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SCHEDULE 14A
(RULE 14A-101)
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
EXIDE ELECTRONICS GROUP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
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PRELIMINARY SOLICITATION MATERIALS DATED JULY 23, 1997
SUBJECT TO COMPLETION
EXIDE ELECTRONICS GROUP, INC.
8609 SIX FORKS ROAD
RALEIGH, NORTH CAROLINA 27615
(919) 872-3020
STATEMENT SOLICITING
REVOCATIONS OF APPOINTMENTS OF DESIGNATED AGENTS
BY THE BOARD OF DIRECTORS OF
EXIDE ELECTRONICS GROUP, INC.
IN OPPOSITION TO THE SOLICITATION OF
DANAHER CORPORATION AND
PQR ACQUISITION CORPORATION
, 1997
Dear Shareholder:
This Statement Soliciting Revocations of Appointments of Designated Agents
(the "Revocation Statement") and the accompanying WHITE Revocation of Agent
Designation card are being furnished by the Board of Directors (the "Board") of
Exide Electronics Group, Inc., a Delaware corporation (the "Company"), to the
holders of the outstanding shares of the Company's common stock, par value $.01
per share (the "Common Stock"), and the outstanding shares of the Company's
Series G Convertible Preferred Stock, par value $.01 per share (the "Preferred
Stock"), in connection with the solicitation of revocations of agent
designations by the Board in opposition to the solicitation (the "Danaher
Solicitation") by Danaher Corporation and PQR Acquisition Corporation (the
"Bidder," and together with Danaher Corporation, "Danaher") of appointments of
designated agents ("Agent Designations") pursuant to a Solicitation Statement
(the "Danaher Solicitation Statement") dated , 1997 to demand a special
meeting of the shareholders of the Company for the purpose of considering and
voting upon certain proposals. See "The Danaher Proposals." Under the Company's
By-Laws, a special meeting of shareholders shall be called upon the written
request of holders of shares representing at least a majority in amount of the
issued and outstanding capital stock of the Company entitled to vote on any
matter proposed to be considered at such special meeting. See "Procedures for
Calling Special Meetings."
As used herein, "Shares" shall mean the outstanding shares of Common Stock
and Preferred Stock together with all outstanding warrants to purchase shares of
Common Stock at $13.475 per share of Common Stock (the "Warrants"), and
"Shareholders" shall mean holders of Shares. All references herein to "Common
Stock" shall include the associated preferred stock purchase rights (the
"Rights") issued pursuant to the Rights Agreement, dated as of November 25,
1992, by and between the Company and First Union National Bank of North
Carolina, as Rights Agent, as amended (the "Rights Agreement"). The first date
that this Statement Soliciting Revocations of Agent Designations and WHITE
Revocation of Agent Designation card with respect thereto are being sent or
given to Shareholders is on or about , 1997.
THE BOARD UNANIMOUSLY OPPOSES THE DANAHER SOLICITATION AND URGES YOU NOT TO
SIGN OR RETURN ANY GOLD AGENT DESIGNATION CARD SENT TO YOU BY DANAHER.
IF YOU HAVE PREVIOUSLY SIGNED AND RETURNED ANY SUCH GOLD AGENT DESIGNATION
CARD TO DANAHER, YOU HAVE EVERY RIGHT TO CHANGE YOUR MIND.
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THE BOARD URGES YOU TO SIGN, DATE AND MAIL THE ENCLOSED WHITE
REVOCATION OF AGENT DESIGNATION CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED.
EVEN IF YOU HAVE NOT PREVIOUSLY SIGNED AND RETURNED ANY SUCH GOLD AGENT
DESIGNATION CARD TO DANAHER, YOU MAY SEND A WHITE REVOCATION OF AGENT
DESIGNATION CARD TO THE COMPANY, WHICH WILL HAVE NO LEGAL EFFECT BUT WOULD
ASSIST US IN MONITORING THE PROGRESS OF THE DANAHER SOLICITATION.
IF YOUR SHARES OF COMMON STOCK OR PREFERRED STOCK ARE HELD IN THE NAME OF A
BANK, BROKER OR OTHER NOMINEE, ONLY YOUR BANK, BROKER OR NOMINEE CAN APPOINT A
DESIGNATED AGENT PURSUANT TO THE DANAHER SOLICITATION AND ONLY PURSUANT TO YOUR
SPECIFIC INSTRUCTIONS. ACCORDINGLY, YOU ARE URGED TO REJECT THE DANAHER
SOLICITATION BY SIGNING, DATING AND RETURNING THE ENCLOSED WHITE REVOCATION OF
AGENT DESIGNATION CARD PROMPTLY, USING THE ACCOMPANYING POSTAGE-PAID ENVELOPE
PROVIDED BY YOUR BANK, BROKER OR NOMINEE.
If you have any questions about revoking your appointment of designated
agent or if you require assistance, please contact:
GEORGESON & COMPANY, INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
(212) 440-9800 (COLLECT)
(800) 223-2064 (TOLL-FREE)
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BACKGROUND
On July 10, 1997, the Bidder commenced a tender offer to purchase (i) all
of the outstanding shares of Common Stock, and associated Rights, at $20.00 per
share, net to the seller in cash, (ii) all of the outstanding Preferred Stock at
$20.00 per share, net to the seller in cash, and (iii) all of the outstanding
Warrants at $6.525 Per Warrant, net to the seller in cash, in each case on the
terms and subject to the conditions set forth in the Offer to Purchase, dated
July 10, 1997, and in the related Letter of Transmittal (which together
constitute the "Danaher Offer"). On July 14, Danaher filed preliminary proxy
materials with the Securities and Exchange Commission (the "Commission") in
connection with their solicitation of Agent Designations to attempt to provide
for the calling of a special meeting of Shareholders to vote on certain
proposals related to the Danaher Offer.
THE BOARD HAS UNANIMOUSLY DETERMINED THAT THE DANAHER OFFER IS INADEQUATE
AND NOT IN THE BEST INTERESTS OF THE COMPANY OR ITS SHAREHOLDERS AND THAT THE
INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS WOULD BE BEST SERVED BY THE
COMPANY EXPLORING STRATEGIC ALTERNATIVES AVAILABLE TO IT TO MAXIMIZE SHAREHOLDER
VALUE, INCLUDING A POSSIBLE SALE OF OR OTHER EXTRAORDINARY TRANSACTION INVOLVING
THE COMPANY. IN THIS REGARD, THE COMPANY HAS ENTERED INTO CONFIDENTIALITY
AGREEMENTS CONCERNING THE FURNISHING OF CONFIDENTIAL INFORMATION WITH, AND HAS
FURNISHED CONFIDENTIAL INFORMATION TO, AND HAS ENGAGED AND IS ENGAGED IN
DISCUSSIONS WITH, CERTAIN OF SUCH PARTIES AND CERTAIN OTHER PARTIES CONCERNING A
POTENTIAL EXTRAORDINARY TRANSACTION INVOLVING THE COMPANY.
ACCORDINGLY, THE BOARD HAS UNANIMOUSLY RECOMMENDED THAT SHAREHOLDERS REJECT
THE DANAHER OFFER AND NOT TENDER ANY SHARES OR RIGHTS PURSUANT THERETO. IN
ADDITION, THE BOARD UNANIMOUSLY OPPOSES THE DANAHER SOLICITATION AND URGES YOU
NOT TO SIGN OR RETURN ANY GOLD AGENT DESIGNATION CARD SENT TO YOU BY DANAHER. IF
YOU HAVE PREVIOUSLY SIGNED AND RETURNED SUCH GOLD AGENT DESIGNATION CARD, YOU
HAVE EVERY RIGHT TO CHANGE YOUR MIND, AND THE BOARD URGES YOU TO REVOKE YOUR
AGENT DESIGNATION BY SIGNING, DATING AND RETURNING THE ENCLOSED WHITE REVOCATION
OF AGENT DESIGNATION CARD.
The Schedule 14D-9 of the Company (the "Schedule 14D-9"), which includes
the Board's determination of the inadequacy of the Danaher Offer and the Board's
recommendation that Shareholders reject the Danaher Offer and which was filed by
the Company with the Commission on July 22, 1997, and all amendments thereto
should be available for inspection at the public reference facilities of the
Commission at 450 Fifth Street, N.W., Washington, DC 20549, and at the regional
offices of the Commission located at Seven World Trade Center, 13th Floor, New
York, NY 10048 and Citicorp Center, 500 West Madison Street (Suite 1400),
Chicago, IL 60661. Copies of such information should be obtainable from the
Public Reference Section of the Commission at 450 Fifth Street, NW, Washington,
DC 20549, at prescribed rates. The Commission also maintains a web site at
http://www.sec.gov that contains reports, proxy statements and other
information. Copies of the Schedule 14D-9 can also be obtained from Georgeson &
Company, Inc. ("Georgeson"), Wall Street Plaza, New York, New York 10005.
REJECTION OF THE DANAHER OFFER -- EXPLORATION OF STRATEGIC ALTERNATIVES
The Board met on June 14, 19 and 23, 1997 to consider a proposal by Danaher
to acquire all of the Company's outstanding securities at a price equivalent to
$20 per share, as set forth in a letter from Danaher dated June 11, 1997 (the
"Original Danaher Proposal") and related matters, and met on July 16 and 21,
1997 to consider the Danaher Offer and related matters. At those meetings, the
Board carefully considered the Company's business, financial condition, results
of operations, current business strategy and future prospects, recent and
historical market prices for the Common Stock, the terms of the Original Danaher
Proposal (at meetings in June), the terms and conditions of the Danaher Offer
(at the July meetings), potential alternatives to the Original Danaher Proposal
and the Danaher Offer, and other matters, including information presented by the
Company's legal and financial advisors.
At the meeting on July 21, 1997 the Board unanimously determined that the
Danaher Offer is inadequate and not in the best interests of the Company or its
Shareholders and that the interests of the Company and its Shareholders would be
best served by the Company exploring strategic alternatives available to it to
maximize
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Shareholder value, including a possible sale of or other extraordinary
transaction involving the Company. Accordingly, the Board unanimously recommends
that Shareholders reject the Danaher Offer and not tender any Shares or Rights
pursuant thereto.
At its July 21 meeting, and in response to requests from Danaher, the Board
unanimously (i) declined to make Section 203 of the Delaware General Corporation
Law (the "Delaware Takeover Statute") inapplicable to the Danaher Offer or
Danaher's proposed second-step merger and (ii) determined not to redeem the
Rights at this time. At the July 21 meeting, the Board deferred the date that
the Rights will separate from the Common Stock and adopted certain amendments to
the Rights Agreement.
In reaching the conclusions and recommendations described above, the Board
considered a number of factors, including, without limitation, the following:
1. The Board's familiarity with the business, financial condition,
results of operations, current business strategy and future prospects of
the Company, the nature of the markets in which the Company operates, the
Company's position in such markets and the historical and current market
prices for the Common Stock, the strength of the Company's management team,
the Company's strong relationships with key worldwide customers and the
Company's unique positioning as the "one-stop" global source for all types
of uninterruptible power supply products;
2. Information provided by the Company's management relating to the
Company's financial performance and future prospects and by Lazard Freres &
Co., LLC, the Company's financial advisor ("Lazard Freres"), relating to
certain strategic options potentially available to the Company for
maximizing Shareholder value;
3. The view of the Company's management and Lazard Freres that a
strategy of investigating alternative strategic transactions with other
interested parties could lead to a value for the Shares in excess of the
$20 per share of Common Stock offered in the Danaher Offer;
4. Information provided by Lazard Freres concerning the Company and
the financial aspects of the Danaher Offer, and the oral opinion of Lazard
Freres to the effect that the price per Share to the Shareholders offered
in the Danaher Offer is inadequate, from a financial point of view, to such
Shareholders;
5. The significant conditions of the Danaher Offer, including among
other things, the requirements that: (A) there be validly tendered a number
of Shares which, when added to the Shares beneficially owned by Danaher,
constitutes at least a majority of the Shares outstanding on a fully
diluted basis on the date of purchase, (B) the Board redeem the Rights or
the Bidder be satisfied, in its sole discretion, that the Rights have been
invalidated or are otherwise inapplicable to the Danaher Offer and proposed
second-step merger, (C) the Board approve the Danaher Offer or the proposed
second-step merger for purposes of Section 203 of the Delaware Law or the
Bidder being satisfied, in its sole discretion, that, following
consummation of the Danaher Offer, such Section 203 will otherwise be
inapplicable to the proposed second-step merger or other business
combination to which the Bidder will be directly or indirectly a party, (D)
there not have occurred or be threatened any change (or any condition,
event or development involving a prospective change) in the business,
properties, assets, liabilities, capitalization, shareholders equity,
condition (financial or otherwise), operations, licenses or franchises,
results of operations or prospects of the Company or any of its
subsidiaries that, in the sole judgment of the Bidder, is or may be
materially adverse (a "Material Adverse Effect") to the Company or any of
its subsidiaries, (E) the Bidder not becoming aware of any facts that, in
its sole judgment, have or may have material adverse significance with
respect to the value of the Company or any of its subsidiaries or the value
of the Shares to Bidder, Danaher or any affiliate of Danaher, (F) there
being no change in the general political, market, economic or financial
conditions in the United States or abroad that could, in the sole judgment
of Bidder, have a Material Adverse Effect on the Company or any of its
subsidiaries or the trading in or value of the Shares and (G) a
considerable number of further conditions be satisfied which are subject to
Bidder's sole judgment or permit termination of the Danaher Offer. Although
the Danaher Offer is not by
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its terms subject to a financing condition, the cumulative effect of all of
the Danaher Offer's conditions is an offer which the Board viewed as
significantly conditional;
6. The financial terms of the Original Danaher Proposal and of the
Danaher Offer, as well as statements made by the Chief Executive Officer of
Danaher to the effect that Danaher may be willing to increase its offer
price to $22 per Share subject to completion of confidential due diligence
and negotiations;
7. The opportunistic timing of the Danaher Offer, which seeks to
exploit the Company's recent stock price in relation to historic trading
patterns;
8. The fact that the Company has entered into confidentiality
agreements with and supplied confidential information to certain third
parties, and has engaged and is engaged in discussions with certain of such
parties and certain other parties concerning a potential extraordinary
transaction involving the Company; and
9. The Board's belief, based in part on the factors referred to in
paragraphs (1) through (8) above, that the Danaher Offer does not reflect
the current value inherent in the Company, and that the interests of the
Company and its Shareholders will be best served by the Company exploring
strategic alternatives available to it for maximizing Shareholder value.
Based on the factors referred to above, the Board believes the interests of
the Company and its Shareholders would be best served by the Company exploring
strategic alternatives available to it to maximize Shareholder value, including
a possible sale of or other extraordinary transaction involving the Company.
These alternatives could lead to and involve negotiations which relate to or
could result in a sale of the Company or other such extraordinary transaction,
including (i) a purchase, sale or transfer of a material amount of assets by the
Company or any of its subsidiaries or a sale or issuance of voting stock, rights
or other securities of the Company or any of its subsidiaries, (ii) a tender or
exchange offer for, or open market or privately negotiated purchases or other
acquisition of securities by or of the Company, (iii) a merger or reorganization
involving the Company or any of its subsidiaries, (iv) a material change in the
present capitalization or dividend policy of the Company, or (v) a joint venture
or other business combination involving the Company or any of its subsidiaries.
In this regard, the Company has entered into confidentiality agreements
concerning the furnishing of confidential information with, and has furnished
confidential information to, certain third parties, and has engaged and is
engaged in discussions with certain of such parties and certain other parties
concerning a potential extraordinary transaction involving the Company. The
Company and Lazard Freres have identified a number of additional parties that
may be interested in a possible extraordinary transaction, and the Company may
enter into confidentiality agreements with, furnish confidential information to
and engage in discussions concerning such a transaction with some or all of such
parties or other parties.
The Board has determined that disclosure at this time with respect to these
possible transactions or the parties thereto, and the possible terms of any
other transactions or proposals of the type referred to above, might jeopardize
the initiation or continuation of any discussions or negotiations that the
Company may conduct. Accordingly, the Board, on July 21, 1997, adopted a
resolution instructing management of the Company not to disclose the possible
terms of any such transactions or proposals, or the parties thereto, unless and
until an agreement in principle relating thereto has been reached.
There can be no assurance that any of the foregoing will result in any
transaction being recommended to the Board or that any transaction that may be
recommended will be authorized or consummated, or that a transaction other than
those described herein will not be proposed, authorized or consummated. The
initiation or continuation of any of the foregoing may also be dependent upon
the future actions of Danaher with respect to the Danaher Offer. The proposal,
authorization, announcement or consummation of any transaction of the type
referred to in the immediately preceding paragraph could adversely affect or
result in withdrawal of the Danaher Offer.
THE BOARD BELIEVES THAT EXPLORING ALTERNATIVE STRATEGIC TRANSACTIONS
INVOLVING THE COMPANY, AS OPPOSED TO ACCEPTING THE DANAHER OFFER, IS THE BEST
COURSE TO PURSUE IN SEEKING TO MAXIMIZE SHAREHOLDER VALUE. THE
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BOARD BELIEVES THAT IT, AND NOT HAND-PICKED DESIGNEES OF DANAHER, IS IN THE BEST
POSITION TO UNDERTAKE A PROCESS WHICH MOST EFFICIENTLY AND MOST EFFECTIVELY
AFFORDS AN OPPORTUNITY TO ACHIEVE MAXIMUM VALUE FOR YOUR SHARES. THE BOARD HAS
ALREADY COMMENCED SUCH A PROCESS AND IS COMMITTED THROUGH SUCH PROCESS TO
SERVING THE BEST INTERESTS OF THE SHAREHOLDERS.
ACCORDING TO ITS PRELIMINARY PROXY MATERIALS, DANAHER BELIEVES THAT YOU
SHOULD SIGN AND RETURN A GOLD AGENT DESIGNATION CARD "[I]F YOU BELIEVE THAT . .
. YOU SHOULD HAVE THE CHANCE TO RECEIVE $20 NET PER SHARE IN CASH FOR ALL OF
YOUR SHARES." YOUR BOARD BELIEVES THAT THE PRICE OF $20 PER SHARE OFFERED BY
DANAHER IS INADEQUATE, AND THAT THE BEST WAY TO MAXIMIZE THE VALUE OF YOUR
SHARES IS FOR THE BOARD TO CONTINUE TO UNDERTAKE THE PROCESS THAT IT HAS BEGUN.
ACCORDINGLY, IF YOU BELIEVE THAT THE BOARD SHOULD CONTINUE IN ITS PROCESS TO
MAXIMIZE SHAREHOLDER VALUE, WITHOUT THE ADDED BURDEN, DISTRACTION AND EXPENSE OF
A PROXY CONTEST, YOU SHOULD NOT RETURN A GOLD AGENT DESIGNATION CARD TO DANAHER
AND, IF YOU HAVE ALREADY RETURNED SUCH A GOLD AGENT DESIGNATION CARD, YOU SHOULD
REVOKE THE CARD USING THE ENCLOSED WHITE REVOCATION OF AGENT DESIGNATION CARD.
VOTING SECURITIES
As of July 22, 1997, there were 10,061,793 shares of Common Stock
outstanding and 1,000,000 shares of Preferred Stock outstanding. Each share of
Common Stock is entitled to one vote, and each share of Preferred Stock is
convertible into one share of Common Stock (subject to adjustment) and is
entitled to the number of votes to which the shares of Common Stock into which
such share of Preferred Stock is convertible are entitled. The shares of
Preferred Stock vote together with the shares of Common Stock as one class. As
of July 22, 1997, there were 643,750 Warrants outstanding and options to
purchase 940,888 shares of Common Stock.
As of July 22, 1997, Fiskars Oy Ab ("Fiskars") owned 825,000 shares of
Common Stock and all of the shares of Preferred Stock outstanding. Pursuant to
the Stockholders Agreement, dated March 13, 1996, by and among Fiskars and the
Company, Fiskars is required, among other things, to (i) cause all Shares held
by them to be represented at Shareholder meetings, (ii) vote all Shares held by
them as directed by the Board and (iii) in the case of election of directors,
vote all Shares held by them in favor of the election of directors nominated by
the Board.
PROCEDURES FOR CALLING SPECIAL MEETINGS
The Company's By-Laws, as amended and restated to date (the "By-Laws"), a
copy of which has been filed by the Company as an exhibit to the Schedule 14D-9,
provide that special meetings of the Company's stockholders may be called by the
Company or a majority of the Board and shall be called upon the written request
of holders of shares representing at least a majority in the amount of the
issued and outstanding capital stock of the Company entitled to vote on any
matter proposed to be considered at such special meeting, and set forth
procedures related thereto. Article II, Section 5(b) of the By-Laws requires
that shareholders who wish to call a special meeting make a written request (the
"Record Date Request") to the Company and that the Board fix a record date to
determine the shareholders entitled to request the special meeting (the "Request
Record Date"). The Board must adopt a resolution fixing a Request Record Date
within five business days after delivery of the Record Date Request, and the
Request Record Date must be not more than ten days after the date of such
resolution. If the Board fails to set a Request Record Date, the Request Record
Date will be the date of delivery of the Record Date Request. To be valid the
Record Date Request must, among other things, set forth the purpose of the
special meeting and must include all information regarding the shareholders, any
matters to be brought before the meeting, and any nominees for directorships
that are required of shareholders giving notice of nominations of directors or
other business to be brought before an annual meeting.
A special meeting of shareholders is to be called upon the delivery of a
written request (a "Meeting Request") of shareholders of record as of the
Request Record Date representing at least a majority in the amount of the
capital stock of the Company issued and outstanding and entitled to vote on any
matter
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proposed to be considered at such special meeting (the "Requisite Holders"). No
purported request will be deemed to have been delivered to the Company until
regionally or nationally recognized independent inspectors of elections certify
to the Company that a majority of requests have been received from Requisite
Holders. The shareholders' Meeting Request must state, among other things, the
purpose for which such special meeting is to be held. A special meeting called
at the request of shareholders must be held at a date not less than 10 and not
more than 60 days after the record date for the special meeting, as designated
by the Board. If the Board fails to designate a date for the special meeting
within five business days after receiving a valid Meeting Request from the
Requisite Holders, then such meeting shall be held on the 90th day after the
date of delivery of the Meeting Request from the Requisite Holders and the
record date for the meeting shall be the 60th day before the meeting. The Board
may set a record date for the special meeting which is not later than 20
business days after the date of delivery of the valid Meeting Request from the
Requisite Holders and set a meeting not less than 10 days and not more than 60
days after such record date.
To nominate an individual for election to the Board or bring any other
business before an annual meeting of shareholders of the Company, a shareholder
must provide notice to the Company not later than 60 nor earlier than 90 days
prior to the first anniversary of the prior annual meeting, unless the date of
the annual meeting is advanced by more than 30 days or delayed more than 60 days
from such anniversary. The shareholder's notice must include information
regarding the shareholder, any matters to be brought before the meeting and any
directors to be nominated at the meeting.
To nominate an individual for election to the Board, the shareholder must
deliver a written notice to the Company not earlier than the earlier of (1) the
delivery of the request described in Section 5(b) of Article II of the By-Laws
and (2) 90 days prior to such special meeting and not later than the close of
business on the later of (a) the 60th day prior to such special meeting and (b)
the 10th day following the day on which the Company first makes a public
announcement of the date of such special meeting at which directors may be
nominated. Such written notice must set forth all of the information that would
be required to be set forth in a notice of a shareholder seeking to nominate an
individual for a directorship or bring other business before an annual meeting
of shareholders.
On June 11, 1997, in connection with the Original Danaher Proposal, the
Company received a letter (the "Danaher Meeting Request") on behalf of Bidder
and its affiliates requesting a special meeting of shareholders, at which, among
other things, Bidder would seek a vote on the Danaher Proposals (as defined
below), be called when Bidder had obtained consents from holders of a majority
of the outstanding shares of Common Stock. As the By-Laws were amended on June
23, 1997, counsel for the Company sent a copy of the By-Laws, as amended and
restated to such date, to counsel for Danaher on June 24, and notified Danaher
that the Company would treat the Danaher Meeting Request as a Record Date
Request at such time as the Danaher Request is supplemented by the information
required by the By-Law Amendments. To date, such supplemental information has
not been provided.
THE DANAHER PROPOSALS
The Danaher Solicitation is seeking Agent Designations in order to call a
special meeting of shareholders to consider and vote upon the following
proposals (the "Danaher Proposals"): (i) the amendment of the Company's By-Laws
to increase the size of the Board from 9 to 19, (ii) the election of 10 nominees
of Danaher (the "Danaher Nominees") as directors of the Company (who would then
constitute a majority of the Board), (iii) the repeal of any By-Laws or
amendments thereto adopted by the Company after December 21, 1989 and prior to
the effectiveness of the foregoing proposals, (iv) any proposals made in respect
of actions taken that could impede, delay or make more costly to Danaher or DH
Holdings Corp., a Delaware corporation and a wholly owned subsidiary of Danaher,
the acquisition of the Company or any of its securities or assets or gaining
control of the Company, including through the election of a majority of the
Board and (v) the transaction of such other business as may properly come before
such special meeting or any adjournment or postponement thereof.
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REVOCATION
Either a GOLD Agent Designation Card or a WHITE Revocation of Agent
Designation Card may be revoked by filing with the Secretary of the Company a
written notice of revocation. Such written revocation may be in any form, but
must be signed and dated and must clearly express your intention to revoke your
previously executed Gold Agent Designation Card or White Revocation of Agent
Designation Card. Any written notice revoking an Agent Designation should be
sent to the Company c/o Georgeson & Company, Inc., Wall Street Plaza, New York,
New York 10005. Your latest dated card will supersede any earlier dated card,
except that a WHITE Revocation of Agent Designation Card will be inoperative and
of no effect if delivered after the date, if any, as of which the requisite
number of Shareholders of Record as of the Request Record Date (if any) have
requested that a special meeting be held in accordance with the By-Laws. See
"Procedures for Calling Special Meetings."
OTHER INFORMATION
On July 9, 1997, Danaher and Bidder filed a suit encaptioned Danaher
Corporation and PQR Acquisition Corp. v. Exide Electronics Group, Inc., et al.
(C.A. No. 15796) in the Court of Chancery of the State of Delaware, New Castle
County, against the Company and the members of the Board. The complaint alleges,
among other things, that the defendants have refused and will refuse to deal in
good faith with Danaher in negotiating an acquisition of the Company by Bidder
and have taken certain actions in response to Danaher's expressions of interest
in such an acquisition, which conduct is alleged to be in breach of the
fiduciary duties of the Board to Shareholders. In particular, the complaint
alleges that the Board acted in violation of its fiduciary duties in amending
the By-Laws to provide for certain time periods with respect to any stockholder
call for a special meeting. The complaint seeks as relief, among other things,
(i) to compel redemption of the Rights, (ii) to compel the Board to render the
Delaware Takeover Statute inapplicable to the proposed acquisition in connection
with the Danaher Offer, (iii) to compel the Board to call a special meeting of
shareholders at an unspecified future date, (iv) to enjoin the Board from taking
any action that would impede or interfere with the Danaher Offer or the exercise
by Exide's shareholders of their franchise and (v) to enjoin the Board from
taking any actions inconsistent with their fiduciary obligations to Exide's
shareholders.
On July 9, 1997, a purported class action encaptioned Rima Spielman v.
Exide Electronics Group, Inc., et al. (C.A. No. 15800) was commenced in Delaware
Chancery Court against the Company and the members of the Board (the
"Shareholder Action"). The Shareholder Action was purportedly brought on behalf
of the public shareholders of the Company. The complaint alleges, among other
things, that (i) the defendants have refused to take the steps necessary to
maximize shareholder value, including properly considering the Danaher Offer,
(ii) by purportedly failing and refusing to take such steps, including
adequately considering the Danaher Offer, the defendants have breached their
fiduciary duty to the plaintiff and the public shareholders and are using their
fiduciary positions of control to thwart others in their legitimate attempts to
acquire the Company and (iii) the members of the Board have purportedly
attempted to entrench themselves in their positions with the Company by
instituting amendments to the By-Laws on June 23, 1997 (the "By-Law
Amendments"). The Shareholder Action seeks as relief, among other things, (i) to
require the directors to cooperate with any person or entity, including Danaher,
having a bona fide interest in proposing any transaction that would maximize
shareholder value, including a merger or acquisition of the Company, (ii) to
enhance the value and attractiveness of the Company as a merger/acquisition
candidate, (iii) to take all appropriate steps to create an active auction of
the Company and (iv) to have the By-Law Amendments declared void.
8
10
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth, as of July 22, 1997, all directors and
executive officers who are the beneficial owners of the Common Stock of the
Company and such beneficial ownership by all executive officers and directors as
a group:
COMMON STOCK
SHARES OF OPTIONS AND WARRANTS
NAME AND ADDRESS OF COMMON STOCK EXERCISABLE WITHIN PERCENT OF
BENEFICIAL OWNER (1)(2) 60 DAYS(1) COMMON STOCK(3)
- -------------------------------------- ------------ --------------------- ---------------
Conrad A. Plimpton.................... 259,836(4) 17,000(8) 2.5%
James A. Risher....................... 269,090 70,103(9) 3.0%
Lance L. Knox......................... 139,890 17,000(8) 1.4%
Ralf R. Boer.......................... 2,500(5) 1,500(8) *
Wayne L. Clevenger.................... 10,000 17,000(8) *
Ron E. Doggett........................ 8,000 12,000(8) *
James E. Fowler....................... 1,250 5,750(8) *
David J. McLaughlin................... 4,300 14,500(8) *
Stig G. Stendahl...................... --(5) 1,500(8) *
Chiaki Tanaka......................... --(6) 12,000(6)(10) *
Marty R. Kittrell..................... 38,314 34,603(11) *
Warren J. Johnson..................... 13,812 9,552(12) *
William J. Raddi...................... 115,000 29,500(9) 1.3%
Mark A. Ascolese...................... 38,142 23,500(13) *
Nicholas J. Costanza.................. 35,828 15,817(14) *
Alden R. Schnaidt..................... 30,000 18,750(15) *
Herman G. P. Metzler.................. 29,733 11,750(16) *
All Executive Officers and Directors
as a Group (17 persons)............. 995,695(4)(7) 311,825 11.5%
- ---------------
* Less than 1%.
(1) Except as indicated in the footnotes to this table, the persons named in
the table have sole voting and investment power with respect to the shares
of Common Stock shown as beneficially owned by them.
(2) Does not include options and warrants to purchase shares of Common Stock
which are listed separately under the next column "Options and Warrants
Exercisable Within 60 Days."
(3) The numerator in this calculation includes the shares of Common Stock plus
options and warrants exercisable within 60 days held by the beneficial
owner. The denominator includes 10,061,793 shares of Common Stock plus
1,000,000 shares of Series G Preferred Stock on an as-converted basis plus
the options and warrants of the beneficial owner exercisable within 60
days.
(4) Includes 2,300 shares held by custodian for the Conrad A. Plimpton SERP
Trust.
(5) Does not include the 825,000 shares of Common Stock or the 1,000,000 shares
of Series G Convertible Preferred Stock held by Fiskars. Messrs. Boer and
Stendahl have shared voting power over any such shares and disclaim
beneficial ownership of such shares.
(6) Does not include 595,273 shares of Common Stock which were acquired July 1,
1995, upon conversion of the Series D and E Preferred held by JSB. Mr.
Tanaka, as an officer of JSB, has shared voting and investment power over
such shares and disclaims beneficial ownership of such shares. Mr. Tanaka
did not seek re-election as director when his current term expired in
February 1997.
(7) Does not include 50,000 shares of Common Stock currently owned by JSB or
595,273 shares of Common Stock which were acquired upon conversion of the
Series D and E Preferred Stock held by JSB.
9
11
Mr. Tanaka, as an officer of JSB, has shared voting and investment power
over such shares and disclaims beneficial ownership of such shares. Does
not include 825,000 shares of Common Stock or the 1,000,000 shares of
Series G Convertible Preferred Stock held by Fiskars. Messrs. Boer and
Stendahl have shared voting power over any such shares and disclaim
beneficial ownership of such shares.
(8) Does not include an option to purchase 4,500 shares of Common Stock which
is not exercisable within 60 days after July 22, 1997.
(9) Does not include an option to purchase 20,000 shares of Common Stock which
is not exercisable within 60 days after July 22, 1997.
(10) Does not include an option to purchase 1,500 shares of Common Stock which
is not exercisable within 60 days after July 22, 1997.
(11) Does not include an option to purchase 25,000 shares of Common Stock which
is not exercisable within 60 days after July 22, 1997.
(12) Does not include an option to purchase 15,500 shares of Common Stock which
is not exercisable within 60 days after July 22, 1997.
(13) Does not include an option to purchase 24,500 shares of Common Stock which
is not exercisable within 60 days after July 22, 1997.
(14) Does not include an option to purchase 14,062 shares of Common Stock which
is not exercisable within 60 days after July 22, 1997.
(15) Does not include an option to purchase 20,250 shares of Common Stock which
is not exercisable within 60 days after July 22, 1997.
(16) Does not include an option to purchase 8,250 shares of Common Stock which
is not exercisable within 60 days after July 22, 1997.
10
12
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, all persons known by the Company to be the
beneficial owners of more than 5% of any class of the voting securities of the
Company. The information set forth below is based on beneficial ownership
information contained in the most recent Schedule 13D, 13F or 13G filed on
behalf of such holder or on information furnished by the holder to the Company.
COMMON STOCK
AMOUNT AND
NATURE OF PERCENT OF
NAME AND ADDRESS BENEFICIAL COMMON
OF BENEFICIAL OWNER OWNERSHIP(1) STOCK(2)(3)
----------------------------------------------------------- ------------ -----------
Fiskars Oy Ab.............................................. 1,825,000(4) 16.5%
Mannerheimintie 14 A
FIN-00100
Helsinki, Finland
Massachusetts Mutual Life Insurance........................ 1,146,789(5) 10.4%
1295 State Street
Springfield, MA 01111
Duquesne Enterprises, Inc. ................................ 1,058,750 9.6%
Grant Building, Suite 240
Pittsburgh, PA 15219
Dimensional Fund Advisors.................................. 682,726 6.2%
1299 Ocean Avenue
Santa Monica, CA 90401
Japan Storage Battery Co., Ltd. ........................... 645,273 5.8%
1 Inobaba-cho
Nishinosho Kisshoin
Minami-ku
Kyoto, Japan
- ---------------
(1) Except as indicated in the footnotes to this table, the persons named in the
table have sole voting and investment power with respect to all shares of
Common Stock shown as beneficially owned by them.
(2) Assumes conversion of 1,000,000 shares of the Series G Convertible Preferred
Stock issued to Fiskars, which have the same voting rights as shares of the
Common Stock.
(3) The denominator in this calculation includes 10,061,793 shares of Common
Stock outstanding as of July 22, 1997, plus 1,000,000 shares of Series G
Convertible Preferred Stock on an as-converted basis.
(4) Includes 825,000 shares of Common Stock and 1,000,000 shares of Series G
Convertible Preferred Stock which have the same voting rights as shares of
the Company's Common Stock.
(5) Massachusetts Mutual Life Insurance Company ("MMLI"), MassMutual Corporate
Investors ("MMCI"), and MassMutual Participation Investors ("MMPI") own
802,752, 229,358 and 114,679 shares of Common Stock of the Company,
respectively. On July 21, 1997, each of MMLI, MMCI and MMPI filed with the
Commission a notice of proposed sale of shares of Common Stock to sell
725,900 shares, 207,400 shares and 103,700 shares, respectively.
SERIES G CONVERTIBLE PREFERRED STOCK
AMOUNT AND
NATURE OF PERCENT OF
NAME AND ADDRESS BENEFICIAL PREFERRED
OF BENEFICIAL OWNER OWNERSHIP STOCK
-------------------------------------------------------------- ---------- ----------
Fiskars Oy Ab................................................. 1,000,000 (1) 100%
Mannerheimintie 14 A
FIN-00100
Helsinki, Finland
- ---------------
(1) The person named in the table has sole voting and investment power with
respect to all shares of Preferred Stock of the Company shown as
beneficially owned by it.
11
13
SOLICITATION OF REVOCATIONS OF APPOINTMENT -- COST AND METHOD
The cost of the solicitation of revocations of agent designations will be
borne by the Company. In addition to solicitation by mail, directors, officers
and other employees of the Company may, without additional compensation, solicit
revocations of agent designations by mail, in person, by telecommunication or by
other electronic means. The Company will reimburse brokerage houses, banks,
custodians and other nominees and fiduciaries for out-of-pocket expenses
incurred in forwarding the Company's revocations of agent designations materials
to, and obtaining instructions relating to such materials from, beneficial
owners of the Common Stock and the Preferred Stock.
The Company has retained Georgeson to assist the Company in connection with
this solicitation of revocations of agent designations. The Company has also
retained Georgeson to assist the Company in connection with its communication
with its Shareholders with respect to, and to provide other services to the
Company in connection with, the Danaher Offer and possible alternative strategic
transactions involving the Company. Georgeson may contact Shareholders by mail,
telephone, telex, telegraph and personal interview and may request brokers,
dealers and other nominee Shareholders to forward this Statement Soliciting
Revocations of Appointments of Designated Agents and the enclosed White
Revocation of Agent Designation Card. Georgeson will receive reasonable and
customary compensation for its services and reimbursement of out-of-pocket
expenses in connection therewith.
The Company has retained Lazard Freres as its financial advisor with
respect to this solicitation, the Danaher Offer and possible alternative
strategic transactions involving the Company. Pursuant to the agreement between
the Company and Lazard Freres, dated July 12, 1997, the Company agreed to pay
Lazard Freres (i) a financial advisory retainer fee of $400,000, and (ii) an
additional fee of $3,600,000 payable upon the earlier of (a) completion of a
Transaction (as defined below) and (b) October 1, 1997 with respect to 50% of
such amount, and April 1, 1998 with respect to the remainder of such amount. A
"Transaction" is defined as the sale of the Company, an interest in the Company
or a subsidiary or division of the Company to another corporation or other
business entity, which transaction takes the form of a merger or a sale of
assets or equity securities or other interests, or a recapitalization of the
Company. Lazard Freres' engagement may be terminated by either the Company or
Lazard Freres at any time; provided, however, that in the case of termination by
the Company and any expiration of the agreement with Lazard Freres, Lazard
Freres will be entitled to full payment of the fees described in this paragraph.
The Company also has agreed to reimburse Lazard Freres for its reasonable
out-of-pocket expenses, including fees and expenses of its legal counsel, and to
indemnify it against certain expenses and liabilities if incurred in connection
with its engagement, including liabilities arising under the federal securities
laws.
The Company has retained Edelman Public Relations Worldwide ("Edelman") to
assist the Company in connection with its communication with its Shareholders
with respect to this solicitation, the Danaher Offer and possible alternative
strategic transactions. Edelman will receive reasonable and customary
compensation for its services and reimbursement of out-of-pocket expenses in
connection therewith.
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14
SHAREHOLDER PROPOSALS
Any shareholder who desires to present a proposal to be considered at the
Company's next Annual Meeting may do so, provided that such shareholder
satisfies the eligibility requirements established by the Commission. To be
considered for submission at the meeting, such proposal must have been received
by the Company (addressed to the attention of the Secretary) not later than
December 29, 1997. To be submitted at the meeting, any such proposal must be a
proper subject for shareholder action under the laws of the State of Delaware
and must otherwise conform to the applicable regulations of the Commission and
the By-Laws.
PLEASE SHOW YOUR SUPPORT FOR THE BOARD'S EFFORTS TO ACHIEVE MAXIMUM VALUE
FOR YOUR SHARES BY COMPLETING, SIGNING AND DATING THE ENCLOSED WHITE REVOCATION
OF AGENT DESIGNATION CARD AND RETURNING IT PROMPTLY TO EXIDE ELECTRONICS GROUP,
INC. C/O GEORGESON & COMPANY, INC. IN THE ENCLOSED ENVELOPE. NO POSTAGE IS
NECESSARY IF THE ENVELOPE IS MAILED IN THE UNITED STATES.
IF YOU HAVE ANY QUESTIONS OR REQUIRE ANY ADDITIONAL INFORMATION CONCERNING
THIS STATEMENT OR THE DANAHER OFFER, PLEASE CONTACT GEORGESON & CO., INC., WALL
STREET PLAZA, NEW YORK, NEW YORK 10005, (212) 440-9800 (COLLECT) OR (800)
223-2064 (TOLL-FREE).
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15
IMPORTANT
1. If your shares are registered in your own name(s), please sign, date and
promptly mail the enclosed WHITE REVOCATION OF AGENT DESIGNATION CARD, using
the postage-paid envelope provided.
2. If you have previously signed and returned a gold appointment of designated
agents card to Danaher, you have every right to change your mind. Only your
latest dated card will count. You may revoke any earlier card returned to
Danaher by signing, dating and mailing the enclosed WHITE REVOCATION OF AGENT
DESIGNATION CARD in the postage-paid envelope provided.
3. If your shares are held in the name of a brokerage firm, bank nominee or
other institution, only it can sign a WHITE REVOCATION OF AGENT DESIGNATION
CARD with respect to your shares and only after receiving your specific
instructions. Accordingly, please sign, date and mail the enclosed WHITE
REVOCATION OF AGENT DESIGNATION CARD in the postage-paid envelope provided.
You should also contact the person responsible for your account and give
instructions for a WHITE REVOCATION OF AGENT DESIGNATION CARD to be issued
representing your shares.
4. After signing the enclosed WHITE REVOCATION OF AGENT DESIGNATION CARD, do not
sign any other cards. Rather, discard any gold appointment of designated
agents cards sent to you by Danaher.
5. Even if you have not previously signed and returned any such gold appointment
of designated agents card to Danaher, you may send a WHITE REVOCATION OF
AGENT DESIGNATION CARD to the Company, which will have no legal effect but
would assist us in monitoring the progress of the Danaher Solicitation.
If you have any questions about giving your revocation of appointment or
require assistance, please contact:
GEORGESON & COMPANY, INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
(212) 440-9800 (COLLECT)
(1-800) 223-2064 (TOLL-FREE)
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16
[WHITE CARD]
REVOCATION OF APPOINTMENT OF DESIGNATED AGENTS CARD
FOR HOLDERS OF
COMMON STOCK AND SERIES G CONVERTIBLE PREFERRED STOCK OF
EXIDE ELECTRONICS GROUP, INC.
THIS REVOCATION OF AGENT DESIGNATION IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
OF
EXIDE ELECTRONICS GROUP, INC.
IN OPPOSITION TO THE SOLICITATION BY
DANAHER CORPORATION AND
PQR ACQUISITION CORPORATION
The undersigned, acting with respect to all shares of Common Stock, par
value $.01 per share (the "Common Stock"), of Exide Electronics Group, Inc. (the
"Company"), and all shares of Series G Convertible Preferred Stock, par value
$.01 per share (the "Preferred Stock"), of the Company, hereby revokes any
previously executed appointment of designated agents requesting the demand for a
special meeting described in the Solicitation Statement of Danaher Corporation
or PQR Acquisition Corporation.
PLEASE SIGN, DATE AND MAIL THIS CARD TODAY. IF YOU NEED ASSISTANCE, PLEASE
CALL GEORGESON & COMPANY, INC. COLLECT AT (212) 440-9800 OR TOLL-FREE AT (800)
223-2064.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU SIGN, DATE AND
MAIL THIS CARD TODAY AND THEREBY REVOKE ANY AGENT DESIGNATION THAT YOU MAY HAVE
GIVEN TO DANAHER.
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by the president or other duly authorized officer.
If a partnership, please sign in partnership name by authorized person. This
revocation card revokes appointments of designated agents with respect to all
shares of Common Stock and Preferred Stock held in all capacities.
--------------------------------------
Signature
--------------------------------------
Signature, if jointly held
--------------------------------------
Title
--------------------------------------
Date
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