights with respect to such Shares, except the right to
receive the Offer Price. From and after the consummation of the Merger, each
Excluded Share (except for shares held by shareholders exercising their
appraisal rights under the CCC, if available) will be canceled and extinguished
and cease to exist without any conversion thereof, and no payment will be made
with respect thereto.
BROADVIEW INTERNATIONAL LLC ("BROADVIEW"), FINANCIAL ADVISOR TO THE
COMPANY, HAS DELIVERED A WRITTEN OPINION TO THE COMPANY BOARD, DATED JANUARY 14,
2001 (THE "BROADVIEW OPINION"), TO THE EFFECT THAT, AS OF JANUARY 14, 2001, THE
PROPOSED CASH CONSIDERATION TO BE RECEIVED BY THE SHAREHOLDERS OF THE COMPANY
(OTHER THAN INTEL AND ITS AFFILIATES) PURSUANT TO THE OFFER AND THE MERGER IS
FAIR TO SUCH SHAREHOLDERS FROM A FINANCIAL POINT OF VIEW. THE FULL TEXT OF THE
BROADVIEW OPINION IS ATTACHED TO THE COMPANY'S SOLICITATION/ RECOMMENDATION
STATEMENT ON SCHEDULE 14D-9 WHICH IS BEING MAILED TO SHAREHOLDERS OF THE COMPANY
HEREWITH. SHAREHOLDERS ARE URGED TO READ THE BROADVIEW OPINION CAREFULLY AND IN
ITS ENTIRETY FOR ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITS OF THE REVIEW
OF BROADVIEW.
The Company has represented to Purchaser that as of January 12, 2001 there
were issued and outstanding 29,921,232 Shares (exclusive of treasury shares) and
options to acquire approximately 7,760,424 Shares. As of the date hereof, Intel
owns 1,868,530 Shares. As of the date hereof, the Minimum Condition should
therefore be satisfied if at least approximately 15,805,054 Shares are validly
tendered and not withdrawn prior to the Expiration Date, inclusive of the
674,333 Shares that will be tendered to Purchaser pursuant to the Voting
Agreement.
THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY MEETING OF
THE COMPANY'S SHAREHOLDERS. ANY SUCH SOLICITATION WOULD BE MADE ONLY PURSUANT TO
SEPARATE PROXY MATERIALS COMPLYING WITH THE REQUIREMENTS OF SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT").
Tendering shareholders will not be obligated to pay solicitation fees or,
subject to Instruction 6 of the Letter of Transmittal, stock transfer taxes on
the sale of Shares pursuant to the Offer. However, any tendering shareholder or
other payee who fails to complete and sign the Substitute Form W-9 that is
included in the Letter of Transmittal may be subject to a required backup
federal income tax withholding of 31% of the gross proceeds payable to such
shareholder or other payee pursuant to the Offer. See "The Tender Offer -- 5.
Certain U.S. Federal Income Tax Consequences of the Offer and Merger" for more
detailed information. Purchaser will pay all charges and expenses of Citibank,
N.A., as Depositary (in such capacity, the "Depositary"), and D.F. King & Co.,
Inc., as Information Agent (in such capacity, the "Information Agent"), incurred
in connection with the Offer. For a description of the fees and expenses to be
paid by Purchaser, see "The Tender Offer -- 20. Fees and Expenses."
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The information contained in this Offer to Purchase concerning the Company
was supplied by the Company. Neither Intel nor Purchaser takes any
responsibility for the completeness or accuracy of such information. The
information contained in this Offer to Purchase concerning the Offer, the
Merger, Intel and Purchaser was supplied by Intel and Purchaser. The Company
takes no responsibility for the completeness or accuracy of such information.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER. ALSO SEE "THE TENDER OFFER -- 21. MISCELLANEOUS" FOR
MORE DETAILED INFORMATION REGARDING CERTAIN ADDITIONAL DOCUMENTS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") IN CONNECTION WITH THE
OFFER.
References herein to Intel will, unless the context indicates otherwise,
include Intel and all of its subsidiaries, including Purchaser.
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THE TENDER OFFER
1. TERMS OF THE OFFER; EXPIRATION DATE
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will accept for payment and pay for all Shares validly
tendered on or prior to the Expiration Date and not theretofore properly
withdrawn in accordance with the terms set forth in this Offer to Purchase under
the section entitled "The Tender Offer -- 3. Withdrawal Rights." The term
"Expiration Date" means 5:00 p.m., New York City time, on Friday, March 2, 2001,
unless and until Purchaser, subject to restrictions contained in the Merger
Agreement, has extended the period of time during which the Offer is open, in
which event the term "Expiration Date" means the latest time and date at which
the Offer, as so extended by Purchaser, will expire.
Purchaser expressly reserves the right to increase the Offer Price or to
make any other changes in the terms and conditions of the Offer, provided that,
unless previously approved by the Company in writing, no change may be made that
(1) decreases the Offer Price, (2) changes the form of consideration to be paid
in the Offer, (3) reduces the maximum number of Shares to be purchased in the
Offer, (4) imposes conditions to the Offer in addition to those set forth in
Annex A to the Merger Agreement, (5) amends the conditions to the Offer set
forth in Annex A to the Merger Agreement to broaden their scope, (6) amends any
other term of the Offer in a manner adverse to the holders of the Shares, (7)
extends the Offer except as permitted by the terms of the Merger Agreement, or
(8) amends or waives the Minimum Condition. Purchaser also has the right to
waive any of the conditions of the Offer (except as otherwise provided in the
Merger Agreement).
Purchaser may, without the consent of the Company Board, (1) from time to
time extend the Offer, if at the scheduled Expiration Date any conditions to the
Offer have not been satisfied or waived, (2) extend the Offer for any period
required by any rule, regulation, interpretation or position of the Commission
or the staff thereof applicable to the Offer, (3) if the first purchase of
Shares under the Offer shall not have occurred prior to March 31, 2001, extend
the Offer to the later of April 10, 2001 and the date on which all conditions to
the Offer have been satisfied, or (4) extend the Offer for any reason on one or
more occasions for an aggregate period of not more than ten business days beyond
the latest Expiration Date that would otherwise be permitted under clause (1),
(2) or (3) of this sentence if, on such Expiration Date, there have not been
tendered at least ninety percent (90%) of the outstanding Shares. In addition,
if at the time of any scheduled Expiration Date any one or more of the
conditions to the Offer set forth on Annex A to the Merger Agreement and
described in "The Tender Offer -- 18. Certain Conditions to the Offer" below are
not satisfied and none of the events set forth in paragraphs (a) through (f) of
Annex A to the Merger Agreement and described in "The Tender Offer -- 18.
Certain Conditions to the Offer" below that would permit Purchaser not to accept
tendered Shares for payment has occurred and is continuing, then, provided that
such conditions are reasonably capable of being satisfied, Purchaser will extend
the Offer from time to time unless any such condition is no longer reasonably
capable of being satisfied or any such event has occurred. In no event, however,
will Purchaser be required to extend the Offer beyond March 31, 2001 (provided
that if on March 31, 2001 the condition set forth in clause (ii) of the first
paragraph of Annex A to the Merger Agreement and described in "The Tender
Offer -- 18. Certain Conditions to the Offer" below regarding the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), is not satisfied and none of the events set forth in paragraphs (a)
through (f) of Annex A that would permit Purchaser not to accept Shares tendered
for payment has occurred and is continuing, then such March 31, 2001 date will
be automatically extended to May 15, 2001). As used in this Offer to Purchase,
"business day" means any day, other than a day on which the Nasdaq National
Market is closed.
Subject to the applicable rules and regulations of the Commission,
Purchaser expressly reserves the right, subject to the terms and conditions of
the Merger Agreement, at any time and from time to time, upon the failure to be
satisfied of any of the conditions to the Offer, to (1) terminate or amend the
Offer, (2) extend the Offer and postpone acceptance for payment of any Shares or
(3) waive any condition, by giving oral or written notice of such termination,
amendment, extension or waiver to the Depositary. During any such extension, all
Shares previously tendered and not properly withdrawn will remain subject to any
such extension and will remain tendered, subject to the right of a tendering
shareholder to withdraw such shareholder's Shares. The
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ability of Purchaser to delay payment for Shares that it has accepted for
payment is limited by Rule 14e-1(c) under the Exchange Act, which requires that
an offeror either pay the consideration offered or return the tendered
securities promptly after the termination or withdrawal of a tender offer. If
Intel or Purchaser waives any of the conditions set forth in this Offer to
Purchase under the section entitled "The Tender Offer -- 18. Certain Conditions
of the Offer," the Commission may, if the waiver is deemed to constitute a
material change to the information previously provided to Company shareholders,
require that the Offer remain open for an additional period of time and/or that
Purchaser disseminate information concerning such waiver.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition to the Offer,
Purchaser will disseminate additional tender offer materials, including by
public announcement as set forth above, and extend the Offer to the extent
required by Rules 14d-4(d), 14d-6(c) and 14e-1 under the Exchange Act. These
rules generally provide that the minimum period during which a tender offer must
remain open following a material change in the terms of the offer or information
concerning the offer, other than a change in price or a change in percentage of
securities sought, will depend upon the facts and circumstances, including the
relative materiality of the changes in the terms or information. In the
Commission's view, an offer should remain open for a minimum of five business
days from the date a material change is first published, sent or given to
securityholders, and, if material changes are made with respect to information
that approaches the significance of price and share levels, a minimum of ten
business days may be required to allow for adequate dissemination and investor
response. With respect to a change in price or a change in percentage of
securities sought, a minimum of ten business days is generally required to allow
for adequate dissemination to shareholders and for investor response.
Any extension, amendment or termination of the Offer will be followed as
promptly as practicable by public announcement in accordance with the public
announcement requirements of Rule 14e-1(d) under the Exchange Act. Subject to
applicable law (including Rules 14d-4(d) and 14d-6(c) under the Exchange Act,
which require that any material change in the information published, sent or
given to shareholders in connection with the Offer be promptly disseminated to
them in a manner reasonably designed to inform shareholders of such change), and
without limiting the manner in which Purchaser may choose to make any public
announcement, Purchaser has no obligation to publish, advertise or otherwise
communicate any such public announcement other than by making a release to the
Dow Jones News Service.
The Company has provided Purchaser with the Company shareholder list, a
non-objecting beneficial owners list and security position listings for the
purpose of disseminating the Offer to holders of Shares. This Offer to Purchase
and the Letter of Transmittal and other relevant materials will be mailed to
record holders of Shares and furnished to brokers, dealers, commercial banks,
trust companies and similar persons whose names, or the names of whose nominees,
appear on the shareholder list or, if applicable, who are listed as participants
in a clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Shares.
2. PROCEDURE FOR ACCEPTING THE OFFER AND TENDERING SHARES
Valid Tender of Shares
For a shareholder to validly tender Shares pursuant to the Offer, either:
(1) (a) a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), together with any required signature guarantees, or an
Agent's Message (as defined herein) in connection with a book-entry delivery of
Shares, and any other required documents, must be received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase, and
(b) either certificates for tendered Shares ("Share Certificates") must be
received by the Depositary at one of such addresses or such tendered Shares must
be delivered pursuant to the procedure for book-entry transfer described below
(and a Book-Entry Confirmation (as defined herein) received by the Depositary),
in each case prior to the Expiration Date; or (2) the tendering shareholder must
comply with the guaranteed delivery procedures described below.
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Book-Entry Transfers
The Purchaser will request that the Depositary establish an account with
respect to the Shares at The Depository Trust Company (the "Book-Entry Transfer
Facility") for purposes of the Offer within two business days after the date of
this Offer to Purchase. Any financial institution that is a participant in the
Book-Entry Transfer Facility may make book-entry delivery of the Shares by
causing the book-entry transfer system to transfer such Shares into the
Depositary's account at the Book-Entry Transfer Facility in accordance with such
Book-Entry Transfer Facility's procedure for such transfer. Although delivery of
Shares may be effected through a book-entry transfer at the Book-Entry Transfer
Facility, a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), with any required signature guarantees, or an Agent's
Message in connection with a book-entry transfer, and any other required
documents, must, in any case, be transmitted to, and received by, the Depositary
at one of its addresses set forth on the back cover of this Offer to Purchase
prior to the Expiration Date, or the tendering shareholder must comply with the
guaranteed delivery procedures described below. The confirmation of a book-entry
transfer of Shares into the Depositary's account at the Book-Entry Transfer
Facility as described above is referred to herein as a "Book-Entry
Confirmation." Delivery of documents to the Book-Entry Transfer Facility in
accordance with its book-entry procedures does not constitute valid delivery to
the Depositary.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of the
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares, that such participant has received the
Letter of Transmittal and agrees to be bound by the terms of the Letter of
Transmittal and that Purchaser may enforce such agreement against such
participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE ELECTION AND SOLE RISK OF THE TENDERING
SHAREHOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED AT THE
DEPOSITARY. IF DELIVERY IS BY MAIL, THEN INSURED OR REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ENSURE TIMELY DELIVERY.
Signature Guarantees
No signature guarantee on the Letter of Transmittal is required if (1) the
Letter of Transmittal is signed by the registered holder of the Shares (which
term, for purposes of this section, includes any participant in the Book-Entry
Transfer Facility system whose name appears on a security position listing as
the owner of the Shares) tendered therewith and such registered holder has not
completed either the box entitled "Special Delivery Instructions" or the box
entitled "Special Payment Instructions" on the Letter of Transmittal or (2) such
Shares are tendered for the account of a bank, broker, dealer, credit union,
savings association or other entity that is a member in good standing of the
Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each, an "Eligible Institution"). In all other cases, all signatures on the
Letter of Transmittal must be guaranteed by an Eligible Institution. See
Instructions 1 and 5 to the Letter of Transmittal for more detailed information.
If the Share Certificates are registered in the name of a person other than the
signer of the Letter of Transmittal, or if payment is to be made to, or Share
Certificates not validly tendered, not accepted for payment or not purchased are
to be issued or returned to, a person other than the registered holder of the
Share Certificates, the tendered Share Certificates must be endorsed in blank or
accompanied by appropriate stock powers, signed exactly as the name of the
registered holder appears on the Share Certificates with the signature on such
Share Certificates or stock powers guaranteed by an Eligible Institution. See
Instructions 1 and 5 to the Letter of Transmittal for more detailed information.
Guaranteed Delivery
If a shareholder desires to tender Shares pursuant to the Offer and the
shareholder's Share Certificates are not immediately available or the procedures
for book-entry transfer cannot be completed on a timely basis or time will not
permit all required documents to reach the Depositary prior to the Expiration
Date, the Shares
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may nevertheless be tendered provided that all of the following guaranteed
delivery procedures are duly complied with:
- the tender is made by or through an Eligible Institution;
- the Depositary receives (by hand, mail, telegram or facsimile
transmission) on or prior to the Expiration Date, a properly completed
and duly executed Notice of Guaranteed Delivery, substantially in the
form provided by Purchaser; and
- the Share Certificates representing all tendered Shares, in proper form
for transfer (or Book-Entry Confirmation with respect to the Shares),
together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) and any other documents required by
the Letter of Transmittal, are received by the Depositary within three
New York Stock Exchange ("NYSE") trading days after the date of the
Notice of Guaranteed Delivery. A "NYSE trading day" is any day on which
securities are traded on the New York Stock Exchange.
The Notice of Guaranteed Delivery may be delivered by hand, or may be
transmitted by telegram, facsimile transmission or mail, to the Depositary and
must include a guarantee by an Eligible Institution in the form set forth in
such Notice of Guaranteed Delivery.
Notwithstanding anything else described in this Offer to Purchase, payment
for Shares accepted for payment pursuant to the Offer will in all cases be made
only after timely receipt by the Depositary of (1) Share Certificates for (or a
timely Book-Entry Confirmation with respect to) the Shares, (2) a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) or, in
the case of book-entry transfer, an Agent's Message and (3) any other documents
required by the Letter of Transmittal. Accordingly, tendering shareholders may
be paid at different times depending upon when Share Certificates, Book-Entry
Confirmations and any other required documents are actually received by the
Depositary. Under no circumstances will interest be paid by Purchaser on the
purchase price of the Shares to any tendering shareholders, regardless of any
extension of the Offer or any delay in making such payment.
Determination of Validity
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance for payment of any tender of Shares will be determined
by Purchaser in its sole discretion, which determination will be final and
binding. Purchaser reserves the absolute right to reject any or all tenders of
Shares that it determines are not in proper form or the acceptance for payment
of or payment for which may, in the opinion of Purchaser's counsel, be unlawful.
Purchaser also reserves the absolute right to waive any of the conditions of the
Offer or any defect or irregularity in the tender of any Shares with respect to
any particular shareholder, whether or not similar defects or irregularities are
waived in the case of other shareholders. Neither Purchaser, Intel, the
Depositary, the Information Agent nor any other person will be under any duty to
give notice of any defects or irregularities in tenders or incur any liability
for failure to give any notice. Purchaser's interpretation of the terms and
conditions of the Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding.
Other Requirements
By executing the Letter of Transmittal, a tendering shareholder irrevocably
appoints designees of Purchaser as the shareholder's proxies, each with full
power of substitution, in the manner set forth in the Letter of Transmittal, to
the full extent of the shareholder's rights with respect to the Shares tendered
by the shareholder and accepted for payment by Purchaser (and with respect to
any and all other Shares or other securities or rights issued or issuable in
respect of the Shares on or after the Expiration Date), effective when, if and
to the extent that Purchaser accepts the Shares for payment pursuant to the
Offer. All such proxies will be considered coupled with an interest in the
tendered Shares. Upon acceptance for payment, all prior proxies given by the
shareholder with respect to the Shares accepted for payment or other securities
or rights will, without further action, be revoked, and no subsequent proxies
may be given. The designees of Purchaser will, with respect to the Shares for
which the appointment is effective, be empowered to exercise all voting and
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other rights of the shareholder as they in their sole discretion may deem proper
in respect of any annual or special meeting of the Company's shareholders or any
adjournment or postponement thereof, by written consent in lieu of any meeting
or otherwise. Purchaser reserves the right to require that, in order for Shares
to be deemed validly tendered, immediately upon Purchaser's payment for the
Shares, Purchaser must be able to exercise full voting rights with respect to
the Shares.
Purchaser's acceptance for payment of Shares tendered pursuant to any of
the procedures described in this section will constitute a binding agreement
between the tendering shareholder and Purchaser upon the terms and subject to
the conditions of the Offer.
Backup Federal Income Tax Withholding
To prevent backup federal income tax withholding on payments of cash
pursuant to the Offer, a United States shareholder tendering Shares in the offer
must provide the Depositary with the shareholder's correct taxpayer
identification number ("TIN") on a Substitute Form W-9 and certify under
penalties of perjury that such TIN is correct and that the shareholder is not
subject to backup withholding. If a United States shareholder does not provide
its correct TIN or fails to provide the certification described herein, under
federal income tax laws, the Depositary will be required to withhold 31% of the
amount of any payment made to the shareholder pursuant to the Offer. All United
States shareholders tendering Shares pursuant to the Offer should complete and
sign the Substitute Form W-9 included as a part of the Letter of Transmittal to
provide the information and certification necessary to avoid backup withholding.
3. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 3, tenders of Shares are
irrevocable. Tendered Shares may be withdrawn at any time prior to the
Expiration Date only by following the procedures described below.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
notice of withdrawal must specify the name of the person who tendered the Shares
to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder of the Shares to be withdrawn as set forth on the Share
Certificates if different from the name of the person who tendered the Shares.
If Share Certificates have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of the Share Certificates, the
serial numbers shown on the Share Certificates must be furnished to the
Depositary and, unless the Shares have been tendered by an Eligible Institution,
the signatures on the notice of withdrawal must be guaranteed by an Eligible
Institution. If Shares have been delivered pursuant to the procedures for
book-entry transfer described in Section 2 above, any notice of withdrawal must
specify the name and number of the account at the Book-Entry Transfer Facility
to be credited with the withdrawn Shares and otherwise comply with such
Book-Entry Transfer Facility's procedures for withdrawal, in which case a notice
of withdrawal will be effective if delivered to the Depositary by any method of
delivery described in the first sentence of this paragraph.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser in its sole discretion,
and its determination will be final and binding. Neither Purchaser, the
Depositary, the Information Agent nor any other person will be obligated to give
notice of any defects or irregularities in any notice of withdrawal, nor will
any of them incur any liability for failure to give any such notice.
Withdrawals of tendered Shares may not be rescinded, and any Shares
properly withdrawn will thereafter be deemed not validly tendered for purposes
of the Offer. However, withdrawn Shares may be retendered by following one of
the procedures described in Section 2 above at any time on or prior to the
Expiration Date.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension or
amendment), promptly after the Expiration Date, Purchaser will
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accept for payment, and will pay for, any and all Shares validly tendered on or
prior to the Expiration Date and not properly withdrawn in accordance with
Section 3 above. Subject to applicable rules of the Commission and the terms and
conditions of the Merger Agreement, Purchaser expressly reserves the right, in
its sole discretion, to delay acceptance for payment of, or payment for, Shares
in order to comply in whole or in part with any applicable law or government
regulation.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (1) the
Share Certificates for the Shares (or timely Book-Entry Confirmation of the
book-entry transfer of the Shares into the Depositary's account at the
Book-Entry Transfer Facility pursuant to the procedures described in Section 2
above), (2) the Letter of Transmittal (or facsimile thereof), properly completed
and duly executed, together with any required signature guarantees, or an
Agent's Message in connection with a book-entry transfer and (3) any other
documents required by the Letter of Transmittal.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered to Purchaser and not
properly withdrawn as, if and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance for payment of the Shares. In all cases,
upon the terms and subject to the conditions of the Offer, payment for Shares so
accepted for payment will be made by the deposit of the purchase price therefor
with the Depositary, which will act as agent for tendering shareholders for the
purpose of receiving payment from Purchaser and transmitting payment to validly
tendering shareholders. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID BY
PURCHASER ON THE PURCHASE PRICE OF SHARES TENDERED PURSUANT TO THE OFFER,
REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
Upon the deposit of funds with the Depositary for the purpose of making payments
to tendering shareholders, Purchaser's obligation to make the payments will be
satisfied and tendering shareholders must thereafter look solely to the
Depositary for payment of amounts owed to them by reason of Purchaser's
acceptance for payment of Shares. Purchaser will pay any stock transfer taxes
with respect to the transfer and sale to it or on its order pursuant to the
Offer, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, as well as any charges and expenses of the Depositary and the
Information Agent. See "The Tender Offer -- 20. Fees and Expenses" for more
detailed information.
If Purchaser is delayed in its acceptance for payment of, or payment for,
tendered Shares or is unable to accept for payment or pay for the Shares
pursuant to the Offer for any reason, then, without prejudice to Purchaser's
rights under the Offer (but subject to Purchaser's obligations under Rule
14e-1(c) under the Exchange Act to pay for or return the tendered Shares
promptly after the termination or withdrawal of the Offer), the Depositary may,
nevertheless, retain tendered Shares on behalf of Purchaser, and the Shares may
not be withdrawn except to the extent tendering shareholders are entitled to
exercise, and duly exercise, withdrawal rights as described under Section 3
above.
If any tendered Shares are not purchased pursuant to the Offer because of
an invalid tender or for any other reason, Share Certificates for any such
Shares will be returned, without expense, to the tendering shareholder (or, in
the case of Shares delivered by book-entry transfer of the Shares into the
Depositary's account at the Book-Entry Transfer Facility pursuant to the
procedures described in Section 2 above, the Shares will be credited to an
account maintained at such Book-Entry Transfer Facility) as promptly as
practicable following the expiration or termination of the Offer.
5. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER AND MERGER
The summary of U.S. federal income tax consequences set forth below is for
general information only and is based on the law as currently in effect. The tax
consequences to each shareholder will depend in part upon the shareholder's
particular situation. The following does not address the U.S. federal income tax
consequences to all categories of shareholders that may be subject to special
rules (e.g., financial institutions, broker-dealers, persons who are not
citizens or residents of the United States, insurance companies, tax exempt
organizations, persons who acquired their shares as part of a straddle, hedge or
other integrated instrument, and shareholders who acquired their Shares through
the exercise of an employee stock option or otherwise as compensation), nor does
it address the federal income tax consequences to persons who do not
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hold the Shares as "capital assets" within the meaning of Section 1221 of the
Internal Revenue Code of 1986, as amended (generally, property held for
investment). ALL SHAREHOLDERS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS AS TO
THE PARTICULAR TAX CONSEQUENCES OF THE OFFER AND THE MERGER TO THEM, INCLUDING
THE APPLICABILITY AND EFFECT OF THE ALTERNATIVE MINIMUM TAX AND ANY STATE, LOCAL
OR FOREIGN INCOME AND OTHER TAX LAWS AND OF CHANGES IN SUCH TAX LAWS.
The receipt of cash for Shares pursuant to the Offer or the Merger will be
a taxable transaction for federal income tax purposes and may also be a taxable
transaction under applicable state, local or foreign tax laws. Generally, a
shareholder who receives cash for Shares pursuant to the Offer or the Merger
will recognize gain or loss for federal income tax purposes equal to the
difference, if any, between the amount of cash received in exchange for the
Shares sold and the shareholder's adjusted tax basis in the Shares exchanged.
Any gain or loss will be capital gain or loss, and will be long-term capital
gain or loss if the holder has held the Shares for more than one year at the
time of sale. Gain or loss will be calculated and characterized separately for
each block of Shares (i.e., Shares with the same tax basis and holding period)
exchanged pursuant to the Offer or the Merger. Capital gains recognized by a
noncorporate taxpayer upon a disposition of a Share that has been held for more
than one year generally will be subject to a maximum rate of 20% or, in the case
of a Share that has been held for one year or less, will be subject to tax at
ordinary income rates. Certain limitations apply to the use of capital losses.
A shareholder (other than certain exempt shareholders including, among
others, all corporations and certain foreign individuals and entities) that
exchanges Shares pursuant to the Offer or the Merger may be subject to 31%
backup withholding unless the shareholder provides its TIN and certifies that
the number provided is correct and that the shareholder is not subject to backup
withholding. A shareholder that does not furnish its TIN may be subject to a
penalty imposed by the Internal Revenue Service (the "IRS"). See "The Tender
Offer -- 2. Procedure for Accepting the Offer and Tendering Shares" for more
detailed information.
If backup withholding applies to a shareholder, the Depositary is required
to withhold 31% from payments to the shareholder. Backup withholding is not an
additional tax. Rather, the amount of the backup withholding can be credited
against the federal income tax liability of the person subject to the backup
withholding, provided that the required information is given to the IRS on a
timely basis. If backup withholding results in an overpayment of tax, a refund
can be obtained by the shareholder upon filing an appropriate income tax return
on a timely basis.
6. PRICE RANGE OF THE SHARES
Since March 31, 1992, the Shares have been quoted on the Nasdaq National
Market under the symbol "XIRC." The following table sets forth, for the periods
indicated, the high and low reported sales prices per share of Company Common
Stock as reported by the Nasdaq National Market:
TRADING
------------------
HIGH LOW
------- -------
Fiscal Year ended September 30, 1999:
First Quarter............................................. $36.125 $15.625
Second Quarter............................................ $46.250 $23.000
Third Quarter............................................. $31.312 $15.750
Fourth Quarter............................................ $48.000 $29.875
Fiscal Year ended September 30, 2000:
First Quarter............................................. $75.937 $42.062
Second Quarter............................................ $71.125 $33.500
Third Quarter............................................. $52.750 $29.125
Fourth Quarter............................................ $51.250 $23.500
Fiscal Year ended September 30, 2001:
First Quarter............................................. $26.250 $12.250
Second Quarter (through January 26, 2001)................. $24.688 $14.781
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On January 12, 2001, the last full day of trading prior to the public
announcement of the execution of the Merger Agreement, according to published
sources, the last reported sales price of Company Common Stock on the Nasdaq
National Market was $18.063 per Share. On January 26, 2001, the last full day of
trading before the commencement of the Offer, according to published sources,
the last reported sales price of Company Common Stock on the Nasdaq National
Market was $24.438 per Share. SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET
QUOTATION FOR COMPANY COMMON STOCK.
7. CERTAIN INFORMATION CONCERNING THE COMPANY
General
The information concerning the Company contained in this Offer to Purchase
has been provided by the Company or has been taken from publicly available
documents and records on file with the Commission and other public sources.
Neither Intel nor Purchaser assumes any responsibility for the accuracy or
completeness of the information concerning the Company contained herein or in
such documents and records or for any failure by the Company to disclose events
which may have occurred or may affect the significance or accuracy of any such
information but which are unknown to Intel or Purchaser.
The Company is a California corporation with its principal executive
offices located at 2300 Corporate Center Drive, Thousand Oaks, California 91320.
The Company's telephone number at its principal executive offices is (805)
376-9300. The Company is a leading global provider of mobile networking and
information access solutions for mobile computer users. The Company's
connectivity solutions allow mobile users worldwide to connect notebook and
handheld computers to corporate networks, the Internet, intranets, extranets,
and other online resources. The Company is focused on the design, development,
manufacture, marketing and support of mobile information access products for
notebook and handheld computers and other computing devices. The Company's
products are recognized for innovative technology, high reliability and broad
compatibility. The Company sells and supports its products in over 100 countries
through distributors, resellers, electronic channels and global original
equipment manufacturer partnerships. The Company has regional headquarters in
Belgium and Singapore, and approximately 1,900 employees worldwide.
Available Information
The Company Common Stock is registered under the Exchange Act. Accordingly,
the Company is subject to the informational filing requirements of the Exchange
Act and, in accordance therewith, is required to file periodic reports, proxy
statements and other information with the Commission relating to its business,
financial condition and other matters. Certain information, as of particular
dates, concerning the Company's directors and officers, including their
remuneration, stock options granted to them and shares held by them, the
principal holders of the Company's securities, and any material interest of such
persons in transactions with the Company is required to be disclosed in proxy
statements and annual reports distributed to the Company's shareholders and
filed with the Commission. These reports, proxy statements and other information
are available for inspection and copying at the public reference facilities of
the Commission located in Judiciary Plaza, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and at the regional offices of the Commission located in
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661,
and Seven World Trade Center, Suite 1300, New York, New York 10048. Copies of
this material may also be obtained by mail, upon payment of the Commission's
customary fees from the Commission's principal office at 450 Fifth Street. N.W.,
Washington, D.C. 20549. The Commission also maintains an Internet site on the
World Wide Web at http://www.sec.gov that contains reports, proxy statements and
other information. In addition, such material should also be available for
inspection at The Nasdaq Stock Market, 1735 K Street, N.W., Washington, D.C.
20006.
Recent Developments
On January 15, 2001, the Company announced its results for the three months
ended December 31, 2000, the Company's first fiscal quarter for 2001. Net sales
for the three months ended December 31, 2000 were $120.1 million, compared to
$124.1 million for the same period in the last fiscal year. Net income,
excluding
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acquisition-related costs, was $0.2 million, or $0.01 per share, compared to
$15.3 million, or $0.55 per share, for the same period in the last fiscal year.
Including acquisition-related costs, net loss was $2.5 million, or $0.08 per
share, for the three months ended December 31, 2000. Acquisition-related costs
consist of non-recurring charges related to acquisitions and ongoing
amortization of goodwill and other acquisition-related intangibles from
transactions completed in prior periods. Set forth below is certain financial
information with respect to the Company and its consolidated subsidiaries
contained in the Company's Current Report on Form 8-K filed with the Commission
on January 18, 2001.
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20
XIRCOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE INFORMATION AND PERCENTAGES)
THREE MONTHS ENDED
DECEMBER 31,
--------------------
2000 1999
-------- --------
(UNAUDITED)
Net sales................................................... $120,094 $124,111
Cost of sales............................................... 84,765 67,038
-------- --------
Gross profit................................................ 35,329 57,073
Operating expenses:
Research and development.................................. 11,027 7,569
Sales and marketing....................................... 21,798 24,832
General and administrative................................ 5,931 4,392
Nonrecurring acquisition-related charges.................. -- 2,865
Amortization of goodwill and other acquisition-related
intangibles............................................ 2,815 608
-------- --------
Total operating expenses.......................... 41,571 40,266
-------- --------
Operating income (loss)..................................... (6,242) 16,807
Other income, net........................................... 3,719 625
-------- --------
Income (loss) before income taxes........................... (2,523) 17,432
Income tax provision (benefit).............................. (63) 4,707
-------- --------
Net income (loss)........................................... $ (2,460) $ 12,725
======== ========
Diluted earnings (loss) per share........................... $ (.08) $ .46
Diluted earnings per share, excluding acquisition-related
costs..................................................... $ .01 $ .55
Weighted average shares outstanding......................... 29,726 27,905
Net sales................................................... 100.0% 100.0%
Gross profit................................................ 29.4% 46.0%
Research and development.................................... 9.3% 6.1%
Sales and marketing......................................... 18.1% 20.0%
General and administrative.................................. 4.9% 3.6%
Acquisition-related costs................................... 2.3% 2.8%
-------- --------
34.6% 32.5%
Operating income (loss)..................................... (5.2)% 13.5%
Operating income (loss), excluding acquisition-related
costs..................................................... (2.9)% 16.3%
Net income (loss)........................................... (2.0)% 10.3%
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XIRCOM, INC.
INFORMATION EXCLUDING ACQUISITION-RELATED COSTS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE INFORMATION AND PERCENTAGES)
The following supplemental information excludes acquisition-related costs
consisting of nonrecurring acquisition-related charges and ongoing amortization
of goodwill and other acquisition-related intangibles. This information is not
prepared in accordance with generally accepted accounting principles.
THREE MONTHS ENDED
DECEMBER 31,
------------------
2000 1999
------- -------
(UNAUDITED)
Operations excluding acquisition-related costs:
Operating expenses.......................................... $38,756 $36,793
Operating income............................................ $(3,427) $20,280
Net income.................................................. $ 229 $15,261
Diluted earnings per share.................................. $ .01 $ .55
Operating expenses.......................................... 32.3% 29.7%
Operating income (loss)..................................... (2.9)% 16.3%
Income tax rate............................................. 22.0% 27.0%
Net income.................................................. 0.2% 12.3%
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XIRCOM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
DECEMBER 31, SEPTEMBER 30,
2000 2000
------------ -------------
(UNAUDITED)
Current assets:
Cash, and short term investments.......................... $274,465 $308,489
Accounts receivable....................................... 48,841 53,203
Income tax receivable..................................... 6,029 2,377
Inventories............................................... 35,104 24,483
Deferred income taxes..................................... 15,109 14,674
Other current assets...................................... 13,360 9,045
-------- --------
Total current assets.............................. 392,908 412,271
Property and equipment, net................................. 81,858 74,734
Other assets................................................ 54,638 54,544
-------- --------
Total assets...................................... $529,404 $541,549
======== ========
Current liabilities:
Accounts payable.......................................... $ 24,852 $ 34,014
Accrued liabilities....................................... 36,054 39,442
-------- --------
Total current liabilities......................... 60,906 73,456
Deferred income taxes....................................... 20,723 17,134
Shareholders' equity:
Common stock.............................................. 30 30
Paid-in capital........................................... 402,206 402,930
Retained earnings......................................... 45,539 47,999
-------- --------
Total shareholders' equity........................ 447,775 450,959
-------- --------
Total liabilities and shareholders' equity........ $529,404 $541,549
======== ========
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8. CERTAIN INFORMATION CONCERNING INTEL AND PURCHASER
General
Intel is a Delaware corporation with its principal offices located at 2200
Mission College Boulevard, Santa Clara, California 95052-8119. Intel designs,
develops, manufactures and markets microcomputer components and related products
at various levels of integration. Intel's principal components consist of
silicon-based semiconductors etched with complex patterns of transistors. Many
of these integrated circuits can perform the functions of millions of individual
transistors, diodes, capacitors and resistors.
Purchaser is a Delaware corporation with its principal executive offices
located at 2200 Mission College Boulevard, Santa Clara, California 95052-8119.
Purchaser is a direct wholly-owned subsidiary of Intel, was organized to acquire
the Company and has not conducted any unrelated activities since its
organization.
Available Information
Intel is subject to the information reporting requirements of the Exchange
Act and, in accordance therewith, files reports and other information with the
Commission. Information, as of particular dates, concerning Intel's directors
and officers, their remuneration, stock options and other matters, the principal
holders of Intel's securities and any material interest of such persons in
transactions with Intel is required to be disclosed in proxy statements
distributed to Intel's stockholders and filed with the Commission. These
reports, proxy statements and other information should be available for
inspection at the Commission and copies thereof should be obtainable from the
Commission in the same manner as is described for the Company in Section 7.
Copies of some of Intel's periodic reports and proxy statements may also be
obtained from Intel's Internet site on the World Wide Web at
http://www.intel.com.
Directors and Officers
The name, business address, citizenship, present principal occupation or
employment and five-year employment history of each of the executive officers of
Intel and Purchaser are set forth in Schedule I hereto.
Except as otherwise described in this Offer to Purchase, none of Intel,
Purchaser or, to the best knowledge of Intel and Purchaser, any of the persons
listed in Schedule I to this Offer to Purchase, nor any associate or
majority-owned subsidiary of any of the foregoing, beneficially owns or has any
right to acquire, directly or indirectly, any Shares and none of Intel,
Purchaser or, to the best knowledge of Intel and Purchaser, any of the persons
or entities referred to above, nor any director, executive officer or subsidiary
of any of the foregoing, has effected any transaction in the Shares during the
past 60 days.
Except as otherwise described in this Offer to Purchase, (1) none of Intel,
Purchaser or any of their respective subsidiaries nor, to the best knowledge of
Intel and Purchaser, any of the persons listed in Schedule I to this Offer to
Purchase, has any contract, arrangement, understanding or relationship with any
other person with respect to any securities of the Company, including, but not
limited to, any contract, arrangement, understanding or relationship concerning
the transfer or the voting of any such securities, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss, guarantees of profits, division of profits or loss or
the giving or withholding of proxies, and (2) none of Intel, Purchaser or, to
the best knowledge of Intel and Purchaser, any of the persons listed on Schedule
I to this Offer to Purchase, has had any business relationship or transaction
with the Company or any of its executive officers, directors or affiliates that
is required to be reported under the rules and regulations of the Commission
applicable to the Offer. Set forth below in Section 11 of this Offer to Purchase
entitled "Contacts with the Company; Background of the Offer and the Merger" and
elsewhere herein is a summary description of the mutual contacts, negotiations
and transactions between any of Purchaser or Intel, or any of their respective
subsidiaries or any of the persons listed on Schedule I to this Offer to
Purchase, on the one hand, and the
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Company or its affiliates, on the other hand, concerning a merger, consolidation
or acquisition, tender offer or other acquisition of securities, an election of
directors or a sale or other transfer of a material amount of assets.
9. SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by Purchaser to purchase the Shares,
other than those which are already owned by Intel, and consummate the Offer and
the Merger will be approximately $701.3 million. Purchaser will obtain all funds
needed for the Offer through a capital contribution, which will be made by Intel
to Purchaser at the time the Shares tendered pursuant to the Offer are accepted
for payment. Intel intends to use its available cash on hand to make this
capital contribution. Neither the Offer nor the Merger is conditioned on
obtaining financing.
10. CERTAIN TRANSACTIONS BETWEEN INTEL AND THE COMPANY
On August 1, 1991, Intel and the Company entered into a Corporate
Non-disclosure Agreement (the "CNDA"). Under the CNDA, both parties agreed to
sign a confidential information and transmittal record (a "CITR"), from time to
time, to protect a disclosing party from disclosure of its confidential,
proprietary and trade secret information ("Confidential Information"). Under the
CNDA/CITR, the receiving party shall (1) protect the Confidential Information
from disclosure to any third parties without the prior written approval of the
disclosing party and (2) exercise a reasonable degree of care to protect the
Confidential Information as it would have protected its own Confidential
Information. The period of confidentiality is generally five years from the date
of the CITR. Title to the Confidential Information at all times belongs to the
disclosing party, and upon termination of the CNDA, or at the disclosing party's
request, the receiving party shall either destroy the Confidential Information
and copies thereof or return them to the disclosing party.
On October 30, 2000, pursuant to discussions of a potential investment in
or acquisition of the Company by Intel, Intel and the Company signed a CITR
which protects the Company from the disclosure of information relating to its
financial condition, business plans, product plans, intellectual property and
operational data. On December 19, 2000, Intel and the Company signed a CITR
which protects the Company from disclosure of information contained in the due
diligence materials provided and oral disclosures made to Intel by the Company
pursuant to the contemplated transaction. Copies of these agreements are filed
with the Commission as exhibits to Intel's and Purchaser's Tender Offer
Statement on Schedule TO.
On February 28, 1997, pursuant to a Common Stock and Warrant Purchase
Agreement between Intel and the Company (the "Purchase Agreement"), Intel paid
the Company approximately $52.3 million to acquire 2,516,405 Shares and a
warrant (the "Warrant") to purchase up to 1,509,903 Shares. In the same
transaction, Intel entered into an Investor Rights Agreement with the Company
(the "Investor Rights Agreement").
Under the Investor Rights Agreement, Intel received a non-voting observer
seat at Company Board meetings (provided Intel held at least 12.5% of the then
outstanding Shares), which seat could, at Intel's election, be converted into a
right to designate a Company Board representative. Intel also received certain
registration rights with respect to the Warrant, including up to three demand
registrations and piggyback and S-3 registration rights, all of which terminate
on February 28, 2004. In addition, Intel received certain rights which allowed
it to maintain its equity stake in the Company, including the right to purchase
its pro rata share of any new securities issued by the Company and a right to
maintain its percentage holding of the Shares upon the issuance of any dilutive
securities. Furthermore, upon the occurrence of certain Corporate Events (as
defined in the Investor Rights Agreement), Intel received the right of first
refusal to purchase or acquire the Company, which right terminated on July 13,
2000. Intel also received a right of first negotiation on any Corporate Event
transaction until July 13, 2004. All of such rights are subject to certain
restrictions and requirements. Finally, Intel and the Company agreed that,
without the written consent of the Company, and subject to certain exceptions,
Intel would limit its holdings of the Shares to less than 22.5%.
On February 17, 1999, the Company and Intel agreed to change the terms of
the Warrant, modifying the definition of "Market Price" and agreeing that any
Shares obtained by Intel upon exercise of the Warrant could be repurchased by
the Company at a $0.50 per share discount from the then current market price of
the
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25
Company's Common Stock. On February 17, 1999, pursuant to the terms of the
Warrant, Intel "net exercised" the Warrant. The Company retained 995,589 of the
Shares issuable under the Warrant in payment of the aggregate exercise price of
approximately $40.8 million, or $27.01 per Share. Intel acquired 514,314 Shares
as a result of the net exercise of the Warrant. The Company then immediately
repurchased the 514,314 Shares from Intel at a price of $38.45 per share, the
five day average closing price, less a $0.50 discount per Share, for
approximately $19.8 million.
Following the exercise of the Warrant and the repurchase of the Shares by
the Company, Intel held 2,516,405 Shares. In August and September 2000, Intel
sold an aggregate of 647,875 Shares pursuant to Rule 144(k) of the Securities
Act of 1933, as amended (the "Securities Act"). As of the date of this Offer to
Purchase, Intel held 1,867,530, or approximately 6.2% of the issued and
outstanding Shares.
The Company supplies Intel with mobile interface cards. For the fiscal year
ended September 30, 2000, Intel accounted for $26.6 million, or 5%, of the
Company's total revenue. For the first quarter of fiscal year 2001, Intel
accounted for $13.8 million, or approximately 11%, of the Company's total
revenue.
11. CONTACTS WITH THE COMPANY; BACKGROUND OF THE OFFER AND THE MERGER
In late October 2000, representatives of Intel decided to designate a small
internal team to investigate the feasibility of entering into a possible
transaction with the Company.
On October 23, 2000, representatives of Intel contacted representatives of
the Company to discuss strategic opportunities to further the relationship
between the parties. A meeting was arranged for October 30.
On October 27, 2000, representatives of Intel presented the Company with a
high-level list requesting additional information about the Company.
On October 30, 2000, representatives of Intel met with representatives of
the Company to discuss possible strategic relationships between Intel and the
Company at the offices of the Company in Thousand Oaks, California. The
representatives of the Company presented an overview of the Company and its
products and the representatives of Intel presented an overview of Intel's
Platform Networking Group. During this meeting, the Company supplied written
responses to Intel's October 27th request. Additionally, during this meeting
Intel entered into a Confidential Information Transmittal Record with the
Company.
During November and early December 2000, representatives of Intel held
several internal meetings to discuss various possible strategic relationships
between Intel and the Company, including the purchase of the Company's PC Card
businesses and the spin-off of the Company's wireless wide area network ("WAN")
business to the Company's management and shareholders.
Between November 3 and November 17, 2000, representatives of Intel
telephoned representatives of the Company to discuss the Company's business and
financial position.
On November 17, 2000, Intel representatives held an internal management
review meeting to discuss the possible transactions with the Company, including
potential deal structures and issues related to a transaction.
Between November 22 and November 30, 2000, representatives of Intel
telephoned representatives of Broadview, the financial advisor to the Company,
and representatives of the Company to discuss possible strategic relationships
with the Company including potential transaction structures and issues related
thereto.
On November 27, 2000, Intel representatives held an internal management
review meeting to discuss the possible acquisition of the Company's PC Card
businesses, including potential deal structures and issues related to a
transaction.
On November 30, 2000, representatives of Intel telephoned representatives
of Broadview to discuss the Company's business and financial position.
On December 4, 2000, representatives of Intel telephoned representatives of
Broadview to discuss possible interest in an acquisition of the Company's PC
Card businesses and possible transaction structures.
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26
On December 5, 2000, representatives of Intel telephoned representatives of
Broadview and indicated Intel's possible willingness to purchase the Company's
PC Card businesses pursuant to a stock-for-stock merger together with the
simultaneous spin-off of the Company's wireless WAN business to the Company's
shareholders. During this telephone call, Intel and Broadview discussed
potential transaction structures and issues related thereto.
From December 5 through December 12, 2000, Intel representatives held a
series of internal meetings to discuss issues surrounding a possible
transaction, including potential structures and tax and accounting concerns.
On December 6, 2000, the Board of Directors of Intel held a telephonic
meeting to discuss the proposed purchase of the Company's PC Card businesses.
Intel's management informed the Board of Directors of the status of the
preliminary review of the Company. After these discussions, the Board of
Directors authorized Intel's senior management to engage in further due
diligence, discussions and negotiations with the Company and its
representatives, with a view to determining whether a transaction on terms
acceptable to Intel could be achieved.
On December 11, 2000, representatives of Intel provided representatives of
the Company with a detailed questionnaire relating to the Company's business and
financial condition.
From December 11 through December 21, 2000, representatives of Intel were
at a facility near the Company's principal executive offices in California to
conduct additional due diligence and to further discuss the Company's products
and business and financial condition with the Company's management. During this
period, representatives from Intel, the Company and Broadview met regularly by
telephone and in-person to discuss ongoing diligence and terms of a potential
transaction.
On December 19, 2000, representatives of Intel met with representatives of
the Company for dinner. During the dinner meeting, representatives of the
Company asked the Intel representatives whether Intel had a possible interest in
acquiring the entire Company. At this dinner, the parties agreed that it was
highly unlikely that a transaction involving the Company's PC Card businesses
could be completed prior to the holidays. As a result, representatives from
Intel, the Company and Broadview agreed to continue to provide and review
diligence materials through the holiday period and renew negotiations for a
possible transaction involving the Company's PC Card businesses immediately
after the holidays. On December 21, 2000, representatives of Broadview
reiterated the Company's willingness to entertain an offer for the acquisition
of the entire Company.
On December 27 and 28, 2000, representatives of Intel telephoned
representatives of the Company and Broadview to further discuss the deal
structure and terms.
The parties reengaged on January 3, 2001 and undertook additional due
diligence and the negotiation of the definitive purchase agreement. Between
January 3 and January 13, 2001, numerous meetings were held by telephone and at
offices of Intel's counsel between representatives of Intel, Intel's counsel,
the Company, the Company's counsel and Broadview to discuss due diligence,
request additional information and negotiate a definitive purchase agreement and
related agreements.
On January 6, 2001, representatives of Broadview telephoned representatives
of Intel to discuss Intel's possible interest in the acquisition of the entire
Company pursuant to a cash or stock transaction.
On January 8, 2001, the Intel representatives held an internal management
review to discuss the status of the negotiations relating to the proposed
purchase of the Company's PC Card businesses and possible interest in an
acquisition of the entire Company. Based on the review, additional diligence and
analysis of a potential acquisition of the entire Company was recommended.
On January 8 and January 10, 2001, representatives from Intel telephoned
representatives from Broadview to discuss the Company's financial outlook,
ongoing negotiations, structural and diligence issues, and a price range for the
purchase of the PC Card businesses.
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27
On January 11, 2001, the Intel representatives held an internal management
review to discuss the latest diligence findings and Intel's possible interest in
an acquisition of the entire Company. Based on Intel's review of the entire
Company and potential employee and integration issues related to the purchase of
the PC Card businesses alone, it was recommended that an acquisition of the PC
Card businesses not be pursued and, instead, an acquisition of the entire
Company be pursued.
Also, on January 11, 2001, representatives of Intel met with
representatives of Broadview at the offices of Intel's counsel to discuss a
possible acquisition of the entire Company by Intel, including price, form of
consideration and transaction structure.
On January 12, 2001, representatives of Intel and representatives of the
Company agreed to proceed with definitive agreements for a cash tender offer for
the entire Company at a $25 per share price, subject to the final approval of
the Company Board.
Between January 12 and the morning of January 15, 2001, representatives
from Intel met and telephoned the representatives of Broadview and the Company
several times daily to discuss ongoing diligence issues and negotiate terms and
conditions for a possible acquisition of the entire Company.
On January 14, 2001, Intel held an internal management briefing to review
the final status of diligence, update final terms and structure of the
transaction and complete employee and press communications relating to the
possible transaction.
During the early morning of January 15, 2001, representatives of Intel and
the Company executed and delivered the Merger Agreement, the Stock Option
Agreement and the Voting Agreement.
On the morning of January 15, 2001, the Company and Intel issued a joint
press release announcing the execution of the Merger Agreement. A copy of the
press release is filed with the Commission as an exhibit to Intel's and
Purchaser's Tender Offer Statement on Schedule TO.
12. PURPOSE OF THE OFFER AND THE MERGER AGREEMENT
The purpose of the Offer is for Intel to acquire, through its wholly-owned
subsidiary, the entire equity interest in the Company. The purpose of the Merger
is for Intel to acquire all of the equity interest in the Company not acquired
pursuant to the Offer. Upon consummation of the Merger, the Company will become
a direct wholly-owned subsidiary of Intel. The acquisition of the entire equity
interest in the Company has been structured as a cash tender offer followed by a
cash merger in order to provide a prompt transfer of ownership of the equity
interest in the Company from the Company's shareholders to Intel and to provide
the Company's shareholders with cash for all of their Shares.
Under the CCC, the approval of the Company Board and, under certain
circumstances, the affirmative vote of the holders of a majority of the
outstanding Shares present at a duly constituted meeting are required to approve
and adopt the Merger Agreement and the transactions contemplated thereby. If a
vote of the shareholders is required, the Company has agreed pursuant to the
Merger Agreement to take all actions necessary to convene and hold a meeting of
its shareholders (the "Shareholders' Meeting"), as promptly as practicable after
the acceptance for payment of Shares tendered pursuant to the Offer, to consider
and vote upon the adoption and approval of the Merger Agreement and the
transactions contemplated thereby, if such action is required under the CCC. A
proxy statement containing detailed information concerning the Merger will be
furnished to shareholders of the Company in connection with any Shareholders'
Meeting. Notwithstanding the foregoing, if, following consummation of the Offer,
Intel, Purchaser and/or any other subsidiary of Intel owns at least ninety
percent (90%) of the outstanding Shares, the parties will take all necessary and
appropriate actions to cause the Merger to become effective as soon as
practicable after the Expiration Date without a Shareholders' Meeting in
accordance with the CCC and the General Corporation Law of the State of Delaware
(the "DGCL").
At a meeting duly called and held on January 14, 2001, the Company Board
(1) after evaluating the Merger, determined that the Merger Agreement and the
transactions contemplated thereby, including the Offer and the Merger, taken
together, are at a price and on terms that are fair and in the best interests of
the
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Company and its shareholders; (2) approved the Merger Agreement and the
transactions contemplated thereby, including the Offer and the Merger, in all
respects; and (3) resolved to recommend that the shareholders of the Company
accept the Offer, tender their Shares thereunder to Purchaser and approve and
adopt the Merger Agreement and the Merger. As described above, the only
remaining corporate action of the Company that may be required is the approval
and adoption of the Merger Agreement and the transactions contemplated thereby
by the holders of a majority of the Shares. If the Minimum Condition is
satisfied, Intel will have sufficient voting power to cause the approval and
adoption of the Merger Agreement and the transactions contemplated thereby
without the affirmative vote of any other shareholder of the Company. Under the
Merger Agreement, Intel has agreed to vote, or cause to be voted, at any such
meeting all Shares owned by it, Purchaser or any other subsidiary of Intel in
favor of the Merger. If Intel acquires at least ninety percent (90%) of the
Shares in the Offer, under the CCC and the DGCL, it will be able to consummate
the Merger without a vote of the Company's shareholders.
Furthermore, the Stock Option Agreement permits Intel to purchase up to
5,954,325 Shares (or such other number of Shares as equals 19.9% of the issued
and outstanding shares of Company Common Stock at the time of exercise of the
option) at an exercise price of $25 per share under certain specified
circumstances. Among other circumstances permitting Intel to exercise its
option, Intel may exercise its option to the extent necessary so that the number
of shares to be acquired pursuant to the option plus the number of tendered
Shares will, upon issuance of the option shares, equal at least ninety percent
(90%) of the issued and outstanding Shares of the Company. The purchase of
Shares pursuant to its option may, under certain circumstances, allow Intel to
increase its ownership of Shares above 90% in order to consummate the Merger
without a vote of the shareholders of the Company. The option is also
exercisable upon a termination of the Merger Agreement in a manner obligating
the Company to pay Intel $24 million as liquidated damages. See -- 13. The
Merger Agreement, the Stock Option Agreement and the Tender and Voting
Agreement" for more detailed information.
13. THE MERGER AGREEMENT, THE STOCK OPTION AGREEMENT AND THE TENDER AND VOTING
AGREEMENT
The Merger Agreement
The following is only a summary of certain provisions of the Merger
Agreement. Company shareholders should read the Merger Agreement in its
entirety. A copy of the Merger Agreement is filed with the Commission as an
exhibit to Intel's and Purchaser's Tender Offer Statement on Schedule TO.
The Offer. The Merger Agreement provides for the making of the Offer.
Pursuant to the Offer, each tendering shareholder will receive the Offer Price
for each Share tendered in the Offer. Purchaser's obligation to accept for
payment or pay for Shares is subject to the satisfaction of the conditions that
are described in the section entitled -- 18. Certain Conditions of the Offer,"
including the Minimum Condition. Pursuant to the Merger Agreement, Purchaser
expressly reserves the right to waive any of the conditions to the Offer (except
as otherwise provided in the Merger Agreement), and to make any change in the
terms or conditions of the Offer; provided that, without the written consent of
the Company, Purchaser may not (1) decrease the Offer Price, (2) change the form
of consideration payable in the Offer, (3) reduce the maximum number of Shares
to be purchased in the Offer, (4) impose conditions to the Offer in addition to
those set forth on Annex A to the Merger Agreement and described in "-- 18.
Certain Conditions of the Offer" below, (5) amend the conditions to the Offer
set forth in Annex A to the Merger Agreement and described in "-- 18. Certain
Conditions of the Offer" below to broaden their scope, (6) amend any other term
of the Offer in a manner adverse to the holders of the Shares, (7) extend the
Offer except as permitted by the terms of the Merger Agreement or (8) amend or
waive the Minimum Condition.
Notwithstanding the foregoing, Purchaser may, without the consent of the
Company Board, (1) from time to time extend the Offer if at the scheduled
Expiration Date any conditions of the Offer have not been satisfied or waived,
(2) extend the Offer for any period required by any rule, regulation,
interpretation or position of the Commission or the staff thereof applicable to
the Offer, (3) if the first purchase of Shares under the Offer shall not have
occurred prior to March 31, 2001, extend the Offer to the later of April 10,
2001 and the date on which all conditions to the offer have been satisfied, or
(4) extend the Offer for any reason on
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one or more occasions for an aggregate period of not more than ten business days
beyond the latest Expiration Date that would otherwise be permitted under clause
(1), (2) or (3) of this sentence if, on such Expiration Date, there have not
been tendered at least ninety percent (90%) of the outstanding Shares. In
addition, if at the time of any scheduled Expiration Date any one or more of the
conditions to the Offer set forth on Annex A to the Merger Agreement and
described in "-- 18. Certain Conditions of the Offer" below are not satisfied
and none of the events set forth in paragraphs (a) through (f) of Annex A to the
Merger Agreement and described in "-- 18. Certain Conditions of the Offer" below
that would permit Purchaser not to accept tendered Shares for payment has
occurred and is continuing, then, provided that such conditions are reasonably
capable of being satisfied, Purchaser will extend the Offer from time to time
unless any such condition is no longer reasonably capable of being satisfied or
any such event has occurred. In no event, however, will Purchaser be required to
extend the Offer beyond March 31, 2001 (provided that if on March 31, 2001, any
applicable waiting period under the HSR Act has not expired or terminated and
none of the events set forth in paragraphs (a) through (f) of Annex A to the
Merger Agreement and described in "-- 18. Certain Conditions of the Offer" below
that would permit Purchaser not to accept Shares tendered for payment has
occurred and is continuing, then such March 31, 2001 date shall be automatically
extended to May 15, 2001).
Board Representation. Promptly upon the purchase by Purchaser of the
Shares pursuant to the Offer and from time to time thereafter, if the Minimum
Condition has been met, Intel will be entitled to designate such number of
directors, rounded up to the next whole number, on the Company Board as will
give Intel representation on the Company Board equal to the product of the total
number of directors on the Company Board (determined after giving effect to the
directors elected pursuant to this sentence) and the percentage that the
aggregate number of Shares so purchased bears to the total number of Shares then
outstanding on a fully diluted basis. Notwithstanding the foregoing, the Company
will use its best efforts to ensure that two of the members of the Company Board
as of January 15, 2001 who are not officers of the Company or affiliates of
Intel (the "Continuing Directors") will remain members of the Company Board
until the Effective Time. If a Continuing Director resigns from the Company
Board, Intel, Purchaser and the Company will permit the remaining Continuing
Director or Directors to appoint the resigning Director's successor who will be
deemed to be a Continuing Director. Following the election or appointment of
Intel's designees to the Company Board pursuant to the Merger Agreement and
prior to the Effective Time, if there are any Continuing Directors, (1) any
amendment of the Merger Agreement, any termination of the Merger Agreement by
the Company, (2) any extension by the Company of the time for the performance of
any of the obligations or other acts of Intel or Purchaser or any waiver of any
of the Company's rights under the Merger Agreement or (3) any other
determination with respect to any action to be taken or not to be taken by the
Company relating to the Merger Agreement, will require the concurrence of a
majority of such Continuing Directors. The Company's obligation to appoint
designees of Intel to the Company Board will be subject to Section 14(f) of the
Exchange Act and Rule 14f-1 thereunder. The name, business address, citizenship,
present principal occupation or employment and five-year employment history of
each person Intel may designate to the Company Board are set forth in Schedule I
hereto.
The Merger. As soon as practicable after the satisfaction or waiver of the
conditions to the Merger, Purchaser will be merged with and into the Company, as
a result of which the separate corporate existence of Purchaser will cease and
the Company will continue as the Surviving Corporation and a direct wholly-owned
subsidiary of Intel. The Effective Time will occur at the date and time that a
certificate of merger or a certificate of ownership and merger in such form as
is required by the DGCL (the "Certificate of Merger") is filed with the
Secretary of State of the State of Delaware and an agreement of merger or
certificate of ownership in such form as is required by the CCC (the "Agreement
of Merger") is filed with the Secretary of State of the State California or such
later time as Intel and the Company may agree upon and as may be set forth in
the Certificate of Merger and the Agreement of Merger. The Surviving Corporation
will continue its corporate existence under the laws of the State of California.
The Articles of Incorporation and bylaws of the Surviving Corporation at the
Effective Time shall be amended and restated. The directors of Purchaser at the
Effective Time will be the initial directors of the Surviving Corporation until
their successors are duly elected and qualified, and the officers of Purchaser
at the Effective Time will be the initial officers of the Surviving Corporation
until their successors are duly elected and qualified.
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Consideration to be Paid in the Merger. In the Merger, each outstanding
Share (except for Excluded Shares) will be converted into the right to receive
the Offer Price, without interest thereon (the "Merger Consideration"). Each
share of common stock of Purchaser issued and outstanding immediately prior to
the Effective Time will be converted into one share of common stock of the
Surviving Corporation.
Rights of Shareholders in the Merger. No dissenters' rights are available
in connection with the Offer. If the Merger is consummated, however,
shareholders of the Company who did not sell their Shares in the Offer and are
entitled to vote on the Merger, may have certain rights under the CCC to dissent
and demand appraisal, and receive payment in cash of the fair market value, of
their Shares. In general, under the CCC, if the approval of the outstanding
shares of a corporation is required for a merger or reorganization, each
shareholder entitled to vote on the transaction who did not vote in favor of the
merger or reorganization may require the corporation to purchase for cash at the
fair market value the shares owned by such shareholder. However, no appraisal
rights are available for shares listed on any national securities exchange
certified by the Commissioner of Corporations or listed on the National Market
System of the Nasdaq Stock Market, unless (1) there exists with respect to such
shares any restriction on transfer imposed by the corporation or by any law or
regulation or (2) demands for payment are filed with respect to 5% or more of
the outstanding shares of that class.
Shareholders who satisfy the statutory conditions discussed above must
perfect such appraisal rights and comply with the procedures set forth in
Chapter 13 of the CCC. If such rights are perfected, and the Surviving
Corporation and shareholder cannot otherwise agree on a price, the fair market
value of the Shares will be determined by a superior court judge, or court
appointed independent appraisers, and the shareholders will be entitled to
receive a cash payment equal to such fair value from the Surviving Corporation
with interest from the date a judgment on the fair market value is entered. In
determining the fair market value of the Shares, the court or the appraisers are
required to take into account all relevant factors. Such determination is to be
determined as of the day before the first announcement of the terms of the
Merger, excluding any appreciation or depreciation in consequence of the
proposed action. Costs of any action are to be assessed and apportioned as the
court considers equitable, unless the appraisal exceeds the price offered by the
Company, in which case the Company shall pay statutory costs. In certain
circumstances, the court may require the Company to pay other costs related to
attorneys' fees, expert witness fees and interest as of the date of judgment.
THE FOREGOING SUMMARY OF THE RIGHTS OF DISSENTING SHAREHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
SHAREHOLDERS DESIRING TO EXERCISE ANY AVAILABLE APPRAISAL RIGHTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF SECTION 1300 INCLUDED
HEREWITH IN ANNEX A. THE PERFECTION AND EXERCISE OF APPRAISAL RIGHTS ARE
CONDITIONED ON STRICT ADHERENCE TO THE APPLICABLE PROVISIONS OF THE CCC.
Options. At the Effective Time, options to purchase Shares granted to
persons who were employees of the Company at the time of grant, including grants
under the Company's 1992 Stock Option Plan, 1995 Stock Option Plan, 1997 Patent
Award Stock Option Plan, Entrega Technologies, Inc. Stock Option Plan or 2000
Stock Option Plan (collectively, the "Option Plans"), which are then outstanding
and unexercised, whether vested or unvested, will be converted automatically
into options to purchase shares of common stock, par value $0.001 per share, of
Intel ("Intel Common Stock") and Intel will assume each such Option Plan,
subject to the terms of the applicable Option Plans. In each case, the number of
shares of Intel Common Stock purchasable upon exercise of an assumed option will
be equal to the number of Shares that were purchasable under such assumed option
immediately prior to the Effective Time multiplied by the Exchange Ratio (as
defined below), and rounded up to the nearest whole share. Further, the per
share exercise price under each such assumed option will be adjusted by dividing
the per share exercise price of each such assumed option by the Exchange Ratio,
and rounding down to the nearest cent. The terms of each assumed option will, in
accordance with its terms, be subject to further adjustment as appropriate to
reflect any stock split, stock dividend, recapitalization or other similar
transaction with respect to Intel Common Stock on or subsequent to the Effective
Time. The duration and other terms of the Option Plans will be the same as the
original options except that all references to the Company will be deemed to be
references to Intel. The "Exchange Ratio"
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shall be equal to the ratio obtained by dividing the Offer Price by the closing
price of one share of Intel Common Stock on the Nasdaq National Market on the
trading day immediately preceding the Effective Time.
Pursuant to the Merger Agreement, the Company agreed to take all actions
necessary to ensure that, on and after January 15, 2001, no further options will
be granted under the Company's 1997 Patent Award Stock Option Plan. With respect
to the Company's Employee Stock Purchase Plan (the "ESPP"), the offering,
extended offering and purchase periods under the ESPP shall end at the earlier
of April 30, 2001 and the first date on which the Purchaser has accepted Shares
for payment pursuant to the Offer. In addition, the Company shall not commence
any new offering, extended offering or purchase period, and shall not permit any
participant to increase the rate of his or her payroll deductions under the
ESPP.
Representations and Warranties. The Merger Agreement contains
representations and warranties by the Company, on the one hand, and Intel and
Purchaser, on the other hand. The terms of a limited number of the Company's
representations and warranties provide that the Company will only be in breach
of the applicable representation or warranty if the effect of the breach has a
"Material Adverse Effect on the Company." "Material Adverse Effect on the
Company" is defined in the Merger Agreement as any circumstance, change in, or
effect on the Company and its subsidiaries, that is, or is reasonably likely in
the future to be, materially adverse to (1) the assets, liabilities (including
contingent liabilities), business, operations, condition (financial or
otherwise), earnings or results of operations of the Company and its
subsidiaries taken as a whole or (2) the Company's ability to consummate the
Merger or any of the transactions contemplated thereby or by any of the other
agreements executed and delivered therewith. The terms of a limited number of
Intel's and the Purchaser's representations and warranties provide that Intel
and Purchaser will only be in breach of the applicable representation or
warranty if the breach has a "Material Adverse Effect on Intel." "Material
Adverse Effect on Intel" is defined in the Merger Agreement as any circumstance,
change in or effect on Intel and its subsidiaries, that is, or is reasonably
likely in the future to be, materially adverse to (1) the assets, liabilities
(including contingent liabilities), business, operations, condition (financial
or otherwise), earnings or results of operations of Intel and its subsidiaries
taken as a whole or (2) Intel's ability to consummate the Offer or the Merger or
any of the transactions contemplated thereby or by any of the other agreements
executed and delivered therewith.
The representations and warranties of the Company, on the one hand, and
Intel and the Purchaser, on the other hand, include:
- due organization, existence and good standing (including, in the case of
the Company, its subsidiaries); qualification to do business (including,
in the case of the Company, its subsidiaries) except where the failure to
be so qualified would not have a Material Adverse Effect on the Company
or a Material Adverse Effect on Intel, as the case may be; and, in the
case of the Company, a true and complete listing of its equity
investments;
- corporate power and authority to enter into the Merger Agreement and
perform its obligations under the Merger Agreement and, in the case of
the Company, the Stock Option Agreement; proper execution, delivery and
enforceability of the Merger Agreement and, in the case of the Company,
the Stock Option Agreement;
- accuracy of the information about the Company, Intel and the Purchaser in
the 14D-9, the proxy statement and the offer documents;
- governmental and third-party approvals and authorizations in connection
with the Merger Agreement and, in the case of the Company, the Stock
Option Agreement, and compliance with each party's charter documents,
material agreements and applicable law;
- absence of material legal proceedings and injunctions;
- absence of broker's fees arising from the transactions contemplated by
the Merger Agreement; and
- in the case of Intel and Purchaser, that they will have the funds
necessary to acquire the Shares.
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The Merger Agreement contains additional representations and warranties of
the Company. These include:
- capitalization of the Company and its subsidiaries;
- approval of the Offer, the Merger, the Merger Agreement and the Stock
Option Agreement by the Company Board;
- filings with the Commission and accuracy of financial statements;
- absence of existing defaults under its charter documents, material
agreements and applicable law;
- absence of undisclosed liabilities and certain changes of the Company and
its subsidiaries;
- the Company's and its subsidiaries' possession of all material permits,
licenses, variances, exemptions, orders and approvals necessary for the
lawful conduct of their respective businesses and compliance with
applicable laws;
- employee benefit plans, labor, employment and related matters;
- no releases of hazardous material and no violations of environmental
laws;
- payment of taxes and filing of tax returns;
- intellectual property;
- insurance;
- certain business practices, including absence of unlawful contributions
and payments;
- product warranties and guarantees;
- suppliers and customers;
- material contracts; and
- receipt of fairness opinion from Broadview.
No representations or warranties made by the Company, Intel or Purchaser
will survive beyond the Effective Time.
Conduct of Business Before the Merger. Each of the Company, Intel and
Purchaser has agreed to do certain things before the Merger occurs.
The Company has agreed to, and to cause each of its subsidiaries to:
- conduct its operations in the ordinary course consistent with past
practice and, to the extent consistent therewith, with no less diligence
and effort than would be applied in the absence of the Merger Agreement;
- use its best efforts to preserve intact its current business
organizations;
- use its best efforts to keep available the services of its current
officers and employees;
- use its best efforts to preserve its relationships with customers,
suppliers, distributors, lessors, creditors, employees, contractors and
others having business dealings with it; and
- continue to take all reasonable action that may be necessary or advisable
to protect and preserve its intellectual property.
The Company, Intel and the Purchaser have also agreed to:
- use all reasonable efforts to do all things reasonably necessary, proper
or advisable under applicable law to consummate and make effective the
transactions contemplated by the Merger Agreement, including the making
of required filings, the obtaining of consents and approvals of all third
parties and
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governmental authorities necessary or advisable to consummate the Merger,
and contesting any legal proceedings relating to the Merger;
- consult and cooperate with one another, and consider in good faith the
views of one another, in connection with any analyses, appearances,
presentations, letters, white papers, memoranda, briefs, arguments,
opinions or proposals made or submitted by or on behalf of any party in
connection with proceedings under or relating to the HSR Act or any other
foreign, federal, or state antitrust, competition, or fair trade law;
- not issue any press release or make any other public statements without
the prior consent of the other party; and
- promptly tell the other party about (1) any events or circumstances that
have caused or would be likely to cause any representations or warranties
to be inaccurate or untrue in any material respect at or prior to the
Effective Time or (2) any material failure to comply with or satisfy in
any material respect any covenant, condition or agreement to be complied
with or satisfied under the Merger Agreement.
Subject to certain agreed exceptions, the Company has agreed for itself and
on behalf of its subsidiaries not to:
- amend its charter documents;
- issue or agree to issue any stock of any class or any other securities or
equity equivalents, except for the issuance and sale of Shares pursuant
to the exercise of Company stock options outstanding as of January 15,
2001;
- split, combine or reclassify any shares of its capital stock, declare,
set aside or pay any dividend or other distribution of any kind in
respect of its capital stock;
- adopt a plan of complete or partial liquidation, dissolution, merger or
other reorganization other than the Merger;
- alter any subsidiary's corporate structure or ownership;
- incur or assume any debt, except under existing lines of credit in the
ordinary course of business consistent with past practice, or modify or
amend the terms of any existing debt;
- assume, guarantee, endorse or otherwise become responsible for the
obligations of any other person except for obligations of the Company's
subsidiaries incurred in the ordinary course of business consistent with
past practice;
- make any loans, advances or capital contributions to or investments in
any other person, except to subsidiaries and customary loans or advances
to employees in the ordinary course of business consistent with past
practice;
- pledge or otherwise encumber its capital stock or the capital stock of
its subsidiaries;
- mortgage or pledge any of its assets or create or permit any material
lien on those assets;
- except as required by law, enter into, adopt, amend or terminate any
employee compensation, benefit or similar plan or increase any
compensation or fringe benefits;
- grant any severance or termination pay, except as required by law or by
any written agreements existing and disclosed on January 15, 2001;
- exercise discretion or voluntarily accelerate the vesting of any stock
options as a result of the Merger;
- acquire, sell, license, transfer or otherwise dispose of any material
assets in any single transaction or series of related transactions having
a fair market value in excess of $100,000 in the aggregate, other than
for sales of its products and non-exclusive licenses of software in the
ordinary course of business consistent with past practices;
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- enter into any exclusive license, distribution, marketing, sales or other
agreements;
- sell, transfer or otherwise dispose of any intellectual property or
license any source code to any third party;
- except as required as a result of a change in law or in generally
accepted accounting principles, change any of its accounting principles,
practices or methods;
- revalue in any material respect any of its assets, including writing down
the value of inventory or writing-off notes or accounts receivable;
- acquire any other business or entity or any equity interest therein;
- enter into agreement having a term in excess or six months of any
material agreement;
- amend, modify or waive any right under any material contracts;
- modify its standard product warranty terms or modify any existing product
warranties in any material and adverse manner;
- authorize any new or additional capital expenditure(s) that in the
aggregate are in excess of $250,000 in any calendar quarter, with respect
to those expenditures listed in the capital budget that was previously
delivered to and acknowledged by Intel;
- authorize any new or additional manufacturing capacity expenditure or
expenditures for any manufacturing capacity contracts or arrangements;
- make or revoke any material tax election or settle or compromise any
income tax liability in excess of $100,000;
- permit any insurance policy naming it as a beneficiary or loss-payable to
expire, be canceled or be terminated, unless a comparable insurance
policy is obtained and in effect;
- fail to file any tax returns when due or fail to cause such tax returns
when filed to be complete and accurate in all material respects;
- fail to pay any taxes or other material debts when due;
- settle or compromise any legal proceeding that relates to the Merger
Agreement, the settlement or compromise of which involves more than
$50,000 or would otherwise be material to the Company and its
subsidiaries, or relates to any intellectual property matters;
- take or fail to take any action that could limit the use of any net
operating losses, built-in losses, tax credits or other similar items;
- take or fail to take any action that could cause any transaction intended
by the Company or its subsidiaries to be a reorganization under Section
368(a) under the Internal Revenue Code to fail to qualify as such a
reorganization;
- modify or fail in any material respect to comply with any of the Company
policies, as described in Attachment 1 to Schedule A-1;
- accelerate the collection of receivables or defer the payment of
payables, or modify the payment terms of any of the receivables or
payables;
- sell, securitize, factor or otherwise transfer any accounts receivable;
or
- take or agree in writing or otherwise to take any of the actions
described above.
The Company also has agreed that it will:
- provide Intel with reasonable access during normal business hours to all
the Company's employees, plants, offices, warehouses and other facilities
and to all books and records and personnel files of current employees of
the Company and its subsidiaries as Intel may reasonably require, and
cause its
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officers and those of its subsidiaries to furnish Intel with such
financial and operating data and other information with respect to the
business and properties of the Company and its subsidiaries as Intel may
from time to time reasonably request;
- provide Intel with periodic financial information, including periodic
statements of total cash and net working capital to enable Intel to
measure compliance by the Company with the financial requirements set
forth on Annex A to the Merger and described in "-- 18. Certain
Conditions of the Offer" below; and
- establish on interest bearing account in which all proceeds from the
exercise of Company stock options on or after January 15, 2001 will be
deposited, which funds will not be counted for purposes of calculating
the Company's total cash or net working capital pursuant to the financial
tests set forth on Annex A to the Merger Agreement and described in
"-- 18. Certain Conditions of the Offer" below.
Acquisition Proposals.
The term "Third Party Acquisition" is used herein to mean any of the
following:
- an acquisition of the Company by merger or otherwise by anyone other than
Intel, Purchaser or any of their affiliates;
- the acquisition by anyone other then Intel, Purchaser or any of their
affiliates of any material portion (which includes 15% or more) of the
assets of the Company and its subsidiaries, other than the sale of its
products in the ordinary course of business consistent with past
practices;
- an acquisition by anyone other then Intel, Purchaser or any of their
affiliates of 15% or more of the outstanding Shares;
- the Company's adoption of a plan of liquidation or declaration or payment
of an extraordinary dividend;
- the Company's or any of its subsidiaries' repurchase of more than 10% of
the outstanding Shares; or
- the Company's or any of its subsidiaries' acquisition of any interest or
investment in any business whose annual revenues, net income or assets is
equal to or greater than 10% of the annual revenues, net income or assets
of the Company.
The Company has agreed that it will:
- cease any discussions or negotiations with any other persons with respect
to any Third Party Acquisition;
- request each person that has executed a confidentiality agreement in
connection with its consideration of acquiring the Company or any of its
subsidiaries to return all confidential information heretofore furnished
to such person by or on behalf of the Company or any of its subsidiaries;
- not, directly or indirectly, encourage, solicit, participate in or
initiate discussions or negotiations with, or provide any information to
anyone except Intel and Purchaser concerning, any Third Party
Acquisition; provided, however, that nothing in the Merger Agreement
shall prevent the Company Board from taking and disclosing to the
Company's shareholders a position contemplated by Rules 14d-9 and 14e-2
promulgated under the Exchange Act with regard to any tender or exchange
offer;
- promptly notify Intel if the Company or any of its subsidiaries or
affiliates receives any proposal or inquiry concerning a Third Party
Acquisition;
- provide a copy of any written agreements, proposals, or other materials
the Company receives about a Third Party Acquisition; and
- advise Intel from time to time of the status and any developments
concerning any Third Party Acquisition.
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Except as described below, the Company Board will not withdraw or modify
its recommendation of the Offer or the Merger. It also may not approve,
recommend, cause or permit the Company to enter into any agreement or obligation
relating to any Third Party Acquisition. However, if the Company Board by a
majority vote determines in its good faith judgment, after consultation with and
based upon the advice of outside legal counsel, that its fiduciary duties
require it to do so, the Company Board may withdraw its recommendation of the
Offer or the Merger or approve or recommend any bona fide proposal to acquire,
directly or indirectly, solely for cash and/or securities, all Company Common
Stock then outstanding, or all or substantially all of the Company's assets:
- that is fully financed and contains terms that the Company Board by a
majority vote determines in good faith, based on the written advice of
the Company's financial advisor or another financial advisor of
nationally recognized reputation, to be more favorable to the Company's
shareholders than the Merger;
- that the Company Board by a majority vote determines in its good faith
judgment (following and based on the written advice the Company's
financial adviser or another financial advisor of nationally recognized
reputation and its legal or other advisers) to be reasonably capable of
being completed (taking into account all legal, financial, regulatory and
other aspects of the proposal and the person making the proposal);
- that does not contain a right of first refusal or right of first offer
with respect to any counter-proposal that Intel may make; and
- that does not contain any financing or "due diligence" condition.
An offer that has all of these characteristics is sometimes referred to
herein as a "Superior Proposal."
The Company Board may only withdraw its recommendation of the Offer or the
Merger or approve or recommend any Superior Proposal (1) after providing written
notice to Intel advising Intel that the Company Board has received a Superior
Proposal, specifying the material terms and conditions and identifying the
person making the Superior Proposal, and (2) if Intel does not, within ten
business days of receipt of notice of such proposal, make an offer that the
Company Board by a majority vote determines in good faith, based on the written
advice of the Company's financial advisor or another financial advisor of
nationally recognized reputation, to be at least as favorable to the Company
shareholders as the Superior Proposal. If Intel fails to make this offer, the
Company may enter into an agreement with respect to the Superior Proposal only
if the Merger Agreement is concurrently terminated in accordance with its terms
and the Company has paid all amounts owing to Intel as a result of such
termination, as more fully described below under " -- Liquidated Damages and
Expenses."
Conditions to the Merger. The obligation of each of the Company, Intel and
Purchaser to consummate the Merger is subject to the satisfaction of each of the
following conditions:
- the Merger Agreement shall have been approved and adopted by the
requisite vote of the Company's shareholders, if such vote is required by
applicable law;
- no statute, rule, regulation, order, decree, ruling or injunction shall
have been enacted, entered, promulgated or enforced by any United States
federal or state court or governmental authority that prohibits,
restrains, enjoins or restricts the Merger;
- any waiting period applicable to the Merger under the HSR Act or any
other foreign, federal or state antitrust, competition or fair trade law
shall have terminated or expired;
- all governmental or regulatory notices, approvals or other requirements
necessary to consummate the transactions contemplated by the Merger
Agreement and to operate the Company's business after the Effective Time
in all material respects as it was operated prior thereto (other than
under the HSR Act) shall have been given, obtained or complied with, as
applicable;
- the proxy statement, if required to be prepared and disseminated to the
Company's shareholders, shall have been cleared by the Commission and
shall not be the subject of any stop order; and
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- the Purchaser or its affiliates shall have purchased all Shares validly
tendered and not withdrawn pursuant to the Offer.
The Company will not be required to complete the Merger unless:
- Intel's and Purchaser's representations and warranties in the Merger
Agreement are true and correct at and as of the Effective Time (except to
the extent that the aggregate of all breaches thereof would not have a
Material Adverse Effect on Intel); and
- Intel and Purchaser shall have performed in all material respects each of
its covenants and obligations to be performed at or before the Effective
Time.
Intel and Purchaser will not be required to complete the Merger unless:
- the Company's representations and warranties in the Merger Agreement
shall be true and correct at and as of the Effective Time (except to the
extent that the aggregate of all breaches thereof would not have a
Material Adverse Effect on the Company);
- the Company shall have performed in all material respects each of its
covenants and obligations to be performed at or before the Effective
Time;
- there have been no events, changes, or effects, individually or in the
aggregate, with respect to the Company or its subsidiaries having, or
that would be reasonably expected to have, a Material Adverse Effect on
the Company; and
- in connection with complying with any applicable law (including the HSR
Act) or obtaining any requisite consent, Intel will not be (1) required,
or be construed to be required, to sell or divest any assets or business
or to restrict any business operations in order to obtain the consent or
successful termination of any review of any governmental entity regarding
the transactions contemplated by the Merger Agreement or (2) prohibited
from owning, and no material limitation shall be imposed on Intel's
ownership of, any material portion of the Company's business or assets.
There is no guarantee that all of the conditions to completing the Merger
will be satisfied.
Termination. The Merger Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Time, before or after it has been
approved by the Company's shareholders. This termination may occur in the
following ways:
- Intel, Purchaser and the Company mutually agree to terminate it in
writing;
- Intel and Purchaser or the Company decides to terminate it because:
(1) any U.S. state or federal court or other U.S. governmental
authority has issued a non-appealable, final order restraining,
enjoining or otherwise prohibiting the Merger; or
(2) the Merger is not completed by May 15, 2001 (the "Final Date"),
unless the failure to complete the Merger by that date is due to the
failure of the party seeking to terminate the Merger Agreement to
perform its obligations under the Merger Agreement.
- The Company decides to terminate it because:
(1) Intel's and Purchaser's representations or warranties in the
Merger Agreement are breached or untrue such that the conditions to the
Company's obligation to complete the Merger would be incapable of being
satisfied by the Final Date, so long as the Company shall not have
breached its own obligations under the Merger Agreement in any material
respect;
(2) Intel or Purchaser shall have failed to perform its covenants
or agreements in the Merger Agreement, and this failure shall have had a
Material Adverse Effect on Intel or materially adversely affected (or
materially delayed) the ability of Intel, Purchaser or the Company to
consummate the Offer or the Merger, and Intel and Purchaser, as the case
may be, shall not have cured such
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breach within 15 business days after notice by the Company thereof and
provided that the Company shall not have breached its own obligations
under the Merger Agreement in any material respect; or
(3) the Company Board has received a Superior Proposal and
responded in a way that permitted termination of the Merger Agreement,
including the payment of liquidated damages and expenses to Intel; or
(4) Purchaser shall have failed to commence the Offer within ten
business days following the date of the initial public announcement of
the Offer or if, by the date described below in "The Tender Offer -- 18.
Certain Conditions of the Offer," Purchaser shall have terminated the
Offer; provided that the Company has not breached its own obligations
under the Merger Agreement in any material respect that in any manner
shall have proximately contributed in any material respect to the
foregoing failure.
- Intel or Purchaser decides to terminate it because:
(1) the Company's representations or warranties in the Merger
Agreement are breached or untrue such that the conditions to Intel's and
Purchaser's obligations to complete the Merger would be incapable of
being satisfied by the Final Date, so long as neither Intel nor
Purchaser shall have breached its own obligations under the Merger
Agreement in any material respect;
(2) the Company shall have failed to perform its covenants or
agreements in the Merger Agreement, and this failure shall have had a
Material Adverse Effect on the Company or materially adversely affected
(or materially delayed) the ability of Intel, Purchaser or the Company
to consummate the Offer or the Merger, and the Company shall not have
cured such breach within 15 business days after notice by Intel or
Purchaser thereof and provided that neither Intel nor Purchaser shall
have breached its own obligations under the Merger Agreement in any
material respect;
(3) the Company Board has recommended a Superior Proposal to the
Company's shareholders;
(4) the Company Board has withdrawn or adversely modified its
approval or recommendation of the Merger Agreement, the Offer or the
Merger;
(5) at any time after the first date on which Purchaser has
accepted Shares for payment pursuant to the Offer, the Company Board
(with the concurrence of, or because of the vote of, one or more of the
remaining directors who are not affiliated with Intel) has stopped using
all reasonable efforts to convene or hold a shareholders' meeting to
vote on the Merger or shall have adopted a resolution not to effect any
of the foregoing; or
(6) due to an occurrence, that if occurring after the commencement
of the Offer would result in a failure to satisfy any of the conditions
described below in "The Tender Offer -- 18. Certain Conditions of the
Offer," Purchaser shall have failed to commence the Offer within ten
business days following the date of the initial public announcement of
the Offer or Purchaser has terminated the Offer in accordance with the
provisions described below in "The Tender Offer -- 18. Certain
Conditions of the Offer;" provided that neither Intel nor Purchaser
shall have breached its own obligations under the Merger Agreement in
any material respect that in any manner shall have proximately
contributed in any material respect to the failure to commence, or
termination of, the Offer.
Effect of Termination. Upon termination, the Merger Agreement becomes void
provided that the confidentiality and fees and expenses provisions remain in
effect. Also, termination will not relieve either party from liability for any
breach of the Merger Agreement before it was terminated. No representations or
warranties made by the Company, Intel or Purchaser shall survive beyond a
termination of the Merger Agreement.
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Liquidated Damages and Expenses. The Company has agreed to pay Intel $24
million as liquidated damages if the Merger Agreement is terminated as follows:
- by the Company because the Company Board received a Superior Proposal and
responded in a way that permitted its termination;
- by Intel and Purchaser because the Company Board recommended to the
Company's shareholders a Superior Proposal or the Company Board withdrew
or adversely modified its approval or recommendation of the Merger
Agreement, the Offer or the Merger;
- by Intel and Purchaser if, at any time after the first date on which
Purchaser has accepted Shares for payment pursuant to the Offer, the
Company Board (with the concurrence of, or because of the vote of, one or
more of the directors not affiliated with Intel) has stopped using all
reasonable efforts to convene or hold a shareholders' meeting to vote on
the Merger or shall have adopted a resolution not to effect any of the
foregoing; or
- by Intel and Purchaser because of a failure by the Company to perform its
agreements in the Merger Agreement which entitles Intel and Purchaser to
terminate the Merger Agreement, and either (1) at the time of such
termination, a plan or proposal by a third party to consummate a Company
Acquisition (as defined below) is outstanding or has been publicly
announced, or (2) within 12 months of termination, the Company enters
into an agreement with respect to a Company Acquisition or a Company
Acquisition occurs involving any third party. As used herein, a "Company
Acquisition" means the occurrence of any of the following events: (1) the
acquisition by a third party of fifty percent (50%) or more of the assets
of the Company and its subsidiaries, taken as a whole; (2) the
acquisition by a third party of fifty percent (50%) or more of the
outstanding Shares or any securities convertible into or exchangeable for
Shares that would constitute fifty percent (50%) or more of the
outstanding Shares upon such conversion or exchange, or any combination
of the foregoing; (3) the acquisition by the Company of the assets or
stock of a third party if, as a result of which the outstanding Shares of
the Company immediately prior thereto are increased by one hundred
percent (100%) or more; or (4) the merger, consolidation or business
combination of the Company with or into a third party, where, following
such merger, consolidation or business combination, the shareholders of
the Company immediately prior to such transaction do not hold,
immediately after such transaction, securities of the surviving entity
constituting more than fifty percent (50%) of the total voting power of
the surviving entity; or
- by Intel and Purchaser due to the Minimum Condition not being satisfied
which entitles Intel or Purchaser to terminate the Merger Agreement, and
either (1) at the time of such termination, a plan or proposal by a third
party to consummate a Company Acquisition is outstanding or has been
publicly announced or (2) within 12 months of termination, the Company
enters into an agreement with respect to a Company Acquisition or a
Company Acquisition occurs involving any third party.
In addition, the Company has agreed to pay Intel up to $5 million as
reimbursement of its fees and expenses if the Merger Agreement is terminated as
follows:
- by Intel and the Purchaser if the Merger has not been consummated by the
Final Date, but only if due to a failure of the conditions set forth in
paragraphs (b)(iv), (b)(v), (b)(vi) or (b)(vii) of Annex A to the Merger
Agreement and described in "-- 18. Certain Conditions of the Offer"
below;
- by the Company because the Company Board received a Superior Proposal and
responded in a way that permitted its termination;
- by Intel and Purchaser because the Company's representations or
warranties in the Merger Agreement are breached or untrue such that the
conditions to Intel's and Purchaser's obligations to complete the Merger
could not be satisfied by the Final Date, so long as neither Intel nor
Purchaser shall have breached its own obligations under the Merger
Agreement in any material respect;
- by Intel and Purchaser because the Company shall have failed to perform
its covenants or agreements in the Merger Agreement, and this failure
shall have had a Material Adverse Effect on the Company or
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materially adversely affected (or materially delayed) the ability of
Intel, Purchaser or the Company to consummate the Offer or the Merger,
and the Company shall not have cured such breach within 15 business days
after notice by Intel or Purchaser thereof and provided that neither
Intel nor Purchaser shall have breached its own obligations under the
Merger Agreement in any material respect;
- by Intel and Purchaser because the Company Board recommended to the
Company's shareholders a Superior Proposal;
- by Intel and Purchaser because the Company Board has withdrawn or
adversely modified its approval or recommendation of the Offer or the
Merger;
- by Intel and Purchaser if, at any time after the first date on which
Purchaser has accepted Shares for payment pursuant to the Offer, the
Company Board (with the concurrence of, or because of the vote of, one or
more of the directors not affiliated with Intel) has stopped using all
reasonable efforts to convene or hold a shareholders' meeting to vote on
the Merger or shall have adopted a resolution not to effect any of the
foregoing; or
- by Intel and Purchaser due to an occurrence, that if occurring after the
commencement of the Offer would result in a failure to satisfy any of the
conditions described below in "The Tender Offer -- 18. Certain Conditions
of the Offer," Purchaser shall have failed to commence the Offer within
ten business days following the date of the initial public announcement
of the Offer or Purchaser has terminated the Offer in accordance with the
provisions described below in "The Tender Offer -- 18. Certain Conditions
of the Offer;" provided that neither Intel nor Purchaser shall have
breached its own obligations under the Merger Agreement in any material
respect that in any manner shall have proximately contributed in any
material respect to the failure to commence, or termination of, the
Offer.
Further, Intel has agreed to pay the Company up to $5 million as
reimbursement of its fees and expenses if the Merger Agreement is terminated by
the Company because:
- Intel's and Purchaser's representations or warranties in the Merger
Agreement are breached or untrue such that the conditions to the
Company's obligation to complete the Merger could not be satisfied by the
Final Date, so long as the Company shall not have breached its own
obligations under the Merger Agreement in any material respect; or
- Intel or Purchaser shall have failed to perform its agreements in the
Merger Agreement, and this failure shall have had a Material Adverse
Effect on Intel or materially adversely affected (or materially delayed)
the ability of Intel, Purchaser or the Company to consummate the Offer
and the Merger, and Intel or Purchaser, as the case may be, shall not
have cured such breach within 15 business days after notice by the
Company thereof and provided that the Company shall not have breached its
own obligations under the Merger Agreement in any material respect.
If a request for expense reimbursement exceeds $2 million, the requesting
party shall accompany such request with invoices or other reasonable evidence of
its payment of such expenses. Except as described above, whether or not the
Merger occurs, the parties to the Merger Agreement have agreed to pay their own
fees and expenses incurred in connection with the Merger Agreement and the
transactions contemplated thereby.
Extension and Waiver. At any time prior to the Effective Time, Intel,
Purchaser and the Company may agree to:
- extend the time for the performance of any of the obligations or other
acts of the other party;
- waive any inaccuracies in the other's representations and warranties or
any document, certificate or writing delivered pursuant to the Merger
Agreement; or
- waive the other's compliance with any of the agreements or conditions in
the Merger Agreement.
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Amendment. The Merger Agreement may be amended by the parties at any time
before or after the Company's shareholders approve the Merger. However, any
change which by law requires the approval of the Company's shareholders will
require their subsequent approval to be effective.
Stock Option Agreement
General. The following is only a summary of certain provisions of the
Stock Option Agreement. Company shareholders should read the Stock Option
Agreement in its entirety. A copy of the Stock Option Agreement is filed with
the Commission as an exhibit to Intel's and Purchaser's Tender Offer Statement
on Schedule TO.
Option Grant. The Stock Option Agreement permits Intel to purchase up to
5,954,325 shares of Company Common Stock (or such other number of shares of
Company Common Stock as equals 19.9% of the issued and outstanding shares of
Company Common Stock at the time of the exercise of the option) at an exercise
price of $25 per share. The total number of shares issuable upon exercise of the
option represents approximately 19.9% of Company Common Stock outstanding,
exclusive of treasury shares, on January 15, 2001 and approximately 16.6% of the
shares of Company Common Stock outstanding, exclusive of treasury shares, after
exercise of such option.
Exercise. Intel may exercise the option, in whole or in part, on or after
the earlier to occur of (1) termination of the Merger Agreement in a manner
obligating the Company to pay Intel the $24 million in liquidated damages (see
"-- The Merger Agreement -- Liquidated Damages and Expenses"), and (2) the date
on which Purchaser has accepted tendered Shares for payment, so long as the
number of shares to be acquired pursuant to the option plus the number of
tendered Shares will, upon issuance of the option shares, equal at least ninety
percent (90%) of the issued and outstanding shares of the Company (a "Trigger
Event"). If Intel wishes to exercise the option at such time as the option is
exercisable and has not terminated, Intel is required to deliver written notice
(the "Exercise Notice") to the Company specifying Intel's intention to exercise
the option, the total number of option shares it wishes to purchase and a date
and time for the closing of such purchase (an "Option Closing"), which date will
not be less than two days after the later of (1) the date such Exercise Notice
is given and (2) the expiration or termination of any applicable waiting period
under the HSR Act.
Certain Conditions. The obligation of the Company to issue option shares
under the Stock Option Agreement upon the exercise of the option is subject to
the satisfaction or waiver of the following conditions: (1) any waiting periods
applicable to the acquisition of the option shares by Intel pursuant to the
Stock Option Agreement under the HSR Act and any material foreign competition
laws shall have expired or been terminated; (2) the representations and
warranties of Intel made in the Stock Option Agreement shall be true and correct
in all material respects; and (3) no statute, rule or regulation shall be in
effect, and no order, decree or injunction entered by any court of competent
jurisdiction or governmental entity in the United States shall be in effect that
prohibits the exercise of the option or acquisition or issuance of option shares
pursuant to the Stock Option Agreement.
Adjustments Upon Changes in Capitalization. In the event of any change in
the number of issued and outstanding shares of Company Common Stock by reason of
any stock dividend, stock split, recapitalization, merger, rights offering,
share exchange or other change in the corporate or capital structure of the
Company, Intel shall receive, upon exercise of the option, the stock or other
securities, cash or property to which Intel would have been entitled if Intel
had exercised the option and had been a holder of record of shares of Company
Common Stock on the record date fixed for determination of holders of shares of
Company Common Stock entitled to receive such stock or other securities, cash or
property at the same aggregate price as the aggregate option price of the option
shares.
Cancellation Amount. After the option becomes exercisable and before the
option expires, Intel, instead of exercising the option, has the right at any
time thereafter (for so long as the option is exercisable) to request in writing
that the Company pay, and promptly (but in any event not more than ten business
days) after the
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giving by Intel of such request, the Company shall pay to Intel, in cancellation
of the option, cash equal to an amount determined as follows:
- the excess of the Market/Tender Offer Price (as defined below) over $25;
- multiplied by the number of shares of Company Common Stock covered by the
option.
As used in the Stock Option Agreement, "Market/Tender Offer Price" means
the higher of (1) the highest per share price of the Company Common Stock paid
as of such date pursuant to any tender or exchange offer or other Company
Acquisition and (2) the average of the closing sale prices of shares of Company
Common Stock on the Nasdaq National Market for the five trading days immediately
preceding the date Intel gives notice of its intent to exercise the option.
Profit Limitation. Notwithstanding any other provision of the Stock Option
Agreement, in no event shall Intel's Total Profit (as defined below) exceed $35
million and, if it otherwise would exceed such amount, Intel, at its sole
election, shall either (1) deliver to the Company for cancellation shares of
Company Common Stock previously purchased by Intel, (2) pay cash or other
consideration to the Company or (3) undertake any combination thereof, so that
Intel's Total Profit shall not exceed $35 million after taking into account the
foregoing actions. As used herein, the term "Total Profit" shall mean the
aggregate amount (before taxes) of the following: (1) the amount received by
Intel pursuant to the Company's repurchase of the Option, (2)(a) the net cash
amounts received by Intel pursuant to the sale of option shares (or any other
securities into which such shares are converted or exchanged) to any
unaffiliated party, less (b) Intel's purchase price for such shares, and (3) the
aggregate amount received by Intel from the Company as liquidated damages under
the Merger Agreement.
Expiration. The Option shall expire at the earlier of (1) the Effective
Time and (2) 5:00 p.m., California time, on the day that is the one (1) year
anniversary of the date on which the Merger Agreement has been terminated in
accordance with the terms thereof.
Registration Rights. Intel may, by written notice (a "Registration
Notice"), request at any time or from time to time within three years following
a Trigger Event (the "Registration Period"), in order to permit the sale,
transfer or other disposition of the option shares that have been acquired by or
are issuable to Intel upon exercise of the option or any other shares of Company
Common Stock that are held by Intel during the Registration Period ("Registrable
Securities"), that the Company register under the Securities Act, the offering,
sale and delivery, or other transfer or disposition, of the Registrable
Securities by Intel. Any such Registration Notice must relate to a number of
Registrable Securities equal to at least twenty percent (20%) of the option
shares, unless the remaining number of Registrable Securities is less than such
amount, in which case Intel will be entitled to exercise its rights thereunder
but only for all of the remaining Registrable Securities (a "Permitted
Offering"). Intel's registration rights under the Stock Option Agreement
terminate at such time as Intel shall be entitled to sell all of the remaining
Registrable Securities pursuant to Rule 144(k) under the Act. The Company is
required to use all reasonable efforts to qualify any Registrable Securities
Intel desires to sell or otherwise dispose of under applicable state securities
or "blue sky" laws; provided, however, that the Company is not required to
qualify to do business, consent to general service of process or submit to
taxation in any jurisdiction by reason of this provision. Without Intel's prior
written consent (which may be withheld in its sole discretion), no other
securities are permitted to be included in any such registration.
The Company is required to use all reasonable efforts to cause each such
registration statement to become effective as promptly as possible, to obtain
all consents or waivers of other persons that are required therefor and to keep
such registration statement effective for a period of at least 120 days from the
day such registration statement first becomes effective. The obligations of the
Company pursuant to the Stock Option Agreement to file a registration statement
and to maintain its effectiveness may be suspended for one or more periods not
exceeding 90 days in any 12 month period if the Company Board determines in good
faith that the filing of such registration statement or the maintenance of its
effectiveness would require disclosure of nonpublic information that would
materially and adversely affect the Company, or the Company is required under
the Act to include audited financial statements for any period in such
registration statement and such
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financial statements are not yet available for inclusion in such registration
statement. Intel shall be entitled to make up to three demand requests for
registration of options shares under the Stock Option Agreement. For purposes of
determining whether the three demand requests have been made, only requests
relating to a registration statement that has become effective under the Act
will be counted.
If, during the Registration Period, the Company shall propose to register
under the Act the offering, sale and delivery of Company Common Stock for cash
for its own account or for any other shareholder of the Company pursuant to a
firm commitment underwriting, the Company is required to, in addition to its
other obligations under the Stock Option Agreement, allow Intel the right to
participate in such registration so long as Intel participates in such
underwriting on terms reasonably satisfactory to the managing underwriters of
such offering; provided, however, that, if the managing underwriter of such
offering advises the Company in writing that in its opinion the number of shares
of Company Common Stock requested to be included in such registration exceeds
the number that it would be in the best interests of the Company to sell in such
offering, the Company will, after fully including therein all shares of Company
Common Stock to be sold by the Company, include the shares of Company Common
Stock requested to be included therein by Intel pro rata (based on the number of
shares of Company Common Stock requested to be included therein) with the shares
of Company Common Stock requested to be included therein by persons other than
the Company and persons to whom the Company owes a contractual obligation (other
than any director, officer or employee of the Company to the extent any such
person is not currently owed such contractual obligation).
The expenses associated with the preparation and filing of any registration
statement filed in connection with Intel's exercise of its registration rights
under the Stock Option Agreement and any sale covered thereby (including any
fees related to blue sky qualifications and filing fees in respect of the
Commission or the National Association of Securities Dealers, Inc. and fees and
disbursements of counsel to Intel) ("Registration Expenses") will be paid by the
Company, except for underwriting discounts or commissions or brokers' fees in
respect of shares of Company Common Stock to be sold by Intel. The Company is
not required to pay for any Registration Expenses with respect to such
registration if the registration request is subsequently withdrawn at the
request of Intel unless Intel agrees to forfeit its right to request one
registration; provided, however, that, if at the time of such withdrawal Intel
has learned of a material adverse change in the results of operations,
condition, business or prospects of the Company not known to Intel at the time
of the request and has withdrawn the request within a reasonable period of time
following disclosure by the Company to Intel of such material adverse change,
then Intel shall not be required to pay any of such expenses and shall not
forfeit such right to request one registration.
Upon the issuance of option shares, the Company will use all commercially
reasonable efforts to promptly list the option shares on the Nasdaq National
Market or on any other exchange on which the Company Common Stock is then
listed.
Tender and Voting Agreement
The following is only a summary of certain provisions of the Tender and
Voting Agreement (the "Voting Agreement"), dated January 15, 2001, by and among
Intel, the Purchaser and Dirk I. Gates. Company shareholders should read the
Voting Agreement in its entirety. A copy of the Voting Agreement is filed with
the Commission as an exhibit to Intel's and Purchaser's Tender Offer Statement
on Schedule TO.
Tender of Shares. In connection with the execution of the Merger
Agreement, Intel and Purchaser entered into the Voting Agreement with a
shareholder of the Company, Dirk I. Gates, who beneficially owns 674,333 Shares,
representing approximately 2.3% of the issued and outstanding Shares. Pursuant
to the Voting Agreement, upon the terms and subject to the conditions therein,
Mr. Gates has agreed to, promptly after the date of commencement of the Offer
(but in all events not later than ten business days thereafter), tender to
Purchaser all Shares beneficially owned by him.
Voting of Shares. Mr. Gates has also agreed to vote all Shares
beneficially owned by him in accordance with the Voting Agreement, including (1)
in favor of approval of the Merger Agreement and any actions required in
furtherance thereof, including the election of designees of Intel as directors
of the Company on the terms set forth in the Merger Agreement; (2) against any
action or agreement that would result in a breach in
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any respect of any covenant, representation or warranty or any other obligation
or agreement of the Company under the Merger Agreement; and (3) except as
otherwise agreed to in writing in advance by Intel, against: (a) any Third Party
Acquisition, (b) any change in a majority of the individuals who, as of January
15, 2001, constitute the Company Board (other than as contemplated by the Merger
Agreement), (c) any extraordinary corporate transaction, such as a merger,
consolidation or other business combination involving the Company or any of its
subsidiaries and any third party, (d) a sale, lease, transfer or disposition of
any assets of the Company's or any of its subsidiaries' business outside the
ordinary course of business, or any assets which are material to its business
whether or not in the ordinary course of business, (e) any change in the present
capitalization of the Company or any amendment of the Company's Articles of
Incorporation or bylaws, (f) any other material change in the Company's
corporate structure or affecting its business, or (g) any other action which is
intended, or could reasonably be expected, to impede, interfere with, delay,
postpone or materially adversely affect the Offer, the Merger or any of the
other transactions contemplated by the Merger Agreement, the Stock Option
Agreement, or the Voting Agreement.
Restriction on Transfer, Proxies and Non-Interference. Mr. Gates has
agreed not to, except as contemplated by the Merger Agreement or the Voting
Agreement, directly or indirectly: (1) offer for sale, sell, transfer, tender,
pledge, encumber, assign or otherwise dispose of, or enter into any contract,
option or other arrangement or understanding with respect to or consent to the
offer for sale, sale, transfer, tender, pledge, encumbrance, assignment or other
disposition of, any or all of his Shares or any interest therein; (2) grant any
proxies or powers of attorney, deposit any Shares into a voting trust or enter
into a voting agreement with respect to any Shares; or (3) take any action that
would make any representation or warranty made by him untrue or incorrect or
have the effect of preventing or disabling him from performing his obligations
under the Voting Agreement. Notwithstanding the foregoing, Mr. Gates has the
right to transfer Shares to (1) any family member, (2) the trustee or trustees
of a trust for the benefit of Mr. Gates and/or one or more family members and/or
charitable organizations, (3) a partnership of which Mr. Gates and/or family
members owns a majority of the partnership interests, (4) a limited liability
company of which Mr. Gates and/or any family members owns a majority of the
membership interests, (5) the executor, administrator or personal representative
of the estate of Mr. Gates, or (6) any guardian, trustee or conservator
appointed with respect to the assets of Mr. Gates; provided that in the case of
any such transfer, the transferee shall, as a condition to such transfer,
execute an agreement to be bound by the terms of the Voting Agreement, or terms
substantially identical thereto.
Other Potential Acquirors. Mr. Gates (1) is required to immediately cease
any discussions or negotiations with any parties with respect to any Third Party
Acquisition; (2) has agreed not to, directly or indirectly, encourage, solicit,
participate in or initiate discussions or negotiations with or provide any
information to any person or group (other than Intel and Purchaser) concerning
any Third Party Acquisition; and (3) has agreed to promptly notify Intel in the
event he receives any proposal or inquiry concerning a Third Party Acquisition
(including the terms and conditions thereof and the identity of the party
submitting such proposal, and any request for confidential information in
connection with a potential Third Party Acquisition), provide a copy of any
written materials he receives from any such person or group and advise Intel
from time to time of the status, at any time upon Intel's request, and promptly
following any developments concerning the same.
Representations and Warranties. The Voting Agreement contains certain
customary representations and warranties of the parties thereto, including,
without limitation, representations and warranties by Mr. Gates as to ownership
of Shares and power and authority.
Director Matters Excluded. In the Voting Agreement, Intel and Mr. Gates
have each acknowledged and agreed that no provision thereof limits or otherwise
restricts Mr. Gates with respect to any act or omission that he may undertake or
authorize in his capacity as a director of the Company, including, without
limitation, any vote that he may make as a director of the Company with respect
to any matter presented to the Company Board.
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Termination. The Voting Agreement expires upon the earlier of (1) the date
on which the Merger Agreement terminates in accordance with its terms, (2) the
date on which Purchaser has accepted tendered shares for payment, and (3) May
15, 2001.
14. INTERESTS OF CERTAIN PERSONS IN THE MERGER
Change of Control Agreements
The Company is party to Change of Control Agreements ("CICs") with 14 of
its employees, including all of its executive officers. Consummation of the
Offer will constitute a "change of control" under these agreements. Accordingly,
each executive will automatically receive acceleration of twelve (12) months of
vesting of his stock options at the time the Offer is consummated. In addition,
if an executive's employment is involuntarily terminated within two years
following consummation of the Offer, or the executive voluntarily terminates
employment after consummation of the Offer for "Good Reason," then the executive
is entitled to certain additional severance payments and entitlements. "Good
Reason" is generally defined as a substantial alteration or reduction in duties
and responsibilities, a reduction in salary or bonus eligibility affecting the
executive individually (as opposed to across the board reductions impacting all
executives equally), reassignment to a different geographic location, or refusal
of the successor entity to assume the CIC. Company shareholders should read the
form of CIC in its entirety. A copy of the form of CIC is filed with the
Commission as an exhibit to the Company's Solicitation/Recommendation Statement
on Schedule 14D-9.
Employment Agreements and Noncompete Agreement
The following summarizes certain provisions of employment agreements and a
noncompete agreement entered into between Intel and certain employees of the
Company. At the time Intel entered into the Merger Agreement, Intel also entered
into employment agreements, dated as of January 15, 2001, with Dirk Gates, the
Chairman of the Board, President and Chief Executive Officer, Marc Devis, Senior
Vice President, Worldwide Sales and Marketing, Steve DeGennaro, Vice President
Finance and Chief Financial Officer, Sam Bass, Senior Vice President, Worldwide
Operations, Jeffrey Tang, Vice President and Managing Director -- Malaysia,
Boguslaw Piekarski, Vice President and General Manager -- Wireless Technology
and Mick Conley, Senior Director -- Access Business Products (collectively, the
"Intel Employment Agreements"). The Intel Employment Agreements will become
effective after the time that Intel accepts Shares for purchase in the Offer and
are contingent on the acceptance of such Shares. In connection with his Intel
Employment Agreement, Mr. Gates has entered into an agreement not to compete
with Intel (the "Noncompete Agreement"). Company shareholders should read the
Intel Employment Agreements and the Noncompete Agreement in their entirety.
Copies of these agreements are filed with the Commission as exhibits to Intel's
and Purchaser's Tender Offer Statement on Schedule TO.
The Intel Employment Agreements provide that each employee shall be
employed "at will," and that either Intel or the employee may terminate
employment with or without cause at any time. Each employee subject to an Intel
Employment Agreement will also be granted options to purchase Intel common
stock, subject to a vesting schedule set forth in the Intel Employment
Agreement. In addition, each employee subject to an Intel Employment Agreement
has agreed that his move to the position described in his respective Intel
Employment Agreement and the associated responsibilities does not constitute
"Good Reason" under the CIC, with the exception of Mr. Conley, who is not a
party to a CIC. Furthermore, in connection with their respective Intel
Employment Agreements, each employee will execute a proprietary information and
inventions agreement.
Pursuant to his Noncompete Agreement, Mr. Gates has agreed that, for the
three-year period commencing on January 15, 2001, he will not engage in the
Company's business in either business areas or geographic regions where the
Company does business, with certain very limited exceptions. The Noncompete
Agreement also provides for a three-year non-solicitation of Company customers
and employees.
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1992 Director Stock Option Plan
Pursuant to the terms of the Company's 1992 Director Stock Option Plan, as
a result of the consummation of the Merger, vesting of the stock options held by
the Company's outside directors will accelerate. Assuming a purchase price of
$25 per share and the exercise of all in the money stock options accelerated
under the 1992 Director Stock Option Plan, each of Michael F.G. Ashby, Kenneth
J. Biba, Gary J. Bowen, William J. Schroeder and Delbert W. Yocam will recognize
a gain above the exercise price of his options in the amount of $170,625.
Indemnification; Directors' and Officers' Insurance
Pursuant to the Merger Agreement, after acceptance of Shares for payment in
the Offer, the Company shall indemnify and hold harmless (and shall also advance
expenses as incurred to the fullest extent permitted under applicable law to),
to the extent not covered by insurance, the Company's officers and directors
(the "Indemnitees") against (1) all losses, claims, damages, costs, expenses
(including counsel fees and expenses), settlement, payments or liabilities
arising out of or in connection with any claim, demand, action, suit, proceeding
or investigation based in whole or in part on or arising in whole or in part out
of the fact that such person is or was an officer or director of the Company or
any of its subsidiaries, whether or not pertaining to any matter existing or
occurring at or prior to the Effective Time and whether or not asserted or
claimed prior to or at or after the Effective Time ("Indemnified Liabilities");
and (2) all Indemnified Liabilities based in whole or in part on or arising in
whole or in part out of or pertaining to the Merger Agreement or the
transactions contemplated thereby to the fullest extent required or permitted
under applicable law.
The Merger Agreement also requires that, from and after the Effective Time,
Intel shall cause the Surviving Corporation to fulfill and honor in all respects
the obligations of the Company pursuant to any indemnification agreements
between the Company and its directors and officers as of or prior to January 15,
2001 (or indemnification agreements in the Company's customary form for
directors joining the Company Board prior to the Effective Time) and any
indemnification provisions under the Company's Articles of Incorporation or
bylaws as in effect immediately prior to the Effective Time. The Surviving
Corporation's aggregate obligation to indemnify and hold harmless all
indemnified persons for all matters to which such indemnified persons may be
entitled to be indemnified or held harmless as described above shall in no event
exceed the Company's net worth at the Effective Time.
In addition, the Merger Agreement provides that, for a period of six years
after the Effective Time, Intel will maintain or cause the Surviving Corporation
to maintain in effect, if available, directors' and officers' liability
insurance covering those persons who, as of immediately prior to the Effective
Time, are covered by the Company's directors' and officers' liability insurance
policy (the "Insured Parties") on terms no less favorable to the Insured Parties
than those of the Company's present directors' and officers' liability insurance
policy; provided, however, that in no event will Intel or the Surviving
Corporation be required to expend on an annual basis in excess of two hundred
percent (200%) of the annual premium currently paid by the Company for such
coverage (or such coverage as is available for two hundred percent (200%) of
such annual premium); provided, further, that, in lieu of maintaining such
existing insurance as provided above, Intel, at its election, may cause coverage
to be provided under any policy maintained for the benefit of Intel or any of
its subsidiaries, so long as the terms are not materially less advantageous to
the intended beneficiaries thereof than such existing insurance.
15. GOING PRIVATE TRANSACTIONS
The Merger must comply with any applicable Federal law at the time of its
consummation. Rule 13e-3 under the Exchange Act is applicable to certain "going
private" transactions. Intel and Purchaser do not believe that Rule 13e-3 will
be applicable to the Merger unless the Merger is consummated more than one year
after the Offer. If applicable, Rule 13e-3 requires, among other things, that
certain financial information concerning the Company and certain information
relating to the fairness of the Merger and the consideration offered to minority
shareholders be filed with the Commission and disclosed to minority shareholders
prior to the consummation of the Merger.
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16. DIVIDENDS AND DISTRIBUTIONS
According to the Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 2000, the Company has not paid cash dividends since its
initial public offering and does not intend to pay any dividends for the
foreseeable future. Pursuant to the terms of the Merger Agreement, the Company
is not permitted, without the prior written consent of Intel, to split, combine
or reclassify the outstanding Shares or declare, set aside or pay any dividend
payable in cash, stock or property with respect to the Shares, or redeem or
otherwise acquire any of the Shares or any securities of any of its
subsidiaries.
17. EFFECTS OF THE OFFER ON THE MARKET FOR THE SHARES; NASDAQ NATIONAL MARKET;
EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS
Possible Effects of the Offer on the Market for the Shares
The purchase of Shares by Purchaser pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly and the number of holders
of Shares, and could thereby adversely affect the liquidity and market value of
the remaining publicly held Shares. It is expected that, following the Offer, a
large percentage of the Shares will be owned by Purchaser. Purchaser cannot
predict whether the reduction in the number of Shares that might otherwise trade
publicly would have an adverse or beneficial effect on the market price for, or
marketability of, the Shares or whether it would cause future market prices to
be greater or less than the Offer Price.
Nasdaq National Market
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the requirements of the National Association of
Securities Dealers, Inc. (the "NASD") for continued inclusion on the Nasdaq
National Market. The maintenance for continued inclusion requires the Company to
substantially meet one of two maintenance standards. The Company must have
either (1)(a) at least 750,000 publicly held shares, (b) at least 400
shareholders of round lots, (c) a market value of at least $5 million, (d) a
minimum bid price per Share of $1.00, (e) at least two registered and active
market makers for its Shares and (f) net tangible assets of at least $4 million,
or (2)(a) at least, 1,100,000 publicly held shares, (b) at least 400
shareholders of round lots, (c) a market value of at least $15 million, (d)
either (i) a market capitalization of at least $50 million or (ii) total assets
and total revenue of at least $50 million each for the most recently completed
fiscal year or two of the last three most recently completed fiscal years, (e) a
minimum bid price per Share of $5.00 and (f) at least four registered and active
market makers. Shares held directly or indirectly by directors, officers or
beneficial owners or more than 10% of the Shares are not considered as being
publicly held for this purpose.
If, as a result of the purchase of Shares pursuant to the Offer or
otherwise, the Shares no longer meet the requirements of the NASD for continued
inclusion in the Nasdaq National Market or in any other tier of the Nasdaq Stock
Market, and the Shares are, in fact, no longer included in the Nasdaq National
Market or in any other tier of the Nasdaq Stock Market, the market for Shares
could be adversely affected. In the event that the Shares no longer meet the
requirements of the NASD for continued inclusion in any tier of the Nasdaq Stock
Market, it may be possible that the Shares would continue to trade in the
over-the-counter market and that price quotations would be reported by other
sources. The extent of the public market for the Shares and the availability of
such quotations would, however, depend upon the number of the holders of Shares
remaining at such time, the interest in maintaining a market in Shares on the
part of the securities firms, the possible termination of registration of the
Shares under the Exchange Act, as described below, and other factors.
Exchange Act Registration
The Shares are currently registered under the Exchange Act. Registration of
the Shares under the Exchange Act may be terminated upon application by the
Company to the Commission if the Shares are not listed on a national securities
exchange and there are fewer than 300 record holders. Termination of the
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Exchange Act registration of the Shares would substantially reduce the
information required to be furnished by the Company to holders of Shares and to
the Commission and would make certain provisions of the Exchange Act, such as
the short-swing profit recovery provisions of Section 16(b), the requirements of
furnishing a proxy statement in connection with shareholders' meetings and the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions, no longer applicable to the Shares. In addition,
"affiliates" of the Company and persons holding "restricted securities" of the
Company may be deprived of the ability to dispose of such securities pursuant to
Rule 144 promulgated under the Securities Act. If registration of the Shares
under the Exchange Act was terminated, the Shares would no longer be "margin
securities" or be eligible for Nasdaq National Market reporting. Intel currently
intends to seek to cause the Company to terminate the registration of the Shares
under the Exchange Act as soon after consummation of the Offer as the
requirements for termination of registration are met.
Margin Regulations
The Shares are currently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board"),
which has the effect, among other things, of allowing brokers to extend credit
on the collateral of such Shares for the purpose of buying, carrying or trading
in securities ("Purpose Loans"). Depending upon factors similar to those
described above regarding the continued listing, public trading and market
quotations of the Shares, it is possible that, following the purchase of the
Shares pursuant to the Offer, the Shares would no longer constitute "margin
securities" for the purposes of the margin regulations of the Federal Reserve
Board and therefore could no longer be used as collateral for Purpose Loans made
by brokers.
18. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer or the Merger Agreement,
and subject to any applicable rules and regulations of the Commission, including
Rule 14e-1(c) relating to Purchaser's obligation to pay for or return tendered
Shares after termination of the Offer, Purchaser shall not be required to accept
for payment or pay for any Shares tendered pursuant to the Offer, may delay the
acceptance for payment of any Shares or extend the Offer one or more times
pursuant to the Merger Agreement and may terminate the Offer at any time after
the earlier of (A) the termination of the Merger Agreement in accordance with
its terms and (B) March 31, 2001 (provided that if on March 31, 2001 the
condition set forth below regarding the HSR Act is not satisfied and none of the
events set forth in any of the paragraphs below has occurred and is continuing,
then such date shall be automatically extended to May 15, 2001), if (1) the
Minimum Condition shall not have been satisfied at the expiration of the Offer;
(2) any applicable waiting period under the HSR Act has not expired or
terminated; (3) all necessary consents and approvals from any foreign
governmental entities shall not have been obtained; or (4) at any time after the
date of the Merger Agreement, and before acceptance for payment of any Shares,
any of the following events shall occur and be continuing:
- there shall have been any action taken, or any statute, rule, regulation,
judgment, order or injunction promulgated, entered, enforced, enacted,
issued or deemed applicable to the Offer or the Merger by any domestic or
foreign court or other governmental entity which directly or indirectly
(a) prohibits, or makes illegal, the acceptance for payment, payment for
or purchase of Shares or the consummation of the Offer, the Merger or the
other transactions contemplated by the Merger Agreement, (b) renders
Purchaser unable to accept for payment, pay for or purchase some or all
of the Shares, (c) imposes material limitations on the ability of Intel
effectively to exercise full rights of ownership of the Shares, including
the right to vote the Shares purchased by it on all matters properly
presented to the Company's shareholders, or (d) otherwise has a Material
Adverse Effect on the Company;
- (a) the representations and warranties of the Company contained in the
Merger Agreement shall not be true and correct (except to the extent that
the aggregate of all breaches thereof would not have a Material Adverse
Effect on the Company) at the date hereof and as of the consummation of
the Offer with the same effect as if made at and as of the consummation
of the Offer (except to the extent such representations specifically
relate to an earlier date, in which case the representations shall be
true and correct as of the earlier date, and in any event, subject to the
foregoing Material Adverse Effect
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qualification), (b) the Company shall have failed in any material respect
to perform its covenants and obligations contained in the Merger
Agreement, (c) there shall have occurred any events or changes that
constitute a Material Adverse Effect on the Company, (d) as of any time
Intel is preparing for the first acceptance of Shares for payment
pursuant to the Offer (the "Final Statement Date"), the total of the
Company's cash, cash equivalents and short-term investments ("Total
Cash") (calculated pursuant to Schedule A-1 to Annex A of the Merger
Agreement) shall be less than $253 million, (e) as of the Final Statement
Date, the sum of the Company's Net Working Capital (as defined in and
calculated pursuant to Schedule A-1 to Annex A of the Merger Agreement)
and Total Cash shall be less than $288 million, (f) if the first purchase
of Shares under the Offer shall not have occurred prior to March 31,
2001, the Company's revenue for the fiscal quarter ended March 31, 2001
(determined in accordance with generally accepted accounting principles,
consistently applied and in compliance with the principles set forth in
Schedule A-1 to Annex A of the Merger Agreement) shall have been less
than $96 million, and notwithstanding any other provision of the Offer,
in order to allow for a determination of such revenues Purchaser may
extend the Offer to the later of April 10, 2001 and the date on which all
conditions to the Offer have been satisfied; or (g) the Company shall (i)
at any time have failed in any material respect to comply with the
Company's manufacturing plan that was previously delivered to and
acknowledged in writing by Intel, (ii) have reduced by more than ten
percent (10%) total headcount or expenditures as detailed in the
Company's engineering plan that was previously delivered to and
acknowledged in writing by Intel, or (iii) not have expended at least
$2.2 million per fiscal quarter for capital expenditures pursuant to the
Company's capital expenditure plan that was previously delivered to and
acknowledged in writing by Intel;
- it shall have been publicly disclosed or Intel shall have otherwise
learned that (a) any person or "group" (as defined in Section l3(d)(3) of
the Exchange Act) shall have acquired or entered into a definitive
agreement or agreement in principle to acquire beneficial ownership of
more than twenty percent (20%) of the Shares or any other class of
capital stock of the Company, through the acquisition of stock, the
formation of a group or otherwise, or shall have been granted any option,
right or warrant, conditional or otherwise, to acquire beneficial
ownership of more than twenty percent (20%) of the Shares and (b) such
person or group shall not have tendered such Shares pursuant to the
Offer;
- the Company Board shall have withdrawn, or modified or changed in a
manner adverse to Intel and Purchaser (including by amendment of the
Schedule 14D-9), its recommendation of the Offer, the Merger Agreement or
the Merger, or recommended another proposal or offer, or the Company
Board, shall have resolved to do any of the foregoing;
- the Merger Agreement shall have terminated in accordance with its terms;
or
- there shall have occurred (a) any general suspension of trading in, or
limitation on prices for, securities on the New York Stock Exchange or
the Nasdaq National Market, for a period in excess of 24 hours (excluding
suspensions or limitations resulting solely from physical damage or
interference with such exchanges not related to market conditions), (b)
the commencement of a war, armed hostilities or other national or
international calamity directly or indirectly involving the United States
that constitutes a Material Adverse Effect on the Company or materially
adversely affects or delays the consummation of the Offer, (c) the
average of the closing prices of the Standard & Poor's 500 Index for any
20 consecutive trading days shall be twenty-five percent (25%) or more
below the closing price of such index on any trading day on or after the
date hereof that precedes the commencement of such 20 trading day period,
(d) a declaration of a banking moratorium or any suspension of payments
in respect of banks in the United States (whether or not mandatory), or
(e) in the case of any of the foregoing existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof;
which in the good faith judgment of Intel, in any such case, and
regardless of the circumstances (including any action or inaction by
Intel) giving rise to such condition makes it inadvisable to proceed with
the Offer or the acceptance for payment of or payment for the Shares.
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The foregoing conditions (other than the Minimum Condition) are for the
sole benefit of Intel and Purchaser and, subject to the Merger Agreement, may be
waived by Intel and Purchaser, in whole or in part at any time and from time to
time, in the sole discretion of Intel and Purchaser. The failure by Intel and
Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right and each such right shall be deemed an ongoing
right which may be asserted at any time and from time to time.
19. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS
General
Except as described below, neither Intel nor Purchaser is aware of any
license or regulatory permit that appears to be material to the business of the
Company and its subsidiaries, taken as a whole, that might be adversely affected
by Purchaser's acquisition of Shares pursuant to the Offer, or of any approval
or other action by any governmental, administrative or regulatory agency or
authority or public body, domestic or foreign, that would be required for the
acquisition or ownership of Shares pursuant to the Offer. Should any such
approval or other action be required, it is presently contemplated that such
approval or other action will be sought except as described below in this
section under "State Law Considerations; Takeover Statutes." While, except as
otherwise expressly described herein, Purchaser does not currently intend to
delay the acceptance for payment of Shares tendered pursuant to the Offer
pending the outcome of any such matter, there can be no guarantee that any such
approval or other action, if needed, would be obtained without substantial
conditions or that adverse consequences might not result to the Company's
business or that certain parts of the Company's business might not have to be
disposed of in the event that such approvals were not obtained or such other
actions were not taken or in order to obtain any such approval or other action,
any of which could cause Intel and Purchaser to decline to accept for payment or
pay for any Shares tendered. Purchaser's obligation under the Offer to accept
for payment and pay for Shares is subject to the Offer Conditions, including
conditions relating to legal matters discussed in this section.
Intel does not believe that consummation of the Offer and the other
transactions contemplated by the Merger Agreement will result in the violation
of any applicable antitrust laws. However, there can be no guarantee that a
challenge to the Offer and the other transactions contemplated by the Merger
Agreement on antitrust grounds will not be made, or if such a challenge is made,
what the result will be. See "-- 18. Certain Conditions of the Offer" for more
detailed information regarding certain conditions to the purchase of the Shares
pursuant to the Offer, including conditions with respect to litigation and
certain governmental actions.
United States Anti-Trust Approval
Under the HSR Act and the rules that have been promulgated thereunder by
the Federal Trade Commission ("FTC"), certain acquisition transactions may not
be consummated unless certain information has been furnished to the Antitrust
Division of the Department of Justice (the "Antitrust Division") and the FTC and
certain waiting period requirements have been satisfied. The acquisition of
Shares pursuant to the Offer is subject to these requirements.
Intel expects to file a Notification and Report Form with respect to the
Offer under the HSR Act as soon as practicable following commencement of the
Offer. The waiting period under the HSR Act with respect to the Offer will
expire at 11:59 p.m., Washington, D.C. time, on the 15th calendar day after the
date such form is filed, unless early termination of the waiting period is
granted. In addition, the Antitrust Division or the FTC may extend such waiting
period by requesting additional information or documentary material from Intel.
If such a request is made with respect to the Offer, the waiting period related
to the Offer will expire at 11:59 p.m., Washington, D.C. time, on the 10th day
after substantial compliance by Intel with such request. With respect to each
acquisition, the Antitrust Division or the FTC may issue only one request for
additional information. In practice, complying with a request for additional
information or material can take a significant amount of time. In addition, if
the Antitrust Division or the FTC raises substantive issues in connection with a
proposed transaction, the parties may engage in negotiations with the relevant
governmental agency concerning possible means of addressing those issues and may
agree to delay consummation of the transaction
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while such negotiations continue. Expiration or termination of applicable
waiting periods under the HSR Act is a condition to Purchaser's obligation to
accept for payment and pay for Shares tendered pursuant to the Offer.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed purchase of the Shares
pursuant to the Offer. At any time before or after such purchase, the Antitrust
Division or the FTC could take such action under the antitrust laws as it deems
necessary or desirable in the public interest, including seeking to enjoin the
transaction or seeking divestiture of the Shares so acquired or divestiture of
substantial assets of Intel or the Company. Litigation seeking similar relief
could be brought by private parties.
Federal Republic of Germany
The German Cartel Act provides for notice of certain intended transactions
considered to be combinations to be filed with the German Federal Cartel Office
(the "Cartel Office"). Pursuant to the German Cartel Act, the Cartel Office may
issue a prohibition order with respect to any combination of the Company's
business operations in the Federal Republic of Germany with those of the
Purchaser or any of its affiliates, if the Cartel Office determines that a
market dominating position in the Federal Republic of Germany would be created
or strengthened as a result of such a combination, unless that enterprises
involved prove that improvements in the competitive situation resulting from the
combination would outweigh the disadvantages of market domination. The Cartel
Office could also, in lieu of issuing a prohibition order, allow the transaction
subject to conditions and obligations designed to eliminate or restrict any
anticompetitive effects in the Federal Republic of Germany resulting from the
combination.
The Purchaser intends to cause a notice to be filed with the Cartel Office
and to obtain clearance of the combination by the Cartel Office prior to
consummation of the Offer. There can be no guarantee that a challenge to the
Offer by the Cartel Office will not be made, or, if such challenge is made, of
the result. See Section 18 of this Offer to Purchase for certain conditions to
the Offer, including conditions with respect to certain governmental actions.
Other
Certain other countries have regulatory requirements that may be applicable
to the Offer and the Merger. The parties are in the process of determining
whether and to what extent such requirements are applicable and, if so, what
impact such requirements would have on the timing of the Offer and the Merger.
State Law Considerations; Takeover Statutes
The CCC provides that, except where the fairness of the terms and
conditions of the transaction has been approved by the California Commissioner
of Corporations and except in a "short-form" merger (the merger of a parent
corporation with a subsidiary in which the parent owns at least 90% of the
outstanding shares of each class of the subsidiary's stock), if the surviving
corporation or its parent corporation owns, directly or indirectly, shares of
the target corporation representing more than 50% of the voting power of the
target corporation prior to the merger, the nonredeemable common stock of a
target corporation may be converted only into nonredeemable common stock of the
surviving corporation or its parent corporation, unless all of the shareholders
of the class consent. The effect of this provision is to prohibit a cash-out
merger of minority shareholders, except where the majority shareholders already
own 90% or more of the voting power of the target corporation and could,
therefore, effect a short-form merger to accomplish such a cash-out of minority
shareholders.
A number of states have adopted "takeover" statutes that purport to apply
to attempts to acquire corporations that are incorporated in such states, or
whose business operations have substantial economic effects in such states, or
which have substantial assets, security holders, employees, principal executive
offices or places of business in such states.
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In Edgar v. MITE Corporation, 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 takeovers of corporations meeting
certain requirements more difficult. However, in CTS Corp. v. Dynamics Corp. of
America, the Supreme Court held that a state may, as a matter of corporate law
and, in particular, those laws concerning corporate governance, constitutionally
disqualify a potential acquirer from voting on the affairs of a target
corporation without prior approval of the remaining shareholders, provided that
such laws were applicable only under certain conditions, in particular, that the
corporation has a substantial number of shareholders in the state and is
incorporated there.
Based on information supplied by the Company, Intel and Purchaser do not
believe that any state takeover statutes purport to apply to the Offer or the
Merger. Neither Purchaser nor Intel has currently complied with any other state
takeover statute or regulation. Intel reserves the right to challenge the
applicability or validity of any other state law purportedly applicable to the
Offer or the Merger and nothing in this Offer to Purchase or any action taken in
connection with the Offer or the Merger is intended as a waiver of such right.
If it is asserted that any other state takeover statute is applicable to the
Offer or the Merger and if an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer or the Merger, Intel might be
required to file certain information with, or to receive approvals from, the
relevant state authorities, and Intel might be unable to accept for payment or
pay for Shares tendered pursuant to the Offer, or be delayed in consummating the
Offer or the Merger. In such case, Intel may not be obliged to accept for
payment or pay for any shares tendered pursuant to the Offer.
20. FEES AND EXPENSES
Intel and Purchaser have retained D.F. King & Co., Inc. to act as the
Information Agent and Citibank, N.A. to serve as the Depositary in connection
with the Offer. The Information Agent may contact holders of Shares by personal
interview, mail, telephone, telex, telegraph and other methods of electronic
communication and may request brokers, dealers, commercial banks, trust
companies and other nominees to forward the Offer materials to beneficial
holders. The Information Agent and the Depositary each will receive reasonable
and customary compensation for their services and be reimbursed for certain
reasonable out-of-pocket expenses. Intel and the Purchaser have also agreed to
indemnify the Information Agent and the Depositary against certain liabilities
and expenses in connection with the Offer, including certain liabilities under
the federal securities laws.
Neither Intel nor Purchaser will pay any fees or commissions to any broker
or dealer or any other person for soliciting tenders of Shares pursuant to the
Offer, other than to the Information Agent. Brokers, dealers, commercial banks,
trust companies and other nominees will, upon request, be reimbursed by
Purchaser for customary mailing and handling expenses incurred by them in
forwarding offering materials to their customers.
21. MISCELLANEOUS
The Offer is being made to all holders of Shares other than the Company.
The Offer is not being made to (nor will tenders be accepted from or on behalf
of) holders of Shares in any jurisdiction in which the making of the Offer or
the acceptance thereof would not be in compliance with the securities, blue sky
or other laws of such jurisdiction. Purchaser may, in its discretion, however,
take such action as it may deem necessary to make the Offer in any jurisdiction
and extend the Offer to holders of Shares in any such jurisdiction.
EXCEPT FOR THE DEPOSITARY'S AUTHORIZATION TO ENTER INTO AGREEMENTS OR
ARRANGEMENTS WITH THE BOOK-ENTRY TRANSFER FACILITY, NO PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION ON BEHALF OF
PURCHASER OR INTEL NOT CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY INTEL AND PURCHASER.
Neither the delivery of this Offer to Purchase nor any purchase pursuant to
the Offer shall, under any circumstances, create any implication that there has
been no change in the affairs of Purchaser, Intel or the Company since the date
as of which information is furnished or the date of this Offer to Purchase.
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Purchaser and Intel have filed with the Commission a Tender Offer Statement
on Schedule TO, together with exhibits, pursuant to Rule 14d-3 under the
Exchange Act, furnishing certain additional information with respect to the
Offer. In addition, the Company has filed with the Commission a
Solicitation/Recommendation Statement on Schedule 14D-9, together with exhibits,
pursuant to Rule 14d-9 under the Exchange Act, setting forth the recommendations
of the Company Board with respect to the Offer and the reasons for such
recommendations and furnishing certain additional related information. Such
Schedules and any amendments thereto, including exhibits, may be inspected and
copies may be obtained from the Commission in the manner set forth in Section 7
of this Offer to Purchase, except that they will not be available at the
regional offices of the Commission.
INTEL CORPORATION
ESR ACQUISITION CORPORATION
January 29, 2001
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF INTEL
The following table sets forth the name, age, business or residence
address, principal occupation or employment at the present time and during the
last five years, and the name of any corporation or other organization in which
such employment is conducted or was conducted of each executive officer or
director of Intel. Except as otherwise indicated, all of the persons listed
below are citizens of the United States of America. Each occupation set forth
opposite a person's name, unless otherwise indicated, refers to employment with
Intel. Unless otherwise indicated, the principal business address of each
director or executive officer is Intel Corporation, 2200 Mission College
Boulevard, Santa Clara, California 95052.
NAME, AGE, CITIZENSHIP AND OTHER MATERIAL POSITIONS
CURRENT BUSINESS ADDRESS PRESENT OCCUPATION OR EMPLOYMENT HELD DURING THE PAST FIVE YEARS
- -------------------------- -------------------------------- -------------------------------
Craig R. Barrett, 61...................... President since 1997; Chief Chief Operating Officer from
Executive Officer since 1998; 1993 -- 1998; Executive Vice
Director -- Intel since 1992 President from 1990 -- 1997;
Director -- Komag, Incorporated
from 1990 -- 1999;
Director -- U.S. West, Inc.
from 1998 -- 2000;
Director -- Qwest
Communications since 2000
John Browne, 52........................... Managing Director and Group Director -- Daimler Benz AG
British Citizenship Chief Executive -- BP Amoco since 1998; Director -- Goldman
BP Amoco p.l.c. p.l.c. (formerly the British Sachs Group, Inc. since 1999;
Britannic House Petroleum Company p.l.c.) since Director -- SmithKline Beecham
1 Finsbury Circus 1991; Director -- Intel since from 1996 to 1999; Trustee --
London EC2M 7BA 1997 British Museum since 1995;
England Director -- Redland PLC from
1993 -- 1996
Winston H. Chen, 59....................... Chairman -- Paramitas Foundation President, Chief Executive
Paramitas Foundation since 1992; Director -- Intel Officer and Chairman --
3945 Freedom Circle, since 1993 Solectron Corporation from
Suite 760 1978 -- 1994; Director --
Santa Clara, CA 95054 Solectron Corporation since
1978; Member of Board of
Trustees -- Stanford University
since 1994; Member of Board of
Trustees -- Santa Clara
University since 1992;
Director -- Edison
International from 1994 -- 2000
Andrew S. Grove, 64....................... Chairman since 1997; Chief Executive Officer from
Director -- Intel since 1974 1987 -- 1998; President from
1979 -- 1997
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NAME, AGE, CITIZENSHIP AND OTHER MATERIAL POSITIONS
CURRENT BUSINESS ADDRESS PRESENT OCCUPATION OR EMPLOYMENT HELD DURING THE PAST FIVE YEARS
- -------------------------- -------------------------------- -------------------------------
D. James Guzy, 64......................... Chairman -- The Arbor Company Director -- Cirrus Logic, Inc.
The Arbor Company since 1969; Director -- Intel since 1984; Director -- Micro
P.O. Box 128 since 1969 Component Technology, Inc.
Glenbrook, NV 89413 since 1992; Director --
Novellus Systems, Inc. since
1989; Director -- Davis
Selected Group of Mutual Funds
since 1979; Director --
Alliance Capital Management
Technology Fund since 1980;
Chairman, President and Chief
Executive Officer -- SRC
Computers Inc. since 1996;
Director -- PLX Technology,
Inc. since 1986
Gordon E. Moore, 72....................... Chairman Emeritus -- Intel since Chairman from 1979 to 1997;
1997; Director -- Intel since Director -- Gilead Sciences,
1968 Inc. since 1996; Director --
Transamerica Corporation from
1983 to 1999; Chairman, Board
of Trustees -- California
Institute of Technology from
1994 to 2001;
Director -- California
Institute of Technology since
2001; Director -- Conservation
International since 1989;
Director -- Varian Associates
from 1985 to 1998
David S. Pottruck, 52..................... President and Co-Chief Executive Director -- McKesson
The Charles Schwab Corporation Officer -- The Charles Schwab Corporation since 1997;
101 Montgomery Street Corporation since 1984; Director -- Preview Travel,
San Francisco, CA 94104 Director -- Intel since 1998 Inc. from 1998 to 1999;
Director -- Bay Area Sports
Organizing Committee since
1998; Director -- U.S. Ski and
SnowBoard Team Foundation since
1998; Trustee -- University of
Pennsylvania since 1995;
Director -- Nasdaq since 1999;
Director -- U.S. Trust since
2000
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NAME, AGE, CITIZENSHIP AND OTHER MATERIAL POSITIONS
CURRENT BUSINESS ADDRESS PRESENT OCCUPATION OR EMPLOYMENT HELD DURING THE PAST FIVE YEARS
- -------------------------- -------------------------------- -------------------------------
Jane E. Shaw, 62.......................... Chairman and Chief Executive Founder -- The Stable Network
1310 Orleans Drive Officer -- AeroGen, Inc. since since 1995; Chairman of the
Sunnyvale, CA 94089 1998; Director -- Intel since Board -- IntraBiotics
1993 Pharmaceuticals since 1995;
Director -- Aviron from 1996 to
2000; Director -- McKesson
Corporation since 1992;
Director -- Boise Cascade
Corporation since 1994;
Director -- Point Biomedical
Corporation from 1997 to 1999
Leslie L. Vadasz, 64...................... Executive Vice President, Intel Senior Vice President,
Capital since 2000; Corporate Business Development
Director -- Intel since 1988 from 1991 - 2000
David B. Yoffie, 46....................... Professor of International Director -- E-Ink Corporation
Harvard Business School Business Administration -- since 1999; Director -- Shiva
Morgan Hall 215 Harvard Business School since Corporation from 1998 to 1999;
Boston, MA 02163 1990 (Max and Doris Starr Director -- Englishtown.com
Professor of International since 2000
Business Administration since
1993); Director -- Intel since
1989
Charles E. Young, 69...................... Chancellor Emeritus -- Chancellor -- University of
296 W. Stafford Road, University of California, Los California, Los Angeles from
Thousand Oaks, CA 91361 Angeles since 1997; 1968 to 1997; Chairman of the
Director -- Intel since 1974; Board of Governors
President -- University of Foundation -- International
Florida since 2000 Exchange of Scientific and
Cultural Information by
Telecommunications since 1987;
Trustee -- Nicholas-Applegate
Growth-Equity Funds from 1991
to 1997; Director -- Nicholas-
Applegate Fund, Inc. from 1993
to 1997; Director --
Canada/United States Fulbright
Commission from 1996 to 2000;
Director -- University Net from
1998 to 1999;
Director -- Student Advantage,
Inc. since 1999
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NAME, AGE, CITIZENSHIP AND OTHER MATERIAL POSITIONS
CURRENT BUSINESS ADDRESS PRESENT OCCUPATION OR EMPLOYMENT HELD DURING THE PAST FIVE YEARS
- -------------------------- -------------------------------- -------------------------------
Arthur Rock, 74........................... Principal -- Arthur Rock & Director -- AirTouch
Arthur Rock & Company Company since 1969; Communications, Inc. from 1994
One Maritime Plaza, Director -- Intel 1968 -- 1999; to 1999; Director -- Echelon
Suite 1220 Director Emeritus -- Intel since Corporation since 1989;
San Francisco, CA 94111 1999 Trustee -- California Institute
of Technology since 1988;
Member -- Board of Governors of
NASD since 1998
Paul S. Otellini, 50...................... Executive Vice President; Executive Vice President from
General Manager, Intel 1996 to 1998; Vice President
Architecture Business Group from 1992 to 1996
since 1998
Gerhard H. Parker, 57..................... Executive Vice President, Executive Vice President and
General Manager, New Business General Manager, Technology and
Group since 1998 Manufacturing Group from 1996
to 1998; Senior Vice President
and General Manager, Technology
and Manufacturing Group from
1992 -- 1996
Sean M. Maloney, 44....................... Executive Vice President, Senior Vice President,
British Citizenship Director, Sales and Marketing Director, Sales and Marketing
Group since 2001 Group from 1998 to 2001; Vice
President, Sales and General
Manager, Asia-Pacific
Operations from 1995 -- 1998;
Technical Assistant to the
Chairman and Chief Executive
Officer from 1992 -- 1995
Albert Y.C. Yu, 60........................ Senior Vice President and Senior Vice President and
General Manager, Optoelectronics General Manager, Intel
Microprocessor Products Group
from 1993 - 2000;
Director -- Power One from 1997
to 1999; Director -- Oak
Technology since 1999
Andy D. Bryant, 50........................ Executive Vice President since Senior Vice President from 1999
2001; Chief Financial Officer to 2001
since 1994
F. Thomas Dunlap, Jr., 50................. Senior Vice President, General Vice President, General Counsel
Counsel and Secretary since 2001 and Secretary from 1987 to 2001
Arvind Sodhani, 46........................ Vice President and Treasurer N/A
since 1988
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Michael R. Splinter, 50. Executive Vice President Senior Vice President from
since 2000; General Manager, 1999 to 2000
Technology and
Manufacturing Group since
1998
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DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER
The following table sets forth the name, age business or residence address,
principal occupation or employment at the present time and during the last five
years, and the name of any corporation or other organization in which such
employment is conducted or was conducted of each executive officer or director
of Purchaser. Except as otherwise indicated, all of the person listed below are
citizens of the United States of America. Each occupation set forth opposite a
person's name, unless otherwise indicated, refers to employment with Intel.
Unless otherwise indicated, the principal business address of each director or
executive officer is Intel Corporation, 2200 Mission College Boulevard, Santa
Clara, California 95052.
NAME, AGE, CITIZENSHIP AND OTHER MATERIAL POSITIONS
CURRENT BUSINESS ADDRESS PRESENT OCCUPATION OR EMPLOYMENT HELD DURING THE PAST FIVE YEARS
- -------------------------- -------------------------------- -------------------------------
Cary I. Klafter, 52....................... Director of Corporate Affairs Partner, Morrison & Foerster
since 1996; Vice President, from prior to 1995 to 1996.
Secretary and Director --
Purchaser since 2000
Suzan A. Miller, 36....................... General Counsel of Intel Capital Senior Attorney from 1991 --
since 1999; President and 1999
Director -- Purchaser since 2000
Arvind Sodhani, 46........................ Vice President and Treasurer N/A
since 1988; Vice President and
Treasurer -- Purchaser since
2000
PERSONS WHO MAY BE DESIGNATED BY INTEL TO SERVE ON THE COMPANY BOARD
The following table sets forth the name, age, business or residence
address, principal occupation or employment at the present time and during the
last five years, and the name of any corporation or other organization in which
such employment is conducted or was conducted of each person Intel may designate
as a member of the Company Board pursuant to the terms of the Merger Agreement.
Except as otherwise indicated, all of the persons listed below are citizens of
the United States of America. Unless otherwise indicated, the principal business
address of each director or executive officer is Intel Corporation, 2200 Mission
College Boulevard, Santa Clara, California 95052.
NAME OF INTEL DESIGNEE AGE PRINCIPAL OCCUPATION DURING PAST FIVE (5) YEARS
---------------------- --- -----------------------------------------------
Leslie L. Vadasz.................. 64 Executive Vice President of Intel since 2000; Director of
Intel since 1988.
Arvind Sodhani.................... 46 Vice President and Treasurer of Intel since 1988; Vice
President and Treasurer of Purchaser since 2000.
Cary I. Klafter................... 52 Director of Corporate Affairs of Intel since 1996; Vice
President, Secretary and Director of Purchaser since 2000.
Partner, Morrison & Foerster from 1994 to 1996.
Suzan A. Miller................... 36 General Counsel of Intel Capital since 1999; Senior
Attorney of Intel from 1991 to 1999; President and Director
of Purchaser since 2000.
Tiffany Doon Silva................ 34 Senior Attorney of Intel since 1999; Associate, Gibson,
Dunn & Crutcher LLP, from 1995 to 1999.
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ANNEX A
TEXT OF SECTION 1300 OF THE CALIFORNIA CORPORATIONS CODE
SEC.1300. REORGANIZATION OR SHORT-FORM MERGER; DISSENTING SHARES; CORPORATE
PURCHASE AT FAIR MARKET VALUE; DEFINITIONS.
(a) If the approval of the outstanding shares (Section 152) of a
corporation is required for a reorganization under subdivisions (a) and (b) or
subdivision (e) or (f) of Section 1201, each shareholder of the corporation
entitled to vote on the transaction and each shareholder of a subsidiary
corporation in a short-form merger may, by complying with this chapter, require
the corporation in which the shareholder holds shares to purchase for cash at
their fair market value the shares owned by the shareholder which are dissenting
shares as defined in subdivision (b). The fair market value shall be determined
as of the day before the first announcement of the terms of the proposed
reorganization or short-form merger, excluding any appreciation or depreciation
in consequence of the proposed action, but adjusted for any stock split, reverse
stock split, or share dividend which becomes effective thereafter.
(b) As used in this chapter, "dissenting shares" means shares which come
within all of the following descriptions:
(1) Which were not immediately prior to the reorganization or
short-form merger either (A) listed on any national securities exchange
certified by the Commissioner of Corporations under subdivision (o) of
Section 25100 or (B) listed on the National Market System of the NASDAQ
Stock Market, and the notice of meeting of shareholders to act upon the
reorganization summarizes this section and Sections 1301, 1302, 1303 and
1304; provided, however, that this provision does not apply to any shares
with respect to which there exists any restriction on transfer imposed by
the corporation or by any law or regulation; and provided, further, that
this provision does not apply to any class of shares described in
subparagraph (A) or (B) if demands for payment are filed with respect to 5
percent or more of the outstanding shares of that class.
(2) Which were outstanding on the date for the determination of
shareholders entitled to vote on the reorganization and (A) were not voted
in favor of the reorganization or, (B) if described in subparagraph (A) or
(B) of paragraph (1) (without regard to the provisos in that paragraph),
were voted against the reorganization, or which were held of record on the
effective date of a short-form merger; provided, however, that subparagraph
(A) rather than subparagraph (B) of this paragraph applies in any case
where the approval required by Section 1201 is sought by written consent
rather than at a meeting.
(3) Which the dissenting shareholder has demanded that the corporation
purchase at their fair market value, in accordance with Section 1301.
(4) Which the dissenting shareholder has submitted for endorsement, in
accordance with Section 1302.
(c) As used in this chapter, "dissenting shareholder" means the
recordholder of dissenting shares and includes a transferee of record.
SEC.1301. NOTICE TO HOLDERS OF DISSENTING SHARES IN REORGANIZATIONS; DEMAND FOR
PURCHASE; TIME; CONTENTS.
(a) If, in the case of a reorganization, any shareholders of a corporation
have a right under Section 1300, subject to compliance with paragraphs (3) and
(4) of subdivision (b) thereof, to require the corporation to purchase their
shares for cash, such corporation shall mail to each such shareholder a notice
of the approval of the reorganization by its outstanding shares (Section 152)
within 10 days after the date of such approval, accompanied by a copy of
Sections 1300, 1302, 1303, 1304 and this section, a statement of the price
determined by the corporation to represent the fair market value of the
dissenting shares, and a brief description of the procedure to be followed if
the shareholder desires to exercise the shareholder's right under such sections.
The statement of price constitutes an offer by the corporation to purchase at
the price stated any
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dissenting shares as defined in subdivision (b) of Section 1300, unless they
lose their status as dissenting shares under Section 1309.
(b) Any shareholder who has a right to require the corporation to purchase
the shareholder's shares for cash under Section 1300, subject to compliance with
paragraphs (3) and (4) of subdivision (b) thereof, and who desires the
corporation to purchase such shares shall make written demand upon the
corporation for the purchase of such shares and payment to the shareholder in
cash of their fair market value. The demand is not effective for any purpose
unless it is received by the corporation or any transfer agent thereof (1) in
the case of shares described in clause (i) or (ii) of paragraph (1) of
subdivision (b) of Section 1300 (without regard to the provisos in that
paragraph), not later than the date of the shareholders' meeting to vote upon
the reorganization, or (2) in any other case within 30 days after the date on
which the notice of the approval by the outstanding shares pursuant to
subdivision (a) or the notice pursuant to subdivision (i) of Section 1110 was
mailed to the shareholder.
(c) The demand shall state the number and class of the shares held of
record by the shareholder which the shareholder demands that the corporation
purchase and shall contain a statement of what such shareholder claims to be the
fair market value of those shares as of the day before the announcement of the
proposed reorganization or short-form merger. The statement of fair market value
constitutes an offer by the shareholder to sell the shares at such price.
SEC.1302. SUBMISSION OF SHARE CERTIFICATES FOR ENDORSEMENT; UNCERTIFIED
SECURITIES.
Within 30 days after the date on which notice of the approval by the
outstanding shares or the notice pursuant to subdivision (i) of Section 1110 was
mailed to the shareholder, the shareholder shall submit to the corporation at
its principal office or at the office of any transfer agent thereof, (a) if the
shares are certificated securities, the shareholder's certificates representing
any shares which the shareholder demands that the corporation purchase, to be
stamped or endorsed with a statement that the shares are dissenting shares or to
be exchanged for certificates of appropriate denomination so stamped or endorsed
or (b) if the shares are uncertificated securities, written notice of the number
of shares which the shareholder demands that the corporation purchase. Upon
subsequent transfers of the dissenting shares on the books of the corporation,
the new certificates, initial transaction statement, and other written
statements issued therefor shall bear a like statement, together with the name
of the original dissenting holder of the shares.
SEC.1303. PAYMENT OF AGREED PRICE WITH INTEREST; AGREEMENT FIXING FAIR MARKET
VALUE; FILING; TIME OF PAYMENT.
(a) If the corporation and the shareholder agree that the shares are
dissenting shares and agree upon the price of the shares, the dissenting
shareholder is entitled to the agreed price with interest thereon at the legal
rate on judgments from the date of the agreement. Any agreements fixing the fair
market value of any dissenting shares as between the corporation and the holders
thereof shall be filed with the secretary of the corporation.
(b) Subject to the provisions of Section 1306, payment of the fair market
value of dissenting shares shall be made within 30 days after the amount thereof
has been agreed or within 30 days after any statutory or contractual conditions
to the reorganization are satisfied, whichever is later, and in the case of
certificated securities, subject to surrender of the certificates therefor,
unless provided otherwise by agreement.
SEC.1304. ACTION TO DETERMINE WHETHER SHARES ARE DISSENTING SHARES OR FAIR
MARKET VALUE; LIMITATION; JOINDER; CONSOLIDATION; DETERMINATION OF
ISSUES; APPOINTMENT OF APPRAISERS.
(a) If the corporation denies that the shares are dissenting shares, or the
corporation and the shareholder fail to agree upon the fair market value of the
shares, then the shareholder demanding purchase of such shares as dissenting
shares or any interested corporation, within six months after the date on which
notice of the approval by the outstanding shares (Section 152) or notice
pursuant to subdivision (i) of Section 1110 was mailed to the shareholder, but
not thereafter, may file a complaint in the superior court of the proper county
praying the court to determine whether the shares are dissenting shares or the
fair market value of the dissenting shares or both or may intervene in any
action pending on such a complaint.
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(b) Two or more dissenting shareholders may join as plaintiffs or be joined
as defendants in any such action and two or more such actions may be
consolidated.
(c) On the trial of the action, the court shall determine the issues. If
the status of the shares as dissenting shares is in issue, the court shall first
determine that issue. If the fair market value of the dissenting shares is in
issue, the court shall determine, or shall appoint one or more impartial
appraisers to determine, the fair market value of the shares.
SEC.1305. REPORT OF APPRAISERS; CONFIRMATION; DETERMINATION BY COURT; JUDGMENT;
PAYMENT; APPEAL; COSTS.
(a) If the court appoints an appraiser or appraisers, they shall proceed
forthwith to determine the fair market value per share. Within the time fixed by
the court, the appraisers, or a majority of them, shall make and file a report
in the office of the clerk of the court. Thereupon, on the motion of any party,
the report shall be submitted to the court and considered on such evidence as
the court considers relevant. If the court finds the report reasonable, the
court may confirm it.
(b) If a majority of the appraisers appointed fail to make and file a
report within 10 days from the date of their appointment or within such further
time as may be allowed by the court or the report is not confirmed by the court,
the court shall determine the fair market value of the dissenting shares.
(c) Subject to the provisions of Section 1306, judgment shall be rendered
against the corporation for payment of an amount equal to the fair market value
of each dissenting share multiplied by the number of dissenting shares which any
dissenting shareholder who is a party, or who has intervened, is entitled to
require the corporation to purchase, with interest thereon at the legal rate
from the date on which judgment was entered.
(d) Any such judgment shall be payable forthwith with respect to
uncertificated securities and, with respect to certificated securities, only
upon the endorsement and delivery to the corporation of the certificates for the
shares described in the judgment. Any party may appeal from the judgment.
(e) The costs of the action, including reasonable compensation to the
appraisers to be fixed by the court, shall be assessed or apportioned as the
court considers equitable, but, if the appraisal exceeds the price offered by
the corporation, the corporation shall pay the costs (including in the
discretion of the court attorneys' fees, fees of expert witnesses and interest
at the legal rate on judgments from the date of compliance with Sections 1300,
1301, and 1302 if the value awarded by the court for the shares is more than 125
percent of the price offered by the corporation under subdivision (a) or Section
1301).
SEC.1306. PREVENTION OF IMMEDIATE PAYMENT; STATUS AS CREDITORS; INTEREST.
To the extent that the provisions of Chapter 5 prevent the payment to any
holders of dissenting shares of their fair market value, they shall become
creditors of the corporation for the amount thereof together with interest at
the legal rate on judgments until the date of payment, but subordinate to all
other creditors in any liquidation proceeding, such debt to be payable when
permissible under the provisions of Chapter 5.
SEC.1307. DIVIDENDS ON DISSENTING SHARES.
Cash dividends declared and paid by the corporation upon the dissenting
shares after the date of approval of the reorganization by the outstanding
shares (Section 152) and prior to payment for the shares by the corporation
shall be credited against the total amount to be paid by the corporation
therefor.
SEC.1308. RIGHTS OF DISSENTING SHAREHOLDERS PENDING VALUATION; WITHDRAWAL OF
DEMAND FOR PAYMENT.
Except as expressly limited in this chapter, holders of dissenting shares
continue to have all the rights and privileges incident to their shares, until
the fair market value of their shares is agreed upon or determined. A dissenting
shareholder may not withdraw a demand for payment unless the corporation
consents thereto.
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SEC.1309. TERMINATION OF DISSENTING SHARE AND SHAREHOLDER STATUS.
Dissenting shares lose their status as dissenting shares and the holders
thereof cease to be dissenting shareholders and cease to be entitled to require
the corporation to purchase their shares upon the happening of any of the
following:
(a) The corporation abandons the reorganization. Upon abandonment of
the reorganization, the corporation shall pay on demand to any dissenting
shareholder who has initiated proceedings in good faith under this chapter
all necessary expenses incurred in such proceedings and reasonable
attorneys' fees.
(b) The shares are transferred prior to their submission for
endorsement in accordance with Section 1302 or are surrendered for
conversion into shares of another class in accordance with articles.
(c) The dissenting shareholder and the corporation do not agree upon
the status of the shares as dissenting shares or upon the purchase price of
the shares, and neither files a complaint or intervenes in a pending action
as provided in Section 1304, within six months after the date on which
notice of the approval by the outstanding shares or notice pursuant to
subdivision (i) of Section 1110 was mailed to the shareholder.
(d) The dissenting shareholder, with the consent of the corporation,
withdraws the shareholder's demand for purchase of the dissenting shares.
SEC.1310. SUSPENSION OF RIGHT TO COMPENSATION OR VALUATION PROCEEDINGS;
LITIGATION OF SHAREHOLDERS' APPROVAL.
If litigation is instituted to test the sufficiency or regularity of the
votes of the shareholders in authorizing a reorganization, any proceedings under
Sections 1304 and 1305 shall be suspended until final determination of such
litigation.
SEC.1311. EXEMPT SHARES.
This chapter, except Section 1312, does not apply to classes of shares
whose terms and provisions specifically set forth the amount to be paid in
respect to such shares in the event of a reorganization or merger.
SEC.1312. RIGHT OF DISSENTING SHAREHOLDER TO ATTACK, SET ASIDE OR RESCIND MERGER
OR REORGANIZATION; RESTRAINING ORDER OR INJUNCTION; CONDITIONS.
(a) No shareholder of a corporation who has a right under this chapter to
demand payment of cash for the shares held by the shareholder shall have any
right at law or in equity to attack the validity of the reorganization or
short-form merger, or to have the reorganization or short-form merger, or to
have the reorganization or short-form merger set aside or rescinded, except in
an action to test whether the number of shares required to authorize or approve
the reorganization have been legally voted in favor thereof; but any holder of
shares of a class whose terms and provisions specifically set forth the amount
to be paid in respect to them in the event of a reorganization or short-form
merger is entitled to payment in accordance with those terms and provisions or,
if the principal terms of the reorganization are approved pursuant to
subdivision (b) of Section 1202, is entitled to payment in accordance with the
terms and provisions of the approved reorganization.
(b) If one of the parties to a reorganization or short-form merger is
directly or indirectly controlled by, or under common control with, another
party to the reorganization or short-form merger, subdivision (a) shall not
apply to any shareholder of such party who has not demanded payment of cash for
such shareholder's shares pursuant to this chapter; but if the shareholder
institutes any action to attack the validity of the reorganization or short-form
merger or to have the reorganization or short-form merger set aside or
rescinded, the shareholder shall not thereafter have any right to demand payment
of cash for the shareholder's shares pursuant to this chapter. The court in any
action attacking the validity of the reorganization or short-form merger or to
have the reorganization or short-form merger set aside or rescinded shall not
restrain or enjoin the consummation of the transaction except upon 10 days'
prior notice to the corporation and upon a
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determination by the court that clearly no other remedy will adequately protect
the complaining shareholder or the class of shareholders of which such
shareholder is a member.
(c) If one of the parties to a reorganization or short-form merger is
directly or indirectly controlled by, or under common control with, another
party to the reorganization or short-form merger, in any action to attack the
validity of the reorganization or short-form merger or to have the
reorganization or short-form merger set aside or rescinded, (1) a party to a
reorganization or short-form merger which controls another party to the
reorganization or short-form merger shall have the burden of proving that the
transaction is just and reasonable as to the shareholders of the controlled
party, and (2) a person who controls two or more parties to a reorganization
shall have the burden of proving that the transaction is just and reasonable as
to the shareholders of any party so controlled.
A-5
65
Manually signed facsimile copies of the Letter of Transmittal will be accepted.
Letters of Transmittal and certificates for Shares should be sent or delivered
by each shareholder of the Company or his broker, dealer, commercial bank or
trust company to the Depositary at one of its addresses set forth below:
The Depositary for the Offer is:
CITIBANK, N.A.
By Mail: By Overnight Courier: By Hand:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
P.O. Box 685 915 Broadway, 5th Floor Corporate Trust Window
Old Chelsea Station New York, New York 10010 111 Wall Street, 5th Floor
New York, New York 10113 New York, New York 10043
By Facsimile Transmission: Confirm Receipt of Facsimile Transmission
by Telephone Only:
(For Eligible Institutions Only) (800)270-0808
(212) 505-2248
Any questions or requests for assistance may be directed to the Information
Agent at its address and telephone numbers set forth below. Requests for
additional copies of this Offer to Purchase and the Letter of Transmittal may be
directed to the Information Agent or the Depositary. Shareholders may also
contact their brokers, dealers, commercial banks or trust companies for
assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street New York, New York 10005-4495
Call Collect: (212) 269-5550
Call Toll-Free: (800) 628-8528