EXHIBIT (a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
VITRONICS CORPORATION
BY
DTI INTERMEDIATE, INC.
A WHOLLY OWNED SUBSIDIARY OF
DOVER TECHNOLOGIES INTERNATIONAL, INC.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
DOVER CORPORATION
AT
$1.90 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON OCTOBER 6, 1997, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER DATED
AS OF SEPTEMBER 3, 1997 AMONG DOVER TECHNOLOGIES INTERNATIONAL, INC., DTI
INTERMEDIATE, INC. AND VITRONICS CORPORATION. THE BOARD OF DIRECTORS OF
VITRONICS CORPORATION HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT, THE OFFER
AND THE MERGER AND DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE
FAIR TO, AND IN THE BEST INTERESTS OF, THE SHAREHOLDERS OF VITRONICS
CORPORATION, AND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS ACCEPT THE OFFER AND
TENDER THEIR SHARES.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER, THAT NUMBER OF
SHARES WHICH REPRESENTS AT LEAST SIXTY-SIX AND TWO-THIRDS PERCENT (66 2/3%) OF
THE SHARES OUTSTANDING ON A FULLY DILUTED BASIS AND (II) THE OTHER CONDITIONS
SET FORTH IN THIS OFFER TO PURCHASE. SEE SECTION 14.
IMPORTANT
Any shareholder who desires to tender all or any portion of such
shareholder's Shares ( as defined herein) should either (i) complete and sign
the Letter of Transmittal (or facsimile thereof) in accordance with the
instructions in 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 or tender such Shares pursuant to
the procedures for book-entry transfer set forth in Section 3 or (ii) request
such shareholder's broker, dealer, commercial bank, trust company or other
nominee to effect the transaction for such shareholder. Any shareholder 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 to tender such Shares.
Any shareholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available, or who cannot comply
with the procedures for book-entry transfer on a timely basis, may tender such
Shares by following the procedures for guaranteed delivery set forth in Section
3.
Questions and requests for assistance may be directed to the Information
Agent at its location and telephone number set forth on the back cover of this
Offer to Purchase. Requests for additional copies of this Offer to Purchase, the
Letter of Transmittal and the Notice of Guaranteed Delivery may be directed to
the Information Agent, the Depositary, or to brokers, dealers, commercial banks
or trust companies. A shareholder also may contact brokers, dealers, commercial
banks or trust companies for assistance concerning the Offer.
September 9, 1997
TABLE OF CONTENTS
PAGE
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INTRODUCTION..................................................................... 3
THE OFFER........................................................................ 4
1. Terms of the Offer....................................................... 4
2. Acceptance for Payment and Payment....................................... 6
3. Procedure for Tendering Shares........................................... 7
4. Withdrawal Rights........................................................ 9
5. Certain Federal Income Tax Consequences.................................. 10
6. Price Range of the Shares; Dividends on the Shares....................... 10
7. Effect of the Offer on the Market for the Shares; Stock Listing; Exchange
Act Registration; Margin Regulations..................................... 11
8. Certain Information Concerning the Company............................... 12
9. Certain Information Concerning the Purchaser, Dover Technologies and
Dover Corporation........................................................ 13
10. Source and Amount of Funds............................................... 14
11. Background of the Offer; Purpose of the Offer and the Merger; The Merger
Agreement and Certain Other Agreements................................... 15
12. Plans for the Company; Other Matters..................................... 22
13. Dividends and Distributions.............................................. 25
14. Conditions of the Offer.................................................. 25
15. Certain Legal Matters.................................................... 27
16. Fees and Expenses........................................................ 30
17. Miscellaneous............................................................ 30
Schedule I -- Directors and Executive Officers of Dover Corporation, Dover
Technologies International, Inc. and DTI Intermediate, Inc....................... 31
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To the Holders of Common Stock of
Vitronics Corporation:
INTRODUCTION
DTI Intermediate, Inc., a Delaware corporation (the "Purchaser") and a
wholly owned direct subsidiary of Dover Technologies International, Inc., a
Delaware corporation ("Dover Technologies"), an indirect wholly owned subsidiary
of Dover Corporation, a Delaware corporation ("Dover Corporation"), hereby
offers to purchase all of the outstanding shares (the "Shares") of Common Stock,
par value $.01 per share (the "Common Stock") of Vitronics Corporation, a
Massachusetts corporation (the "Company"), at $1.90 per Share, net to the seller
in cash, upon the terms and subject to the conditions set forth in this Offer to
Purchase and in the related Letter of Transmittal (which, together with any
amendments or supplements hereto or thereto, collectively constitute the
"Offer"). Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares pursuant to the Offer. The
Purchaser will pay all fees and expenses incurred in connection with the Offer
of The Bank of New York ("Bank"), which is acting as the Depositary (the
"Depositary"), and Morrow & Co., Inc., which is acting as the Information Agent
(the "Information Agent").
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER, THAT NUMBER OF
SHARES WHICH REPRESENTS AT LEAST SIXTY-SIX AND TWO-THIRDS PERCENT (66 2/3%) OF
THE SHARES OUTSTANDING ON A FULLY DILUTED BASIS (THE "MINIMUM CONDITION"). SEE
SECTION 14. As used in this Offer to Purchase, "fully diluted basis" takes into
account issued and outstanding Shares and Shares subject to issuance under
outstanding options. The Company has informed the Purchaser that, as of
September 3, 1997, there were 9,856,572 Shares issued and outstanding, and there
were outstanding options to purchase an aggregate of 543,400 Shares. The Merger
Agreement provides, among other things, that the Company will not, without the
prior written consent of Dover Technologies, issue any additional Shares (except
on the exercise of outstanding options and warrants). Based on the foregoing and
giving effect to the exercise of all outstanding options, the Purchaser believes
that the Minimum Condition will be satisfied if 6,933,315 Shares are validly
tendered and not withdrawn prior to the expiration of the Offer.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of September 3, 1997 (the "Merger Agreement"), by and among Dover
Technologies, the Purchaser and the Company pursuant to which, as soon as
practicable after the completion of the Offer and satisfaction or waiver, if
permissible, of all conditions to the Merger (as defined below), (i) at the
election of Dover Technologies, the Company may be merged with and into the
Purchaser and the separate corporate existence of the Company will thereupon
cease, or (ii) at the election of Dover Technologies, the Purchaser may be
merged with and into the Company and the separate corporate existence of the
Purchaser will cease. The merger, as effected pursuant to clause (i) or (ii) of
the immediately preceding sentence, is referred to herein as the "Merger," and
such of the Purchaser or the Company as is the surviving corporation of the
Merger is sometimes herein referred to as the "Surviving Corporation." At the
effective time of the Merger (the "Effective Time"), each Share then outstanding
(other than Shares held by Dover Technologies, the Purchaser or any other wholly
owned subsidiary of Dover Technologies and Shares held by shareholders who
perfect their dissenters' rights under Massachusetts law) will be converted into
the right to receive $1.90 in cash or any higher price per Share paid in the
Offer. The Merger Agreement is more fully described in Section 11.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT, THE OFFER AND THE MERGER AND DETERMINED THAT THE TERMS OF THE OFFER
AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY'S
SHAREHOLDERS, AND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS ACCEPT THE OFFER AND
TENDER THEIR SHARES.
Scott-Macon Securities, Inc., the Company's financial advisor
("Scott-Macon"), has delivered to the Company's Board of Directors its written
opinion to the effect that the consideration to be received by the public
shareholders of the Company in the Offer and the Merger is fair to such
shareholders from a financial point of view as of the date of delivery of that
opinion. Such opinion is set forth in full as an exhibit to the
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Company's Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule
14D-9") that is being mailed to shareholders of the Company.
The Merger Agreement provides that, except as otherwise provided therein,
following satisfaction or waiver, if permissible, of the conditions to the Offer
and subject to the terms and conditions thereof, the Purchaser will accept for
payment, in accordance with the terms of the Offer, all Shares validly tendered
and not withdrawn pursuant to the Offer as soon as it is permitted to do so
pursuant to applicable law. The Offer will not remain open following the time
Shares are accepted for payment.
Consummation of the Merger is conditioned upon, among other things, the
approval and adoption by the requisite vote of shareholders of the Company of
the Merger Agreement, if required by applicable law in order to consummate the
Merger. See Section 12. Under the Massachusetts General Laws, Chapter 156B
Massachusetts Business Corporation Law ("Corporations Code"), except as
otherwise provided below, the affirmative vote of two-thirds of the outstanding
shares of Common Stock is required to approve the Merger Agreement and the
Merger.
Under Section 82 of the Corporations Code, if a corporation owns at least
90% of the outstanding shares of each class of another corporation, the
corporation holding such stock may merge such other corporation into itself
without any action or vote on the part of the shareholders upon a vote of its
directors (a "short-form merger"). In the event that Dover Technologies, the
Purchaser and any other subsidiaries of Dover Technologies acquire in the
aggregate at least 90% of the Shares, pursuant to the Offer or otherwise, then,
at the election of Dover Technologies, a short-form merger could be effected
without any approval of the shareholders of the Company upon a vote of the Board
of Directors of the Company, subject to compliance with the provisions of
Section 82 of the Corporations Code. Even if Dover Technologies, the Purchaser
and the other subsidiaries of Dover Technologies do not own 90% of the
outstanding Shares following consummation of the Offer, Dover Technologies and
the Purchaser could seek to purchase additional shares in the open market or
otherwise in order to reach the 90% threshold and employ a short-form merger.
The per share consideration paid for any Shares so acquired may be greater or
less than that paid in the Offer. Dover Technologies does presently intend to
effect a merger, whether or not it acquires 90% or more of the Shares.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
THE OFFER
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer, the Purchaser
will accept for payment and pay for all Shares validly tendered prior to the
Expiration Date and not theretofore withdrawn in accordance with Section 4 of
this Offer to Purchase. The term "Expiration Date" shall mean 12:00 Midnight,
New York City time, on October 6, 1997, unless and until the Purchaser, in
accordance with the terms of the Merger Agreement, shall have extended the
period of time for which the Offer is open, in which event the term "Expiration
Date" shall mean the latest time and date at which the Offer, as so extended by
the Purchaser, shall expire.
The Offer is conditioned upon, among other things, the satisfaction of the
Minimum Condition and the expiration or termination of all waiting periods
imposed by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the regulations thereunder (the "HSR Act"). See Section 14. If such
conditions are not satisfied prior to the Expiration Date, the Purchaser
reserves the right (but shall not be obligated) to (i) decline to purchase any
of the Shares tendered and terminate the Offer, subject to the terms of the
Merger Agreement, (ii) waive any of the conditions to the Offer, to the extent
permitted by applicable law and the provisions of the Merger Agreement, and,
subject to complying with applicable rules and regulations of the Securities and
Exchange Commission (the "Commission"), purchase all Shares validly tendered or
(iii) subject to the terms of the Merger Agreement, extend the Offer and,
subject to the right of
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shareholders to withdraw Shares until the Expiration Date, retain the Shares
which will have been tendered during the period or periods for which the Offer
is extended.
Subject to the terms of the Merger Agreement, the Purchaser expressly
reserves the right, in its sole discretion, at any time or from time to time,
(i) to extend the period of time during which the Offer is open and thereby
delay acceptance for payment of, and the payment for, any Shares, by giving oral
or written notice of such extension to the Depositary and (ii) to amend the
Offer in any respect (including, without limitation, by decreasing or increasing
the consideration offered in the Offer (the "Offer Price") to holders of Shares
and/or by decreasing the number of Shares being sought in the Offer), by giving
oral or written notice of such amendment to the Depositary. The rights reserved
by the Purchaser in this paragraph are in addition to the Purchaser's rights to
terminate the Offer as described in Section 14. Any extension, amendment or
termination will be followed as promptly as practicable by public announcement
thereof, the announcement in the case of an extension to be issued no later than
9:00 a.m., New York City time, on the next business day after the previously
scheduled Expiration Date in accordance with the public announcement
requirements of Rule 14d-4(c) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Without limiting the obligation of the Purchaser
under such Rule or the manner in which the Purchaser may choose to make any
public announcement, the Purchaser currently intends to make announcements by
issuing a release to the Dow Jones News Service. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE TO BE PAID BY THE PURCHASER FOR THE
SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
The Merger Agreement provides that the Purchaser will not amend or waive
the Minimum Condition and will not decrease the Offer Price or decrease the
number of Shares sought, or amend any other condition of the Offer in any manner
adverse to the holders of the Shares without the written consent of the Company;
provided, however, that if on the initial scheduled Expiration Date of the
Offer, which is twenty business days after the date the Offer is commenced, all
conditions to the Offer shall not have been satisfied or waived, the Purchaser
may, from time to time, in its sole discretion, extend the Expiration Date for
one or more periods not to exceed thirty business days in the aggregate.
Notwithstanding the foregoing, the Merger Agreement provides that the Purchaser
may extend the Offer as it reasonably deems necessary to comply with any legal
or regulatory requirements, including the HSR Act. Furthermore, under the terms
of the Merger Agreement, if, immediately prior to the Expiration Date, the
Shares tendered and not withdrawn equal more than 75% but less than 90% of the
outstanding Shares, the Purchaser may extend the Offer for a period not to
exceed twenty business days, notwithstanding that all conditions to the Offer
may have been satisfied. The Merger Agreement further provides, however, that in
no event may the Offer be extended beyond the date of termination of the Merger
Agreement, and either party has the right to terminate the Merger Agreement if
the Offer is not completed by November 21, 1997.
If the Purchaser extends the Offer, or if the Purchaser (whether before or
after its acceptance for payment of Shares) is delayed in its purchase of or
payment for Shares or is unable to pay for Shares pursuant to the Offer for any
reason, then, without prejudice to the Purchaser's rights under the Offer, the
Depositary may retain tendered Shares on behalf of the Purchaser, and such
Shares may not be withdrawn except to the extent tendering shareholders are
entitled to withdrawal rights as described in Section 4. However, the ability of
the Purchaser to delay the payment for Shares which the Purchaser has accepted
for payment is limited by Rule 14e-l(c) under the Exchange Act, which requires
that a bidder pay the consideration offered or return the securities deposited
by or on behalf of holders of securities promptly after the termination or
withdrawal of the Offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the
Exchange Act. The minimum period during which the Offer must remain open
following material changes 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 then existing, including
the relative materiality of the changed terms or information. In a public
release, the Commission has stated that in its view an offer must remain open
for a minimum period of time following a material change in the terms of
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the Offer and that waiver of a material condition, such as the Minimum
Condition, is a material change in the terms of the Offer. The release states
that 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 security holders and
that, if material changes are made with respect to information not materially
less significant than the offer price and the number of shares being sought, a
minimum of ten business days may be required to allow adequate dissemination and
investor response. The requirement to extend the Offer will not apply to the
extent that the number of business days remaining between the occurrence of the
change and the then-scheduled Expiration Date equals or exceeds the minimum
extension period that would be required because of such amendment. As used in
this Offer to Purchase, "business day" has the meaning set forth in Rule 14d-1
under the Exchange Act.
The Company has provided the Purchaser with the Company's shareholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of Transmittal
will be mailed by the Purchaser to record holders of Shares and will be
furnished by the Purchaser to brokers, dealers, banks and similar persons whose
names, or the names of whose nominees, appear on the shareholder lists or, if
applicable, who are listed as participants in a clearing agency's security
position listing, for subsequent transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT.
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), the Purchaser will accept for payment and will pay, promptly
after the Expiration Date, for all Shares validly tendered prior to the
Expiration Date and not properly withdrawn in accordance with Section 4. All
determinations concerning the satisfaction of such terms and conditions will be
within the Purchaser's discretion, which determinations will be final and
binding. See Sections 1 and 14. The 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, including, without
limitation, the HSR Act. Any such delays will be effected in compliance with
Rule 14e-l(c) under the Exchange Act (relating to a bidder's obligation to pay
the consideration offered or return the securities deposited by or on behalf of
holders of securities promptly after the termination or withdrawal of such
bidder's offer).
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates for
such Shares (or a timely Book-Entry Confirmation (as defined below) with respect
thereto), (ii) a Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message (as defined below), and (iii)
any other documents required by the Letter of Transmittal. The per Share
consideration paid to any shareholder pursuant to the Offer will be the highest
per Share consideration paid to any other shareholder pursuant to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares properly tendered to the Purchaser
and not withdrawn as, if and when the Purchaser gives oral or written notice to
the Depositary of the Purchaser's acceptance for payment of such Shares. Payment
for Shares accepted for payment pursuant to the Offer will be made by deposit of
the purchase price therefor with the Depositary, which will act as agent for
tendering shareholders for the purpose of receiving payment from the Purchaser
and transmitting payment to tendering shareholders. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE TO BE PAID BY THE PURCHASER FOR THE
SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
If the Purchaser is delayed in its acceptance for payment of, or payment
for, Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer (including such rights as are set forth in Sections 1 and 14) (but
subject to compliance with Rule 14e-1(c) under the Exchange Act), the Depositary
may, nevertheless, on behalf of the Purchaser, retain tendered Shares, and such
Shares may not be withdrawn except to the extent tendering shareholders are
entitled to exercise, and duly exercise, withdrawal rights as described in
Section 4.
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If any tendered Shares are not purchased pursuant to the Offer for any
reason, 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 such Shares into the Depositary's account at the Book-Entry Transfer
Facility (as defined below) pursuant to the procedures set forth in Section 3,
such Shares will be credited to an account maintained at the Book-Entry Transfer
Facility), as promptly as practicable after the expiration or termination of the
Offer.
The Purchaser reserves the right to transfer or assign, in whole or in
part, to Dover Technologies or to one or more direct or indirect wholly owned
subsidiaries of Dover Technologies, the right to purchase Shares tendered
pursuant to the Offer, but any such transfer or assignment will not relieve the
Purchaser of its obligations under the Offer and will in no way prejudice the
rights of tendering shareholders to receive payment for Shares validly tendered
and accepted for payment pursuant to the Offer.
3. PROCEDURE FOR TENDERING SHARES.
Valid Tender. For Shares to be validly tendered pursuant to the Offer,
either (i) a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), together with any required signature guarantees, or in the
case of a book-entry transfer, an Agent's Message, 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 prior to the Expiration Date and
either certificates for tendered Shares must be received by the Depositary at
one of such addresses or such Shares must be delivered pursuant to the
procedures for book-entry transfer set forth below (and a Book-Entry
Confirmation received by the Depositary), in each case, prior to the Expiration
Date or (ii) the tendering shareholder must comply with the guaranteed delivery
procedures set forth below.
The Depositary will 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's systems may make book-entry delivery of Shares by causing the
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account in accordance with the Book-Entry Transfer Facility's procedure for such
transfer. However, although delivery of Shares may be effected through
book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility, the Letter of Transmittal (or facsimile thereof), properly completed
and duly executed, with any required signature guarantees, or an Agent's
Message, 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 SUCH BOOK-ENTRY TRANSFER FACILITY'S
PROCEDURES DOES NOT CONSTITUTE 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 a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE
OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (i) if the Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Section, includes any participant in
the Book Entry Transfer Facility's systems whose name appears on a security
position listing as
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the owner of the Shares) of 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 (ii)
if such Shares are tendered for the account of a financial institution
(including most commercial banks, savings and loan associations and brokerage
houses) that is a participant in the Security Transfer Agent's Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program (each, an "Eligible Institution" and,
collectively, "Eligible Institutions"). In all other cases, all signatures on
Letters of Transmittal must be guaranteed by an Eligible Institution. See
Instructions 1 and 5 to the Letter of Transmittal. If the certificates for
Shares are registered in the name of a person other than the signer of the
Letter of Transmittal, or if payment is to be made, or certificates for Shares
not tendered or not accepted for payment are to be returned, to a person other
than the registered holder of the certificates surrendered, then the tendered
certificates for such Shares must be endorsed or accompanied by appropriate
stock powers, in either case, signed exactly as the name or names of the
registered holders or owners appear on the certificates, with the signatures on
the certificates or stock powers guaranteed as aforesaid. See Instructions 1 and
5 to the Letter of Transmittal.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's certificates for Shares 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, such shareholder's tender may be
effected if all the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser, is received
by the Depositary, as provided below, prior to the Expiration Date; and
(iii) the certificates for (or a Book-Entry Confirmation with respect
to) such Shares, together with a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message,
and any other required documents are received by the Depositary within
three trading days after the date of execution of such Notice of Guaranteed
Delivery. A "trading day" is any day on which the New York Stock Exchange
is open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or 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 any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for (or a timely Book-Entry
Confirmation with respect to) such Shares, (ii) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message, and (iii) any other documents required by the Letter of Transmittal.
Accordingly, tendering shareholders may be paid at different times depending
upon when certificates for Shares or Book-Entry Confirmations with respect to
Shares are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE TO BE PAID BY THE PURCHASER FOR THE
SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
The valid tender of Shares pursuant to one of the procedures described
above will constitute a binding agreement between the tendering shareholder and
the Purchaser upon the terms and subject to the conditions of the Offer.
Appointment. By executing the Letter of Transmittal as set forth above, the
tendering shareholder will irrevocably appoint designees of the Purchaser, and
each of them, as such shareholder's attorneys-in-fact and proxies in the manner
set forth in the Letter of Transmittal, each with full power of substitution, to
the full extent of such shareholder's rights with respect to the Shares tendered
by such shareholder and accepted for payment by the Purchaser and with respect
to any and all other Shares or other securities or rights issued or issuable in
respect of such Shares. All such proxies will be considered coupled with an
interest in the tendered
8
Shares. Such appointment will be effective when, and only to the extent that,
the Purchaser accepts for payment Shares tendered by such shareholder as
provided herein. Upon such appointment, all prior powers of attorney, proxies
and consents given by such shareholder with respect to such Shares or other
securities or rights will, without further action, be revoked and no subsequent
powers of attorney, proxies, consents or revocations may be given by such
shareholder (and, if given, will not be deemed effective). The designees of the
Purchaser will thereby be empowered to exercise all voting and other rights with
respect to such Shares and other securities or rights, including, without
limitation, in respect of any annual, special or adjourned meeting of the
Company's shareholders, actions by written consent in lieu of any such meeting
or otherwise, as they in their sole discretion deem proper. The Purchaser
reserves the right to require that, in order for Shares to be deemed validly
tendered, immediately upon the Purchaser's acceptance for payment of such
Shares, the Purchaser must be able to exercise full voting, consent and other
rights with respect to such Shares and other related securities or rights,
including voting at any meeting of shareholders.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by the Purchaser, in its sole discretion, which determination
will be final and binding. The Purchaser reserves the absolute right to reject
any or all tenders of any Shares determined by it not to be in proper form or
the acceptance for payment of, or payment for which may, in the opinion of the
Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute
right, in its sole discretion, subject to the provisions of the Merger
Agreement, to waive any of the conditions of the Offer or any defect or
irregularity in the tender of any Shares of any particular shareholder, whether
or not similar defects or irregularities are waived in the case of other
shareholders. No tender of Shares will be deemed to have been validly made until
all defects or irregularities relating thereto have been cured or waived. None
of the Purchaser, Dover Technologies, Dover Corporation, the Depositary, the
Information Agent, or any other person will be under any duty to give
notification of any defects or irregularities in tenders or incur any liability
for failure to give any such notification. The 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.
Backup Withholding. In order to avoid "backup withholding" of U.S. federal
income tax on payments of cash pursuant to the Offer, a shareholder surrendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such 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 such shareholder is not subject to backup withholding. If a
shareholder does not provide such shareholder's correct TIN or fails to provide
the certifications described above, the Internal Revenue Service may impose a
penalty on such shareholder and payment of cash to such shareholder pursuant to
the Offer may be subject to backup withholding of 31%. All shareholders
surrendering Shares pursuant to the Offer should complete and sign the main
signature form and the Substitute Form W-9 included as part of the Letter of
Transmittal to provide the information and certification necessary to avoid
backup withholding (unless an applicable exemption exists and is proved in a
manner satisfactory to the Purchaser and the Depositary). Certain shareholders
(including, among others, all corporations and certain foreign individuals and
entities) are not subject to backup withholding. Foreign shareholders, if
exempt, should complete and sign the main signature form and a Form W-8,
Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding. See Instruction 9 to the
Letter of Transmittal.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares are
irrevocable. Shares tendered pursuant to the Offer may be withdrawn pursuant to
the procedures set forth below at any time prior to the Expiration Date and,
unless theretofore accepted for payment and paid for by the Purchaser pursuant
to the Offer, may also be withdrawn at any time after November 17, 1997.
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 and
must specify the name of the person having 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, if different from the name of the person who
tendered the Shares. If certificates for Shares have been delivered or otherwise
9
identified to the Depositary, then, prior to the physical release of such
certificates, the serial numbers shown on such certificates must be submitted to
the Depositary and, unless such Shares have been tendered by an Eligible
Institution, the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution. If Shares have been delivered pursuant to the procedures
for book-entry transfer as set forth in Section 3, any notice of withdrawal must
also specify the name and number of the account at the appropriate Book-Entry
Transfer Facility to be credited with the withdrawn Shares and otherwise comply
with such Book-Entry Transfer Facility's procedures. Withdrawals of tenders of
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 again following one of the procedures described in
Section 3 any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination will be final and binding. None of the
Purchaser, Dover Technologies, Dover Corporation, the Depositary, the
Information Agent, or any other person will be under any duty to give
notification of any defects or irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The receipt of cash for Shares pursuant to the Offer or the Merger will be
a taxable transaction for U.S. federal income tax purposes and also may be a
taxable transaction under state, local or foreign tax laws. In general, a
shareholder who tenders Shares in the Offer or receives cash in exchange for
Shares in the Merger will recognize gain or loss for federal income tax purposes
equal to the difference, if any, between the amount of cash received and the
shareholder's tax basis in the Shares sold. Gain or loss will be determined
separately for each block of Shares (i.e., Shares acquired at the same time and
price) exchanged pursuant to the Offer or the Merger. Such gain or loss
generally will be capital gain or loss if the Shares disposed of were held as
capital assets by the shareholder, and will be long-term capital gain or loss if
the Shares disposed of were held for more than one year at the date of sale.
A shareholder of Shares who perfects such shareholder's dissenter's rights,
if any, under the Corporations Code probably will recognize gain or loss at the
Effective Time in an amount equal to the difference between the "amount
realized" and such shareholder's adjusted tax basis of such Shares. For this
purpose, although there is no authority to this effect directly on point, the
amount realized generally should equal the trading value per share of the Shares
at the Effective Time. Ordinary interest income and/or capital gain (or capital
loss, assuming that the Shares were held as capital assets) should be recognized
by such shareholder at the time of actual receipt of payment, to the extent that
such payment exceeds (or is less than) the amount realized at the Effective
Time.
The foregoing summary constitutes a general description of certain U.S.
federal income tax consequences of the Offer and the Merger without regard to
the particular facts and circumstances of each shareholder of the Company and is
based on the provisions of the Internal Revenue Code of 1986, as amended,
Treasury Department Regulations issued pursuant thereto and published rulings
and court decisions in effect as of the date hereof, all of which are subject to
change, possibly with retroactive effect. Special tax consequences not described
herein may be applicable to certain shareholders subject to special tax
treatment (including, but not limited to, insurance companies, tax-exempt
organizations, financial institutions or broker dealers, foreign shareholders
and shareholders who have acquired their Shares pursuant to the exercise of
employee stock options or otherwise as compensation). ALL SHAREHOLDERS SHOULD
CONSULT THEIR TAX ADVISORS WITH RESPECT TO SPECIFIC TAX EFFECTS APPLICABLE TO
THEM OF THE OFFER AND THE MERGER, INCLUDING THE APPLICABILITY AND EFFECT OF THE
ALTERNATIVE MINIMUM TAX AND ANY STATE, LOCAL AND FOREIGN TAX LAWS.
6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES.
The Shares are traded on the American Stock Exchange ("AMEX") under the
symbol "VTC". The following table sets forth, for each of the calendar years
indicated, the high and low reported sales price per Share on the AMEX based on
published financial sources.
10
SALES PRICE
-----------------------
HIGH LOW
---- ---
1995
First Quarter............................... 2 3/16 1 5/16
Second Quarter.............................. 1 11/16 1 3/16
Third Quarter............................... 3 7/16 1 1/2
Fourth Quarter.............................. 3 2 3/16
1996
First Quarter............................... 2 7/8 1 15/16
Second Quarter.............................. 2 9/16 1 13/16
Third Quarter............................... 2 1 3/8
Fourth Quarter.............................. 1 5/8 1
1997
First Quarter............................... 1 7/16 7/8
Second Quarter.............................. 1 3/4
On September 2, 1997, the last full trading day prior to the first public
announcement of the Purchaser's intention to commence the Offer, the last
reported sales price of the Shares on the AMEX was $1 3/8 per Share.
SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
The Company has advised the Purchaser that the Company has never declared
or paid any cash dividends on its capital stock.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK LISTING; EXCHANGE
ACT REGISTRATION; MARGIN REGULATIONS.
Market for the Shares. The purchase of Shares pursuant to the Offer will
reduce the number of holders of Shares and the number of Shares that might
otherwise trade publicly and, depending upon the number of Shares so purchased,
could adversely effect the liquidity and market value of the remaining Shares
held by the public.
Stock Listing. Depending upon the number of Shares purchased pursuant to
the Offer, and the aggregate market value and per share price of any Shares not
purchased pursuant to the Offer, the Shares may no longer meet the standards for
continued inclusion on the AMEX. According to the AMEX's published guidelines,
AMEX would consider delisting such Shares if, among other things, the number of
public holders of such Shares should fall below 300, the number of publicly held
Shares (exclusive of holdings of officers, directors, their immediate families
and other concentrated holdings of 10% or more ("AMEX Excluded Holdings"))
should fall below 200,000 or the aggregate market value of publicly held Shares
(exclusive of AMEX Excluded Holdings) should fall below $1,000,000. If as a
result of the purchase of the Shares pursuant to the Offer or otherwise, the
Shares no longer meet the requirements of the AMEX for continued listing and the
Shares are no longer listed, the market for the Shares could be adversely
affected.
In the event the Shares should no longer be listed or traded on the AMEX,
it is possible that the Shares would continue to trade in the over-the-counter
market and that price quotations might still be available from other sources.
The extent of the public market for the Shares and availability of such
quotations would, however, depend upon the number of holders of Shares remaining
at such time, the interest in maintaining a market in the Shares on the part of
securities firms, the possible termination of registration under the Exchange
Act, as described below, and other factors.
The Company has advised that as of July 30, 1997, there were approximately
3,107 holders of record of Shares including 2,171 shareholders holding Shares in
"street names". According to information provided by the Company, as of July 30,
1997, there were 9,856,572 Shares outstanding. If, as a result of the purchase
of Shares pursuant to the Offer or otherwise, the Company does not meet the
requirements for continued inclusion in the AMEX and the Shares are no longer
included in the AMEX, as the case may be, the market for Shares could be
adversely affected.
11
Exchange Act Registration. The Shares currently are registered under the
Exchange Act. Registration of the Shares under the Exchange Act may be
terminated upon application of the Company to the Commission if the Shares are
neither listed on a national securities exchange nor held by 300 or more holders
of record. Termination of registration of the Shares under the Exchange Act
would substantially reduce the information required to be furnished by the
Company to its shareholders and to the Commission and would make certain
provisions of the Exchange Act, such as the short-swing profit recovery
provisions of Section 16(b), the requirement of furnishing a proxy statement
pursuant to Section 14(a) in connection with shareholders' meetings and the
related requirement of furnishing an annual report to shareholders and the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions, no longer applicable to the Company. Furthermore, the
ability of "affiliates" of the Company and persons holding "restricted
securities" of the Company to dispose of such securities pursuant to Rule 144 or
Rule 144A promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), may be impaired or eliminated. If registration of the Shares
under the Exchange Act were terminated, the Shares would no longer be "margin
securities" or be eligible for continued listing on any stock exchange. The
Purchaser may seek to cause the Company to apply for termination of registration
of the Shares under the Exchange Act as soon after the completion of the Offer
as the requirements for such termination are met.
If registration of the Shares is not terminated prior to the Merger, then
the Shares will be delisted from the AMEX and the registration of the Shares
under the Exchange Act will be terminated following the consummation of the
Merger.
Margin Regulations. The Shares presently are "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which status has the effect, among other things of
allowing brokers to extend credit on the collateral of such securities.
Depending upon factors similar to those described above regarding listing and
market quotations, it is possible that, following the Offer, the Shares would no
longer constitute "margin securities" for the purposes of the margin regulations
of the Federal Reserve Board and therefore could no longer be used as collateral
for loans made by brokers.
If registration of the Shares under the Exchange Act were terminated, the
Shares would no longer be "margin securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
General. The information concerning the Company contained in this Offer to
Purchase, including that set forth below under the caption "Selected Financial
Information," has been furnished by the Company or has been taken from or based
upon publicly available documents and records on file with the Commission and
other public sources. Neither Dover Technologies, Dover Corporation nor the
Purchaser assumes responsibility for the accuracy or completeness of the
information concerning the Company contained in such documents and records or
for any failure by the Company to disclose events which may have occurred or may
affect the significance or accuracy of any such information but which are
unknown to Dover Technologies or the Purchaser.
According to the Company's 10-K, for the year ended December 31, 1996 the
Company is engaged in designing, engineering, manufacturing and marketing
state-of-the-art thermal processing systems for soldering surface mount devices
to printed circuit boards and cleaning of the finished assembly. The Company's
customers are captive and contract manufacturers of medium to high reliability
printed circuit boards. The Company produces several lines of solder reflow
ovens used primarily in the final step of attachment of surface mounted devices
to printed circuit boards. Using similar technology, the Company has also
produced systems for attaching hybrid circuits to ceramic substrates and for
curing epoxies and adhesives used in bonding applications by the electronic
industries. The Company is a Massachusetts corporation with its principal
executive offices at 1 Forbes Road, Newmarket, New Hampshire 03857. The
telephone number of the Company at such offices is (603) 659-6550.
Selected Financial Information. Set forth below is certain selected
consolidated financial information with respect to the Company, excerpted or
derived from the Company's 1996 Annual Report to Shareholders
12
and its Quarterly Reports on Form 10-Q for the six months ended June 29, 1996
and June 29, 1997, all filed with the Commission pursuant to the Exchange Act.
More comprehensive financial information is included in such reports and in
other documents filed by the Company with the Commission. The following summary
is qualified in its entirety by reference to such reports and other documents
and all of the financial information (including any related notes) contained
therein. Such reports and other documents may be inspected and copies may be
obtained from the Commission in the manner set forth below.
VITRONICS CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
SIX MONTHS ENDED FISCAL YEARS ENDED
------------------- ------------------------------------------
JUNE 29, JUNE 29, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1996 1995 1994
-------- -------- ------------ ------------ ------------
OPERATING DATA:
Net sales................................ $ 10,703 $ 12,066 $ 22,708 $ 23,525 $ 17,346
Operating income (loss).................. 589 856 1,236 2,334 798
Net income (loss)........................ 365 518 802 2,775 602
Net income (loss) per share (primary).... 0.04 0.05 0.08 0.30 0.08
Net income (loss) per share (fully
diluted)............................... 0.04 0.05 0.08 0.27 0.07
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital.......................... $ 5,941 $ 5,977 $ 5,585 $ 5,505 $ 2,676
Total assets............................. 10,085 9,763 9,763 10,246 6,052
Total liabilities........................ 3,579 3,588 3,588 4,342 4,324
Shareholders' equity..................... 6,506 6,175 6,175 5,904 1,728
Available Information. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports, proxy statements and other information with the Commission
relating to its business, financial condition and other matters. Information as
of particular dates concerning the Company's directors and officers, their
remuneration, options granted to them, the principal holders of the Company's
securities and any material interests of such persons in transactions with the
Company is required to be disclosed in proxy statements distributed to the
Company's shareholders and filed with the Commission. Such reports, proxy
statements and other information should be available for inspection at the
public reference facilities of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the Commission located at
Seven World Trade Center, Suite 1300, New York, NY 10048 and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, IL 60661. Copies of such
information should be obtainable by mail, upon payment of the Commission's
customary charges, by writing to the Commission's principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549. The Commission also maintains a website at
http://www.sec.gov that contains reports, proxy statements and other
information. Such material should also be available for inspection at the
offices of the AMEX, located at 86 Trinity Place, 7th Floor, New York, New York
10006-1881.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER, DOVER TECHNOLOGIES AND DOVER
CORPORATION.
General. The Purchaser, a Delaware corporation and a wholly owned
subsidiary of Dover Technologies, was organized for the purpose of acquiring the
Company and has conducted no activities unrelated to such purpose since its
organization. All of the issued and outstanding shares of capital stock of the
Purchaser are owned by Dover Technologies. The principal executive offices of
the Purchaser are located at the principal executive offices of Dover
Technologies. The telephone number of the Purchaser at such offices is (607)
773-2290.
13
Dover Technologies is a wholly owned indirect subsidiary of Dover
Corporation located at 280 Park Avenue, New York, NY 10017. Dover Corporation is
a publicly traded company registered with the Commission and listed on the New
York Stock Exchange under the symbol of "DOV". Dover Technologies is a high
technology corporation with subsidiaries in the fields of electronic components,
automated assembly equipment for printed circuit boards, spring probes and test
equipment and fixtures for printed circuit boards, among other things. Dover
Technologies has a subsidiary, Soltec International, B.V. which manufactures
automated soldering equipment for printed circuit boards which will be
complemented by the acquisition of the Company. Dover Technologies is a Delaware
corporation with its principal executive offices at One Marine Midland Plaza,
East Tower, Sixth Floor, Binghamton, New York 13901. Its telephone number at
such address is (607) 773-2290.
Certain Information. The name, citizenship, business address, present
principal occupation or employment and five-year employment history of each of
the directors and executive officers of the Purchaser, Dover Technologies and
Dover Corporation are set forth in Schedule I hereto.
Except as set forth in this Offer to Purchase, neither the Purchaser, Dover
Technologies or Dover Corporation, nor, to the best of their knowledge, any of
the persons listed on Schedule I, nor any associate or majority-owned subsidiary
of any of the foregoing, beneficially owns or has a right to acquire any Shares,
and neither the Purchaser, Dover Technologies, Dover Corporation nor, to the
best of their knowledge, any of the persons or entities referred to above, nor
any of the respective executive officers, directors or subsidiaries of any of
the foregoing, has effected any transaction in Shares during the past 60 days.
Except as set forth in this Offer to Purchase, neither the Purchaser, Dover
Technologies, Dover Corporation, nor, to the best of their knowledge, any of the
persons listed on Schedule I, 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 securities of the
Company, joint ventures, loan or option arrangements, puts or calls, guarantees
of loans, guarantees against loss, or the giving or withholding of proxies.
Except as set forth in this Offer to Purchase, none of the Purchaser, Dover
Technologies, Dover Corporation, or any of their respective affiliates, nor, to
the best of their knowledge, any of the persons listed on Schedule I, has had,
since January 1, 1994, any business relationships or transactions with the
Company or any of its executive officers, directors or affiliates that would
require reporting under the rules of the Commission. Except as set forth in this
Offer to Purchase, since January 1, 1994, there have been no contacts,
negotiations or transactions between the Purchaser, Dover Technologies, Dover
Corporation, any of their respective affiliates or, to the best of their
knowledge, any of the persons listed on Schedule I, and the Company or its
affiliates concerning a merger, consolidation or acquisition, tender offer or
other acquisition of securities, election of directors or a sale or other
transfer of a material amount of assets.
Available Information. Dover Corporation is subject to the informational
filing requirements of the Exchange Act and in accordance therewith, is
obligated to file reports, proxy statements and other information with the
Commission relating to its business, financial conditions and other matters.
Information as of particular dates concerning Dover Corporation's directors and
officers, their renumeration, options granted to them, the principal holders of
Dover Corporation's securities and any material interests of such persons in
transactions with Dover Corporation is required to be disclosed in proxy
statements distributed to Dover Corporation's shareholders and filed with the
Commission. Such reports, proxy statements and other information should be
available for inspection from the offices of the Commission in the same manner
set forth with respect to information concerning the Company in Section 8. Such
material should also be available for inspection at the offices of the New York
Stock Exchange, Inc., located at 20 Broad Street, New York, NY 10005.
10. SOURCE AND AMOUNT OF FUNDS.
The total amount of funds required by the Purchaser to purchase all of the
Shares pursuant to the Offer and the Merger, and to pay related fees and
expenses is expected to be approximately $20 million.
14
Dover Corporation, Dover Technologies and the Purchaser anticipate that the
funds required in connection with the transactions contemplated by the Merger
Agreement would be obtained from funds currently available from internal cash
flow.
11. BACKGROUND OF THE OFFER; PURPOSE OF THE OFFER AND THE MERGER; THE MERGER
AGREEMENT AND CERTAIN OTHER AGREEMENTS.
The following description was prepared by Dover Technologies and the
Company. Information about the Company was provided by the Company and neither
the Purchaser nor Dover Technologies takes any responsibility for the accuracy
or completeness of any information regarding meetings or discussions in which
Dover Technologies or its representatives did not participate.
Background of the Offer. Dover Technologies believes that there is a
significant opportunity in the market for soldering equipment through the
consolidation of efforts of the Company and Dover Technologies' existing
subsidiary, Soltec International, B. V., located in Holland. The Company has a
long history and reputation in the world as one of the leaders in reflow
soldering equipment. Soltec International, B.V. is the world's second largest
supplier of wave soldering equipment. Dover Technologies believes common
ownership will accelerate the growth of both company's product lines and produce
economies in manufacturing and distribution, resulting in increased operating
income for both companies.
On April 5, 1995, John E. Pomeroy, President and Chief Executive Officer of
Dover Technologies, met with Ronald Lawler, then President of the Company, and
Chairman of the Board James Manfield at the Company's headquarters in Newmarket,
New Hampshire for the purpose of discussing a possible business combination of
the Company and Soltec International, B.V. During the following five months
there were several discussions with the representatives of Scott-Macon, Ltd.,
investment bankers for the Company.
On September 7, 1995, Ronald Lawler and Jim Manfield met with John Pomeroy
and Michiel van Schaik, Managing Director of Soltec International, B.V., in
Holland to discuss some type of business combination of the Company and Soltec
International, B.V. In the following months there were discussions with the
representatives of Scott-Macon, Ltd. regarding some type of business combination
of the Company and Soltec International, B.V. and a visit by Michiel van Schaik
to the Company at its headquarters in Newmarket, New Hampshire to continue the
review of a potential business combination. During the ensuing months Michiel
van Schaik met with Company Board member David Steadman at the airport in
Amsterdam to discuss the potential transaction.
Michiel van Schaik was present at a Company Board of Directors meeting on
February 9, 1996 and discussed ways of consolidating the Company and Soltec
International, B.V.
After that Board meeting, Michiel van Schaik prepared a plan of
consolidation and presented it at the March 13, 1996 meeting of the Board of
Directors of the Company in Boston, Massachusetts. At that time, Al Scott of
Scott-Macon, Ltd. was to respond to Dover Technologies with a proposed structure
of a transaction.
The Company responded with a proposal regarding an exchange of shares which
Dover Technologies found unacceptable. At a meeting on May 14, 1996 between John
Pomeroy, Robert A. Livingston, Vice President of Dover Technologies, Robert A.
Tyre, Vice President Corporate Development of Dover Corporation and James
Manfield of the Company at Scott-Macon, Ltd. in New York City, Dover
Technologies came to the conclusion that the parties could not agree on
valuation and the discussion of a potential business combination was terminated.
On or about July 1, 1997 Al Scott from Scott-Macon, Ltd. contacted John
Pomeroy regarding the potential sale of the Company. From July 1, 1997 to July
28, 1997 John Pomeroy, Robert A. Livingston and Al Scott participated in several
phone discussions regarding the potential sale of the Company. On July 28, 1997
John Pomeroy met with James Manfield and Thomas Nash, Vice President Sales and
Marketing of the Company at Company headquarters in Newmarket, New Hampshire
regarding an update on current business conditions and an overall review of the
business as a potential acquisition candidate. After July 28, 1997 there were
again several telephone conversations with John Pomeroy, Robert Livingston,
Edgar Masinter from
15
Beacon Group Capital Services, LLC (investment bankers representing Dover
Technologies) and representatives from Scott-Macon, Ltd. regarding a possible
acquisition of the Company.
On Sunday, August 3, 1997, Michiel van Schaik met with James Manfield at
the Heathrow Airport to discuss more details of the potential acquisition of
Company. On Monday, August 4, 1997 Dover Technologies faxed an expression of
interest to the Company expressing interest in pursuing the purchase of the
outstanding shares of the Company, subject to a satisfactory due diligence
review.
On August 7, 1997, the Board of Directors of Dover Corporation held a
meeting to consider the proposed terms of the transaction. At such meeting,
after a full discussion, the Board of Directors of Dover Corporation authorized
Dover Technologies to pursue a possible transaction.
Between Tuesday, August 12, 1997 and Monday, August 18, 1997, Edgar
Masinter, John Pomeroy, Robert Livingston and Zenas Colt of Scott-Macon, Ltd.,
participated in discussions regarding the value of the Company.
On Monday, August 18, 1997 Michiel van Schaik and his operations team
arrived at the Company headquarters in Newmarket, New Hampshire to begin a
review of the business and continued such review through Thursday, August 21,
1997. On August 18, 1997 and August 20, 1997, environmental review and testing
was performed on site by Eder Associates, on behalf of Dover Technologies. On
August 19, 1997 and August 20, 1997, Robert A. Livingston and his due diligence
team arrived on site in Newmarket, New Hampshire at the Company to conduct the
legal and financial due diligence in connection with the acquisition. As a
result of the due diligence review, Dover Technologies proposed to acquire the
Company's outstanding Shares at $1.90 per Share, subject to the negotiation,
execution and delivery of a definitive Agreement and Plan of Merger.
At a meeting of the Board of Directors of the Company held on September 3,
1997, the Board of Directors of the Company unanimously approved the Merger
Agreement, the Offer and the Merger and determined that the terms of the Offer
and the Merger are fair to, and in the best interests of, the Company's
shareholders, and unanimously recommended that shareholders of the Company
accept the Offer and tender their Shares. On September 3, 1997, Scott-Macon
Securities, Inc., an affiliate of Scott-Macon, Ltd., delivered to the Company's
Board of Directors its written opinion to the effect that the consideration to
be received by the public shareholders of the Company in the Offer and the
Merger is fair to such shareholders from a financial point of view as of the
date of such meeting. The opinion of Scott-Macon Securities, Inc. is set forth
in full as an exhibit to the Company's Schedule 14D-9 which is being mailed to
shareholders of the Company. Shareholders of the Company are urged to read that
opinion in its entirety.
Following the approval of the respective Boards of Directors, on September
3, 1997, Dover Technologies, the Purchaser and the Company executed and
delivered the Merger Agreement.
On September 9, 1997, the Purchaser and Dover Technologies commenced the
Offer.
Purpose of the Offer and the Merger. The purpose of the Offer, the Merger
and the Merger Agreement is to enable Dover Technologies to acquire control of,
and the entire equity interest in, the Company. The Offer is being made pursuant
to the Merger Agreement and is intended to increase the likelihood that the
Merger will be effected. The purpose of the Merger is to acquire all outstanding
Shares not purchased pursuant to the Offer. The transaction is structured as a
merger in order to ensure the acquisition by Dover Technologies and its
affiliates, including the Purchaser, of all the outstanding Shares. Upon
consummation of the Merger, the Company will become (or will be merged into) a
wholly owned subsidiary of Dover Technologies.
If the Merger is consummated, Dover Technologies' common equity interest in
the Company would increase to 100% and Dover Technologies would be entitled to
all benefits resulting from that interest. These benefits include complete
management with regard to the future conduct of the Company's business and any
increase in its value. Similarly, Dover Technologies will also bear the risk of
any losses incurred in the operation of the Company and any decrease in the
value of the Company.
Shareholders of the Company who sell their Shares in the Offer will cease
to have any equity interest in the Company and to participate in its earnings
and any future growth. If the Merger is consummated, the
16
shareholders will no longer have an equity interest in the Company and instead
will have only the right to receive cash consideration pursuant to the Merger
Agreement or to exercise statutory dissenters' rights under Massachusetts law.
See Section 12. Similarly, the shareholders of the Company will not bear the
risk of any decrease in the value of the Company after selling their Shares in
the Offer or the subsequent Merger.
The primary benefits of the Offer and the Merger to the shareholders of the
Company are that such shareholders are being afforded an opportunity to sell all
of their Shares for cash at a price which represents a premium of approximately
38% over the closing market price of the Shares on the last full trading day
prior to the initial public announcement of the Offer, and a more substantial
premium over recent historical trading prices.
Merger Agreement. The following is a summary of certain provisions of the
Merger Agreement. The summary is qualified in its entirety by reference to the
Merger Agreement which is incorporated herein by reference and a copy of which
has been filed with the Commission as an exhibit to the Schedule 14D-1. The
Merger Agreement may be examined and copies may be obtained at the places and in
the manner set forth in Section 9 of this Offer to Purchase.
THE OFFER. The Merger Agreement provides that the Purchaser will commence
the Offer and that, upon the terms and subject to the prior satisfaction or
waiver of the conditions of the Offer, the Purchaser will purchase all Shares
validly tendered pursuant to the Offer. The Merger Agreement provides that,
without the written consent of the Company, the Purchaser will not decrease the
Offer Price, decrease the number of Shares sought in the Offer, amend or waive
the Minimum Condition, or amend any condition of the Offer in a manner adverse
to the holders of Shares, except that if on the initial scheduled expiration
date of the Offer all conditions to the Offer shall not have been satisfied or
waived, the Purchaser may, from time to time, in its sole discretion, extend the
expiration date for one or more periods not to exceed thirty business days in
the aggregate or as may reasonably be necessary to comply with any legal or
regulatory requirements. The Merger Agreement provides that if, immediately
prior to the expiration date of the Offer, as it may be extended, the Shares
tendered and not withdrawn pursuant to the Offer equal more than 75% of the
outstanding Shares but less than 90%, the Purchaser may extend the Offer for a
period not to exceed 20 business days. Notwithstanding the foregoing, the Merger
Agreement provides that the Offer may not be extended beyond the date of
termination of the Merger Agreement pursuant to the terms thereof.
THE MERGER. Following the consummation of the Offer, the Merger Agreement
provides that, subject to the terms and conditions thereof, at the election of
Dover Technologies and in accordance with Massachusetts law, the Company may be
merged with and into the Purchaser and, as a result of the Merger, the separate
corporate existence of the Company shall cease and the Purchaser shall continue
as the surviving corporation (sometimes referred to as the "Purchaser Surviving
Corporation" or the "Surviving Corporation"). In the event that Dover
Technologies does not so elect, then at the Effective Time the Purchaser will be
merged with and into the Company and, as a result of the Merger, the separate
corporate existence of the Purchaser will cease and the Company will continue as
the surviving corporation (sometimes referred to as the "Company Surviving
Corporation" or the "Surviving Corporation").
The respective obligations of Dover Technologies and the Purchaser, on the
one hand, and the Company, on the other hand, to effect the Merger are subject
to the satisfaction on or prior to the Closing Date (as defined in the Merger
Agreement) of each of the following conditions, any and all of which may be
waived, in whole or in part, jointly by Dover Technologies and the Company to
the extent permitted by applicable law: (i) the Merger Agreement shall have been
approved and adopted by the requisite vote of the holders of Shares, if required
by applicable law, in order to consummate the Merger; (ii) no statute, rule or
regulation shall have been enacted or promulgated by any governmental authority
which prohibits the consummation of the Merger, and there shall be no order or
injunction of a court of competent jurisdiction in effect precluding the
consummation of the Merger; (iii) Dover Technologies, the Purchaser or their
affiliates shall have purchased Shares pursuant to the Offer, unless such
failure to purchase is a result of a breach of Dover Technologies' and the
Purchaser's obligations under the Merger Agreement; and (iv) the applicable
waiting period under the HSR Act shall have expired or been terminated.
17
In addition, the obligations of Dover Technologies and the Purchaser to
consummate the Merger are further subject to the fulfillment of the condition
(which may be waived by Dover Technologies and the Purchaser) that the Company
comply with its obligations regarding the Company's or any of its Subsidiaries'
outstanding options, stock option plans and any other plan, program or
arrangement providing for the issuance or grant of any other interest in respect
of the capital stock of the Company or any of its Subsidiaries, as more fully
described below.
At the Effective Time of the Merger (i) each issued and outstanding Share
(other than Shares that are owned by the Company as treasury stock, any Shares
owned by Dover Technologies, the Purchaser or any other wholly owned Subsidiary
of Dover Technologies, or any Shares which are held by shareholders exercising
dissenters' rights under Massachusetts law) will be converted into the right to
receive the price per share paid pursuant to the Offer and (ii) each issued and
outstanding share of the common stock, par value $.01 per share, of the
Purchaser will be converted into one share of common stock of the Company
Surviving Corporation or shall remain outstanding and constitute shares of the
Purchaser Surviving Corporation, as the case may be, and shall constitute the
only outstanding shares of capital stock of the Surviving Corporation.
THE COMPANY'S BOARD OF DIRECTORS. The Merger Agreement provides that
promptly after the purchase by the Purchaser of at least a majority of the
outstanding Shares, Dover Technologies shall be entitled to designate such
number of directors, rounded up to the next whole number, on the Company's Board
of Directors as is equal to the product of the total number of directors on the
Company's Board of Directors (giving effect to the directors designated by Dover
Technologies) multiplied by the percentage that the number of Shares so accepted
for payment bears to the total number of Shares then outstanding. The Company
will, upon request of the Purchaser, promptly use its best reasonable efforts,
including amending its By-laws if necessary, either to increase the size of the
Company's Board of Directors or secure the resignations of such number of its
incumbent directors, or both, as is necessary to enable Dover Technologies'
designees to be elected to the Company's Board of Directors. The Company's
obligation to appoint Dover Technologies' designees to the Company's Board of
Directors is subject to compliance with Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder.
Following the election or appointment of the Purchaser's designees pursuant
to the Merger Agreement and prior to the earlier to occur of (i) the Effective
Time or (ii) November 21, 1997, any amendment or termination of the Merger
Agreement, grant by the Company of any extension for the performance or waiver
of the obligations or other acts of the Purchaser or Dover Technologies, waiver
of the Company's rights hereunder, or action with respect to the Company's
employee benefit plans or option agreements, shall require the concurrence of a
majority of the Company's directors then in office who are directors on the date
hereof, or are directors (other than directors designated by the Purchaser in
accordance with this Section) designated by such directors to fill any vacancy
("Current Directors"). In addition, following the election or appointment of the
Purchaser's designees pursuant to this Section and prior to the earlier to occur
of (i) the Effective Time or (ii) November 21, 1997, none of Dover Technologies,
the Purchaser or such designee shall cause the Company to take any action or
fail to take any action that would cause or result in any obligation of the
Company under the Merger Agreement or any condition therein not being satisfied
without the concurrence of a majority of the Company's directors then in office
who are Current Directors. Prior to the earlier to occur of (i) the Effective
Time or (ii) November 21, 1997, neither the Purchaser nor its designees shall
remove any Current Director, except for cause, and the Purchaser agrees to cause
its designees to vote for the election of any designee of the Current Directors
to fill a vacancy created by any Current Director ceasing to be a director.
SHAREHOLDERS' MEETING. Pursuant to the Merger Agreement, the Company will,
if required by applicable law in order to consummate the Merger, duly call, give
notice of, convene and hold a special meeting of its shareholders as promptly as
practicable following the acceptance for payment and purchase of Shares by the
Purchaser pursuant to the Offer for the purpose of considering and taking action
upon the approval of the Merger and the adoption of the Merger Agreement. The
Merger Agreement provides that the Company will, if required by applicable law
in order to consummate the Merger, prepare and file with the Commission a
preliminary proxy or information statement (the "Proxy Statement") relating to
the Merger and the Merger Agreement and use its best efforts (i) to obtain and
furnish the information required to be included by the
18
Commission in the Proxy Statement and, after consultation with Dover
Technologies, to respond promptly to any comments made by the Commission with
respect to the preliminary Proxy Statement and cause a definitive Proxy
Statement to be mailed to its shareholders, provided that no amendment or
supplement to the Proxy Statement will be made by the Company without
consultation with Dover Technologies and its counsel and (ii) to obtain the
necessary approvals of the Merger and the Merger Agreement by its shareholders.
If the Purchaser acquires at least two-thirds of the outstanding Shares, the
Purchaser will have sufficient voting power to approve the Merger, even if no
other shareholder votes in favor of the Merger. The Company has agreed to
include in the Proxy Statement the recommendation of the Company's Board of
Directors that shareholders of the Company vote in favor of the approval of the
Merger and the adoption of the Merger Agreement. Dover Technologies has agreed
that it will vote, or cause to be voted, all of the Shares then owned by it, the
Purchaser or any of its other Subsidiaries and affiliates in favor of the
approval of the Merger and the adoption of the Merger Agreement.
The Merger Agreement provides that Dover Technologies, the Purchaser and
the Company will, at the request of Dover Technologies and subject to the terms
of the Merger Agreement, take all necessary and appropriate action to cause the
Merger to become effective as soon as practicable after such acquisition, with
or without a meeting of shareholders of the Company, in accordance with
Massachusetts law.
OPTIONS. Pursuant to the Merger Agreement, at the Effective Time, each
holder of then outstanding options (collectively, the "Options") to purchase
Shares granted by the Company, whether or not then exercisable, will be entitled
to receive, and will receive, in settlement of each Option an amount in cash
equal to the difference between the Offer Price and the per Share exercise price
of such Option. Prior to the Effective Time, the Company shall use all
commercially reasonable efforts to obtain all necessary consents or releases
from holders of outstanding Options, to the extent required by the terms of the
plans or agreements governing such Options, as the case may be, or pursuant to
the terms of any Option granted thereunder. Except as may be otherwise agreed to
by Dover Technologies or the Purchaser and the Company, the Company shall take
all action necessary to ensure that: (i) the Company's 1995 Key Employees Stock
Option Plan, (the "Stock Option Plan") shall have been terminated as of the
Effective Time and the provisions in any other plan, program or arrangement
providing for the issuance or grant of any other interest in respect of the
capital stock of the Company or any of its Subsidiaries shall be cancelled as of
the Effective Time, and (ii) following the Effective Time, (a) no participant in
any Stock Option Plan or other plans, programs or arrangements shall have any
right thereunder to acquire equity securities of the Company, the Surviving
Corporation or any Subsidiary thereof (except options to acquire approximately
96,000 Shares of the Company where the exercise price is higher than $1.90 per
Share) and all such plans shall have been terminated, and (b) the Company will
not be bound by any convertible security, option, warrant, right or agreement
which would entitle any person to own any capital stock of the Company, the
Surviving Corporation or any Subsidiary thereof.
INTERIM OPERATIONS; COVENANTS. Pursuant to the Merger Agreement, the
Company has agreed that, except as expressly contemplated or provided by the
Merger Agreement or agreed to in writing by Dover Technologies, prior to the
time the designees of the Purchaser constitute a majority of the Company's Board
of Directors (the "Appointment Date"): (a) the business of the Company and its
Subsidiaries will be conducted only in the ordinary and usual course (other than
actions necessary to consummate the transactions described in the Merger
Agreement) and to the extent consistent therewith, each of the Company and its
Subsidiaries will use its best efforts to preserve its business organization
intact and maintain its existing relations with customers, suppliers, employees,
creditors and business partners subject, however, to any changes to such
relationships necessitated or caused by the announcement of the proposed
transaction contemplated hereby; and (b) the Company will not, directly or
indirectly, (i) issue, sell, transfer or pledge or agree to sell, transfer or
pledge any treasury stock of the Company or any capital stock of any of its
Subsidiaries beneficially owned by it, except upon the exercise of Options or
other rights to purchase shares of Common Stock outstanding on the date of the
Merger Agreement; (ii) amend its Articles of Incorporation or By-laws or similar
organizational documents; or (iii) split, combine or reclassify the outstanding
Shares or any outstanding capital stock of any of the Subsidiaries of the
Company; and (c) neither the Company nor any of its Subsidiaries shall (i)
declare, set aside or pay any dividend or other distribution payable in cash,
stock or
19
property with respect to its capital stock; (ii) issue, sell, pledge, dispose of
or encumber any additional shares of, or securities convertible into or
exchangeable for, or options, warrants, calls, commitments or rights of any kind
to acquire, any shares of capital stock of any class of the Company or its
Subsidiaries, other than Shares reserved for issuance on the date of the Merger
Agreement pursuant to the exercise of Options outstanding on the date of the
Merger Agreement; (iii) transfer, lease, license, sell, or dispose of any
assets, or incur any indebtedness or other liability other than in the ordinary
course of business, or mortgage, pledge or encumber any assets or modify any
indebtedness; (iv) redeem, purchase or otherwise acquire, directly or
indirectly, any of its capital stock; (d) neither the Company nor any of its
Subsidiaries will (i) grant any increase in the compensation payable or to
become payable by the Company or any of its Subsidiaries to any of its executive
officers or adopt any new or amend or otherwise increase or accelerate the
payment or vesting of the amounts payable or to become payable under any
existing bonus, incentive compensation, deferred compensation, severance, profit
sharing, stock option, stock purchase, insurance, pension, retirement or other
employee benefit plan, agreement or arrangement; (ii) enter into any employment
or severance agreement with or, except in accordance with the existing written
policies of the Company, grant any severance or termination pay to any officer,
director or employee of the Company or any of its Subsidiaries; (iii) permit any
insurance policy naming it as a beneficiary or a loss payable payee to be
cancelled or terminated without notice to Dover Technologies; (iv) enter into
any contract or transaction relating to the purchase of assets other than in the
ordinary course of business; (v) change any of the accounting methods used by it
unless required by generally accepted accounting principles ("GAAP"), make any
material tax election, change any material tax election already made, adopt any
material tax accounting method, change any material tax accounting method unless
required by GAAP, enter into any closing agreement, settle any tax claim or
assessment or consent to any tax claim or assessment or any waiver of the
statute of limitations for any such claim or assessment; or (vi) enter into any
agreement with respect to the foregoing or take any action with the intent of
causing any of the conditions to the Offer set forth in Section 14 not to be
satisfied.
NO SOLICITATION. Pursuant to the Merger Agreement, the Company has agreed
that neither the Company nor any of its Subsidiaries will (and the Company and
its Subsidiaries will cause their respective officers, directors, employees,
representatives and agents, including, but not limited to, investment bankers,
attorneys and accountants, not to), directly or indirectly, encourage, solicit,
participate in or initiate discussions or negotiations with, or provide any
information to, any corporation, partnership, person or other entity or group
(other than Dover Technologies, any of its affiliates or representatives)
concerning any proposal or offer to acquire all or a substantial part of the
business and properties of the Company or any of its Subsidiaries or any capital
stock of the Company or any of its Subsidiaries, whether by merger, tender
offer, exchange offer, sale of assets or similar transactions involving the
Company or any Subsidiary, division or operating or principal business unit of
the Company (an "Acquisition Proposal"), except that the Merger Agreement does
not prohibit the Company and the Company's Board of Directors from (i) taking
and disclosing to the Company's shareholders a position with respect to a tender
or exchange offer by a third party pursuant to Rules 14d-9 and 14e-2 promulgated
under the Exchange Act, or (ii) making such disclosure to the Company's
shareholders as, in the good faith judgment of the Board, after receiving advice
from outside counsel, is required under applicable law, provided that, except as
permitted under the terms of the Merger Agreement, neither the Company's Board
of Directors nor any committee thereof shall approve or recommend, or propose to
approve or recommend, any Acquisition Proposal, or enter into any agreement with
respect to any Acquisition Proposal or withdraw or modify, or propose to
withdraw or modify, in a manner adverse to Dover Technologies or the Purchaser,
the approval or recommendation of the Company's Board of Directors, or any such
committee thereof, of the Offer, the Merger Agreement or the Merger. The Company
also agreed to immediately cease any existing activities, discussions or
negotiations with any parties conducted prior to the date of the Merger
Agreement with respect to any of the foregoing.
The Merger Agreement provides that, notwithstanding the foregoing, the
Company, prior to the acceptance of Shares pursuant to the Offer constituting
the Minimum Condition, may furnish information concerning its business,
properties or assets to any corporation, partnership, person or other entity or
group pursuant to appropriate confidentiality agreements, and may negotiate and
participate in discussions and negotiations with such entity or group concerning
an Acquisition Proposal if (i) such entity or group has, on an unsolicited
basis, submitted a bona fide written proposal to the Company relating to any
such transaction
20
which the Company's Board of Directors determines in good faith, after receiving
advice from Scott-Macon Securities, Inc. or a nationally recognized investment
banking firm, represents a superior transaction to the Offer and the Merger and
which the Company's Board of Directors determines in good faith can be fully
financed and (ii) in the opinion of the Company's Board of Directors, only after
receipt of advice from outside legal counsel, the failure to provide such
information or access or to engage in such discussions or negotiations could
reasonably be expected to cause the Company's Board of Directors to violate its
fiduciary duties to the Company's shareholders under applicable law (an
Acquisition Proposal which satisfies clauses (i) and (ii) above is referred to
in the Merger Agreement as a "Superior Proposal"). The Company will, within one
business day following receipt of a Superior Proposal, notify Dover Technologies
of the receipt of the same. The Company will promptly provide to Dover
Technologies any material non-public information regarding the Company provided
to any other party which was not previously provided to Dover Technologies. At
any time after two business days following notification to Dover Technologies of
its intent to do so (which notification shall include the identity of the bidder
and a complete summary of the material terms and conditions of the proposal) and
if permitted to do so pursuant to the terms of the Merger Agreement, the
Company's Board of Directors may withdraw or modify its approval or
recommendation of the Offer.
In the event of a Superior Proposal which (i) is to be paid entirely in
cash and (ii) is not subject to any financing condition or contingency, the
Company may enter into an agreement with respect to such Superior Proposal no
sooner than four days after giving Dover Technologies written notice of its
intention to enter into such agreement; provided that the Purchaser or Dover
Technologies has not, prior to the expiration of such four-day period, advised
the Company of its intention to raise the Offer Price to match such Superior
Proposal. Upon expiration of such four-day period without such action by the
Purchaser or Dover Technologies, the Company may enter into an agreement with
respect to such Superior Proposal (with the bidder and on terms no less
favorable than those specified in such notification), provided it shall
concurrently with entering into such agreement pay or cause to be paid to Dover
Technologies an amount equal to the greater of $750,000 or an amount equal to
the actual, reasonable and reasonably documented out-of-pocket fees and expenses
incurred by Dover Technologies and the Purchaser in connection with the Offer,
the Merger, the Merger Agreement, and the consummation of the transactions
contemplated under the Merger Agreement, provided that in no event shall the
Company be obligated to pay any such fees and expenses in excess of $1 Million.
INDEMNIFICATION. Pursuant to the Merger Agreement, for six years after the
Effective Time, the Surviving Corporation (or any successor to the Surviving
Corporation) and Dover Technologies shall jointly indemnify, defend and hold
harmless the present and former officers and directors of the Company and its
Subsidiaries, and persons who become any of the foregoing prior to the Effective
Time, with respect to matters occurring at or prior to the Effective Time to the
full extent permissible under applicable Massachusetts law, the terms of the
Company's Articles of Incorporation or the By-laws, as in effect as of the date
of the Merger Agreement.
REPRESENTATIONS AND WARRANTIES. Pursuant to the Merger Agreement, the
Company has made customary representations and warranties to Dover Technologies
and the Purchaser with respect to, among other things, its organization,
capitalization, financial statements, public filings, conduct of business,
employee benefit plans, intellectual property, employment matters, compliance
with laws, tax matters, litigation, environmental matters, vote required to
approve the Merger Agreement, undisclosed liabilities, information in the Proxy
Statement and the absence of any material adverse effect on the Company since
December 31, 1996.
TERMINATION; FEES. The Merger Agreement may be terminated and the
transactions contemplated therein abandoned at any time prior to the Effective
Time, whether before or after approval of the shareholders of the Company, (a)
by mutual written consent of Dover Technologies and the Company, (b) by either
the Company or Dover Technologies (i) if (x) the Offer shall have expired
without any Shares being purchased therein or (y) the Purchaser shall not have
accepted for payment all Shares tendered pursuant to the Offer by November 17,
1997, provided, that such right to terminate will not be available to any party
whose failure to fulfill any obligation under the Merger Agreement was the cause
of, or resulted in, the failure of Dover Technologies or the Purchaser to
purchase the Shares on or before such date; or (ii) if any
21
governmental entity shall have issued an order, decree or ruling or taken any
other action (which order, decree, ruling or other action the parties will use
their reasonable efforts to lift), in each case permanently restraining,
enjoining or otherwise prohibiting the acceptance for payment of, or payment
for, Shares pursuant to the Offer or the Merger and such order, decree, ruling
or other action shall have become final and non-appealable, (c) by the Company
(i) if Dover Technologies, the Purchaser or any of their affiliates shall have
failed to commence the Offer on or prior to five business days following the
date of the initial public announcement of the Offer; provided, that the Company
may not terminate the Merger Agreement pursuant to this clause (c)(i) if the
Company is at such time in breach of its obligations under the Merger Agreement
such as to cause a material adverse effect on the Company and its Subsidiaries,
taken as a whole; (ii) if Dover Technologies or the Purchaser shall have
breached in any material respect any of their respective representations,
warranties, covenants or other agreements contained in the Merger Agreement,
which breach cannot be or has not been cured, in all material respects, within
30 days after the giving of written notice to Dover Technologies or the
Purchaser, as applicable; (iii) in connection with entering into a definitive
agreement in accordance with the Merger Agreement, provided it has complied with
all provisions thereof, including the notice provisions therein, and that it
makes simultaneous payment of an amount equal to the greater of $750,000 or an
amount equal to the actual, reasonable and reasonably documented out-of-pocket
fees and expenses incurred by Dover Technologies and the Purchaser in connection
with the Offer, the Merger, the Merger Agreement, the consummation of the
transactions contemplated under the Merger Agreement, provided that in no event
shall the Company be obligated to pay any such fees and expenses in excess of $1
Million, or (d) by Dover Technologies (i) if, due to an occurrence, not
involving a breach by Dover Technologies or the Purchaser of their obligations
under the Merger Agreement, which makes it impossible to satisfy any of the
conditions to the Offer set forth in Section 14, Dover Technologies, the
Purchaser, or any of their affiliates shall have failed to commence the Offer on
or prior to five business days following the date of the initial public
announcement of the Offer; (ii) if prior to the purchase of Shares pursuant to
the Offer, the Company has breached any representation, warranty, covenant or
other agreement contained in the Merger Agreement which (x) would give rise to
the failure of a condition described in clauses (f) and (g) of Section 14 and
(y) cannot be or has not been cured, in all material respects, within 30 days
after the giving of written notice to the Company; or (iii) upon the occurrence
of any event set forth in clause (e) of Section 14.
In accordance with the Merger Agreement, if (x) Dover Technologies
terminates the Merger Agreement pursuant to clause (d)(iii) of the immediately
preceding paragraph, (y) the Company terminates the Merger Agreement pursuant to
clause (c)(iii) of the immediately preceding paragraph, or (z) either the
Company or Dover Technologies terminates the Merger Agreement pursuant to clause
(b)(i) of the immediately preceding paragraph and prior thereto there shall have
been publicly announced another Acquisition Proposal or an event set forth in
clause (h) of Section 14 shall have occurred, the Company has agreed to pay to
Dover Technologies an amount equal to the greater of $750,000 or an amount equal
to Dover Technologies' actual, reasonable and reasonably documented
out-of-pocket fees and expenses incurred by Dover Technologies and the Purchaser
in connection with the Offer, the Merger, the Merger Agreement, the consummation
of the Transactions, provided that in no event shall the Company be obligated to
pay such fees and expenses in excess of $1 Million. The Merger Agreement also
provides that if the Company terminates the Merger Agreement (i) pursuant to
clause (b)(i) of the immediately preceding paragraph or (ii) pursuant to clause
(c)(i) or (c)(ii) of the immediately preceding paragraph, then Dover
Technologies shall pay to the Company an amount equal to the Company's
reasonable legal fees and expenses incurred as of the date of such termination
with respect to the Merger Agreement and the transactions contemplated therein.
12. PLANS FOR THE COMPANY; OTHER MATTERS.
Plans for the Company. Dover Technologies is conducting a detailed review
of the Company and its assets, corporate structure, dividend policy,
capitalization, operations, properties, policies, management and personnel and
will consider, subject to the terms of the Merger Agreement, what, if any,
changes would be desirable in light of the circumstances which exist upon
completion of the Offer. Such changes could include changes in the Company's
business, corporate structure, articles of incorporation, by-laws,
capitalization, Board of Directors, management or dividend policy, although,
except as disclosed in this Offer to Purchase, Dover Technologies has no current
plans with respect to any of such matters. The Merger Agreement provides
22
that, promptly after the purchase by the Purchaser of at least a majority of the
outstanding Shares, Dover Technologies has the right to designate such number of
directors, rounded up to the next whole number, on the Company's Board of
Directors as is equal to the product of the total number of directors on the
Company's Board of Directors (giving effect to the directors designated by Dover
Technologies) multiplied by the percentage that the number of Shares so accepted
for payment bears to the total number of Shares then outstanding. See Section
11. The Merger Agreement provides that the directors and officers of the
Purchaser at the Effective Time of the Merger will, from and after the Effective
Time, be the directors and officers, respectively, of the Surviving Corporation.
For purposes of assuring a smooth transition of ownership and blending the
operations of the Company with those of Dover Technologies' subsidiary Soltec
International, B.V. ("Soltec"), Dover Technologies has entered into an
employment agreement with James J. Manfield, Jr. effective upon the Merger
whereby Mr. Manfield will be employed by the Company or its successor for a
period of two (2) years to assist in the transition at an annual salary of
$157,500. While employed, he will be eligible to participate in the benefit
plans offered by the Company and will also be eligible to participate in the
Company's employee bonus plan to be paid in 1998 and will receive a bonus of
$50,000 in January, 1999 conditioned upon his not undertaking any activity which
hinders, impedes or imparts ill will to Dover Technologies' program to combine
Soltec and the Company.
Except as disclosed in this Offer to Purchase, neither Dover Technologies
nor the Purchaser has any present plans or proposals that would result in an
extraordinary corporate transaction, such as a merger, reorganization,
liquidation, relocation of operations, or sale or transfer of assets, involving
the Company or any of its subsidiaries, or any material changes in the Company's
corporate structure, business or composition of its management or personnel.
Other Matters
SHAREHOLDER APPROVAL. Under the Corporations Code, the approval of the
Board of Directors of the Company and the affirmative vote of the holders of
two-thirds of the outstanding Shares are required to adopt and approve the
Merger Agreement and the transactions contemplated thereby. The Company has
represented in the Merger Agreement that the Board of Directors of the Company
has unanimously approved the Merger Agreement, the Offer and the Merger and the
transactions contemplated thereby in satisfaction of the requirement under the
Corporations Code. Therefore, unless the Merger is consummated pursuant to the
short-form merger provisions under the Corporations Code described below (in
which case no further corporate action by the shareholders of the Company will
be required to complete the Merger), the only remaining required corporate
action of the Company will be the approval of the Merger Agreement and the
transactions contemplated thereby by the affirmative vote of the holders of
two-thirds of the Shares. The Merger Agreement provides that Dover Technologies
will vote, or cause to be voted, all of the Shares then owned by Dover
Technologies, the Purchaser or any of Dover Technologies' other subsidiaries,
among others, in favor of the approval of the Merger and the approval and
adoption of the Merger Agreement. In the event that Dover Technologies, the
Purchaser and Dover Technologies' other subsidiaries acquire in the aggregate at
least two-thirds of the Shares, the vote of no other shareholder of the Company
will be required to approve the Merger and the Merger Agreement.
SHORT-FORM MERGER. Section 82 of the Corporations Code provides that, if a
corporation owns at least 90% of the outstanding shares of each class of another
corporation, the corporation holding such stock may merge such other corporation
into itself without any action or vote on the part of the shareholders by vote
of its directors (a "short-form merger"). In the event that Dover Technologies,
the Purchaser and any other subsidiaries of Dover Technologies acquire in the
aggregate at least 90% of the Shares, pursuant to the Offer or otherwise, then,
at the election of Dover Technologies, a short-form merger could be effected
without any approval of the shareholders of the Company by a vote of the Board
of Directors of the Company, subject to compliance with the provisions of
Section 82 of the Corporations Code. Even if Dover Technologies, the Purchaser
and the other subsidiaries of Dover Technologies do not own 90% of the
outstanding Shares following consummation of the Offer, Dover Technologies and
the Purchaser could seek to purchase additional shares in the open market or
otherwise in order to reach the 90% threshold and employ a short-form
23
merger. The per share consideration paid for any Shares so acquired may be
greater or less than that paid in the Offer. Dover Technologies does presently
intend to effect a merger, whether or not it acquires 90% or more of the Shares.
MASSACHUSETTS BUSINESS COMBINATION STATUTE. In general, Chapter 110F (the
"Massachusetts Business Combination Statute") of the Massachusetts General Laws,
Title XV Regulation of Trade ("Regulation of Trade Laws") prohibits any person
who is an "interested shareholder," including an owner of 5% or more of the
outstanding voting stock of a corporation, from engaging in certain "business
combinations" (including the Merger) with certain corporations for a period of
three years following the time at which such person became an interested
stockholder, unless (a) prior to such date the board of directors of the
corporation approved either the business combination or the transaction which
resulted in the stockholder becoming an interested stockholder, (b) upon
consummation of the transaction which resulted in the stockholder becoming an
interested stockholder, the interested stockholder owned at least 90% of the
voting stock of the corporation outstanding at the time the transaction
commenced, excluding for purposes of determining the number of shares
outstanding, those shares owned by (1) persons who are directors and also
officers and (2) employee stock plan in which employee participants do not have
the right to determine confidentially whether shares held subject to the plan
will be tendered in a tender or exchange offer; or (c) on or subsequent to such
date the business combination is approved by the board of directors and
authorized at an annual or special meeting of the stockholders, and not by
written consent, by the affirmative vote of at least two-thirds of the
outstanding voting stock which is not owned by the interested stockholder. The
requirements of the Massachusetts Business Combination Statute do not apply
under a number of circumstances including if (i) the corporation fails to
satisfy the "Massachusetts nexus" of having a principal executive office or
substantial assets in Massachusetts and either 10% or more of its shareholders
residing in Massachusetts or 10% or more of its shares owned by Massachusetts
residents, (ii) the corporation's original articles of organization contain a
provision expressly electing not to be governed by this statute or (iii) if the
corporation adopts a by-law within 90 days after the effective date of this
statute expressly electing not to be governed thereby. According to publicly
available information, the Company's original Articles of Organization and
By-Laws do not contain such provisions but the Company has indicated that it
does not meet the requirements of the "Massachusetts nexus" test. Accordingly,
the requirements of the Massachusetts Business Combination Statute do not apply
to the Company.
The Company has represented in the Merger Agreement that its Board of
Directors has unanimously approved this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, and such approval
constitutes approval of the Offer, the Merger Agreement and the transactions
contemplated thereby, including the Merger, for purposes of Chapter 110F of the
Regulation of Trade Laws, such that the provisions of Section 1 of Chapter 110F
of the Regulation of Trade Laws in addition to being inapplicable because of the
"Massachusetts nexus" test described above will also not apply to the Offer and
such transactions because of such board approval.
MASSACHUSETTS CONTROL SHARE ACQUISITION STATUTE. Massachusetts has also
enacted a control share acquisition statute (Chapter 110D of the Regulation of
Trade Laws) that provides, in general, that shares of a widely held
Massachusetts corporation acquired in a control share acquisition (as defined in
the statute) will not have voting rights unless, among other things, voting
rights for such shares are approved by a vote of the shareholders of the
corporation, not including those holding such shares. Excluded from the
definition of "control share acquisition," is, among other things, an
acquisition by merger or tender offer pursuant to a merger agreement to which
the Massachusetts corporation is a party. Since the Company is a party to the
Merger Agreement and since the Company does not meet the "Massachusetts nexus"
test, described above, the Massachusetts control share acquisition statute is
inapplicable to the acquisition of Shares in the Offer or the Merger.
DISSENTERS' RIGHTS. Shareholders do not have dissenters' rights as a result
of the Offer. However, if the Merger is consummated, shareholders of the Company
who did not vote in favor of the Merger may have certain rights under
Massachusetts law to dissent and demand appraisal of, and payment in cash of the
fair value of, their Shares (the "Dissenting Shares"). Such rights, if the
statutory procedures were complied with, could lead to a judicial determination
of the fair value (excluding any element of value arising from the
24
accomplishment or expectation of the Merger) required to be paid in cash to such
dissenting holders for their Shares. Any such judicial determination of the fair
value of Shares could be based upon considerations other than or in addition to
the price paid in the Offer and the market value of the Shares, including asset
values and the investment value of the Shares. The value so determined could be
more or less than the purchase price per Share pursuant to the Offer or the
consideration per Share to be paid in the Merger.
In addition, the Merger will have to comply with other applicable
procedural and substantive requirements of Massachusetts law, including any
duties to minority stockholders imposed upon a controlling or, if applicable,
majority stockholder.
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 DISSENTERS' RIGHTS. THE
PRESERVATION AND EXERCISE OF DISSENTERS' RIGHTS REQUIRE STRICT ADHERENCE TO THE
APPLICABLE PROVISIONS OF THE CORPORATIONS CODE.
The foregoing description of the Corporations Code and the Regulation of
Trade Laws, including the descriptions of the merger provisions, the
Massachusetts Business Combination Statute, the control share acquisition
statute and dissenters' rights, is not necessarily complete and is qualified in
its entirety by reference to the Corporations Code and the Regulation of Trade
Laws.
RULE 13E-3. The Merger would have to comply with any applicable Federal law
operative at the time. Rule 13e-3 under the Exchange Act is applicable to
certain "going private" transactions; however, the Purchaser believes that Rule
13e-3 will not be applicable to the Merger. If Rule 13e-3 were applicable to the
Merger, it would require, among other things, that certain financial information
concerning the Company, and certain information relating to the fairness of the
proposed transaction and the consideration offered to minority shareholders in
such a transaction, be filed with the Commission and disclosed to minority
shareholders prior to consummation of the transaction.
13. DIVIDENDS AND DISTRIBUTIONS.
As described above, the Merger Agreement provides that, prior to the time
the designees of Dover Technologies have been elected to, and constitute a
majority of, the Board of Directors of the Company, without the prior written
consent of Dover Technologies, (i) the Company will not, directly or indirectly,
(A) except upon exercise of warrants or options or other rights to purchase
shares of Common Stock outstanding on the date of the Merger Agreement, issue,
sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock
of the Company or any capital stock of any of its subsidiaries beneficially
owned by it; (B) amend its Articles of Organization, as amended, or by-laws or
similar organizational documents; or (C) split, combine or reclassify the
outstanding Shares or any outstanding capital stock of any of the subsidiaries
of the Company; and (ii) neither the Company nor any of its subsidiaries will
(A) declare, set aside or pay any dividend or other distribution payable in
cash, stock or property with respect to its capital stock; (B) issue, sell,
pledge, dispose of or encumber any additional shares of, or securities
convertible into or exchangeable for, or options, warrants, calls, commitments
or rights of any kind to acquire, any shares of capital stock of any class of
the Company or its subsidiaries, other than Shares reserved for issuance on the
date of the Merger Agreement pursuant to the exercise of warrants or options
outstanding on such date; (C) transfer, lease, license, sell or dispose of any
assets, or incur any indebtedness or other liability other than in the ordinary
course of business, or mortgage, pledge or encumber any assets or modify any
indebtedness; or (D) redeem, purchase or otherwise acquire, directly or
indirectly, any of its capital stock.
14. CONDITIONS OF THE OFFER.
Notwithstanding any other provisions of the Offer, and in addition to (and
not in limitation of) the Purchaser's rights to extend and amend the Offer at
any time in its sole discretion (subject to the provisions of the Merger
Agreement), the Purchaser shall not be required to accept for payment or,
subject to any applicable rules and regulations of the Commission, including
Rule 14e-l(c) under the Exchange Act (relating to the Purchaser's obligation to
pay for or return tendered Shares promptly after termination or
25
withdrawal of the Offer), pay for, and may delay the acceptance for payment of
or, subject to the restriction referred to above, the payment for, any tendered
Shares, and may terminate or amend the Offer as to any Shares not then paid for,
if (i) any applicable waiting period under the HSR Act has not expired or
terminated, (ii) the Minimum Condition has not been satisfied, or (iii) at any
time on or after the date of the Merger Agreement and before the time of
acceptance for payment for any such Shares, any of the following events shall
occur or shall be determined by the Purchaser, in its judgment reasonably
exercised, to have occurred:
(a) there shall be threatened or pending any suit, action or proceeding by
any court, arbitral tribunal, administrative agency or commission or other
governmental or other regulatory authority or agency (a "Governmental Entity")
against the Purchaser, Dover Technologies, the Company or any subsidiary of the
Company (i) seeking to prohibit or impose any material limitations on Dover
Technologies' or the Purchaser's ownership or operation (or that of any of their
respective subsidiaries or affiliates) of all or a material portion of their or
the Company's businesses or assets, or to compel Dover Technologies or the
Purchaser or their respective subsidiaries and affiliates to dispose of or hold
separate any material portion of the business or assets of the Company or Dover
Technologies and their respective subsidiaries, in each case taken as a whole,
(ii) challenging the acquisition by Dover Technologies or the Purchaser of any
Shares under the Offer, seeking to restrain or prohibit the making or
consummation of the Offer or the Merger or the performance of any of the other
transactions contemplated by the Merger Agreement, or seeking to obtain from the
Company, Dover Technologies or the Purchaser any damages that are material in
relation to the Company and its subsidiaries taken as a whole, (iii) seeking to
impose material limitations on the ability of the Purchaser, or render the
Purchaser unable, to accept for payment, pay for or purchase some or all of the
Shares pursuant to the Offer and the Merger, (iv) seeking to impose material
limitations on the ability of Purchaser or Dover Technologies effectively to
exercise full rights of ownership of the Shares, including, without limitation,
the right to vote the Shares purchased by it on all matters properly presented
to the Company's shareholders, or (v) which otherwise is reasonably likely to be
materially adverse to the Company and its subsidiaries, taken as a whole;
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated, or deemed applicable,
pursuant to an authoritative interpretation by or on behalf of a Government
Entity, to the Offer or the Merger, or any other action shall be taken by any
Governmental Entity, other than the application to the Offer or the Merger of
applicable waiting periods under HSR Act, that is reasonably likely to result,
directly or indirectly, in any of the consequences referred to in clauses (i)
through (v) of paragraph (a) above;
(c) there shall have occurred (i) any general suspension of trading in, or
limitation on prices for, securities on the New York Stock Exchange or the
American Stock Exchange 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), (ii) any decline in
either the Dow Jones Industrial Average or the Standard & Poor's Index of 400
Industrial Companies or in the New York Stock Exchange Composite Index in excess
of 15% measured from the close of business on the trading day next preceding the
date of the Merger Agreement, (iii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States (whether or not
mandatory), (iv) a commencement of a war, armed hostilities or other
international or national calamity directly or indirectly involving the United
States, (v) any limitation (whether or not mandatory) by any United States
governmental authority on the extension of credit generally by banks or other
financial institutions, (vi) a change in general financial, bank or capital
market conditions which materially and adversely affects the ability of
financial institutions in the United States to extend credit or syndicate loans
or (vii) in the case of any of the foregoing existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof;
(d) there shall have occurred any events after the date of the Merger
Agreement which, either individually or in the aggregate, would be materially
adverse to the Company and its subsidiaries, taken as a whole;
26
(e) the Board of Directors of the Company or any committee thereof shall
have withdrawn or modified in a manner adverse to Dover Technologies or the
Purchaser its approval or recommendation of the Offer, the Merger or the Merger
Agreement, or approved or recommended any Acquisition Proposal (as defined in
the Merger Agreement);
(f) the representations and warranties of the Company set forth in the
Merger Agreement shall not be true and correct, in each case (i) as of the date
referred to in any representation or warranty which addresses matters as of a
particular date, or (ii) as to all other representations and warranties, as of
the date of the Merger Agreement and as of the scheduled expiration of the
Offer, unless the inaccuracies (without giving effect to any materiality or
material adverse effect qualifications or materiality exceptions contained
therein) under such representations and warranties, taking all the inaccuracies
under all the representations and warranties together in their entirety, would
not, individually or in the aggregate, be materially adverse to the Company and
its Subsidiaries, taken as a whole;
(g) the Company shall have failed to perform any obligation or to comply
with any agreement or covenant to be performed or complied with by it under the
Merger Agreement other than any failure which would not, either individually or
in the aggregate, be materially adverse to the Company and its Subsidiaries,
taken as a whole;
(h) any person acquires beneficial ownership (as defined in Rule 13d-3
promulgated under the Exchange Act), of at least 25% of the outstanding Common
Stock of the Company; or
(i) the Merger Agreement shall have been terminated in accordance with its
terms.
The foregoing conditions are for the sole benefit of Dover Technologies and
the Purchaser, may be asserted by Dover Technologies or the Purchaser regardless
of the circumstances giving rise to such condition (including any action or
inaction by Dover Technologies or the Purchaser not in violation of the Merger
Agreement) and may be waived by Dover Technologies or the Purchaser in whole or
in part at any time and from time to time in the sole discretion of Dover
Technologies or the Purchaser, subject in each case to the terms of the Merger
Agreement. The failure by Dover Technologies or the 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.
15. CERTAIN LEGAL MATTERS.
Except as described in this Section 15, based on information provided by
the Company, none of the Company, Purchaser or Dover Technologies 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 the Purchaser's acquisition of Shares (and the indirect acquisition
of the stock of the Company's subsidiaries) as contemplated herein or of any
approval or other action by a domestic or foreign governmental, administrative
or regulatory agency or authority that would be required for the acquisition and
ownership of the Shares (and the indirect acquisition of the stock of the
Company's subsidiaries) by the Purchaser as contemplated herein. Should any such
approval or other action be required, the Purchaser and Dover Technologies
presently contemplate that such approval or other action will be sought, except
as described below under "State Takeover Laws." While, except as otherwise
described in this Offer to Purchase, the Purchaser does not presently intend to
delay the acceptance for payment of or payment for Shares tendered pursuant to
the Offer pending the outcome of any such matter, there can be no assurance that
any such approval or other action, if needed, would be obtained or would be
obtained without substantial conditions or that failure to obtain any such
approval or other action might not result in consequences adverse to the
Company's business or that certain parts of the Company's business might not
have to be disposed of or other substantial conditions complied with 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. If certain types of
adverse action are taken with respect to the matters discussed below, the
Purchaser could decline to accept for payment or pay for any Shares tendered.
See Section 14 for certain conditions to the Offer, including conditions with
respect to governmental actions.
27
State Takeover Laws. The Company is incorporated under the laws of the
Commonwealth of Massachusetts. In general, Section 3 of Chapter 110C of the
Regulation of Trade Laws prohibits any offeror from making a takeover bid if he
and his associates and affiliates are directly or indirectly the beneficial
owners of 5% or more of the issued and outstanding equity securities of any
class of the target company, any of which were purchased within one (1) year
before the proposed takeover bid, and the offeror, before making any such
purchase, failed to publicly announce his intention to gain control of the
target company, or otherwise failed to make fair, full, and effective disclosure
of such intention to the persons from whom he acquired such securities. Section
1 of Chapter 110C of the Regulation of Trade Laws defines a takeover bid and
indicates it does not include any takeover bid to which the target company
consents, by action of its Board of Directors, if such Board of Directors has
recommended acceptance thereof to shareholders and the terms thereof, including
any inducements to officers or directors which are not made available to all
shareholders have been furnished to the shareholders. The Company has
represented that its Board of Directors has unanimously approved the Merger
Agreement and the transactions contemplated hereby, including the Offer and the
Merger, and such approval constitutes approval of the Offer, the Merger
Agreement and the transactions contemplated thereby, including the Merger, for
purposes of Section 1 and Section 3 of Chapter 110C of the Regulation of Trade
Laws, such that the provisions of Section 1 and the restrictions contained in
Section 3 of the Regulation of Trade Laws will not apply to the Offer and such
transactions. A number of other states have adopted laws and regulations
applicable to attempts to acquire securities of corporations which are
incorporated, or have substantial assets, shareholders, principal executive
offices or principal places of business, or whose business operations otherwise
have substantial economic effects in such states. In Edgar v. MITE Corp., the
Supreme Court of the United States invalidated on constitutional grounds the
Illinois Business Takeover statute, which, as a matter of state securities law,
made takeovers of corporations meeting certain requirements more difficult.
However in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court
held that the State of Indiana may, as a matter of corporate law and, in
particular, with respect to those aspects of corporate law concerning corporate
governance, constitutionally disqualify a potential acquiror from voting on the
affairs of a target corporation without the prior approval of the remaining
shareholders. The state law before the Supreme Court was by its terms applicable
only to corporations that had a substantial number of shareholders in the state
and were incorporated there.
The Company is headquartered in New Hampshire. Pursuant to Section 421-A of
the New Hampshire Annotated Statutes, Title XXXVIII Securities ("New Hampshire
Securities Law") no offeror shall make a takeover bid unless as soon as
practical on the date of commencement of the takeover bid he files with the
Secretary of State and the target company a registration statement containing
the information required by Section 421-A:4 of the New Hampshire Securities Law
and publicly discloses the material terms of the offer. Under Section 421-A:2 of
the New Hampshire Securities Law a takeover bid is defined to mean the
acquisition of, offer to acquire, or request or invitation for tenders of an
equity security of a corporation organized under the laws of New Hampshire or
having its principal place of business within New Hampshire or having its
principal executive office within New Hampshire or which is the parent of a
subsidiary incorporated under New Hampshire Law if after acquisition thereof the
offeror would directly or indirectly be a record or beneficial owner of more
than 5% of any class of the issued and outstanding equity securities of such
corporation. It is the Purchaser's current understanding that (i) less than 10%
of its shareholders reside in New Hampshire, (ii) less than 10% of its shares
are owned by New Hampshire residents and (iii) there are less than ten thousand
shareholders who are residents in New Hampshire. Consequently, this New
Hampshire statute may not be applicable to this transaction. If it is applicable
the Purchaser will comply with such statute.
The Company and certain of its subsidiaries conduct business in a number of
other states throughout the United States, some of which have enacted takeover
laws and regulations. Neither Dover Technologies nor the Purchaser knows whether
any or all of these other takeover laws and regulations will by their terms
apply to the Offer, and, except as set forth above with respect to Sections 1
and 3 of Chapter 110C of the Regulation of Trade Laws and the New Hampshire
Securities Law, neither Dover Technologies nor the Purchaser has currently
complied with any other state takeover statute or regulation. The Purchaser
reserves the right to challenge the applicability or validity of any state law
purportedly applicable to the Offer and nothing in this Offer to Purchase or any
action taken in connection with the Offer is intended as a waiver of such right.
If it is
28
asserted that any state takeover statute is applicable to the Offer and an
appropriate court does not determine that it is inapplicable or invalid as
applied to the Offer, the Purchaser might be required to file certain
information with, or to receive approvals from, the relevant state authorities,
and the Purchaser might be unable to accept for payment or pay for Shares
tendered pursuant to the Offer, or may be delayed in consummating the Offer. In
such case, the Purchaser may not be obligated to accept for payment or pay for
any Shares tendered pursuant to the Offer. See Section 14.
Antitrust. The Offer and the Merger are subject to the HSR Act, which
provides that 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 Federal Trade
Commission (the "FTC") and certain waiting period requirements have been
satisfied.
Dover Technologies and the Company expect to file soon their Notification
and Report Forms with respect to the Offer under the HSR Act. The waiting period
under the HSR Act with respect to the Offer will expire at 11:59 p.m., New York
City time, on the fifteenth day after the date Dover Technologies' form is filed
unless early termination of the waiting period is granted. However, the
Antitrust Division or the FTC may extend the waiting period by requesting
additional information or documentary material from Dover Technologies or the
Company. If such a request is made, such waiting period will expire at 11:59
p.m., New York City time, on the tenth day after substantial compliance by Dover
Technologies with such request. Only one extension of the waiting period
pursuant to a request for additional information is authorized by the HSR Act.
Thereafter, such waiting period may be extended only by court order or with the
consent of Dover Technologies. 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 frequently engage in
negotiations with the relevant governmental agency concerning possible means of
addressing those issues and may agree to delay consummation of the transaction
while such negotiations continue. The Purchaser will not accept for payment
Shares tendered pursuant to the Offer unless and until the waiting period
requirements imposed by the HSR Act with respect to the Offer have been
satisfied. See Section 14.
As discussed below, the HSR Act requirements with respect to the Merger
will not apply if certain conditions are met. In particular, the Merger may not
be consummated until thirty days after receipt by the Antitrust Division and the
FTC of the Notification and Report Forms of both Dover Technologies and the
Company unless the Purchaser acquires 50% or more of the outstanding Shares
pursuant to the Offer (which would be the case if the Minimum Condition were
satisfied) or the thirty-day period is earlier terminated by the Antitrust
Division and the FTC. Within such thirty-day period, the Antitrust Division or
the FTC may request additional information or documentary materials from Dover
Technologies and/or the Company. The Merger may not be consummated until twenty
days after such requests are substantially complied with by both Dover
Technologies and the Company. Thereafter, the waiting periods may be extended
only by court order or with the consent of Dover Technologies and the Company.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's acquisition of Shares
pursuant to the Offer and the Merger. At any time before or after the
Purchaser's acquisition of Shares, 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 acquisition of Shares pursuant
to the Offer or otherwise or seeking divestiture of Shares acquired by the
Purchaser or divestiture of substantial assets of Dover Technologies or its
subsidiaries. Private parties, as well as state governments, may also bring
legal action under the antitrust laws under certain circumstances. Based upon an
examination of publicly available information relating to the businesses in
which Dover Technologies and the Company are engaged, Dover Technologies and the
Purchaser believe that the acquisition of Shares by the Purchaser will not
violate the antitrust laws. Nevertheless, there can be no assurance that a
challenge to the Offer or other acquisition of Shares by the Purchaser on
antitrust grounds will not be made or, if such a challenge is made, of the
result. See Section 14 for certain conditions to the Offer, including conditions
with respect to litigation and certain governmental actions.
Other. Based upon Purchaser's examination of publicly available information
concerning the Company, it appears that the Company and its subsidiaries own
assets and conduct business in a number of foreign
29
countries. In connection with the acquisition of Shares pursuant to the Offer,
the laws of certain of these foreign countries may require the filing of
information with, or the obtaining of the approval of, governmental authorities
therein. After commencement of the Offer, Purchaser will seek further
information regarding the applicability of any such laws and currently intends
to take such action as they may require, but no assurance can be given that such
approvals will be obtained. If any action is taken prior to completion of the
Offer by any such government or governmental authority, Purchaser may not be
obligated to accept for payment or pay for any tendered Shares.
16. FEES AND EXPENSES.
Dover Technologies has engaged Beacon Group Capital Services, LLC to act as
financial advisor to Dover Technologies in connection with the proposed
acquisition of the Company. Dover Technologies has agreed to pay Beacon Group
Capital Services, LLC an advisory fee of $350,000.00 in connection with the
transactions contemplated by the Merger Agreement. Dover Technologies has also
agreed to reimburse Beacon Group Capital Services, LLC for all reasonable
out-of-pocket expenses incurred in connection with its role as financial
advisor, for the Offer and the Merger, including reasonable attorneys' fees and
disbursements, and to indemnify Beacon Group Capital Services, LLC against
certain liabilities in connection with the Offer, including certain liabilities
under federal securities laws.
The Purchaser has retained Morrow & Co., Inc. to act as the Information
Agent and The Bank of New York to act as the Depositary in connection with the
Offer. Such firms each will receive reasonable and customary compensation for
their services. The Purchaser has also agreed to reimburse each such firm for
certain reasonable out-of-pocket expenses and to indemnify each such firm
against certain liabilities in connection with their services, including certain
liabilities under federal securities laws.
The Purchaser will not pay any fees or commissions to any broker or dealer
or other person (other than the Information Agent) for making solicitations or
recommendations in connection with the Offer. Brokers, dealers, banks and trust
companies will be reimbursed by the Purchaser for customary mailing and handling
expenses incurred by them in forwarding material to their customers.
17. MISCELLANEOUS.
The Offer is being made to all holders of Shares other than the Company.
The Purchaser is not aware of any jurisdiction in which the making of the Offer
or the tender of Shares in connection therewith would not be in compliance with
the laws of such jurisdiction. If the Purchaser becomes aware of any
jurisdiction in which the making of the Offer would not be in compliance with
applicable law, the Purchaser will make a good faith effort to comply with any
such law. If, after such good faith effort, the Purchaser cannot comply with any
such law, the Offer will not be made to (nor will tenders be accepted from or on
behalf of) the holders of Shares residing in such jurisdiction. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of the Purchaser by one or more registered brokers or dealers licensed
under the laws of such jurisdiction.
No person has been authorized to give any information or to make any
representation on behalf of Dover Technologies, Dover Corporation or the
Purchaser 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.
The Purchaser, Dover Technologies and Dover Corporation have filed with the
Commission the Schedule 14D-1 pursuant to Rule 14d-3 under the Exchange Act
furnishing certain additional information with respect to the Offer. The
Schedule 14D-1 and any amendments thereto, including exhibits, may be examined
and copies may be obtained from the offices of the Commission and the American
Stock Exchange, Inc. in the manner set forth in Section 9 of this Offer to
Purchase (except that they will not be available at the regional offices of the
Commission).
DTI INTERMEDIATE, INC.
SEPTEMBER 9, 1997
30
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF DOVER CORPORATION, DOVER TECHNOLOGIES AND THE PURCHASER
The following table sets forth the name, business address and present
principal occupation or employment, and material occupations, positions, offices
or employments for the past five years, of each director and executive officer
of Dover Corporation, Dover Technologies and DTI Intermediate, Inc. Each such
person is a citizen of the United States of America (except that Messrs. Benson
and Fleming are citizens of the United Kingdom and Mr. Ormsby is a citizen of
Canada) and, unless otherwise indicated, the business address of each such
person is c/o Dover Technologies International, Inc., One Marine Midland Plaza,
Sixth Floor, East Tower, Binghamton, New York 13901. Unless otherwise indicated,
each occupation set forth opposite an individual's name refers to employment
with the respective company. Unless otherwise indicated, each such person has
held his or her present occupation as set forth below, or has been an executive
officer at the respective company, or the organization indicated, for the past
five years. Directors are identified by an asterisk.
DOVER CORPORATION
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ------------------------------ -------------------------------------------------------------
David H. Benson*.............. Non-Executive Director and formerly Vice Chairman of
Kleinwort-Benson Group Plc; Chairman, Kleinwort Charter
Investment Trust Plc. (financial management); Director of The
Rouse Company (real estate development); Director of Harrow
Corporation (industrial manufacturing); Non-Executive
Director of British Gas Plc. and Marshall Cavendish Ltd.;
Trustee of The Charities Official Investment Fund and The
Pilot Funds (financial management).
Lewis E. Burns................ Vice President of Dover Corporation; Director and President
of Dover Industries, Inc.; Director of Dover Technologies.
Magalen O. Bryant*............ Director of Carlisle Companies Incorporated and O'Sullivan
Corp. (industrial manufacturing).
Jean-Pierre M. Ergas*......... Executive Vice President, Europe, Alcan Aluminum, Ltd.
(aluminum manufacturer); previously Chairman and Chief
Executive Officer of American National Can Company (beverage
can manufacturer); Director of ABC Rail Products Corporation
(rail equipment manufacturer) and Brockway Standard Holdings
Corporation (container manufacturer).
Roderick J. Fleming*.......... Director, Robert Fleming Holdings Ltd. (financial
management); previously International Portfolio Director
(through November 1991), Director Capital Markets (through
July 1993), and Director of Corporate Finance UK (through
April 1994) at Robert Fleming; Director of Aurora Exploration
and Development Corporation Ltd. (natural resources); Updown
Investment Company Ltd. (financial management); and West Rand
Consolidated Mines Limited (natural resources).
John F. Fort*................. Director of Tyco International Ltd. (fire protection systems
and industrial products) and formerly Chairman (through
January 1993) and Chief Executive Officer (through July
1992); Director Roper Industries (industrial products).
Rudolf J. Herrmann............ Vice President of Dover Corporation; Director and President
of Dover Resources, Inc.; Director of Dover Technologies.
31
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ------------------------------ -------------------------------------------------------------
James L. Koley*............... Chairman, Koley, Jessen, Daubman & Rupiper, P.C (law firm);
Chairman of the Board of Directors of Arts-Way Manufacturing
Co., Inc. (agricultural manufacturing).
John F. McNiff*............... Vice President-Finance of Dover Corporation, Director, The
Allen Group (telecommunications products); and The Haven Fund
(financial management); Director of Dover Technologies.
Anthony J. Ormsby*............ Private investor; Director of Dover Technologies.
John E. Pomeroy............... Vice President of Dover Corporation; Director and President
of Dover Technologies.
Thomas L. Reece*.............. President (since May 1993) and Chief Executive Officer (since
May 1994) of Dover Corporation; prior thereto Vice President
of Dover Corporation and President of Dover Resources, Inc.;
Director of Dover Technologies.
Gary L. Roubos*............... Chairman of the Board of Dover Corporation; previsouly Chief
Executive Officer (through May 1994) and President (through
May 1993) of Dover Corporation for more than five years;
Director of Bell & Howell Company (information managment);
Omnicom Group, Inc. (advertising); and The Treasurers Fund
(financial management); Director of Dover Technologies.
Jerry W. Yochum............... Vice President of Dover Corporation; Director and President
of Dover Diversified, Inc.
DOVER TECHNOLOGIES INTERNATIONAL, INC.
Lewis E. Burns*............... See Dover Corporation above.
Rudolf J. Herrmann*............ See Dover Corporation above.
Robert G. Kuhbach*............ Vice President and General Counsel to Dover Corporation.
Robert A. Livingston.......... Vice President, Chief Financial Officer, Secretary and
Treasurer of Dover Technologies; Assistant Secretary of Dover
Corporation.
John F. McNiff*............... See Dover Corporation above.
Anthony J. Ormsby*............ See Dover Corporation above.
John E. Pomeroy*.............. See Dover Corporation above.
Thomas L. Reece*.............. See Dover Corporation above.
Gary L. Roubos*............... See Dover Corporation above.
DTI INTERMEDIATE, INC.
Robert A. Livingston*......... See Dover Technologies above.
John E. Pomeroy*.............. See Dover Corporation above.
32
Facsimile copies of the Letter of Transmittal, properly completed and duly
signed, will be accepted. The Letter of Transmittal, certificates for Shares and
any other required documents should be sent or delivered by each shareholder of
the Company or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary, at one of the addresses set forth below:
The Depositary for the Offer is:
THE BANK OF NEW YORK
By Mail: By Hand/Overnight Delivery:
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
By Facsimile Transmission:
(For Eligible Institutions Only)
(212) 815-6213
Confirm Receipt of Facsimile by Telephone:
(800) 507-9357
Questions and requests for assistance or additional copies of this Offer to
Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and the
Guidelines for Certification of Taxpayer Identification on Substitute Form W-9
may be directed to the Information Agent at its respective location and
telephone number set forth below. Shareholders may also contact their broker,
dealer, commercial bank or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
Morrow & Co., Inc.
909 Third Avenue, 20th Floor
New York, New York 10022
(212) 754-8000
Toll Free: (800) 566-9061
Banks and Brokerage Firms please call:
(800) 662-5200