SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C)
OF THE SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
[X] Preliminary Information Statement [ ] Confidential, For Use of
the Commission Only (as
permitted by Rule 14c-5(d)(2))
[ ] Definitive Information Statement
SUMMIT AUTONOMOUS INC.
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) 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 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.
[X] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
$193,479
(2) Form, Schedule or Registration Statement No.:
Schedule TO
(3) Filing Party:
Alcon Acquisition Corp.
Alcon Holdings Inc.
(4) Date Filed:
June 5, 2000
2
[LOGO OF SUMMIT AUTONOMOUS]
21 Hickory Drive
Waltham, Massachusetts 02451
[INSERT DATE]
Dear Stockholder:
You are cordially invited to attend a Special Meeting of Stockholders,
which will be held on [INSERT DATE] at [INSERT LOCATION] at [INSERT TIME],
local time.
As described in the enclosed Information Statement, at the Special
Meeting you will be asked to consider and vote upon the merger of Alcon
Acquisition Corp., a wholly-owned subsidiary of Alcon Holdings Inc., with and
into Summit Autonomous Inc. (the "Company"), pursuant to an Agreement and Plan
of Merger, dated as of May 26, 2000. Upon consummation of the merger, each
outstanding share of the Company's common stock (other than shares held by the
Company and its subsidiaries, Alcon Holdings Inc. and its subsidiaries and
dissenting stockholders who perfect their dissenters' rights) will be
converted into the right to receive $19.00 in cash, without interest, upon
surrender of certificates formerly representing such shares.
The merger is the second and final step in the acquisition of the Company
by Alcon Holdings Inc. The first step was a tender offer by Alcon Acquisition
Corp. for all of the outstanding shares of the Company's common stock at a
price of $19.00 per share. Alcon Acquisition Corp. purchased 41,944,555 shares
pursuant to the tender offer and now owns approximately 89.2% of the
outstanding shares of the Company.
The affirmative vote of holders of two-thirds of the shares of the
Company's common stock outstanding and entitled to vote at the Special Meeting
is necessary to approve the Agreement and Plan of Merger. Alcon Acquisition
Corp. owns a sufficient number of shares to assure approval of the Agreement
and Plan of Merger at the Special Meeting and will vote all of its shares in
favor of the Agreement and Plan of Merger. As a result, the affirmative vote
of any other stockholder will not be required to approve the Agreement and
Plan of Merger. In light of the foregoing, the Company has determined not to
solicit proxies from its stockholders.
Your Board of Directors has determined that the terms of the merger are
fair to and in the best interests of the Summit Autonomous stockholders. The
Board of Directors unanimously recommends that Summit Autonomous stockholders
vote "for" approval of the Agreement and Plan of Merger.
Among the factors considered by the Board of Directors in evaluating the
merger was the opinion dated May 26, 2000 of Chase H&Q, the Company's
financial advisor, to the effect that as of such date, the cash consideration
to be received by the stockholders of the Company pursuant to the tender offer
and the merger was fair to such stockholders from a financial point of view.
The opinion contains a description of the procedures followed, matters
considered and limitation on the review undertaken by Chase H&Q in rendering
its opinion. The written opinion of Chase H&Q is attached as Annex B to the
enclosed Information Statement and should be read carefully and in its
entirety by stockholders.
Whether or not you plan to attend the Special Meeting, please read the
attached Information Statement carefully. THE COMPANY IS NOT ASKING YOU FOR A
PROXY AND YOU ARE REQUESTED NOT TO SEND A PROXY.
Please do not send any certificates for your stock at this time. You will
receive instructions regarding the surrender of your stock certificates and
receipt of payment for your shares after the merger is effective.
Sincerely,
Robert J. Palmisano
President and Chief Executive Officer
This Information Statement is dated [INSERT DATE],
and is being mailed to Summit
Autonomous stockholders on or about [INSERT DATE].
[LOGO OF SUMMIT AUTONOMOUS]
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To the Stockholders of Summit Autonomous Inc.:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of Summit
Autonomous Inc. (the "Company") will be held at [INSERT LOCATION], on [INSERT
DATE], at [INSERT TIME], local time, for the following purposes:
1. To consider and vote upon a proposal to approve the Agreement and Plan
of Merger, dated as of May 26, 2000, among Alcon Holdings Inc., Alcon
Acquisition Corp., a wholly-owned subsidiary of Alcon Holdings Inc., and the
Company (the "Merger Agreement"). The Merger Agreement provides, among other
things, that in accordance with the relevant provisions of the Massachusetts
Business Corporation Law, Alcon Acquisition Corp. will be merged with and into
the Company. Following the effective time of the merger, the Company will
continue as the surviving corporation and a wholly-owned subsidiary of Alcon
Holdings Inc. and each share of the Company's Common Stock, par value $.01 per
share (other than shares held by the Company and its subsidiaries, Alcon
Holdings Inc. and its subsidiaries and dissenting stockholders who perfect
their dissenters' rights), will be automatically converted into the right to
receive an amount in cash equal to $19.00, without interest, upon surrender of
certificates formerly representing such shares.
2. To transact such other business as may properly come before the
Special Meeting or any adjournments or postponements thereof.
The Board of Directors has specified [INSERT DATE] as the record date for
the purpose of determining the stockholders who are entitled to receive notice
of and to vote at the Special Meeting. Only holders of the Company's common
stock of record at the close of business on that date will be entitled to
notice of and to vote at the Special Meeting or any adjournments or
postponements thereof.
If the Merger Agreement is approved by the stockholders at the meeting
and the merger is consummated, any stockholder (1) who files with the Company
before the taking of the vote on the approval of such action, a written
objection to the proposed action stating that he, she or it intends to demand
payment for his, her or its shares if the action is taken and (2) whose shares
are not voted in favor of such action, has or may have the right to demand in
writing from the Company, within twenty days after the date of mailing to such
stockholder of notice in writing that the corporate action has become
effective, payment for his, her or its shares and an appraisal of the value
thereof. The Company and any such stockholder shall in such cases have the
rights and duties and shall follow the procedure set forth in sections 86 to
98, inclusive, of Chapter 156B of the General Laws of Massachusetts.
By order of the Board of Directors,
James A. Lightman
Clerk
THE AFFIRMATIVE VOTE OF TWO-THIRDS OF THE OUTSTANDING SHARES OF THE COMPANY'S
COMMON STOCK ENTITLED TO VOTE THEREON IS REQUIRED TO APPROVE THE MERGER
AGREEMENT. THE COMPANY IS NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT
TO SEND A PROXY.
PLEASE DO NOT SEND ANY SHARE CERTIFICATES REPRESENTING YOUR SHARES AT THIS
TIME.
-----------------
The date of this Information Statement is [INSERT DATE].
SUMMARY TERM SHEET
This summary term sheet highlights selected information from this
Information Statement and may not contain all information that is important to
you. If you wish to understand the merger fully and you would like a more
complete description of the legal terms of the merger, you should carefully
read this entire Information Statement and the documents to which it refers.
The merger agreement is attached as Annex A to this Information Statement. It
is the legal document that governs the merger.
THE SPECIAL MEETING
DATE, PLACE AND TIME: The special meeting will be held at
[INSERT TIME], local time, on
[INSERT DATE], at [INSERT LOCATION].
PURPOSE OF THE SPECIAL MEETING: The purpose of the special meeting
is to approve the Agreement and Plan
of Merger dated as of May 26, 2000
among Alcon Holdings Inc., Alcon
Acquisition Corp., a wholly-owned
subsidiary of Alcon Holdings Inc.,
and Summit Autonomous Inc. If the
merger is completed, Summit
Autonomous Inc. will become a
wholly-owned subsidiary of Alcon
Holdings Inc. and you will be
entitled to receive, subject to any
applicable dissenters' rights, $19.00 in
cash, without interest, for each share
of Summit Autonomous Inc. common stock
that you own. See "The Special Meeting".
RECORD DATE: The Board of Directors has
fixed the close of business on
[INSERT DATE] as the record date for
determination of the Summit
Autonomous Inc. stockholders entitled
to notice of the special meeting and
entitled to vote at the special
meeting. See "The Special Meeting".
VOTE REQUIRED TO APPROVE The holders of two-thirds of the
THE MERGER AGREEMENT: outstanding shares of Summit
Autonomous Inc. common stock must
approve the merger agreement. You are
entitled to one vote for each share
of Summit Autonomous Inc. common
stock that you owned on the record
date. ALCON ACQUISITION CORP. OWNS A
SUFFICIENT NUMBER OF SHARES TO ASSURE
APPROVAL OF THE MERGER AGREEMENT AT
THE SPECIAL MEETING AND INTENDS TO
VOTE ALL OF ITS SHARES IN FAVOR OF
THE MERGER AGREEMENT. AS A RESULT,
THE MERGER AGREEMENT WILL BE APPROVED
EVEN IF NO STOCKHOLDERS OTHER THAN
ALCON ACQUISITION CORP. VOTE TO
APPROVE IT. ALCON ACQUISITION CORP.
AND SUMMIT
AUTONOMOUS INC. ARE NOT ASKING YOU FOR
A PROXY AND YOU ARE REQUESTED NOT TO
SEND US A PROXY. See "The Special
Meeting".
THE PARTIES
SUMMIT AUTONOMOUS INC.: Summit Autonomous Inc. is a
Massachusetts corporation engaged in
the manufacture and supply of excimer
laser systems and related products
used to perform procedures that
correct common refractive vision
disorders such as nearsightedness,
farsightedness and astigmatism. See
"The Parties".
ALCON ACQUISITION CORP.: Alcon Acquisition Corp. is a
Massachusetts corporation and a
wholly-owned subsidiary of Alcon
Holdings Inc. Alcon Acquisition
Corp. was organized to acquire Summit
Autonomous Inc. and has not conducted
any unrelated activities since its
organization. See "The Parties".
ALCON HOLDINGS INC.: Alcon Holdings Inc., a Delaware
corporation, is a holding company. The
principal operating subsidiary of Alcon
Holdings Inc. is Alcon Laboratories,
Inc., which is engaged in the
business of researching, developing,
manufacturing and marketing
ophthalmic products including
surgical instruments and accessory
products, intraocular lenses,
prescription drugs and contact lens
care solutions. Alcon Holdings Inc.
is an indirect wholly-owned
subsidiary of Nestle S.A., a Swiss
corporation. See "The Parties".
THE MERGER AND RELATED TRANSACTIONS
OVERVIEW: Pursuant to the merger agreement,
Alcon Acquisition Corp. will be
merged with and into Summit
Autonomous Inc., with Summit
Autonomous Inc. being the surviving
corporation.
As a result of the merger, Summit
Autonomous Inc. will become a
wholly-owned subsidiary of Alcon
Holdings Inc. and each share of
Summit Autonomous Inc. common stock
outstanding at the time of the
merger, other than shares held by
Summit Autonomous Inc. and its
subsidiaries, Alcon Holdings Inc.
ii
and its subsidiaries, and dissenting
stockholders who perfect their
dissenters' rights, will, by virtue
of the merger and without any further
action on the part of the holder of
such share, automatically be
converted into the right to receive
$19.00 in cash, without interest.
After the consummation of the merger,
you will have no continuing equity
interest in, and will not share in
future earnings, dividends or growth,
if any, of Summit Autonomous Inc.
RECOMMENDATION OF THE After an evaluation of business,
BOARD OF DIRECTORS: financial and market factors and
consultation with its legal and
financial advisors, at a meeting of
the Board of Directors held on
May 26, 2000, prior to the
commencement and consummation of the
tender offer by Alcon Acquisition
Corp. and Alcon Holdings Inc., the
Board of Directors of Summit
Autonomous Inc. (all of whose members
were unaffiliated with Alcon Holdings
Inc. and Alcon Acquisition Corp. on
that date) determined that the merger
was fair to and in the best interests
of Summit Autonomous Inc. and its
stockholders, unanimously approved
the merger agreement and the
transactions contemplated thereby and
unanimously voted to recommend that
Summit Autonomous Inc. stockholders
approve the merger agreement. See
"The Merger and Related Transactions
- Recommendations of the Board of
Directors" and "The Merger and
Related Transactions - Reasons for
the Board of Directors'
Recommendations; Factors Considered".
OPINION OF FINANCIAL ADVISOR: On May 26, 2000, Chase Securities Inc.
("Chase H&Q", a division of Chase
Securities Inc.) delivered its written
opinion to the Board of Directors to
the effect that, as of such date, the
$19.00 per share in cash to be
received by Summit Autonomous Inc.
stockholders in the tender offer and
the merger was fair to such holders
from a financial point of view. The
full text of the written opinion of
Chase H&Q dated May 26, 2000, which
contains a description of procedures
followed, matters considered,
assumptions made and limitations on
the review
iii
undertaken by Chase H&Q in rendering
its opinion, is attached as Annex B to
this Information Statement. The
opinion of Chase H&Q does not
constitute a recommendation as to how
you should vote with respect to the
merger agreement. You should read the
opinion in its entirety. See "The
Merger and Related Transactions -
Opinion of Chase H&Q".
ALCON HOLDING INC. OWNERSHIP OF After consummation of the tender
SUMMIT AUTONOMOUS INC. COMMON STOCK: offer and the cashing out of certain
employee stock options by Summit
Autonomous Inc., Alcon Acquisition
Corp. owns 41.9 million shares of
Summit Autonomous Inc. common stock
(or approximately 89.2% of the
outstanding shares of Summit
Autonomous Inc. common stock). Alcon
Acquisition Corp. can approve the
merger agreement without the
affirmative vote of any other
stockholder of Summit Autonomous
Inc. as a result of its ownership of
Summit Autonomous Inc. common stock.
DISSENTERS' RIGHTS: Under Massachusetts law,
stockholders who do not vote in favor
of the merger agreement will be
entitled to exercise dissenters'
rights in connection with the merger.
Stockholders desiring to exercise
such dissenters' rights will have the
rights and duties and must follow the
procedures set forth in Sections 86
through 98 of the Massachusetts
Business Corporation Law. The full
text of these sections is attached to
this Information Statement as Annex
C. Stockholders who wish to exercise
dissenters' rights must carefully
follow the procedures described
therein and are urged to read Annex C
in its entirety. See Annex C.
METHOD OF ACCOUNTING: The merger will be accounted for under
the purchase method of accounting.
EFFECTIVE TIME: The merger will become effective
as of the date and time that the
Articles of Merger are filed with the
Secretary of State of The Commonwealth
of Massachusetts in accordance with the
Massachusetts Business Corporation Law,
which is expected to occur as soon as
practicable after the special
meeting.
iv
EXCHANGE OF CERTIFICATES: Pursuant to the merger agreement, Alcon
Acquisition Corp. will deposit with
ChaseMellon Shareholder Services,
L.L.C., $19.00 per share in cash, to
be paid with respect to the shares
outstanding immediately prior to the
effective time of the merger (other
than shares held by Summit Autonomous
Inc. and its subsidiaries, Alcon
Holdings Inc. and its subsidiaries, and
dissenting stockholders who perfect
their dissenters' rights). As soon as
reasonably practicable after the
effective time of the merger,
ChaseMellon Shareholder Services,
L.L.C. will send to each stockholder
of record, as of immediately prior to
the effective time of the merger, a
letter of transmittal and detailed
instructions specifying the
procedures to be followed in
surrendering certificates. SHARE
CERTIFICATES SHOULD NOT BE FORWARDED
TO CHASEMELLON SHAREHOLDER SERVICES,
L.L.C. UNTIL RECEIPT OF THE LETTER OF
TRANSMITTAL. Upon the surrender of a
share certificate, ChaseMellon
Shareholder Services, L.L.C. will
issue to the surrendering holder a
check representing an amount of cash
equal to $19.00 per share of common
stock formerly represented by the
share certificates surrendered to
ChaseMellon Shareholder Services,
L.L.C.
CONDITIONS TO THE MERGER: The consummation of the merger is
subject only to the following
conditions:
o Summit Autonomous Inc. stockholders
shall have approved the merger
agreement by an affirmative vote of
the holders of two-thirds of the
outstanding shares;
o any consents, approvals and filings
under any foreign antitrust law,
the absence of which would prohibit
the consummation of the merger,
shall have been obtained or made;
and
o no legal restraint or prohibition
preventing the consummation of the
merger shall be in effect.
All other conditions to the merger have
been satisfied.
v
TERMINATION AND AMENDMENT The merger agreement may be
OF THE MERGER AGREEMENT: terminated at any time prior to
the effective time of the merger by,
among other things, the mutual
agreement of the parties or, if a
governmental entity takes any action
that prohibits the merger and such
action becomes final and
nonappealable, by either Summit
Autonomous Inc. or Alcon Holdings
Inc. acting independently. The merger
agreement may be amended by the
parties at any time, but after the
merger agreement has been approved by
the stockholders, no amendment may be
made which by law requires further
approval of the stockholders without
obtaining such approval.
U.S. FEDERAL INCOME TAX If the merger is consummated, the
CONSEQUENCES: exchange of shares by a holder
for cash pursuant to the merger will
be a taxable transaction under the
Internal Revenue Code of 1986, as
amended. Because of the complexities of
the tax laws, you are advised to
consult your own tax advisors
concerning the applicable Federal,
state, local, foreign and other tax
consequences resulting from the merger.
REGULATORY AND OTHER APPROVALS: There are no U.S. Federal or state
regulatory requirements which remain to
be complied with in order to consummate
the merger (other than the filing of
Articles of Merger with the Secretary
of State of The Commonwealth of
Massachusetts).
SOURCE AND AMOUNT OF FUNDS: The total amount of funds required by
Alcon Acquisition Corp. to purchase all
shares tendered pursuant to and to
pay all related fees and expenses in
connection with the tender offer was
approximately $797 million. The
amount of funds required by Summit
Autonomous Inc. to make all payments
to participants in Summit Autonomous
Inc. stock option plans pursuant to
the merger agreement was
approximately $39 million. The total
amount of funds required by Alcon
Acquisition Corp. to consummate and
to pay all related fees and expenses
in connection with the merger is
estimated to be approximately $104
million. Alcon Acquisition Corp.
plans to obtain all funds needed for
the merger through capital
contributions or intercompany
advances from Alcon Holdings Inc.
Such funds will be
vi
made available to Alcon Holdings Inc.
through intercompany advances from
Nestle S.A. or an affiliate of Nestle
S.A.
vii
TABLE OF CONTENTS
SUMMARY TERM SHEET.......................................................... i
The Special Meeting..................................................... i
The Parties............................................................. ii
The Merger and Related Transactions..................................... ii
INTRODUCTION................................................................ 1
Information Statement................................................... 1
Securities.............................................................. 1
QUESTIONS AND ANSWERS ABOUT THE MERGER...................................... 1
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION................. 3
THE SPECIAL MEETING......................................................... 3
General Information.................................................... 3
Purpose of the Special Meeting......................................... 4
Record Date............................................................ 4
Vote Required to Approve the Merger Agreement.......................... 4
THE PARTIES................................................................. 4
Summit Autonomous Inc.............................................. 4
Alcon Acquisition Corp............................................. 4
Alcon Holdings Inc................................................. 4
THE MERGER AND RELATED TRANSACTIONS......................................... 5
General............................................................ 5
Conversion of Securities........................................... 5
Vote Required to Approve the Merger................................ 6
Recommendations of the Company Board of Directors.................. 6
Background of the Merger........................................... 6
Reasons for the Board of Directors'
Recommendations; Factors Considered.............................. 8
Opinion of Chase H&Q............................................... 10
Certain Company Projections........................................ 15
Change of Control.................................................. 16
Conditions to the Merger........................................... 16
Termination of the Merger Agreement................................ 17
Takeover Proposals................................................. 17
Fees and Expenses.................................................. 18
Board of Directors................................................. 19
Employee Benefits.................................................. 20
Reasonable Efforts; Notification................................... 20
Representations and Warranties..................................... 21
Procedure for Termination, Amendment, Extension or Waiver.......... 21
Rights Agreement................................................... 21
The Confidentiality Agreement...................................... 21
Plans for the Company.............................................. 22
Certain U.S. Federal Income Tax Consequences....................... 22
Method of Accounting............................................... 23
Regulatory and Other Approvals..................................... 23
Source and Amount of Funds......................................... 23
DISSENTERS' RIGHTS.......................................................... 23
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT................. 24
INTERESTS OF CERTAIN PERSONS IN THE MERGER.................................. 25
Stock Options...................................................... 25
Severance Agreements............................................... 25
Indemnification and Insurance...................................... 26
viii
MISCELLANEOUS............................................................... 27
Other Matters...................................................... 27
Incorporation of Certain Documents by Reference.................... 28
Available Information.............................................. 28
Annex A ----- Agreement and Plan of Merger
Annex B ----- Opinion of Chase H&Q
Annex C ----- Dissenters' Rights
ix
INTRODUCTION
INFORMATION STATEMENT
This Information Statement ("Information Statement") pursuant to
Section 14(c) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), is being furnished by Summit Autonomous Inc. (the "Company")
to its stockholders in connection with the proposed merger of Alcon
Acquisition Corp. (the "Purchaser"), a wholly-owned subsidiary of Alcon
Holdings Inc. ("Parent"), with and into the Company (the "Merger") pursuant to
the Agreement and Plan of Merger dated as of May 26, 2000 (the "Merger
Agreement"). Following the effective time (the "Effective Time") of the
Merger, the Company will continue as the surviving corporation (the "Surviving
Corporation") and will be a wholly-owned subsidiary of Parent.
The Merger is the second and final step in the acquisition of the
Company by Parent. The first step was the tender offer by the Purchaser and
Parent to purchase all of the outstanding shares of the Company's common stock
(including the associated preferred stock purchase rights) at a purchase price
of $19.00 per share, net to the seller in cash, without interest (the "Offer
Price"), upon the terms and subject to the conditions set forth in the Offer
to Purchase dated June 5, 2000 (the "Offer to Purchase") and the related
Letter of Transmittal (together with the Offer to Purchase, the "Offer").
A copy of the Merger Agreement is filed herewith as Annex A and is
incorporated herein by reference.
SECURITIES
The title of the class of securities to which this Information
Statement relates is the common stock, par value $0.01 per share, of the
Company ("Company Common Stock"), including the associated preferred stock
purchase rights (the "Rights") issued pursuant to the Rights Agreements dated
as of March 28, 2000, as amended from time to time (the "Rights Agreement").
As of [INSERT DATE], there were [INSERT NUMBER] shares of Company Common Stock
("Shares") outstanding, of which 41,944,555 were owned by the Purchaser.
QUESTIONS AND ANSWERS ABOUT THE MERGER
WHAT WILL HAPPEN IN THE MERGER?
Upon consummation of the Merger, the Purchaser will be merged with
and into the Company and stockholders who surrender their Share certificates,
other than the Company and its subsidiaries, Parent and its subsidiaries, the
Purchaser and dissenting stockholders who perfect their dissenters' rights,
will receive a cash payment of $19.00, without interest, for each of their
Shares.
WHO WILL OWN THE COMPANY AFTER THE MERGER?
After the Merger, Parent will own all of the outstanding shares of
the Surviving Corporation.
WHY HAS THE MERGER BEEN PROPOSED?
The Merger is the second step in a two-part transaction, the purpose
of which is the acquisition by Parent of the entire equity interest in the
Company. The first step was a tender offer for all of the outstanding Shares,
which was consummated by the Purchaser on July 3, 2000. Pursuant to the Offer,
the Purchaser purchased 41,944,555 Shares and owns approximately 89.2% of the
outstanding Shares.
WHAT VOTE IS REQUIRED TO APPROVE THE MERGER AGREEMENT?
Approval of the Merger Agreement requires the affirmative vote of
holders of two-thirds of the Shares outstanding and entitled to vote at the
Special Meeting. THE PURCHASER ALREADY OWNS A SUFFICIENT NUMBER OF SHARES TO
ASSURE APPROVAL OF THE MERGER AGREEMENT AND WILL VOTE ALL OF ITS SHARES IN
FAVOR OF THE MERGER AGREEMENT. AS A RESULT, NO OTHER STOCKHOLDER WILL NEED TO
VOTE "FOR" THE PROPOSAL FOR THE MERGER AGREEMENT TO BE APPROVED. WE ARE NOT
ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
WHAT WILL I RECEIVE IN THE MERGER?
As a stockholder of the Company, you will receive $19.00 in cash,
without interest, for each Share that you validly surrender for payment. This
is the "Merger Consideration". For example, if you own 100 Shares, upon
consummation of the Merger, you will receive $1,900.00 in cash.
ARE DISSENTERS' RIGHTS AVAILABLE?
Yes. Under Massachusetts law, stockholders who do not vote in favor
of the merger agreement will be entitled to exercise dissenters' rights in
connection with the merger. Stockholders desiring to exercise such dissenters'
rights will have the rights and duties and must follow the procedures set
forth in Sections 86 through 98 of the Massachusetts Business Corporation Law.
The full text of these sections is attached to this Information Statement as
Annex C. Stockholders who wish to exercise dissenters' rights must carefully
follow the procedures described therein and are urged to read Annex C in its
entirety.
IF THE MERGER IS CONSUMMATED, WHEN CAN I EXPECT TO RECEIVE THE MERGER
CONSIDERATION FOR MY SHARES OF COMPANY COMMON STOCK?
As soon as reasonably practicable after the Merger is consummated,
you will receive detailed instructions regarding the surrender of your Share
certificates. You should not send your Share certificates to the Company or
anyone else until you receive these instructions. The Purchaser will send
payment of the Merger Consideration to you as promptly as practicable
following receipt of your Share certificates and other required documents.
WHEN DO YOU EXPECT THE MERGER TO BE COMPLETED?
We expect the Merger to be consummated as soon as reasonably
practicable after the date of the Special Meeting.
WHAT ARE THE TAX CONSEQUENCES OF THE MERGER TO ME?
The receipt of cash in exchange for Shares in the Merger by you will
be a taxable transaction for U.S. Federal income tax purposes. To review the
tax consequences to you in greater detail, see "Certain U.S. Federal Income
Tax Consequences". Your tax consequences will depend on your personal
situation. You should consult your tax advisors for a full understanding of
the tax consequences of the Merger to you.
WHAT DO I NEED TO DO NOW?
This Information Statement contains important information regarding
the Merger and the Merger Agreement, as well as information about the Company,
the Purchaser and Parent. It also contains important information about what
the Board of Directors of the Company (the "Board of Directors") considered in
evaluating the Offer and the Merger. If you wish to understand the Merger
fully, we urge you to read this Information Statement carefully, including its
2
Annexes. You may also want to review the documents referenced under "Where You
Can Find More Information".
TO WHOM CAN I TALK IF I HAVE QUESTIONS?
If you would like additional copies of this document, or if you would
like to ask any additional questions about the Merger, you should contact:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
44 Wall Street, 7th Floor
New York, NY 10005
Banks and Brokers Call: (917) 320-6235
All Others Please Call Toll-Free: (888) 509-7935
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
This Information Statement, including through the incorporation by
reference of certain documents and other statements made from time to time by
the Company, Parent, the Purchaser, or their respective affiliates or
representatives, contains certain forward-looking statements. Those forward-
looking statements include statements regarding the intent, belief or current
expectations of the Company, Parent and the Purchaser and members of their
respective management teams, as well as the assumptions on which such
statements are based. Such forward-looking statements are not guarantees of
future performance and involve risks and uncertainties, and actual results may
differ materially from those contemplated by such forward-looking statements.
Important factors currently known to management of the Company, Parent and the
Purchaser that could cause actual results to differ materially from those
contained in forward-looking statements include, but are not limited to, the
risks discussed herein and: (i) competition from other manufacturers and
vision correction technologies; (ii) delays in obtaining regulatory approvals;
(iii) challenges to patents owned and licensed by the Company affecting per
procedure revenues; (iv) adverse litigation results, (v) difficulties in
commercializing the LADARVision system; and (vi) dependence on sole source
suppliers. The Company, Parent and the Purchaser undertake no obligation to
update or revise forward-looking statements to reflect changes in assumptions,
the occurrence of unanticipated events, or changes in future operating results
over time.
THE SPECIAL MEETING
GENERAL INFORMATION
This Information Statement is being provided by the Board of
Directors in connection with the Special Meeting of the holders of the Shares.
The Special Meeting is scheduled to be held as follows:
[INSERT DATE]
[INSERT TIME], local time
[INSERT LOCATION]
PURPOSE OF THE SPECIAL MEETING
The Special Meeting is being held so that stockholders of the Company
may consider and vote upon a proposal to approve the Merger Agreement and to
transact any other business that is properly brought before the Special
Meeting or any postponement or adjournment thereof. Approval of the Merger
Agreement will constitute approval of the Merger and the other transactions
contemplated by the Merger Agreement.
3
If the Merger Agreement is approved and the Merger becomes effective,
the Purchaser will merge with and into the Company, and the Company will
become a wholly-owned subsidiary of Parent. You will receive $19.00 in cash
for each Share that you own. The Merger Consideration will not be paid in
exchange for Shares that are held in the treasury of the Company, owned by
Parent, its subsidiaries or the Purchaser or held by dissenting stockholders
who seek appraisal of the fair value of their Shares and comply with all of
the Massachusetts law procedures set forth in Annex C.
RECORD DATE
The Board of Directors has fixed the close of business on [INSERT
DATE] as the record date for determination of stockholders of the Company
entitled to notice of the Special Meeting and entitled to vote at the Special
Meeting. On the record date, there were [INSERT NUMBER] Shares outstanding
(excluding [INSERT NUMBER] treasury Shares), held by approximately [INSERT
NUMBER] holders of record.
VOTE REQUIRED TO APPROVE THE MERGER AGREEMENT
The holders of two-thirds of the outstanding Shares must approve the
Merger. You are entitled to one vote for each Share that you owned on the
record date. THE PURCHASER OWNS A SUFFICIENT NUMBER OF SHARES TO ASSURE
APPROVAL OF THE MERGER AGREEMENT AT THE SPECIAL MEETING AND WILL VOTE ALL OF
ITS SHARES IN FAVOR OF THE MERGER AGREEMENT. AS A RESULT, THE MERGER AGREEMENT
WILL BE APPROVED WITHOUT THE AFFIRMATIVE VOTE OF ANY OTHER STOCKHOLDER. WE ARE
NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
THE PARTIES
SUMMIT AUTONOMOUS INC.
The Company is a Massachusetts corporation that is engaged in the
manufacture and supply of excimer laser systems and related products used to
perform procedures that correct common refractive vision disorders such as
nearsightedness, farsightedness and astigmatism.
The principal executive offices of the Company are located at 21
Hickory Drive, Waltham, Massachusetts 02451. The telephone number is (781)
890-1234.
ALCON ACQUISITION CORP.
The Purchaser, a Massachusetts corporation that is a wholly-owned
subsidiary of Parent, was organized to acquire the Company and has not
conducted any unrelated activities since its organization. All outstanding
shares of capital stock of the Purchaser are owned by Parent.
The principal executive offices of the Purchaser are located at 6201
South Freeway, Fort Worth, Texas 76134-2099. The telephone number is (817)
293-0450.
ALCON HOLDINGS INC.
Parent is a Delaware corporation and is a holding company. Parent's
principal operating subsidiary is Alcon Laboratories, Inc., which is engaged
in the business of researching, developing, manufacturing and marketing
ophthalmic products including surgical instruments and accessory products,
intraocular lenses, prescription drugs and contact lens care solutions.
The principal executive offices of Parent are located at 6201 South
Freeway, Fort Worth, Texas 76134-2099. The telephone number is (817) 293-0450.
4
Parent is an indirect wholly-owned subsidiary of Nestle S.A., a Swiss
corporation ("Nestle"). Nestle's subsidiaries manufacture and sell food and
beverage products throughout the world, engage in research and development
activities, manufacture and sell cosmetic products, and develop, manufacture
and sell pharmaceutical products. The address of Nestle's principal office is
Avenue Nestle 55, CH-1800 Vevey, Switzerland.
THE MERGER AND RELATED TRANSACTIONS
GENERAL
The following summary of the Merger Agreement is qualified in its
entirety by reference to the Merger Agreement, a copy of which is attached as
Annex A hereto. You should read the Merger Agreement in its entirety if you
would like a more complete description of the matters summarized below.
The Merger Agreement provides that, following the satisfaction or
waiver of the conditions described below under "Conditions to the Merger", the
Purchaser will be merged with and into the Company, with the Company being the
surviving corporation.
CONVERSION OF SECURITIES
As of the effective time of the Merger (the "Effective Time"),
without any further action on the part of the Purchaser, the Company or
holders of securities of the Purchaser or the Company:
o Each issued and outstanding share of common stock of the
Purchaser will be converted into a number of shares of common
stock of the Surviving Corporation equal to the number of
Shares outstanding immediately prior to the Effective Time
(excluding any Shares that are owned by any subsidiary of the
Company or Parent other than the Purchaser) divided by 1,000,
rounded up to the next whole share;
o Each Share that is owned directly by the Company, Parent or the
Purchaser will be cancelled and no consideration will be
delivered for any such Share;
o Each Share that is owned by any subsidiary of the Company or
Parent (other than the Purchaser) will be converted into one
share of common stock of the Surviving Corporation;
o Each other Share issued and outstanding prior to the Effective
Time (other than Shares as to which dissenters' rights have
been perfected) will be converted into the right to receive
$19.00 in cash, without interest. These Shares will no longer
be outstanding and will automatically be cancelled and retired
and each holder of a certificate formerly representing any of
these Shares shall cease to have any rights except the right to
receive the Merger Consideration, less any applicable
withholding taxes, upon surrender of the Share certificate that
formerly evidenced Shares; and
o Shares of Company Common Stock as to which dissenters' rights
have been properly perfected will be converted into the right
to receive from the Surviving Corporation the fair value of
such Shares in accordance with Sections 86 through 98 of the
Massachusetts Business Corporation Law. In no event will
dissenters be entitled to any on-going interest in the
Surviving Corporation.
5
As a result of the actions described above, at the Effective Time,
the Company will become a wholly-owned subsidiary of Parent.
VOTE REQUIRED TO APPROVE THE MERGER
The Massachusetts Business Corporation Law requires, among other
things, that the adoption of the Merger Agreement must be approved by the
Board of Directors and approved by the holders of two-thirds of the Company's
outstanding voting securities. The Board of Directors has approved the Offer,
the Merger and the Merger Agreement; consequently, the only additional action
of the Company necessary to effect the Merger is approval of the Merger
Agreement by the Company's stockholders. All Shares owned by Parent or the
Purchaser will be voted in favor of the approval of the Merger Agreement.
Because the Purchaser acquired more than two-thirds of the outstanding Shares
pursuant to the Offer, it has sufficient voting power to effect the Merger
without the affirmative vote of any other stockholder of the Company.
RECOMMENDATIONS OF THE COMPANY BOARD OF DIRECTORS
At a meeting held on May 26, 2000, the Board of Directors (i)
approved the Merger Agreement, the Offer, the Merger and the other
transactions contemplated by the Merger Agreement, (ii) determined that the
terms of the Offer, the Merger and the other transactions contemplated by the
Merger Agreement were fair to and in the best interests of the Company and its
stockholders, (iii) recommended that the Company's stockholders accept the
Offer and tender their Shares pursuant to the Offer and (iv) recommended that
the Company's stockholders approve the Merger Agreement.
BACKGROUND OF THE MERGER
For the purposes of this Section references to Parent include Alcon
Laboratories, Inc., Parent's principal operating subsidiary. From time to time
during 1999, officers of Parent discussed with officers of the Company
potential joint business arrangements, including a business combination.
During the summer of 1999 the Company was approached by a third party
concerning a possible acquisition of the Company. As discussions with the
third party progressed, the Company instructed its financial advisor to
identify and contact other possible bidders. In September and October 1999,
the third party conducted due diligence and the Company's financial advisor
and the third party's financial advisor commenced discussions with respect to
a possible transaction between the parties.
On November 4, 1999, the Company's Board of Directors met to discuss
a preliminary proposal for an acquisition of the Company by the third party.
The Board of Directors instructed the Company's financial advisor to negotiate
specific terms for a potential transaction.
In mid November 1999, the Company's financial advisor and the third
party's financial advisor had several discussions, after which the Company's
financial advisor was advised by the third party's financial advisor that
mutually satisfactory terms between the parties would not likely be reached.
The Company's financial advisor maintained contact with the third party's
financial advisors, but ceased active negotiation.
During such period, the Company's financial advisor had identified
Parent as a potential interested party and, on October 8, 1999, contacted
Parent to determine if it was interested in acquiring the Company. The
Company's financial advisor contacted several other parties, none of which
expressed an interest in making a bid for the Company. On November 5, 1999,
Parent and the Company entered into a confidentiality agreement covering
non-public information regarding the Company to be furnished to Parent.
6
From November 1999 through March 2000, there were a number of
meetings and conversations between the managements of Parent and the Company
and the financial advisors to Parent and the Company regarding a possible
acquisition of the Company. During this period representatives of Parent
conducted a due diligence investigation of the Company and discussed their
analysis of the valuation of the Company with the Company representatives.
On April 6, 2000, Mr. Timothy R.G. Sear, President and Chief
Executive Officer of Parent, sent a letter to Mr. Robert J. Palmisano, Chief
Executive Officer of the Company, proposing to acquire all the outstanding
Shares for $15 per Share in cash, which included a draft of a proposed form of
the Merger Agreement. The letter stated that the proposal was conditioned on,
among other things, Parent's completion of certain additional due diligence.
Shortly thereafter, the financial advisor to the Company informed the
financial advisor to Parent that Parent's proposed price was unacceptable and
that the Company would not review the draft of the proposed Merger Agreement.
On April 13, 2000, Mr. Sear sent a letter to Mr. Palmisano expressing
disappointment in the Company's response to Parent's proposal and suggesting
that the parties meet to discuss a potential transaction between Parent and
the Company.
On April 14, 2000, Mr. Palmisano sent a letter to Mr. Sear suggesting
a meeting in Florida to determine whether the parties could agree on a
transaction at an appropriate valuation.
On April 19, 2000, Mr. Sear and a representative of Parent's
financial advisor met with Mr. Palmisano and a representative of the Company's
financial advisor in Miami, Florida, to discuss the potential market for the
Company's products and the valuation of the Company. During the meeting, Mr.
Palmisano indicated that the Company's Board of Directors believed the Company
was worth significantly more than $15 per Share.
On April 28, 2000, Mr. Palmisano sent a letter to Mr. Sear providing
additional information regarding the potential market for the Company's
products.
During April 2000, representatives of Parent had several meetings
with representatives of the Company to discuss various aspects of the Company,
including the potential market for the Company's products, the Company's
financial projections, intellectual property and microkeratome technology.
On May 3, 2000, counsel for the Company provided to counsel for
Parent their initial comments on the draft of the proposed form of the Merger
Agreement.
On May 9, 2000, Mr. Sear sent a letter to Mr. Palmisano stating that,
following the additional due diligence by Parent, Parent was increasing its
proposed price to acquire the Company to $16.50 per Share.
On May 11, 2000, Mr. Palmisano and Mr. Sear had a telephone
conversation in which Mr. Palmisano stated that the Board of Directors had
rejected Parent's proposal of $16.50 per Share. Mr. Palmisano stated that the
Company's Board would not accept less than $19 per Share.
As discussions were progressing with Parent, the financial advisor to
the third party which had expressed an interest in a transaction with the
Company in the summer and fall of 1999 had maintained intermittent contact
with the Company's financial advisor. During the week of May 15, 2000, the
Company's financial advisor told the third party's financial advisor that if
the third party was interested in pursuing a transaction with the Company, it
needed to make a proposal promptly. The third party's financial advisor
advised the Company's financial advisor that it did not believe the third
7
party would be able to make a competitive proposal, but that it would contact
the Company's financial advisor if that was not the case. As of this date,
neither the Company nor the Company's financial advisor has been contacted by
the third party or its financial advisor.
From May 3 through May 25, 2000, representatives of Parent and the
Company, including their financial advisors and counsel, had a number of
discussions regarding the terms of the proposed Merger Agreement.
On May 19, 2000, the Board of Directors, the Company's financial
advisor and the Company's counsel met to discuss the status of the discussions
with the third party and with Parent. After presentations by the Company's
financial advisor and the Company's counsel, the Board of Directors discussed
the terms and conditions of the proposed Merger Agreement.
On May 24, 2000, Parent's financial advisor contacted the Company's
financial advisor to determine whether a price of $18.50 per Share would be
acceptable. The Company's financial advisor stated that a price below $19 per
Share would not be acceptable.
On May 25, 2000, Parent's financial advisor contacted the Company's
financial advisor to state that Parent would be willing to proceed with a
transaction at $19 per Share. Beginning in the evening of May 25, 2000, and
continuing on May 26, 2000, representatives of Parent and the Company and
their respective counsel negotiated the final terms of the Merger Agreement.
On May 26, 2000 the Board of Directors approved the proposed Merger
Agreement and the parties executed the Merger Agreement. Parent and the
Company then issued a joint press release announcing the transaction.
On June 5, 2000, in accordance with the Merger Agreement, the
Purchaser commenced the Offer.
On June 9, 2000, Nestle and the Company filed, pursuant to the Merger
Agreement, a Notification and Report Form for Certain Mergers and
Acquisitions, which was required to be submitted under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), with the
Department of Justice and the Federal Trade Commission. On June 24, 2000, the
applicable waiting period under the HSR Act expired.
At 12:00 midnight, New York City time, on Friday, June 30, 2000, the
Offer expired. On July 3, 2000, the Purchaser accepted for payment all Shares
that were validly tendered and not withdrawn pursuant to the Offer. On July 7,
2000, the Purchaser was informed by ChaseMellon Shareholder Services, L.L.C.
that a total of 41,944,555 Shares, representing approximately 89.2% of the
outstanding Shares, had been validly tendered and not withdrawn.
On July 5, 2000, by written consent in lieu of a meeting of the Board
of Directors: (i) the Company accepted the resignations of the following
directors: Jeffrey A. Bernfeld, C. Glen Bradley, Richard F. Miller and John A.
Norris; and (ii) the following four designees of Parent were elected to the
Board: Timothy R. G. Sear, C. Allen Baker, Charles E. Miller, Sr., and Gerald
D. Cagle.
REASONS FOR THE BOARD OF DIRECTORS' RECOMMENDATIONS; FACTORS CONSIDERED
On May 26, 2000, the Board of Directors (all of whose members were
unaffiliated with Alcon Holdings Inc. and Alcon Acquisition Corp. on that
date) approved the Merger Agreement and the transactions contemplated thereby,
including the Offer and the Merger, and recommended that all holders of Shares
8
accept the Offer and tender their Shares pursuant to the Offer, approve the
Merger and approve and adopt the Merger Agreement. In taking such action, the
Board of Directors considered a number of factors including, but not limited
to, the following:
1. The historical market prices, price to earnings ratios and
other multiples, recent trading activity and trading range of
the Shares, including the fact that the Offer Price represented
(i) a premium of approximately 49.8% over the $12.6875 closing
price of the Shares on NASDAQ on May 25, 2000, the last full
trading day prior to the announcement of the Offer and the
Merger and (ii) a premium of approximately 169% over the
$7.0625 closing price of the Shares on NASDAQ on February 28,
2000, the date in the last twelve months on which the Shares
had their lowest closing price.
2. The competitive challenges associated with going forward as a
"stand alone entity" given the entry, or likely entry, into the
laser vision correction industry of larger ophthalmic
enterprises able to sell refractive products with other
ophthalmic products and services.
3. The fairness opinion of Chase H&Q delivered at the meeting of
the Board of Directors held on May 26, 2000. The full text of
the written opinion dated as of May 26, 2000 of Chase H&Q,
which contains a description of the procedures followed,
matters considered, assumptions made and limitations on the
review undertaken by Chase H&Q in rendering its opinion, is
attached as Annex B hereto. Holders of Shares are urged to read
such opinion carefully in its entirety.
4. The financial condition, operating results and forecasts of the
Company.
5. The fact that no other party had presented the Company with an
acquisition proposal that would be more favorable to the
Company and its stockholders than the Offer and the Merger.
6. The fact that the Offer and the Merger provide for a prompt
cash tender offer for all Shares to be followed by the Merger
for the same consideration, thereby enabling the Company's
stockholders, at the earliest possible time, to obtain the
benefits of the transaction in exchange for their Shares.
7. The fact that Parent's and the Purchaser's obligations under
the Offer were not subject to any financing condition, and the
financial strength of Parent.
8. The terms and conditions of the Merger Agreement, including the
parties' representations, warranties and covenants, the
conditions to their respective obligations, the limited ability
of Parent and the Purchaser to terminate the Offer or the
Merger Agreement and the provision for payment of all cash with
no financing condition.
9. The extensive arms-length negotiations between the Company and
Parent that resulted in the $19.00 per Share price.
10. The Merger Agreement permitted the Board of Directors, prior to
the acceptance for payment of Shares pursuant to the Offer, in
order to comply with its fiduciary duties, to furnish
information and enter into discussions and negotiations, in
connection with an unsolicited acquisition proposal that was
reasonably likely to result in a superior proposal and to
withdraw its recommendation of the Merger in favor of a
superior unsolicited acquisition proposal.
9
11. The Merger Agreement permitted the Company Board, prior to the
acceptance for payment of Shares pursuant to the Offer, in the
exercise of its fiduciary duties, to terminate the Merger
Agreement in favor of a superior acquisition proposal,
provided, that prior to such termination, the Company must have
paid Parent a fee of $32.5 million.
The foregoing discussion of information and factors considered and
given weight by the Board of Directors is not intended to be exhaustive, but
is believed to include all of the material factors, both positive and
negative, considered by the Board of Directors. In view of the variety of
factors considered in connection with its evaluation of the Offer and the
Merger, the Board of Directors did not find it practicable to, and did not,
quantify or otherwise assign relative weights to the specific factors
considered in reaching its determinations and recommendations. In addition,
individual members of the Board of Directors may have given different weights
to different factors.
OPINION OF CHASE H&Q
At the May 26, 2000 meeting of the Board of Directors, Chase H&Q
delivered its oral opinion, subsequently confirmed in writing in an opinion
dated May 26, 2000, to the Board of Directors, to the effect that, as of that
date and based upon the assumptions made, matters considered and limits of
review set forth in its opinion, the consideration of $19.00 per share in cash
to be received by the Company's stockholders in the Offer and the Merger was
fair to such stockholders from a financial point of view.
The full text of Chase H&Q's written opinion dated May 26, 2000,
which sets forth the assumptions made, matters considered and certain
limitations on the scope of review undertaken by Chase H&Q, is attached as
Annex B to this Information Statement. Stockholders are urged to read this
opinion in its entirety. Chase H&Q's opinion was provided for the use and
benefit of the Board of Directors in its evaluation of the Offer and the
Merger, was directed only to the fairness to the Company's stockholders of the
consideration to be received in the Offer and the Merger from a financial
point of view, and does not constitute a recommendation as to how any
stockholder should vote with respect to the Merger or any other matters
relating to the Merger. This summary of Chase H&Q's opinion is qualified in
its entirety by reference to the full text of its opinion, which is attached
to this Information Statement as Annex B.
In arriving at its opinion, Chase H&Q, among other things:
o reviewed the Merger Agreement;
o reviewed certain publicly available business and financial
information Chase H&Q deemed relevant relating to the Company
and the industries in which it operates;
o reviewed certain internal non-public financial and operating
data and forecasts provided to Chase H&Q by the management of
the Company relating to its business;
o discussed, with members of the senior management of the
Company, the Company's operations, historical financial
statements and future prospects;
o compared the financial and operating performance of the Company
with publicly available information concerning certain other
companies Chase H&Q deemed comparable and reviewed the relevant
historical stock prices of the Company Common Stock and certain
publicly traded securities of such other companies;
10
o compared the proposed financial terms of the Merger with the
financial terms of certain other transactions Chase H&Q deemed
relevant; and
o made such other analyses and examinations as Chase H&Q deemed
necessary or appropriate.
In rendering its opinion, Chase H&Q assumed and relied upon, without
assuming any responsibility for verification, the accuracy and completeness of
all of the financial and other information provided to, discussed with or
reviewed by or for Chase H&Q, or publicly available, for purposes of its
opinion, and further relied upon the assurance of the management of the
Company that they were not aware of any facts that would make such information
inaccurate or misleading. Chase H&Q neither made nor obtained any independent
evaluations or appraisals of the assets or liabilities of the Company, nor did
Chase H&Q conduct a physical inspection of the properties or facilities of the
Company. Chase H&Q assumed that the financial forecasts provided to or
discussed with Chase H&Q by the Company had been reasonably determined on
bases reflecting the best currently available estimates and judgments of the
management of the Company as to the future financial performance of the
Company. Chase H&Q expressed no view as to such forecast or projection
information or the assumptions on which they were based.
For purposes of rendering its opinion, Chase H&Q assumed that, in all
respects material to its analysis, the representations and warranties of each
party contained in the Merger Agreement were true and correct, that each party
would perform all of the covenants and agreements required to be performed by
it under the Merger Agreement and that all conditions to the consummation of
the Offer and the Merger would be satisfied without waiver thereof. Chase H&Q
also assumed that the definitive Merger Agreement would not differ in any
material respects from the draft thereof furnished to Chase H&Q.
Chase H&Q's opinion was necessarily based on market, economic and
other conditions as they existed and could be evaluated on the date of its
opinion. Chase H&Q's opinion was limited to the fairness, from a financial
point of view, to the Company's stockholders of the consideration to be
received in the Offer and the Merger, and Chase H&Q expressed no opinion as to
the merits of the underlying decision by the Company to engage in the Merger.
The following is a summary of certain financial and comparative
analyses performed by Chase H&Q in arriving at its opinion. Some of these
summaries of financial analyses include information presented in tabular
format. In order to understand fully the financial analyses used by Chase H&Q,
the tables must be read together with the text of each summary. The tables
alone do not constitute a complete description of the financial analyses.
COMPARABLE PUBLIC COMPANIES ANALYSIS. Using publicly available
information, Chase H&Q compared certain financial and operating information
and ratios for the Company with corresponding financial and operating
information and ratios for the following two groups of companies in lines of
business believed to be generally comparable to those of the Company, as
follows:
Group One
o Allergan, Inc.
o Bausch & Lomb Incorporated
o Visx, Incorporated
o The Cooper Companies, Inc.
o Sunrise Technologies International, Inc.
o STAAR Surgical Company
o KeraVision, Inc.
o LaserSight Incorporated
11
Group Two
o Medtronic, Inc.
o Baxter International Inc.
o Guidant Corporation
o Boston Scientific Corporation
o St. Jude Medical, Inc.
o ArthroCare Corporation
o Novoste Corporation
o Eclipse Surgical Technologies, Inc.
The analysis for Group One indicated that:
o the ratio of the total enterprise value, meaning the market
value of equity plus total debt, minority interest and
preferred stock minus cash, to projected revenue ranged from
approximately: 2.2x to 7.2x for 2000, with a mean of
approximately 4.2x and a median of approximately 4.0x; and
2.0x to 4.7x for 2001, with a mean of approximately 3.4x and
a median of approximately 3.5x;
o the ratio of the total enterprise value to tax effected
earnings before interest and taxes, which is referred to as
EBIT, ranged from approximately: 13.1x to 51.6x for the last
twelve month period, with a mean of approximately 28.2x and
a median of approximately 24.0x; and 18.4x to 46.0x for 2000
(estimated), with a mean of approximately 28.8x and median
of approximately 23.5x; and
o the ratio of the share price, based on the closing price per
share on May 18, 2000, to projected earnings per share
ranged from approximately: 16.7x to 83.6x for 2000, with a
mean of approximately 37.2x and a median of approximately
25.8x; 4.9x to 50.8x for 2001, with a mean of approximately
25.2x and a median of approximately 21.0x; and 11.6x to
28.1x for 2002, with a mean of approximately 19.9x and a
median of approximately 16.8x.
The analysis for Group Two indicated that:
o the ratio of the total enterprise value to projected revenue
ranged from approximately: 2.8x to 12.3x for 2000, with a
mean of approximately 6.4x and a median of approximately
4.1x; and 2.6x to 10.6x for 2001, with a mean of
approximately 5.6x and median of approximately 5.0x;
o the ratio of the total enterprise value to tax effected EBIT
ranged from approximately: 25.8x to 74.4x for the last
twelve month period, with a mean of approximately 40.7x and
a median of approximately 30.1x; and 24.1x to 60.6x for 2000
(estimated), with a mean of approximately 34.8x and median
of approximately 27.1x; and
o the ratio of the share price, based on the closing price per
share on May 18, 2000, to projected earnings per share
ranged from approximately: 19.6x to 57.3x for 2000, with a
mean of approximately 35.1x and a median of approximately
29.2x; 16.7x to 49.5x for 2001, with a mean of approximately
30.0x and a median of approximately 29.4x; and 14.0x to
40.6x for 2002, with a mean of approximately 26.3x and a
median of approximately 24.6x.
Based on these analyses, the implied equity value per Share ranged
from approximately $12.00 to $18.50.
PRECEDENT TRANSACTIONS ANALYSIS. Chase H&Q reviewed certain publicly
available information regarding selected business combinations in the medical
12
devices industry. The comparable transaction and the month in which each
transaction was announced were as follows:
o Bausch & Lomb Incorporated/Wesley Jessen VisionCare, Inc.
(March 2000)
o Wesley Jessen VisionCare, Inc./Ocular Sciences, Inc. (March
2000)
o Biomet, Inc./Implant Innovations Inc. (August 1999)
o Guidant Corporation/Cardiothoracic Systems, Inc. (August 1999)
o Medtronic, Inc./Xomed Surgical Products, Inc. (August 1999)
o Abbott Laboratories/Perclose, Inc. (July 1999)
o Fox Paine & Co./Maxxim Medical, Inc. (June 1999)
o St. Jude Medical, Inc./Angio-Seal (a division of Tyco
International Ltd.) (February 1999)
o Medtronic, Inc./Arterial Vascular Engineering, Inc. (November
1998)
o Maxxim Medical, Inc./Circon Corporation (November 1998)
o Medtronic, Inc./Sofamor Danek Group, Inc. (November 1998)
o Summit Technology, Inc./Autonomous Technologies Corporation
(October 1998)
o General Electric Company/Marquette Medical Systems, Inc.
(September 1998)
o Guidant Corporation/Sulzer Intermedics and Sulzer Osypka
(divisions of Sulzer Medica Ltd.) (September 1998)
o Guidant Corporation/InControl, Inc. (August 1998)
o Stryker Corporation/Howmedica (a division of Pfizer, Inc.)
(July 1998)
o Johnson & Johnson/Depuy, Inc. (July 1998)
o Arterial Vascular Engineering, Inc./C.R. Bard, Inc. (coronary
cath lab business) (July 1998)
o Medtronic, Inc./Physio-Control International Corporation (June
1998)
o Tyco International Ltd./United States Surgical Corporation (May
1998)
o Sulzer Medica Ltd./Spine-Tech, Inc. (December 1997)
o Respironics, Inc./Healthdyne Technologies, Inc. (November 1997)
o Bausch & Lomb Incorporated/Storz Instrument (October 1997)
o Bausch & Lomb Incorporated/Chiron Vision Corporation (October
1997)
o Beckman Instruments, Inc./Coulter Corporation (September 1997)
The analysis indicated that:
o the transaction value as a multiple of last twelve months
revenue ranged from approximately 1.3x to 14.9x, with a mean of
approximately 4.6x and a median of approximately 2.5x;
o the transaction price as a multiple of estimated one-year
forward earnings per share ranged from approximately 8.2x to
47.2x, with a mean of approximately 23.8x and a median of
approximately 22.1x;
o premiums paid relative to the closing price per share one day
prior to the announcement date ranged from approximately 3% to
67%, with a mean of approximately 25.8% and a median of
approximately 19.6%;
o premiums paid relative to the closing price per share four
weeks prior to the announcement date ranged from approximately
4% to 118%, with a mean of approximately 47.5% and a median of
approximately 36.6%;
o premiums paid relative to the closing price per share 90 days
prior to the announcement date ranged from approximately
negative 11% to 95%, with a mean of approximately 29.2% and a
median of approximately 28.6%.
13
Based on this analysis, the implied equity value per Share using the
transaction multiples method ranged from approximately $10.50 to $21.00, and
using the premiums paid method the implied equity value per Share ranged from
approximately $13.50 to $24.00.
DISCOUNTED CASH FLOW ANALYSIS. Chase H&Q performed a discounted cash
flow analysis for the Company using financial forecasts provided by the
Company to calculate a present value of projected unlevered free cash flows
for the Company. For this analysis, Chase H&Q discounted the estimated
unlevered free cash flows using a range of discount rates from 25% to 35%.
Chase H&Q added to the present values of the cash flows the terminal value of
tax-effected EBIT in the year 2006, and discounted the terminal value using
the range of discount rates as was used to discount the unlevered free cash
flows. The terminal value was calculated using the terminal multiple method,
assuming a range of terminal multiples of one-year forward tax effected EBIT
from 10.0x to 20.0x. Based on this analysis, the implied equity value per
Share ranged from approximately $15.00 to $27.00.
The following is a summary of valuation ranges derived from Chase
H&Q's comparable public companies analysis, precedent transactions analysis
and discounted cash flow analysis, all as described above:
Method of Analysis Per Share Valuation Range
- --------------------- -------------------------
Comparable Public Companies Analysis $12.00 to $18.50
Precedent Transactions Analysis $13.50 to $24.00
(Premiums Paid)
Precedent Transactions Analysis $10.50 to $21.00
(Transaction Multiples)
Discounted Cash Flow Analysis $15.00 to $27.00
The summary set forth above does not purport to be a complete
description of the analyses performed by Chase H&Q in arriving at its opinion.
Arriving at a fairness opinion is a complex process not necessarily
susceptible to partial analysis or summary description. Chase H&Q believes
that its analyses must be considered as a whole and that selecting portions of
analyses and of the factors considered by it, without considering all such
factors and analyses, could create a misleading view of the processes
underlying its opinion. Chase H&Q did not assign relative weights to any of
its analyses in preparing its opinion. The matters considered by Chase H&Q in
its analyses were based on numerous macroeconomic, operating and financial
assumptions with respect to industry performance, general business and
economic conditions and other matters, many of which are beyond the Company's
control and involve the application of complex methodologies and educated
judgment. Any estimates incorporated in the analyses performed by Chase H&Q
are not necessarily indicative of actual past or future results or values,
which may be significantly more or less favorable than such estimates.
Estimated values do not purport to be appraisals and do not necessarily
reflect the prices at which businesses or companies may be sold in the future,
and such estimates are inherently subject to uncertainty. None of the
comparable companies used in the comparable public companies analysis
described above is identical to the Company, and none of the comparable
transactions used in the comparable transactions analysis described above is
identical to the Merger. Accordingly, an analysis of publicly traded
comparable companies and transactions is not mathematical; rather it involves
complex considerations and judgments concerning differences in financial and
operating characteristics of the comparable companies and other factors that
could affect the public trading value of the comparable companies or company
to which they are being compared.
14
The Board of Directors selected Chase H&Q to act as its financial
advisor on the basis of the reputation of Chase H&Q as an internationally
recognized investment banking firm with substantial expertise in transactions
similar to the Merger and because it is familiar with the Company and its
business. As part of its financial advisory business, Chase H&Q is continually
engaged in the valuation of businesses and their securities in connection with
mergers and acquisitions and valuations for estate, corporate and other
purposes. Chase H&Q has acted as financial advisor to the Board of Directors
in connection with the Merger and will receive a fee for its services, payment
of a significant portion of which was contingent upon the consummation of the
Offer. In the ordinary course of business, Chase H&Q or its affiliates may
trade in the debt and equity securities of the Company for its own account and
for the accounts of its customers and, accordingly, may at any time hold a
long or short position in such securities.
The terms of the engagement of Chase H&Q by the Board of Directors
are set forth in a letter dated October 15, 1999. Pursuant to the terms of the
letter agreement, the Company agreed to pay Chase H&Q a fee of $650,000 in
cash upon delivery of its opinion. Upon consummation of a sale of the Company,
the Company also agreed to pay to Chase H&Q a fee in cash on closing in an
amount equal to 0.45% of the aggregate consideration received by the Company's
stockholders (subject to a minimum fee of $3,000,000), against which any fees
previously paid by the Company will be credited. The Company has also agreed
to reimburse Chase H&Q for its reasonable out-of-pocket expenses, including,
without limitation, the reasonable fees and disbursements of its counsel. In
addition, the Company has also agreed to indemnify Chase H&Q against certain
liabilities and expenses arising out of its engagement.
CERTAIN COMPANY PROJECTIONS
During the course of discussions between representatives of Parent
and the Company, the Company provided Parent or its representatives with
certain non-public business and financial information about the Company. This
information included the following projections of total revenues, net income
and earnings per share for the Company for the years ended December 31, 2000
through 2005:
2000 2001 2002 2003 2004 2005
--------- --------- --------- --------- --------- --------
(in thousands, except per share amounts)
Total revenues...... $108,060 $146,468 $237,280 $295,093 $366,180 $457,680
Operating income.... 2,804 29,848 96,325 136,861 191,030 263,247
Net income.......... 3,553 20,303 61,438 87,852 123,213 170,425
Earnings per share.. $0.08 $0.44 $1.30 $1.83 $2.55 $3.52
The Company does not as a matter of course make public any
projections as to future performance or earnings, and the projections set
forth above are included in this Information Statement only because this
information was provided to Parent. The projections were not prepared with a
view to public disclosure or compliance with the published guidelines of the
Securities and Exchange Commission or the guidelines established by the
American Institute of Certified Public Accountants regarding projections or
forecasts. The projections do not purport to present operations in accordance
with generally accepted accounting principles, and the Company's independent
auditors have not examined or compiled the projections and accordingly assume
no responsibility for them. The Company's internal financial forecasts (upon
which the projections provided to Parent and the Purchaser were based in part)
are, in general, prepared solely for internal use and capital budgeting and
other management decisions and are subjective in many respects and thus
susceptible to interpretations and periodic revision based on actual
experience and business developments. The projections also reflect numerous
assumptions made by management of the Company, including assumptions with
respect to the market for the Company's products and services, general
business, economic, market and financial conditions and other matters,
including effective tax rates consistent with historical levels for the
Company and interest rates and the
15
anticipated amount of borrowings by the Company, all of which are difficult to
predict, many of which are beyond the Company's control, and none of which
were subject to approval by Parent or the Purchaser. Accordingly, there can be
no assurance that the assumptions made in preparing the projections will prove
accurate. It is expected that there will be differences between actual and
projected results, and actual results may be materially greater or less than
those contained in the projections. The inclusion of the projections herein
should not be regarded as an indication that any of Parent, the Purchaser, the
Company or their respective affiliates or representatives considered or
consider the projections to be a reliable prediction of future events, and the
projections should not be relied upon as such. None of Parent, the Purchaser,
the Company or any of their respective affiliates or representatives has made
or makes any representation to any person regarding the ultimate performance
of the Company compared to the information contained in the projections, and
none of them intends to update or otherwise revise the projections to reflect
circumstances existing after the date when made or to reflect the occurrence
of future events even in the event that any or all of the assumptions
underlying the projections are shown to be in error.
Financial information with respect to the Company and its
subsidiaries is included in the Company's annual report on Form 10-K for the
year ended December 31, 1999, its quarterly report on Form 10-Q for the
quarter ended March 31, 2000 and other documents filed by the Company with the
Securities and Exchange Commission. See "Incorporation of Certain Documents by
Reference" and "Available Information".
CHANGE OF CONTROL
At 12:00 midnight, New York City time, on Friday, June 30, 2000, the
Offer expired. On July 3, 2000, the Purchaser accepted for payment all Shares
that were validly tendered and not withdrawn pursuant to the Offer. On July 7,
2000, the Purchaser was informed by ChaseMellon Shareholder Services, L.L.C.
that a total of 41,944,555 Shares had been validly tendered and not withdrawn.
As a result, the Purchaser owns approximately 89.2% of the outstanding Shares.
See also "The Merger and Related Transactions - Background of the Merger", "-
Board of Directors", "- Stock Options", "- Employee Benefits" and "- Severance
Agreements".
CONDITIONS TO THE MERGER
Following the consummation of the Offer, the Merger Agreement
provides that the respective obligations of each party to effect the Merger
are subject to the satisfaction or waiver of certain remaining conditions,
including the following: (a) the Company's stockholders shall have approved
the Merger by an affirmative vote of the holders of two-thirds of the
outstanding Shares (the "Company Stockholder Approval"); (b) any consents,
approvals and filings under any foreign antitrust laws, the absence of which
would prohibit the consummation of the Merger, shall have been obtained or
made; (c) no statute, rule, regulation, executive order, decree, temporary
restraining order, preliminary or permanent injunction or other order enacted,
entered, promulgated, enforced or issued by any Governmental Entity (as
defined below under "- Termination of the Merger Agreement"), or other legal
restraint or prohibition (collectively, "Legal Restraints") preventing the
consummation of the Merger shall be in effect; provided that each of the
parties shall have used all reasonable efforts to prevent the entry of any
such injunction or other order and to appeal as promptly as possible any such
injunction or other order that may be entered.
16
TERMINATION OF THE MERGER AGREEMENT
The Merger Agreement may be terminated at any time prior to the
Effective Time, whether before or after adoption of the Merger Agreement by
the stockholders of the Company:
(a) by mutual written consent of Parent, the Purchaser and the
Company; or
(b) by either Parent or the Company:
(i) if any Federal, state, local or foreign government or any
court of competent jurisdiction, administrative agency or
commission or other governmental authority or
instrumentality, domestic or foreign (a "Governmental
Entity"), shall have issued an order, decree or ruling or
taken any other action permanently enjoining, restraining
or otherwise prohibiting the acceptance for payment of, or
payment for, the Shares pursuant to the Offer or the
Merger and such order, decree, ruling or other action
shall have become final and nonappealable; or
(ii) if, upon a vote at a duly held meeting to obtain the
Company Stockholder Approval, the Company Stockholder
Approval is not obtained; provided that Parent may not
terminate the Merger Agreement pursuant to this
termination provision if the Purchaser, Parent or any
other subsidiary of Parent shall not have voted its Shares
in favor of obtaining the Company Stockholder Approval.
TAKEOVER PROPOSALS
The Merger Agreement provides that the Company will not, nor will it
authorize or permit any of its subsidiaries to, nor will it authorize or
permit any director, officer or employee of, or any investment banker,
attorney or other advisor or representative of, the Company or any of its
subsidiaries to (i) directly or indirectly, solicit, initiate or encourage the
submission of any Takeover Proposal (as defined below), (ii) enter into any
agreement with respect to any Takeover Proposal or (iii) directly or
indirectly, participate in any discussions or negotiations regarding, or
furnish to any person any information with respect to, or take any other
action to facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Takeover Proposal.
However, prior to July 3, 2000, the date on which the Purchaser accepted
Shares for payment pursuant to the Offer, the Merger Agreement permitted the
Board of Directors, to the extent necessary to act in a manner consistent with
its fiduciary obligations, as determined in good faith by it after
consultation with outside counsel, in response to a Takeover Proposal that the
Board of Directors determined, in good faith after consultation with outside
counsel and Chase H&Q or another nationally recognized independent financial
advisor, was reasonably likely to lead to a Superior Proposal (as defined
below), that was unsolicited and that did not otherwise result from a breach
or a deemed breach of this provision, and subject to compliance with the
certain obligations to notify Parent, (x) furnish information with respect to
the Company to the person making such Takeover Proposal (and its
representatives) pursuant to a customary confidentiality agreement; and (y)
participate in discussions or negotiations with the person making such
Takeover Proposal (and its representatives) regarding such Takeover Proposal.
The Company did not receive any Takeover Proposal from a third party prior to
consummation of the Offer.
"Takeover Proposal" means (i) any proposal or offer for a merger,
consolidation, dissolution, recapitalization or other business combination
involving the Company or any significant subsidiary of the Company, (ii) any
17
proposal for the issuance by the Company of over 20% of its equity securities
as consideration for the assets or securities of another person or (iii) any
proposal or offer to acquire in any manner, directly or indirectly, over 20%
of the equity securities or consolidated total assets of the Company, in each
case other than pursuant to the Offer, the Merger and the other transactions
contemplated by the Merger Agreement.
"Superior Proposal" means any proposal made by a third party to
acquire substantially all the equity securities or assets of the Company,
pursuant to a tender or exchange offer, a merger, a consolidation, a
liquidation or dissolution, a recapitalization or a sale of all or
substantially all its assets, (i) on terms which the Board of Directors
determines in good faith to be superior from a financial point of view to the
holders of Shares to the Offer, the Merger and the other transactions
contemplated by the Merger Agreement (after consultation with the Company's
financial advisor, which shall be Chase H&Q or another nationally recognized
independent financial advisor), taking into account all the terms and
conditions of such proposal and the Merger Agreement (including any proposal
by Parent to amend the terms of the Offer, the Merger and the transactions
contemplated by the Merger Agreement) and (ii) that is reasonably capable of
being completed, taking into account all financial, regulatory, legal and
other aspects of such proposal.
The Merger Agreement further provides that, unless the Board of
Directors, after consultation with outside counsel, determines in its good
faith judgment that it is necessary to do so to fulfill its fiduciary
obligations, neither the Board of Directors nor any committee thereof may (i)
withdraw (or modify in a manner adverse to Parent or the Purchaser) or
publicly propose to withdraw (or modify in a manner adverse to Parent or the
Purchaser) the approval or recommendation by such Board of Directors or any
such committee of the Merger Agreement, the Offer or the Merger, (ii) approve
any letter of intent, agreement in principle, acquisition agreement or similar
agreement relating to any Takeover Proposal, or (iii) approve or recommend, or
publicly propose to approve or recommend, any Takeover Proposal. However,
prior to the consummation of the Offer, the Company was permitted to take the
actions set forth in clauses (ii) or (iii) of the preceding sentence if: (i)
the Board of Directors received a Superior Proposal, (ii) in light of such
Superior Proposal the Board of Directors determined in good faith, after
consultation with outside counsel, that it was necessary to withdraw or modify
its approval or recommendation of the Merger Agreement, the Offer or the
Merger in order to act in a manner consistent with its fiduciary duty under
applicable law, (iii) the Company notified Parent in writing of the
determinations described in clause (ii) above, (iv) at least three business
days following receipt by Parent of the notice referred to in clause (iii)
above, and taking into account any revised proposal made by Parent since
receipt of the notice referred to in clause (iii) above, such Superior
Proposal remained a Superior Proposal and the Board of Directors again made
the determinations referred to in clause (ii) above, (v) the Company was in
compliance with the provisions related to Takeover Proposals referenced above
(other than breaches that, individually and in the aggregate, were not
material and did not prejudice Parent's rights under the Merger Agreement),
(vi) the Company had previously paid the Termination Fee described below,
(vii) the Board of Directors concurrently approved, and the Company
concurrently entered into, a definitive agreement, providing for the
implementation of such Superior Proposal and (viii) Parent was not at such
time entitled to terminate the Merger Agreement pursuant to a Company breach
or failure to perform in any material respect any of its representations,
warranties or covenants contained in the Merger Agreement. The Company did not
receive a Superior Proposal or any other Takeover Proposal from a third party
prior to consummation of the Offer.
FEES AND EXPENSES
The Merger Agreement provides that, except as set forth below, all
fees and expenses incurred in connection with the Merger Agreement, the Offer,
the
18
Merger and the other transactions contemplated by the Merger Agreement shall
be paid by the party incurring such fees or expenses, whether or not the
Merger is consummated.
The Merger Agreement required the Company to pay to Parent a fee of
$32.5 million (the "Termination Fee") if: (i) the Merger Agreement was
terminated because the Offer expired without the Purchaser accepting Shares
for payment as a result of the failure of the condition set forth in paragraph
(d) of Exhibit A to the Merger Agreement; (ii) the Company terminated the
Merger Agreement in order to enter into a definitive agreement with respect to
a Superior Proposal as described above; (iii) Parent terminated the Merger
Agreement prior to consummation of the Offer because the Board of Directors
had withdrawn or modified its recommendation of the Offer or as a result of
the Company materially breaching its obligations described under "Takeover
Proposals"; (iv) after the date of the Merger Agreement, any person made a
Takeover Proposal, (A) the Offer remained open until the scheduled expiration
date immediately following the date such Takeover Proposal was made, (B) fewer
than two-thirds of the Shares outstanding on a fully diluted basis were
tendered in the Offer by such expiration date, (C) the Merger Agreement was
terminated under certain circumstances in which the Offer was not consummated
on or before November 26, 2000 or the Offer was not consummated as a result of
a failure of certain conditions and (D) within 12 months of such termination
the Company entered into a definitive agreement to consummate, or consummated,
the transactions contemplated by the Takeover Proposal; or (v) the Merger
Agreement was terminated by Parent under certain circumstances as a result of
a wilful breach by the Company and within 12 months of such termination the
Company entered into a definitive agreement to consummate, or consummated, the
transactions contemplated by a Takeover Proposal.
The Merger Agreement provided that, if the Company had become
obligated to pay the Termination Fee pursuant to clause (v) described above as
a result of a wilful breach by the Company, Parent would have had the right to
elect not to receive the Termination Fee and instead pursue any and all
rights, claims and causes of action it may have had with respect to such
breach under law. If Parent elected to receive the Termination Fee, and the
Company paid the Termination Fee as described above, the payment by the
Company of such fee would have been Parent's sole remedy with respect to such
breach and Parent would have been required to waive, to the fullest extent
permitted by law, any and all rights, claims and causes of action (other than
claims of, or causes of action arising from, fraud) it may have had against
the Company with respect to such breach.
BOARD OF DIRECTORS
The Merger Agreement provided that promptly upon consummation of the
Offer, the Purchaser was entitled to designate such number of directors on the
Board of Directors as would give the Purchaser representation on the Board of
Directors equal to at least that number of directors, rounded up to the next
whole number, which is the product of (a) the total number of directors on the
Board of Directors (giving effect to the directors elected pursuant to this
sentence) multiplied by (b) the percentage that (i) such number of Shares so
accepted for payment and paid for by the Purchaser plus the number of Shares
otherwise owned by the Purchaser or any other subsidiary of Parent bears to
(ii) the number of such Shares outstanding. Until the Effective Time, the
Board of Directors shall have at least three directors who were directors on
the date of the Merger Agreement (the "Independent Directors"). The Merger
Agreement provides that, if the number of Independent Directors is reduced
below three for any reason whatsoever, any remaining Independent Directors (or
Independent Director, if there is only one remaining) will be entitled to
designate persons to fill such vacancies who will be deemed to be Independent
Directors for purposes of the Merger Agreement or, if no Independent Directors
then remain, the other directors will designate three persons to fill such
vacancies who are not officers, stockholders or affiliates of the Company,
19
Parent or the Purchaser, and such persons will be deemed to be Independent
Directors for purposes of the Merger Agreement.
On July 5, 2000, by written consent in lieu of a meeting of the Board
of Directors: (i) the Company accepted the resignations of the following
directors: Jeffrey A. Bernfeld, C. Glen Bradley, Richard F. Miller and John A.
Norris; and (ii) the following four designees of Parent were elected to the
Board: Timothy R. G. Sear, C. Allen Baker, Charles E. Miller, Sr., and Gerald
D. Cagle.
EMPLOYEE BENEFITS
The Merger Agreement provides that Parent will cause the Surviving
Corporation (i) to maintain for a period of one year after the Effective Time
the Company Benefit Plans (as defined in the Merger Agreement) (other than
equity-based plans) in effect on the date of the Merger Agreement or (ii) to
provide benefits (other than equity-based plans) to each current employee of
the Company and its subsidiaries that are not materially less favorable in the
aggregate to such employees than those benefits in effect for such employees
on the date of the Merger Agreement.
In addition, from and after July 5, 2000, the date on which the
Purchaser's designees were appointed to the Board of Directors (the "Control
Date"), Parent will cause the Company or the Surviving Corporation, as
applicable, to honor in accordance with their respective terms (as in effect
on the date of the Merger Agreement), all the Company's employment, severance
and termination agreements, plans and policies disclosed in the Company's
disclosure schedule to the Merger Agreement including any change in control
provisions contained therein.
The Merger Agreement further provides that with respect to any
"employee benefit plan", as defined in Section 3(3) of ERISA, maintained by
Parent or any of its subsidiaries (including any severance plan), for all
purposes, including determining eligibility to participate and vesting,
service with the Company or any of its subsidiaries shall be treated as
service with Parent or any of its subsidiaries; provided, that such service
need not be recognized to the extent that such recognition would result in any
duplication of benefits.
REASONABLE EFFORTS; NOTIFICATION
The Merger Agreement provides that each of the parties shall use all
reasonable efforts to take, or cause to be taken, all reasonable actions, and
to do, or cause to be done, and to assist and cooperate with the other parties
in doing, all things reasonably necessary, proper or advisable to consummate
and make effective, in the most expeditious manner practicable, the Merger and
the other transactions contemplated by the Merger Agreement, including (i) the
obtaining of all necessary actions or nonactions, waivers, consents and
approvals from Governmental Entities and the making of all necessary
registrations and filings (including filings with Governmental Entities, if
any) and the taking of all reasonable steps as may be necessary to obtain an
approval or waiver from, or to avoid an action or proceeding by, any
Governmental Entity, (ii) the obtaining of all necessary consents, approvals
or waivers from third parties, (iii) the defending of any lawsuits or other
legal proceedings, whether judicial or administrative, challenging the Merger
Agreement or the consummation of the transactions contemplated by the Merger
Agreement, including, when reasonable, seeking to have any stay or temporary
restraining order entered by any court or other Governmental Entity vacated or
reversed and (iv) the execution and delivery of any additional instruments
necessary to consummate the transactions contemplated by the Merger Agreement
and to fully carry out the purposes of the Merger Agreement. Nothing in the
Merger Agreement is deemed to require any party to waive any substantial
rights or agree to any substantial limitation on its operations or to dispose
of any significant asset or collection of assets.
20
The Company shall give prompt notice to Parent, and Parent or the
Purchaser shall give prompt notice to the Company, of (i) any representation
or warranty made by it contained in the Merger Agreement that is qualified as
to materiality becoming untrue or inaccurate in any respect or any such
representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect or (ii) the failure by it to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under the Merger Agreement; provided, that no
such notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under the Merger Agreement.
REPRESENTATIONS AND WARRANTIES
The Merger Agreement contains various customary representations and
warranties.
PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR WAIVER
The Merger Agreement may be amended by the parties at any time,
whether before or after the Company Stockholder Approval has been obtained;
provided (i) that, after the Company Stockholder Approval has been obtained,
there shall be made no amendment that by law requires further approval by the
Company's stockholders without the further approval of such stockholders and
(ii) that after the Merger Agreement is adopted by the Company's stockholders,
no such amendment or modification shall be made that reduces the amount or
changes the form of Merger Consideration or otherwise materially and adversely
affects the rights of the Company's stockholders hereunder, without the
further approval of such stockholders. The Merger Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
thereto.
At any time prior to the Effective Time, the parties may (a) extend
the time for the performance of any of the obligations or other acts of the
other parties, (b) waive any inaccuracies in the representations and
warranties contained in the Merger Agreement or in any document delivered
pursuant thereto or (c) waive compliance with any of the agreements or
conditions contained therein. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure by any party to the Merger
Agreement to assert any of its rights under the Merger Agreement or otherwise
shall not constitute a waiver of such rights.
A termination of the Merger Agreement, an amendment of the Merger
Agreement or an extension or waiver shall, in order to be effective, require
in the case of Parent, the Purchaser or the Company, action by its Board of
Directors or the duly authorized designee of its Board of Directors; provided,
that in the case of the Company, such action shall also require action by a
majority of the Independent Directors.
RIGHTS AGREEMENT
The Rights Agreement was amended as of May 26, 2000, to render the
Rights inapplicable to the Offer, the Merger and the other transactions
contemplated by the Merger Agreement.
THE CONFIDENTIALITY AGREEMENT
Alcon Laboratories, Inc., the principal operating subsidiary of Parent,
and the Company entered into a Confidentiality Agreement on November 5, 1999.
Pursuant to the Confidentiality Agreement, the Company and Alcon agreed to
keep confidential certain information provided by the Company or its
representatives. The Merger Agreement provides that certain information
21
exchanged pursuant to the Merger Agreement will be subject to the
Confidentiality Agreement.
PLANS FOR THE COMPANY
Following completion of the Merger, Parent intends to operate the
Company as a subsidiary of Parent under the direction of Parent's management.
Parent's principal reason for acquiring the Company is the strategic fit of
the Company's operations with Parent's operations. Parent intends to continue
to review the Company and its assets, corporate structure, dividend policy,
capitalization, operations, properties, policies, management and personnel and
to consider, subject to the terms of the Merger Agreement, what, if any,
changes would be desirable in light of the circumstances then existing, and
reserves the right to take such actions or effect such changes as it deems
desirable. Such changes could include changes in the Company's corporate
structure, operational headquarters, capitalization, management or dividend
policy.
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The following discussion describes certain U.S. Federal income tax
consequences of the Merger. The discussion is based upon the Internal Revenue
Code of 1986, as amended (the "Code"), existing and proposed treasury
regulations, rulings, administrative pronouncements and judicial decisions,
changes to which could materially affect the tax consequences described in
this Information Statement and could be made on a retroactive basis. This
discussion does not address all aspects of U.S. Federal income taxation that
may be important to you based on your particular circumstances and does not
address any aspect of state, local, foreign or other tax laws. This summary
generally considers only Shares that are exchanged for cash pursuant to the
Merger and that are held as capital assets (generally, assets held for
investment) and may not apply to holders who acquired Shares pursuant to the
exercise of employee stock options or other compensation arrangements with the
Company, holders that are subject to special tax treatment, holders that hold
Shares as part of a "straddle", "hedge", or "conversion transaction", or
holders the functional currency of which is not the U.S. dollar. Holders that
may be subject to special tax treatment include broker-dealers, insurance
companies, tax-exempt organizations, financial institutions, and regulated
investment companies.
CONSEQUENCES TO HOLDERS OF SHARES. A holder of Shares will recognize
gain or loss equal to the difference between the amount of cash received in
the Merger and the holder's adjusted tax basis in the Shares exchanged
therefor. Such gain or loss will be capital gain or loss and will be long-term
capital gain or loss if at the Effective Time the holder has a holding period
for the Shares of more than one year.
BACKUP WITHHOLDING AND INFORMATION REPORTING. Payments of cash to a
holder surrendering Shares will be subject to information reporting and
"backup" withholding at a rate of 31% of the cash payable to the holder,
unless the holder furnishes its taxpayer identification number in the manner
prescribed in applicable treasury regulations, certifies that such number is
correct, certifies as to no loss of exemption from backup withholding and
meets certain other conditions. Any amounts withheld from payments to a holder
under the backup withholding rules generally will be allowed as a credit
against the holder's U.S. Federal income tax liability, which may entitle such
holder to a refund provided the required information is furnished to the
Internal Revenue Service.
The preceding discussion does not purport to be a complete analysis
or discussion of all potential tax effects relevant to the Merger. Thus,
stockholders are urged to consult their own tax advisors as to the specific
tax consequences to them of the Merger, including tax return reporting
requirements, the applicability and effect of Federal, state, local, foreign
22
and other applicable tax laws and the effect of any proposed changes in the
tax laws.
METHOD OF ACCOUNTING
The Merger will be accounted for under the purchase method of
accounting.
REGULATORY AND OTHER APPROVALS
There are no U.S. Federal or state regulatory requirements which
remain to be complied with in order to consummate the Merger (other than the
filing of articles of merger with the Secretary of State of The Commonwealth
of Massachusetts).
SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by the Purchaser to purchase all
Shares tendered pursuant to and to pay all related fees and expenses in
connection with the Offer was approximately $797 million. The amount of funds
required by the Company to make all payments to participants in the Company's
stock option plans pursuant to the Merger Agreement was approximately $39
million. The total amount of funds required by the Purchaser to consummate and
to pay all related fees and expenses in connection with the Merger is
estimated to be approximately $104 million. The Purchaser plans to obtain all
funds needed for the Merger through capital contributions or intercompany
advances from Parent. Such funds will be made available to Parent through
intercompany advances from Nestle or an affiliate of Nestle.
DISSENTERS' RIGHTS
Stockholders of the Company who do not vote in favor of adoption of
the Merger Agreement have the right to seek payment in cash of the fair value
of their Shares by complying with Sections 86 to 98, inclusive, of Chapter
156B of the General Laws of Massachusetts ("Sections 86-98").
The following discussion is not a complete statement of the law
pertaining to appraisal rights under Massachusetts law, and is qualified in
its entirety by the full text of Sections 86-98, which are provided in their
entirety as Annex C to this Information Statement.
If the Merger Agreement is approved by the stockholders at the
Special Meeting and the Merger is consummated, any stockholder (1) who files
with the Company before the taking of the vote on the approval of such action
written objection to the proposed action stating that he, she or it intends to
demand payment for such person's Shares if the action is taken and (2) whose
Shares are not voted in favor of the Merger Agreement, has or may have the
right to demand in writing from the Company, within twenty days after the date
of mailing to such person of notice in writing that the corporate action has
become effective, payment for his, her or its Shares and an appraisal of the
value thereof. The Company and any such stockholder shall in such cases have
the rights and duties and shall follow the procedure set forth in Sections 86
to 98, inclusive, of Chapter 156B of the General Laws of Massachusetts.
FAILURE TO FOLLOW THE STEPS REQUIRED BY SECTIONS 86 TO 98, INCLUSIVE, OF
CHAPTER 156B OF THE GENERAL LAWS OF MASSACHUSETTS FOR PERFECTING DISSENTERS'
RIGHTS MAY RESULT IN THE LOSS OF SUCH RIGHTS.
Therefore, under Massachusetts law, a stockholder wishing to exercise
his, her or its appraisal rights (1) must not vote in favor of adoption of the
Merger Agreement, (2) must deliver to the Company prior to the vote on the
Merger Agreement at the Special Meeting to be held on [INSERT DATE], a written
objection to the proposed action stating that he, she or it intends to demand
payment for his, her or its Shares if the action is taken, and (3) within
23
twenty days after the date of mailing to such person of notice in writing that
the Merger has become effective, must demand in writing from the Company
payment for such person's Shares. Within ten days after the Effective Time,
the Company will notify each stockholder who has properly filed written
objection and who did not vote in favor of adoption of the Merger Agreement
that the Merger has become effective. The stockholder must be the record
holder of such Shares on the date the written objection is made and must
continue to hold such Shares of record until the Effective Time. Accordingly,
a stockholder who is the record holder of Shares on the date the written
demand for appraisal is made, but who thereafter transfers such Shares prior
to the Effective Time, will lose any right to appraisal in respect of such
Shares.
You should consult your tax advisors with regard to the particular
Federal, state, local, foreign and other tax consequences to you of exercising
your appraisal rights under Massachusetts law.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company Common Stock as of the date of this
Information Statement by (i) each person who is known by the Company to own
beneficially more than five percent (5%) of the outstanding Shares, (ii) each
of the Company's directors, (iii) the Chief Executive Officer and each of the
four other most highly compensated executive officers of the Company in fiscal
year 1999 (the "Named Executive Officers") and (iv) all directors and officers
of the Company as a group. Unless otherwise indicated, the mailing address of
each of the persons shown is c/o Summit Autonomous Inc., 21 Hickory Drive,
Waltham, Massachusetts 02451.
Shares Percent
Beneficially Beneficially
Beneficial Owner Owned(1) Owned (2)
- -------------------------------------------------------------------------------------------------------------------
Alcon Acquisition Corp.
6201 South Freeway
Fort Worth, Texas 76134-2099.....................................41,944,555(3) 89.2%
Directors
C. Allen Baker..............................................................0(4) *
Gerald D. Cagle.............................................................0(4) *
Randy W. Frey...............................................................0(5) *
Charles E. Miller...........................................................0(4) *
Robert J. Palmisano.........................................................0(5) *
Timothy R.G. Sear...........................................................0(4) *
Richard M. Traskos..........................................................0 *
Named Executive Officers
Menderes Akdag..............................................................0 *
Robert J. Kelly.............................................................0 *
Peter E. Litman.............................................................0 *
D. Verne Sharma.............................................................0 *
All Executive Officers and Directors
as a Group (27 persons).............................................[53,616] *
- ------------
* Less than 1% of the outstanding Company Common Stock.
(1) Except as otherwise noted, the Company believes that the persons named
in the table have sole voting and investment power with respect to
the Shares set forth opposite such persons' name.
24
(2) Determined on the basis of [INSERT NUMBER] Shares outstanding as of
[INSERT DATE].
(3) As reported on a Schedule TO Tender Offer Statement date July 7, 2000 as
filed by the Purchaser and Parent.
(4) Does not include 41,944,555 Shares beneficially owned by the Purchaser,
which such Directors of the Company may be deemed to beneficially own by
virtue of their positions with Parent. Each of C. Allen Baker, Gerald D.
Cagle, Charles E. Miller and Timothy R.G. Sear disclaim any such
beneficial ownership
(5) Mr. Frey is an officer of the Company and Mr. Palmisano is the Chief
Executive Officer of the Company.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Stockholders should be aware that the executive officers and
directors of the Company have interests in the Merger that are in addition to
or different from the interests of stockholders of the Company generally.
These interests are discussed below.
STOCK OPTIONS
The Merger Agreement provides that the Board of Directors (or, if
appropriate, any committee administering the Company Stock Plans (as defined
in the Merger Agreement)) shall adopt such resolutions or take such other
actions as are required to adjust the terms of all outstanding Company Stock
Options (as defined in the Merger Agreement) and all outstanding Company SARs
(as defined in the Merger Agreement), in each case whether vested or unvested,
granted before the date of the Merger Agreement under any Company Stock Plan
to provide that each such Company Stock Option (and any Company SAR related
thereto) outstanding immediately prior to the first acceptance for payment of
Shares pursuant to the Offer shall be canceled in exchange for a cash payment
by the Company as soon as practicable following the first acceptance for
payment of Shares pursuant to the Offer of an amount equal to (i) the excess,
if any, of (x) the highest price per Share to be paid pursuant to the Offer
over (y) the exercise price per Share subject to such Company Stock Option,
multiplied by (ii) the number of Shares issuable pursuant to the unexercised
portion of such Company Stock Options.
The Company has agreed to use its best efforts to obtain all consents
of the holders of Company Stock Options as shall be necessary to effectuate
the foregoing. At Parent's request, payment may be withheld in respect of any
Company Stock Option until all necessary consents with respect to such Company
Stock Option are obtained.
The Merger Agreement provides that the Company Stock Plans shall
terminate as of the Effective Time, and the provisions in any other Benefit
Plan (as defined in the Merger Agreement) providing for the issuance, transfer
or grant of any capital stock of the Company or any interest in respect of any
capital stock of the Company shall be deleted as of the Effective Time, and
the Company shall ensure that following the Effective Time no holder of a
Company Stock Option or Company SAR or any participant in any Company Stock
Plan or other Company Benefit Plan shall have any right thereunder to acquire
any capital stock of the Company or the surviving corporation in the Merger.
SEVERANCE AGREEMENTS
The Board of Directors has approved severance agreements for its
officers and director-level employees. These severance arrangements become
available only in the event of a "change of control" of the Company and
entitle covered employees to continuation of salary, standard bonuses and
25
benefits in the event they are terminated without cause after a change of
control or terminate their employment for "good reason" after a change of
control. The severance arrangements would not apply to a termination for
"cause" after a change of control. The arrangements approved by the Board of
Directors provide for salary continuation and continuation of certain benefits
for (i) three years for Robert Palmisano, President and Chief Executive
Officer of the Company, (ii) two years for each of Randy Frey, Executive Vice
President and Chief Technology Officer; Charline Gauthier, Executive Vice
President and Chief Operations Officer; Bernard Haffey, Executive Vice
President and Chief Commercial Officer; Robert Kelly, Executive Vice
President, Chief Financial Officer and Treasurer; and James Lightman, Senior
Vice President, General Counsel and Clerk and (iii) one year for all other
Vice Presidents. The severance arrangements also provide that in the event the
severance provisions are triggered, the Company will make outplacement
services available to such individuals for one year, all outstanding options
held by such individuals will become exercisable and such individuals will be
entitled to certain payments to make them whole for taxes imposed by Section
4999 of the Internal Revenue Code, the so-called "golden parachute" tax.
Menderes Akdag, President of Lens Express, Inc., has a severance arrangement
with Lens Express, Inc. that provides for salary continuation for two years on
the same terms and under the same circumstances as the severance arrangements
set forth above, but which is triggered upon a change of control of Lens
Express, Inc. The cash severance payable to Mr. Palmisano, assuming his
employment is terminated under circumstances entitling him to severance, would
be $1,642,500 (before giving effect to any payment for golden parachute
taxes). The cash severance payable to the following individuals, assuming such
person's employment is terminated under circumstances entitling him or her to
severance (before giving effect to any payment for golden parachute taxes),
would be: Mr. Frey $667,000, Dr. Gauthier $616,000, Mr. Haffey $616,000, Mr.
Kelly $728,000 and Mr. Lightman $557,550. The cash severance payable to Mr.
Akdag, assuming his employment is terminated under circumstances entitling him
to severance, would be $667,800. Payments made under these severance
arrangements will be paid in a lump-sum cash payment within 30 days of
termination, or, at the option of the employee entitled to the severance
payment, in monthly installments with interest at the rate of 7% per annum
over a period not to exceed two years.
INDEMNIFICATION AND INSURANCE
Parent and the Purchaser have agreed in the Merger Agreement that
Parent shall, to the fullest extent permitted by law, cause the Company from
and after July 5, 2000 to honor all the Company's obligations to indemnify,
defend and hold harmless (including any obligations to advance funds for
expenses) the current and former directors and officers of the Company and its
subsidiaries against all losses, claims, damages or liabilities arising out of
acts or omissions by any such directors and officers occurring prior to the
Effective Time to the maximum extent that such obligations of the Company
exist on the date of the Merger Agreement, whether pursuant to the Company's
charter, the Company's by-laws, the Massachusetts Business Corporation Law,
individual indemnity agreements or otherwise, and such obligations shall
survive the Merger and shall continue in full force and effect in accordance
with the terms of the Company's charter, the Company's by-laws and such
individual indemnity agreements from the Effective Time until the expiration
of the applicable statute of limitations with respect to any claims against
such directors or officers arising out of such acts or omissions. In the event
a current or former director or officer of the Company or any of its
subsidiaries is entitled to indemnification, such director or officer shall be
entitled to reimbursement from the Company (from and after the Control Date)
or the corporation surviving the Merger (from and after the Effective Time)
for reasonable attorney fees and expenses incurred by such director or officer
in pursuing such indemnification, including payment of such fees and expenses
by the Surviving Corporation or the Company, as applicable, in advance of the
final disposition of such action upon receipt of an undertaking by such
current or former director or officer to repay such payment if it shall be
26
adjudicated that such current or former director or officer was not entitled
to such payment.
The Merger Agreement also provides that from and after the Control
Date and for a period of six years after the Effective Time, Parent shall
cause to be maintained in effect the current policies of directors' and
officers' liability insurance maintained by the Company (provided that Parent
may either (i) substitute therefor policies with reputable and financially
sound carriers or (ii) maintain self insurance or similar arrangements through
a financially sound insurance affiliate of Parent, in each case of at least
the same coverage and amounts containing terms and conditions which are no
less advantageous) with respect to claims arising from or related to facts or
events which occurred at or before the Effective Time; provided, that Parent
shall not be obligated to make annual premium payments for such insurance to
the extent such premiums exceed 200% of the annual premiums paid as of the
date hereof by the Company for such insurance (such 200% amount, the "Maximum
Premium"). If such insurance coverage cannot be obtained at all, or can only
be obtained at an annual premium in excess of the Maximum Premium, Parent
shall maintain the most advantageous policies of directors' and officers'
insurance obtainable for an annual premium equal to the Maximum Premium. In
the Merger Agreement, the Company has represented to Parent that the Maximum
Premium is $400,000.
The Company has agreed in the Merger Agreement to maintain, through
the Effective Time, the Company's existing directors' and officers' insurance
in full force and effect without reduction of coverage.
The Merger Agreement also provides that the by-laws of the
corporation surviving the Merger shall contain the provisions that are set
forth, as of the date of the Merger Agreement, in Article VIII of the by-laws
of the Company, which provisions shall not be directly or indirectly (by
amending, repealing or otherwise modifying the Articles of Organization of the
Company) amended, repealed or otherwise modified for a period of six years
from the Effective Time in any manner that would affect adversely the rights
thereunder of individuals who at or at any time prior to the Effective Time
were directors, officers, employees or other agents of the Company.
Additionally, if the corporation surviving the Merger or any of its successors
or assigns (i) consolidates with or merges into any other person and shall not
be the continuing or surviving corporation or entity of such consolidation or
merger and the continuing or surviving entity does not assume the
indemnification obligations of the surviving corporation, or (ii) transfers
all or substantially all of its properties and assets to any person, then, and
in each such case, proper provision shall be made so that the successors and
assigns of the corporation surviving the merger assume, as a matter of law or
otherwise, the obligations.
Parent has agreed in the Merger Agreement to guarantee that if for
any reason the Company or the Surviving Corporation, as the case may be, shall
not meet its obligations, Parent shall meet such obligations described above
in full when and as such obligations arise.
MISCELLANEOUS
OTHER MATTERS
Management knows of no other business to be presented at the Special
Meeting.
27
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company (File No.
000-16937) with the Commission are incorporated by reference in this
Information Statement:
o The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1999, previously filed with the
Commission on March 30, 2000;
o The Company's Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2000, previously filed with
the Commission on May 12, 2000; and
o The Company's Current Reports on Form 8-K, previously filed
with the Commission on March 29, 2000, May 12, 2000, May 30,
2000, May 31, 2000, June 30, 2000 and July 14, 2000.
All documents filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date hereof
and prior to the date of the Special Meeting shall be deemed to be
incorporated by reference herein and shall be a part hereof from the date of
filing of such documents. Any statements contained in a document incorporated
by reference herein or contained in this Information Statement shall be deemed
to be modified or superseded for purposes hereof to the extent that a
statement contained herein (or in any other subsequently filed document which
also is incorporated by reference herein) modified or superseded such
statement. Any statement so modified or superseded shall not be deemed to
constitute a part hereof except as so modified or superseded.
This Information Statement incorporates documents by reference that
are not presented in or delivered with this Information Statement. These
documents are available upon request from James A. Lightman, Clerk, Summit
Autonomous Inc., 21 Hickory Drive, Waltham, Massachusetts 02451. In order to
ensure timely delivery, any request should be made by [INSERT DATE].
AVAILABLE INFORMATION
The Company files annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission.
You may read and copy any reports, statements or other information the Company
files at the Public Reference Section of the Commission located at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549 and at the following regional
offices of the Commission: 7 World Trade Center, 13th Floor, Suite 1300, New
York, New York 10004; and Suite 1400, Citicorp Center, 500 West Madison
Street, Chicago, Illinois 60661. You may obtain copies of all or any portion
of the material by mail from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Please
call the Commission at (800) SEC-0330 for further information on the public
reference rooms. The Company's filings are also available to the public at the
web site maintained by the Commission at <http://www.sec.gov.
28
ANNEX A
===============================================================================
CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
Dated as of May 26, 2000,
Among
ALCON HOLDINGS INC.,
ALCON ACQUISITION CORP.
And
SUMMIT AUTONOMOUS INC.
===============================================================================
i
TABLE OF CONTENTS
ARTICLE I
The Offer and the Merger
SECTION 1.01. The Offer................................................... 2
SECTION 1.02. Company Actions............................................. 4
SECTION 1.03. The Merger.................................................. 5
SECTION 1.04. Closing..................................................... 6
SECTION 1.05. Effective Time.............................................. 6
SECTION 1.06. Effects..................................................... 6
SECTION 1.07. Articles of Organization and By-laws........................ 6
SECTION 1.08. Directors................................................... 6
SECTION 1.09. Officers.................................................... 7
ARTICLE II
Effect on the Capital Stock of theConstituent
Corporations
SECTION 2.01. Effect on Capital Stock..................................... 7
SECTION 2.02. Exchange of Certificates.................................... 8
ARTICLE III
Representations and Warranties of the Company
SECTION 3.01. Organization, Standing and Power............................ 11
SECTION 3.02. Company Subsidiaries; Equity Interests...................... 12
SECTION 3.03. Capital Structure........................................... 12
SECTION 3.04. Authority; Execution and Delivery; Enforceability........... 14
SECTION 3.05. No Conflicts; Consents...................................... 15
SECTION 3.06. SEC Documents; Undisclosed Liabilities...................... 17
SECTION 3.07. Information Supplied........................................ 18
SECTION 3.08. Absence of Certain Changes or Events........................ 18
SECTION 3.09. Taxes.. .................................................... 20
SECTION 3.10. Absence of Changes in Benefit Plans.. ...................... 21
SECTION 3.11. ERISA Compliance; Excess Parachute Payments................. 22
SECTION 3.12. Litigation.................................................. 24
SECTION 3.13. Compliance with Applicable Laws............................. 24
SECTION 3.14. Contracts; Debt Instruments................................. 25
SECTION 3.15. Intellectual Property....................................... 25
SECTION 3.16. Brokers; Schedule of Fees and Expenses...................... 26
SECTION 3.17. Opinion of Financial Advisor................................ 27
SECTION 3.18. Lens Express, Inc. Sale..................................... 27
ii
ARTICLE IV
Representations and Warranties of Parent and Sub
SECTION 4.01. Organization, Standing and Power. .......................... 28
SECTION 4.02. Sub......................................................... 28
SECTION 4.03. Authority; Execution and Delivery; Enforceability........... 28
SECTION 4.04. No Conflicts; Consents...................................... 29
SECTION 4.05. Information Supplied........................................ 30
SECTION 4.06. Brokers..................................................... 30
SECTION 4.07. Financial Ability to Perform................................ 30
ARTICLE V
Covenants Relating to Conduct of Business
SECTION 5.01. Conduct of Business......................................... 30
SECTION 5.02. No Solicitation............................................. 34
ARTICLE VI
Additional Agreements
SECTION 6.01. Preparation of Proxy Statement; Stockholders Meeting........ 37
SECTION 6.02. Access to Information; Confidentiality...................... 38
SECTION 6.03. Reasonable Efforts; Notification............................ 38
SECTION 6.04. Stock Options............................................... 40
SECTION 6.05. Benefit Plans............................................... 41
SECTION 6.06. Indemnification............................................. 42
SECTION 6.07. Fees and Expenses........................................... 44
SECTION 6.08. Public Announcements........................................ 45
SECTION 6.09. Transfer Taxes.............................................. 45
SECTION 6.10. Directors................................................... 45
SECTION 6.11. Rights Agreement; Consequences if Rights Triggered.......... 46
SECTION 6.12. Stockholder Litigation...................................... 47
SECTION 6.13. Transfers of Certain Intangible Assets...................... 47
ARTICLE VII
Conditions Precedent
SECTION 7.01. Conditions to Each Party's Obligation To
Effect The Merger......................................... 48
iii
ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.01. Termination. .............................................. 49
SECTION 8.02. Effect of Termination. .................................... 51
SECTION 8.03. Amendment. ................................................ 51
SECTION 8.04. Extension; Waiver. ........................................ 51
SECTION 8.05. Procedure for Termination, Amendment, Extension or Waiver... 52
ARTICLE IX
General Provisions
SECTION 9.01. Nonsurvival of Representations and Warranties............... 52
SECTION 9.02. Notices..................................................... 53
SECTION 9.03. Definitions................................................. 54
SECTION 9.04. Interpretation; Disclosure Letters.......................... 54
SECTION 9.05. Severability................................................ 55
SECTION 9.06. Counterparts................................................ 55
SECTION 9.07. Entire Agreement; No Third-Party Beneficiaries.............. 55
SECTION 9.08. Governing Law............................................... 55
SECTION 9.09. Assignment.................................................. 55
SECTION 9.10. Enforcement................................................. 56
SECTION 9.11. Consents.................................................... 56
EXHIBIT A
Conditions of the Offer...................................................A-1
EXHIBIT B
Articles of Organization..................................................B-1
AGREEMENT AND PLAN OF MERGER dated as of
May 26, 2000, among ALCON HOLDINGS INC., a
Delaware corporation ("Parent"), ALCON
ACQUISITION CORP., a Massachusetts
corporation ("Sub") and a wholly owned
subsidiary of Parent, and SUMMIT AUTONOMOUS
INC., a Massachusetts corporation (the
"Company") (formerly known as Summit
Technology, Inc.).
WHEREAS the respective Boards of Directors of Parent, Sub and the
Company have approved the acquisition of the Company by Parent on the terms
and subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance of such acquisition, Parent proposes to
cause Sub to make a tender offer (as it may be amended from time to time as
permitted under this Agreement, the "Offer") to purchase all the outstanding
shares of common stock, par value $0.01 per share, of the Company (the
"Company Common Stock"), including the associated Company Rights (as defined
in Section 3.03), at a price per share of Company Common Stock (including the
associated Company Right) of $19.00, net to the seller in cash, on the terms
and subject to the conditions set forth in this Agreement;
WHEREAS the respective Boards of Directors of Parent, Sub and the
Company have approved the merger (the "Merger") of Sub into the Company, or
(at the election of Parent) the Company into Sub, on the terms and subject to
the conditions set forth in this Agreement, whereby each issued share of
Company Common Stock not owned directly by Parent or the Company, other than
Appraisal Shares (as defined in Section 2.01(d)), shall be converted into the
right to receive the highest per share cash consideration paid pursuant to the
Offer; and
2
WHEREAS Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe various conditions to the Offer and
the Merger.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
The Offer and the Merger
------------------------
SECTION 1.01. The Offer. (a) Subject to the conditions of this
Agreement, as promptly as practicable after the date of this Agreement (but in
no event later than five business days after the public announcement of this
Agreement), Sub shall, and Parent shall cause Sub to, commence the Offer
within the meaning of the applicable rules and regulations of the Securities
and Exchange Commission (the "SEC"). The obligation of Sub to, and of Parent
to cause Sub to, commence the Offer and accept for payment, and pay for, any
shares of Company Common Stock tendered pursuant to the Offer are subject to
the conditions set forth in Exhibit A. The initial expiration date of the
Offer shall be the 20th business day following the commencement of the Offer
(determined using Rules 14d-1(g)(3) and 14d-2 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")). Sub expressly reserves
the right to waive any condition to the Offer or modify the terms of the
Offer, except that, without the consent of the Company, Sub shall not and
Parent shall not permit Sub to (i) reduce the number of shares of Company
Common Stock subject to the Offer, (ii) reduce the price per share of Company
Common Stock to be paid pursuant to the Offer, (iii) waive or change the
Minimum Tender Condition (as defined in Exhibit A), (iv) modify in any manner
adverse to the holders of Company Common Stock or add to the conditions set
forth in Exhibit A, (v) except as provided in the next sentence, extend the
Offer or (vi) change the form of consideration payable in the Offer.
Notwithstanding the foregoing, Sub may, without the consent of the Company,
(A) if at the scheduled or any extended expiration date of the Offer (whether
extended pursuant to this clause (A) or otherwise) any of the conditions to
Sub's obligation to purchase shares of Company Common Stock are not satisfied
or waived, extend the Offer for such period as Sub determines; provided that
such extension shall be in increments of not more than five business days if
all of the conditions set
3
forth in Exhibit A other than the Minimum Tender Condition have been satisfied
or waived at such scheduled or extended expiration date, (B) extend the Offer
for any period required by any rule, regulation, interpretation or position of
the SEC or the staff thereof applicable to the Offer and (C) if at the
scheduled or any extended expiration date of the Offer less than 90% of the
Fully Diluted Shares (as defined in Exhibit A) have been validly tendered and
not withdrawn in the Offer, extend the Offer for a period of not more than ten
business days in the aggregate beyond the latest expiration date that would
otherwise be permitted under clause (A) or (B) of this sentence. In addition,
Sub may make available a "subsequent offering period", in accordance with Rule
14d-11 of the Exchange Act. In the event that the Minimum Tender Condition has
not been satisfied or waived at the scheduled expiration date of the Offer, at
the request of the Company, Sub shall, and Parent shall cause Sub to, extend
the expiration date of the Offer in such increments as Sub may determine until
the earliest to occur of (w) the satisfaction or waiver of such condition, (x)
Parent reasonably determines that such condition to the Offer is not capable
of being satisfied on or prior to the Outside Date (as defined in Section
8.01(b)(i)), (y) the termination of this Agreement in accordance with its
terms and (z) the Outside Date. On the terms and subject to the conditions of
the Offer and this Agreement, Sub shall accept for payment and pay for all
shares of Company Common Stock validly tendered and not withdrawn pursuant to
the Offer that Sub becomes obligated to purchase pursuant to the Offer as soon
as practicable after the expiration of the Offer.
(b) On the date of commencement of the Offer, Parent and Sub shall
file with the SEC a Tender Offer Statement on Schedule TO with respect to the
Offer, which shall contain an offer to purchase and a related letter of
transmittal and summary advertisement (such Schedule TO and the documents
included therein pursuant to which the Offer will be made, together with any
supplements or amendments thereto, the "Offer Documents"). Each of Parent, Sub
and the Company shall promptly correct any information provided by it for use
in the Offer Documents if and to the extent that such information shall have
become false or misleading in any material respect, and each of Parent and Sub
shall take all steps necessary to amend or supplement the Offer Documents and
to cause the Offer Documents as so amended or supplemented to be filed with
the SEC and to be disseminated to the Company's stockholders, in each case as
and to the extent required by applicable Federal securities laws. Parent and
Sub shall give the Company and its counsel a reasonable opportunity to review
and comment on the Offer
4
Documents prior to their being filed with the SEC or disseminated to the
stockholders of the Company. Parent and Sub shall provide the Company and its
counsel in writing with any comments Parent, Sub or their counsel may receive
from the SEC or its staff with respect to the Offer Documents promptly after
the receipt of such comments and shall provide the Company and its counsel
with a reasonable opportunity to participate in the response of Parent or Sub
to such comments.
(c) Prior to the expiration of the Offer, Parent shall provide or
cause to be provided to Sub on a timely basis the funds necessary to purchase
any shares of Company Common Stock that Sub becomes obligated to purchase
pursuant to the Offer.
SECTION 1.02. Company Actions. (a) Subject to Section 5.02(b), the
Company hereby approves of and consents to the Offer, the Merger and the other
transactions contemplated by this Agreement (collectively, the
"Transactions").
(b) On the date the Offer Documents are filed with the SEC, the
Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer, including an information statement
(such Schedule 14D-9, as amended and supplemented from time to time, the
"Schedule 14D-9"), describing the recommen dations referred to in Section
3.04(b), or any permitted withdrawal or modification in accordance with
Section 5.02(b), and shall mail the Schedule 14D-9 (including in the
information statement) to the holders of Company Common Stock. Each of the
Company, Parent and Sub shall promptly correct any information provided by it
for use in the Schedule 14D-9 if and to the extent that such information shall
have become false or misleading in any material respect, and the Company shall
take all steps necessary to amend or supplement the Schedule 14D-9 and to
cause the Schedule 14D-9 as so amended or supplemented to be filed with the
SEC and disseminated to the Company's stockholders, in each case as and to the
extent required by applicable Federal securities laws. The Company shall
provide Parent and its counsel in writing with any comments the Company or its
counsel may receive from the SEC or its staff with respect to the Schedule
14D-9 promptly after the receipt of such comments.
(c) In connection with the Offer, the Company shall cause its
transfer agent to furnish Sub as promptly as is reasonably practicable with
mailing labels containing the names and addresses of the record holders of
Company Common
5
Stock as of a recent date and of those persons becoming record holders
subsequent to such date, together with copies of all lists of stockholders,
security position listings and computer files and all other information as Sub
may reasonably request in the Company's possession or control regarding the
beneficial owners of Company Common Stock, and shall furnish to Sub such
information and assistance (including updated lists of stockholders, security
position listings and computer files) as Parent may reasonably request in
communicating the Offer to the Company's stockholders. Subject to the
requirements of applicable Law (as defined in Section 3.05), and except for
such steps as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Transactions, Parent and Sub shall hold
in confidence pursuant to the Confidentiality Agreement (as defined in Section
6.02) the information contained in any such labels, listings and files, shall
use such information only for the purpose of communicating the Offer and
disseminating any other documents necessary to consummate the Offer, the
Merger and the other Transactions and, if this Agreement shall be terminated,
shall, upon request, deliver to the Company all copies of such information
then in their possession.
SECTION 1.03. The Merger. On the terms and subject to the
satisfaction or waiver of the conditions set forth in this Agreement, and in
accordance with the Massachusetts Business Corporation Law (the "BCL"), Sub
shall be merged with and into the Company at the Effective Time (as defined in
Section 1.05). At the Effective Time, the separate corporate existence of Sub
shall cease and the Company shall continue as the surviving corporation (the
"Surviving Corporation"). The Surviving Corporation shall possess all the
rights, privileges, immunities, powers and franchises of the Company and Sub,
and the Surviving Corporation shall by operation of law become liable for all
of the debts, liabilities and duties of the Company and Sub. The name of the
Surviving Corporation shall be Summit Autonomous Inc. and the purpose thereof
shall be as set forth in Section 2 of the Articles of Organization of the
Surviving Corporation. Notwithstanding the foregoing, Parent may elect at any
time prior to the Merger, instead of merging Sub into the Company as provided
above, to merge the Company with and into Sub; provided, however, that the
Company shall not be deemed to have breached any of its representations,
warranties or covenants set forth in this Agreement solely by reason of such
election. In such event, the parties shall execute an appropriate amendment to
this Agreement to reflect the foregoing. At the election of Parent, any direct
or indirect wholly owned subsidiary of Parent may be substituted for Sub as a
constituent
6
corporation in the Merger. In such event, the parties shall execute an
appropriate amendment to this Agreement in order to reflect the foregoing.
SECTION 1.04. Closing. The closing (the "Closing") of the Merger
shall take place at the offices of Cravath, Swaine & Moore, 825 Eighth Avenue,
New York, New York 10019 at 10:00 a.m. on the second business day following
the satisfaction (or, to the extent permitted by Law, waiver by all parties)
of the conditions set forth in Article VII, or at such other place, time and
date as shall be agreed in writing between Parent and the Company. The date on
which the Closing occurs is referred to in this Agreement as the "Closing
Date".
SECTION 1.05. Effective Time. Prior to the Closing, Parent shall
prepare and give the Company and its counsel the opportunity to review, and on
the Closing Date or as soon as practicable thereafter Parent shall file with
the Secretary of State of The Commonwealth of Massachusetts, articles of
merger or other appropriate documents (in any such case, the "Articles of
Merger") executed in accordance with the relevant provisions of the BCL and
shall make all other filings or recordings required under the BCL. The Merger
shall become effective at such time as the Articles of Merger is duly filed
with such Secretary of State, or at such other time as Parent and the Company
shall agree and specify in the Articles of Merger (the time the Merger becomes
effective being the "Effective Time").
SECTION 1.06. Effects. The Merger shall have the effects set forth in
Section 80 of the BCL.
SECTION 1.07. Articles of Organization and By-laws. (a) The Articles
of Organization of the Company shall be amended and restated at the Effective
Time to read in the form of Exhibit B, and, as so amended, such Articles of
Organization shall be the Articles of Organization of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable Law.
(b) Subject to Section 6.06, the By-laws of Sub as in effect
immediately prior to the Effective Time shall be the By-laws of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable Law.
SECTION 1.08. Directors. At the Closing, Parent shall designate the
directors of the Surviving Corporation and such directors shall hold office
until the earlier of their resignation or removal or until their respective
7
successors are duly elected and qualified, as the case may
be.
SECTION 1.09. Officers. At the Closing, Parent shall designate the
officers of the Surviving Corporation and such officers shall hold office
until the earlier of their resignation or removal or until their respective
successors are duly elected or appointed and qualified, as the case may be.
ARTICLE II
Effect on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
shares of Company Common Stock or any shares of capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of
capital stock of Sub shall be converted into and become a number of fully paid
and nonassessable shares of common stock, par value $0.01 per share, of the
Surviving Corporation ("Surviving Corporation Common Stock") equal to (i) the
number of shares of Company Common Stock outstanding immediately prior to
Effective Time (excluding any shares of Company Common Stock that are owned by
any subsidiary of the Company or Parent other than Sub) divided by (ii) 1,000;
provided, however, that if the aggregate number of shares of Surviving
Corporation Common Stock into which the capital stock of Sub is to be
converted pursuant to this Section 2.01(a) is not a whole number, such number
shall be rounded up to the next higher whole number.
(b) Cancelation of Treasury Stock and Parent- Owned Stock. Each
share of Company Common Stock that is owned directly by the Company, Parent or
Sub shall no longer be outstanding and shall automatically be canceled and
retired and shall cease to exist, and no other consideration shall be
delivered or deliverable in exchange therefor. Each share of Company Common
Stock that is owned by any subsidiary of the Company or Parent (other than
Sub) shall automatically be converted into one fully paid and nonassessable
share of Surviving Corporation Common Stock.
(c) Conversion of Company Common Stock.(1) Subject to Sections
2.01(b) and 2.01(d), each issued share of Company Common Stock shall be
converted into the
8
right to receive in cash the highest price per share of Company Common Stock
paid pursuant to the Offer.
(2) The cash payable upon the conversion of shares of Company Common
Stock pursuant to this Section 2.01(c) is referred to collectively as the
"Merger Consideration". As of the Effective Time, all such shares of Company
Common Stock shall no longer be outstanding and shall automatically be
canceled and retired and shall cease to exist, and each holder of a
certificate representing any such shares of Company Common Stock shall cease
to have any rights with respect thereto, except the right to receive Merger
Consideration upon surrender of such certificate in accordance with Section
2.02, without interest.
(d) Appraisal Rights. Notwithstanding anything in this Agreement to
the contrary, shares ("Appraisal Shares") of Company Common Stock that are
outstanding immediately prior to the Effective Time and that are held by any
person who is entitled to demand and properly demands appraisal of such
Appraisal Shares pursuant to, and who complies in all respects with, Sections
86 through 97 of the BCL (the "Appraisal Provisions") shall not be converted
into Merger Consideration as provided in Section 2.01(c), but rather the
holders of Appraisal Shares shall be entitled to payment of the fair value of
such Appraisal Shares in accordance with the Appraisal Provisions; provided,
however, that if any such holder shall fail to perfect or otherwise shall
waive, withdraw or lose the right to appraisal under the Appraisal Provisions,
then the right of such holder to be paid the fair value of such holder's
Appraisal Shares shall cease and such Appraisal Shares shall be deemed to have
been converted as of the Effective Time into, and to have become exchangeable
solely for the right to receive, Merger Consideration as provided in Section
2.01(c). The Company shall serve prompt notice to Parent of any demands
received by the Company for appraisal of any shares of Company Common Stock,
and Parent shall have the right to participate in and direct all negotiations
and proceedings with respect to such demands. Prior to the Effective Time, the
Company shall not, without the prior written consent of Parent, make any
payment with respect to, or settle or offer to settle, any such demands, or
agree to do any of the foregoing.
SECTION 2.02. Exchange of Certificates. (a) Paying Agent. Prior to
the Effective Time, Parent shall select a bank or trust company in the United
States, reasonably acceptable to the Company, to act as paying agent (the
"Paying Agent") for the payment of the Merger Consideration upon surrender of
certificates representing
9
Company Common Stock. Parent shall take all steps necessary to enable and
cause the Surviving Corporation to provide to the Paying Agent on a timely
basis, as and when needed after the Effective Time, cash necessary to pay for
the shares of Company Common Stock converted into the right to receive cash
pursuant to Section 2.01(c) (such cash being hereinafter referred to as the
"Exchange Fund"). If for any reason (including losses) the Exchange Fund is
inadequate to pay the amounts to which holders of shares of Company Common
Stock shall be entitled under this Section 2.02(a), Parent shall take all
steps necessary to enable or cause the Surviving Corporation promptly to
deposit in trust additional cash with the Paying Agent sufficient to make all
payments required under this Agreement, and Parent and the Surviving
Corporation shall in any event be liable for payment thereof. The Exchange
Fund shall not be used for any purpose except as expressly provided in this
Agreement.
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, the Surviving Corporation shall cause the Paying Agent to mail
to each holder of record of a certificate or certificates (the "Certificates")
that immediately prior to the Effective Time represented outstanding shares of
Company Common Stock whose shares were converted into the right to receive
Merger Consideration pursuant to Section 2.01, (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and
title to the Certificates shall pass, only upon delivery of the Certificates
to the Paying Agent and shall be in such form and have such other provisions
as Parent may reasonably specify) and (ii) instructions for use in effecting
the surrender of the Certificates in exchange for Merger Consideration. Upon
surrender of a Certificate for cancelation to the Paying Agent, together with
such letter of transmittal, duly executed, and such other documents as may
reasonably be required by the Paying Agent, the holder of such Certificate
shall be entitled to receive in exchange therefor the amount of cash into
which the shares of Company Common Stock theretofore represented by such
Certificate shall have been converted pursuant to Section 2.01, and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Company Common Stock that is not registered in the
transfer records of the Company, payment may be made to a person other than
the person in whose name the Certificate so surrendered is registered, if such
Certificate shall be properly endorsed or otherwise be in proper form for
transfer and the person requesting such payment shall pay any transfer or
other taxes required by reason of the payment to a person other than the
registered holder of such Certificate or establish to the satisfaction
10
of Parent that such tax has been paid or is not applicable. Until surrendered
as contemplated by this Section 2.02, each Certificate shall be deemed at any
time after the Effective Time to represent only the right to receive upon such
surrender the amount of cash, without interest, into which the shares of
Company Common Stock theretofore represented by such Certificate have been
converted pursuant to Section 2.01. If any holder of shares of Company Common
Stock shall be unable to surrender such holder's Certificates because such
Certificates have been lost, mutilated or destroyed, such holder may deliver
in lieu thereof an affidavit and indemnity bond in form and substance and with
surety reasonably satisfactory to the Surviving Corporation. No interest shall
be paid or accrue on the cash payable upon surrender of any Certificate.
(c) No Further Ownership Rights in Company Common Stock. The Merger
Consideration paid in accordance with the terms of this Article II upon
conversion of any shares of Company Common Stock shall be deemed to have been
paid in full satisfaction of all rights pertaining to such shares of Company
Common Stock, and after the Effective Time there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of shares of Company Common Stock that were outstanding
immediately prior to the Effective Time. If, after the Effective Time, any
certificates formerly representing shares of Company Common Stock are
presented to the Surviving Corporation or the Paying Agent for any reason,
they shall be canceled and exchanged as provided in this Article II.
(d) Termination of Exchange Fund. Any portion of the Exchange Fund
that remains undistributed to the holders of Company Common Stock for six
months after the Effective Time shall be delivered to Parent, upon demand, and
any holder of Company Common Stock who has not theretofore complied with this
Article II shall thereafter look only to Parent for payment of its claim for
Merger Consideration.
(e) No Liability. None of Parent, Sub, the Company or the
Paying Agent shall be liable to any person in respect of any cash from the
Exchange Fund delivered to a public official pursuant to any applicable
abandoned property, escheat or similar Law. If any Certificate has not been
surrendered prior to five years after the Effective Time (or immediately prior
to such earlier date on which Merger Consideration in respect of such
Certificate would otherwise escheat to or become the property of any
Governmental Entity (as defined in Section 3.05)), any such shares, cash,
dividends or distributions in respect of such Certificate shall, to the extent
permitted by applicable
11
Law, become the property of the Surviving Corporation, free and clear of all
claims or interest of any person previously entitled thereto.
(f) Investment of Exchange Fund. The Paying Agent shall invest any
cash included in the Exchange Fund, as directed by Parent, on a daily basis.
Any interest and other income resulting from such investments shall be paid to
Parent.
(g) Withholding Rights. Parent shall be entitled to deduct
and withhold from the consideration otherwise payable to any holder of Company
Common Stock pursuant to this Agreement such amounts as may be required to be
deducted and withheld with respect to the making of such payment under the
Code (as defined in Section 3.11), or under any provision of state, local or
foreign tax Law.
(h) Charges and Expenses. The Surviving Corporation shall pay all
charges and expenses, including those of the Paying Agent, in connection with
the exchange of cash for shares of Company Common Stock.
ARTICLE III
Representations and Warranties of the Company
The Company represents and warrants to Parent and Sub as follows:
SECTION 3.01. Organization, Standing and Power. Each of the Company
and each of its subsidiaries (the "Company Subsidiaries") is duly organized,
validly existing and in good standing under the laws of the jurisdiction in
which it is organized and has full corporate power and authority and possesses
all governmental franchises, licenses, permits, authorizations and approvals,
and has made all filings, registrations and declarations, in each case whether
domestic or foreign, necessary to enable it to own, lease or otherwise hold
its properties and assets and to conduct its businesses as presently
conducted, including all licenses, approvals and registrations by or with the
U.S. Food and Drug Administration (the "FDA"), and all other Governmental
Entities performing similar functions, necessary for the sale and distribution
of its products in all jurisdictions in which such products are sold or
distributed, in each case other than such franchises, licenses, permits,
authorizations, approvals, filings, registrations and declarations the lack of
which, individually and in the aggregate, has not had and would not
12
reasonably be expected to have a material adverse effect on the Company and
the Company Subsidiaries, taken as a whole, a material adverse effect on the
ability of the Company to perform its obligations under this Agreement or a
material adverse effect on the ability of the Company to consummate the Offer,
the Merger and the other Transactions (a "Company Material Adverse Effect").
The Company and each Company Subsidiary is duly qualified to do business in
each jurisdiction where the nature of its business or their ownership or
leasing of its properties make such qualification necessary except where the
failure to so qualify has not had and would not reasonably be expected to have
a Company Material Adverse Effect. The Company has made available to Parent
true and complete copies of the articles of organization of the Company, as
amended to the date of this Agreement (as so amended, the "Company Charter"),
and the by-laws of the Company, as amended to the date of this Agreement (as
so amended, the "Company By- laws"), and the comparable charter and
organizational documents of each Company Subsidiary, in each case as amended
through the date of this Agreement.
SECTION 3.02. Company Subsidiaries; Equity Interests. (a) The
letter, dated as of the date of this Agreement, from the Company to Parent and
Sub (the "Company Disclosure Letter") lists each Company Subsidiary and its
jurisdiction of organization. All the outstanding shares of capital stock of
each "significant subsidiary" (as defined in Regulation S-X of the Federal
securities laws) ("Significant Subsidiary") of the Company have been validly
issued and are fully paid and nonassessable and, except as set forth in the
Company Disclosure Letter, are owned by the Company, by another Significant
Subsidiary of the Company or by the Company and another Significant Subsidiary
of the Company, free and clear of all pledges, liens, charges, mortgages,
encumbrances and security interests of any kind or nature whatsoever
(collectively, "Liens").
(b) Except for its interests in the Company Subsidiaries and
except for the ownership interests set forth in the Company Disclosure Letter,
the Company does not own, directly or indirectly, any capital stock,
membership interest, partnership interest, joint venture interest or other
equity interest in any person.
SECTION 3.03. Capital Structure. The authorized capital stock of the
Company consists of 100,000,000 shares of Company Common Stock and 5,000,000
shares of preferred stock, par value $0.01 per share (together with the
Company Common Stock, the "Company Capital Stock"). At the close of business
on May 25, 2000, (i) 46,892,798 shares of Company
13
Common Stock were issued and outstanding, (ii) 164,715 shares of Company
Common Stock were held by the Company in its treasury, (iii) 3,980,328 shares
of Company Common Stock were subject to outstanding Company Stock Options (as
defined in Section 6.04) and 2,209,747 additional shares of Company Common
Stock were reserved for issuance pursuant to the Company Stock Plans (as
defined in Section 6.04), (iv) 42,471 shares of Company Common Stock were
subject to outstanding Company Warrants (as defined below) and (v) 100,000
shares of Series A Preferred Stock, par value $.01 per share, of the Company
were reserved for issuance in connection with the rights (the "Company
Rights") issued pursuant to the Rights Agreement dated as of March 28, 2000
(as amended from time to time, the "Company Rights Agreement"), between the
Company and Fleet National Bank, as Rights Agent. Except as set forth above,
at the close of business on May 26, 2000, no shares of capital stock or other
voting securities of the Company were issued, reserved for issuance or
outstanding. There are no outstanding Company SARs (as defined in Section
6.04) that were not granted in tandem with a related Company Stock Option. All
outstanding shares of Company Capital Stock are, and all such shares that may
be issued prior to the Effective Time will be when issued, duly authorized,
validly issued, fully paid and nonassessable and not subject to or issued in
violation of any purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar right under any provision
of the BCL, the Company Charter, the Company By-laws or any Contract (as
defined in Section 3.05) to which the Company is a party or otherwise bound.
There are not any bonds, debentures, notes or other indebtedness of the
Company having the right to vote (or convertible into, or exchangeable for,
securities having the right to vote) on any matters on which holders of
Company Common Stock may vote ("Voting Company Debt"). Except as set forth
above, as of the date of this Agreement, there are not any options, warrants,
rights, convertible or exchangeable securities, "phantom" stock rights, stock
appreciation rights, stock-based performance units, commitments, Contracts,
arrangements or undertakings of any kind to which the Company or any Company
Subsidiary is a party or by which any of them is bound (i) obligating the
Company or any Company Subsidiary to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other equity
interests in, or any security convertible or exercisable for or exchangeable
into any capital stock of or other equity interest in, the Company or of any
Company Subsidiary or any Voting Company Debt, (ii) obligating the Company or
any Company Subsidiary to issue, grant, extend or enter into any such option,
warrant, call, right, security, commitment, Contract,
14
arrangement or undertaking or (iii) that give any person the right to receive
any economic benefit or right similar to or derived from the economic benefits
and rights occurring to holders of Company Capital Stock. As of the date of
this Agreement, there are not any outstanding contractual obligations of the
Company or any Company Subsidiary to repurchase, redeem or otherwise acquire
any shares of capital stock of the Company or any Company Subsidiary. The
Company has delivered to Parent a complete and correct copy of the Company
Rights Agreement, as amended to the date of this Agreement. "Warrants" means
warrants to purchase Company Common Stock assumed in connection with the
Company's acquisition of Autonomous Technologies Corporation, a Florida
corporation, on April 29, 1999.
SECTION 3.04. Authority; Execution and Delivery; Enforceability. (a)
The Company has all requisite corporate power and authority to execute and
deliver this Agreement and, subject to the Company Stockholder Approval (as
defined below) with respect to the Merger if required by Law, to consummate
the Transactions. The execution and delivery by the Company of this Agreement
and the consummation by the Company of the Transactions have been duly
authorized by all necessary corporate action on the part of the Company,
subject, in the case of the Merger, to receipt of the Company Stockholder
Approval (as defined in Section 3.04(c)). The Company has duly executed and
delivered this Agreement, and this Agreement constitutes its legal, valid and
binding obligation (subject to the Company Stockholder Approval with respect
to the Merger if required by Law), enforceable against it in accordance with
its terms, except to the extent that enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
other similar laws of general applicability relating to or affecting the
enforcement of creditors' rights and by the effect of the principles of equity
(regardless of whether enforceability is considered in a proceeding in equity
or at law).
(b) The Board of Directors of the Company (the "Company
Board"), at a meeting duly called and held, duly and unanimously adopted
resolutions (i) approving this Agreement, the Offer, the Merger and the other
Transactions, (ii) determining that the terms of the Offer, the Merger and the
other Transactions are fair to and in the best interests of the Company and
its stockholders, (iii) recommending that the holders of Company Common Stock
accept the Offer and tender their shares of Company Common Stock pursuant to
the Offer and (iv) recommending that the Company's stockholders approve this
Agreement. Such resolutions are sufficient to render inapplicable to Parent
and Sub and this Agreement,
15
the Offer, the Merger and the other Transactions the provisions of Chapter
110C (assuming the requirement that the terms of the Offer be furnished to
shareholders is satisfied), Chapter 110D and Chapter 110F of the BCL. To the
Company's knowledge, no other state takeover statute or similar statute or
regulation applies or purports to apply to the Company with respect to this
Agreement, the Offer, the Merger or any other Transaction. The Company has
been advised by each of its directors and executive officers that, as of the
date of this Agreement, each such person intends to tender all shares of
Company Common Stock owned by such person pursuant to the Offer, except to the
extent of any restrictions created by Section 16(b) of the Exchange Act.
(c) The only vote of holders of any class or series of Company
Capital Stock necessary to approve and adopt this Agreement and the Merger is
the approval of this Agreement by the holders of two-thirds of the outstanding
Company Common Stock (the "Company Stockholder Approval"). The affirmative
vote of the holders of Company Capital Stock, or any of them, is not necessary
to consummate the Offer or any Transaction other than the Merger.
SECTION 3.05. No Conflicts; Consents. (a) Except as set forth in the
Company Disclosure Letter, the execution and delivery by the Company of this
Agreement do not, and the consummation of the Offer, the Merger and the other
Transactions (other than the transactions set forth in Section 6.13) and
compliance with the terms hereof (other than Section 6.13) will not, result in
any violation of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancelation or acceleration of
any obligation or to loss of a material benefit under, or to increased,
additional, accelerated or guaranteed rights or entitlements of any person
under, or result in the creation of any Lien upon any of the properties or
assets of the Company or any Company Subsidiary under, any provision of (i)
the Company Charter, the Company By-laws or the comparable charter or
organizational documents of any Company Subsidiary, (ii) any contract, lease,
license, indenture, note, bond, agreement, permit, concession, franchise or
other instrument (a "Contract") to which the Company or any Company Subsidiary
is a party or by which any of their respective properties or assets is bound
or (iii) subject to the filings and other matters referred to in Section
3.05(b), any judgment, order, injunction or decree, domestic or foreign
("Judgment"), or statute, law (including common law), legislation,
interpretation, ordinance, rule or regulation, domestic or foreign ("Law"),
applicable to the Company or any Company
16
Subsidiary or their respective properties or assets, other than, in the case
of clauses (ii) and (iii) above, any such items that, individually and in the
aggregate, have not had and would not reasonably be expected to have a Company
Material Adverse Effect.
(b) No consent, approval, license, permit, order or authorization
("Consent") of, or registration, declaration or filing with, any Federal,
state, local or foreign government or any court of competent jurisdiction,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign (a "Governmental Entity") is required to
be obtained or made by or with respect to the Company or any Company
Subsidiary in connection with the execution, delivery and performance of this
Agreement or the consummation of the Transactions (other than the transactions
set forth in Section 6.13), other than (i) compliance with and filings under
the Hart- Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), (ii) the filing with the SEC of (A) the Schedule 14D-9, (B) a
proxy or information statement relating to the approval of this Agreement by
the Company's stockholders (the "Proxy Statement"), (C) any information
statement (the "Information Statement") required under Rule 14f-1 in
connection with the Offer and (D) such reports under Section 13 of the
Exchange Act as may be required in connection with this Agreement, the Offer,
the Merger and the other Transactions, (iii) the filing of the Articles of
Merger with the Secretary of State of The Commonwealth of Massachusetts and
appropriate documents with the relevant authorities of the other jurisdictions
in which the Company is qualified to do business, (iv) such filings as may be
required in connection with the taxes described in Section 6.09, (v)
compliance with and filings under the Laws of the European Union, Brazil,
Germany, Ireland, Italy, the Netherlands and certain other foreign
jurisdictions, in each case if and to the extent required, and (vi) such other
items that, individually and in the aggregate, have not had and would not
reasonably be expected to have a Company Material Adverse Effect.
(c) The Company and the Company Board have taken all action
necessary to (i) render the Company Rights inapplicable to this Agreement, the
Offer, the Merger and the other Transactions and (ii) ensure that (A) neither
Parent nor any of its stockholders, affiliates or associates is or will become
an "Acquiring Person" (as defined in the Company Rights Agreement) by reason
of this Agreement, the Offer, the Merger or any other Transaction), (B) a
"Distribution Date" (as defined in the Company Rights Agreement) shall not
occur by reason of this Agreement, the
17
Offer, the Merger or any other Transaction and (C) the Company Rights shall
expire immediately prior to the Effective Time.
SECTION 3.06. SEC Documents; Undisclosed Liabilities. The Company
has filed all reports, schedules, forms, statements and other documents
required to be filed by the Company with the SEC since January 1, 1998 (the
"Company SEC Documents"). As of its respective date, each Company SEC Document
complied in all material respects with the requirements of the Exchange Act or
the Securities Act of 1933, as amended (the "Securities Act"), as the case may
be, and the rules and regulations of the SEC promulgated thereunder applicable
to such Company SEC Document, and did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. As of the date of
this Agreement, the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1999 (filed on March 30, 2000) (the "1999 Form 10-K"), its
definitive Proxy Statement with respect to its 2000 Special Meeting (filed on
April 19, 2000), its Quarterly Report on Form 10-Q for the quarter ended March
31, 2000 (filed on May 12, 2000), and its Current Report on Form 8-K (filed on
May 12, 2000) (collectively, the "2000 SEC Documents") taken together do not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The consolidated financial statements of the Company included
in the Company SEC Documents comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles ("GAAP") (except, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC) applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto) and fairly present the consolidated financial position of the Company
and its consolidated subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). Except as set forth in the Filed Company SEC Documents (as
defined in Section 3.08), neither the Company nor any Company Subsidiary has
any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by GAAP to be set forth on a consolidated
balance
18
sheet of the Company and its consolidated subsidiaries or in the notes
thereto, other than liabilities or obligations incurred in the ordinary course
of business consistent with prior practice since the date of the most recent
financial statements included in the Filed Company SEC Documents.
SECTION 3.07. Information Supplied. None of the information supplied
or to be supplied by the Company for inclusion or incorporation by reference
in (i) the Offer Documents, the Schedule 14D-9 or the Information Statement
will, at the time such document is filed with the SEC, at any time it is
amended or supplemented or at the time it is first published, sent or given to
the Company's stockholders, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, or (ii) the Proxy Statement will,
at the date it is first mailed to the Company's stockholders or at the time of
the Company Stockholders Meeting (as defined in Section 6.01), contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Schedule 14D-9, the Information Statement and the Proxy
Statement will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder,
except that no representation is made by the Company with respect to
statements made or incorporated by reference therein based on information
supplied by Parent or Sub for inclusion or incorporation by reference therein.
SECTION 3.08. Absence of Certain Changes or Events. Except as
disclosed in the Company SEC Documents filed and publicly available prior to
the date of this Agreement (the "Filed Company SEC Documents") or in the
Company Disclosure Letter, from the date of the most recent audited financial
statements included in the Filed Company SEC Documents to the date of this
Agreement, the Company has conducted its business only in the ordinary course,
and during such period there has not been:
(i) any event, change, effect or development that, individually or
in the aggregate, has had or would reasonably be expected to have a Company
Material Adverse Effect;
(ii) any declaration, setting aside or payment of any
dividend or other distribution (whether in cash, stock or property)
with respect to any Company Capital
19
Stock or any repurchase for value by the Company of any Company Capital
Stock;
(iii) any split, combination or reclassification of any Company
Capital Stock or any issuance or the authorization of any issuance of any
other securities in respect of, in lieu of or in substitution for shares of
Company Capital Stock;
(iv) (A) any granting by the Company or any Company Subsidiary to any
current or former director, officer or employee of the Company or any
Company Subsidiary of any increase in compensation, except to the extent
required under employment agreements in effect as of the date of the most
recent audited financial statements included in the Filed Company SEC
Documents or, with respect to employees (other than directors, officers or
key employees) in the ordinary course of business consistent with prior
practice and except for Company Stock Options that are reflected as
outstanding in clause (iii) of Section 3.03, (B) any granting by the
Company or any Company Subsidiary to any such director, officer or employee
of any material increase in severance or termination pay, except as was
required under any employment, severance or termination policy, practice or
agreements in effect as of the date of the most recent audited financial
statements included in the Filed Company SEC Documents or (C) any entry by
the Company or any Company Subsidiary into, or any amendment of, any
employment, severance or termination agreement with any such director,
officer or employee, except for such agreements or amendments with employees
(other than directors, officers or key employees) that are entered into in
the ordinary ourse of business consistent with prior practice;
(v) any termination of employment or departure of any officer,
material scientist or other key employee of the Company or any Company
Subsidiary;
(vi) any change in accounting methods, principles or practices by the
Company or any Company Subsidiary materially affecting the consolidated
assets, liabilities or results of operations of the Company, except insofar
as may have been required by a change in GAAP; or
(vii) any material elections with respect to Taxes (as defined in
Section 3.09) by the Company or any Company Subsidiary or settlement or
compromise by the
20
Company or any Company Subsidiary of any material Tax liability or
refund.
SECTION 3.09. Taxes. (a) Each of the Company and each Company
Subsidiary has timely filed, or has caused to be timely filed on its behalf,
all Tax Returns required to be filed by it, and all such Tax Returns are true,
complete and accurate, except to the extent any failure to file or any
inaccuracies in any filed Tax Returns, individually and in the aggregate, has
not had and would not reasonably be expected to have a Company Material
Adverse Effect. All Taxes shown to be due on such Tax Returns, or otherwise
owed, have been timely paid, except to the extent that any failure to pay,
individually and in the aggregate, has not had and would not reasonably be
expected to have a Company Material Adverse Effect.
(b) The most recent financial statements contained in the Filed
Company SEC Documents reflect an adequate reserve (in accordance with GAAP) for
all Taxes payable by the Company and the Company Subsidiaries for all Taxable
periods and portions thereof through the date of such financial statements (in
addition to any reserve for deferred Taxes established to reflect timing
differences between book and tax income). No deficiency with respect to any
Taxes has been proposed, asserted or assessed against the Company or any Company
Subsidiary, and no requests for waivers of the time to assess any such Taxes are
pending, except to the extent any such deficiency or request for waiver,
individually and in the aggregate, has not had and would not reasonably be
expected to have a Company Material Adverse Effect.
(c) The Federal income Tax Returns of the Company and each Company
Subsidiary consolidated in such Returns have never been examined by or settled
with the United States Internal Revenue Service. All material assessments for
Taxes due with respect to such completed and settled examinations or any
concluded litigation have been fully paid.
(d) There are no material Liens for Taxes (other than for current
Taxes not yet due and payable) on the assets of the Company or any Company
Subsidiary. Neither the Company nor any Company Subsidiary is bound by any
agreement with respect to Taxes other than agreements between or among the
Company and Company Subsidiaries and no other person.
21
(e) Note 14 to the Company's consolidated financial statements
included in the 1999 Form 10-K has been prepared in accordance with GAAP.
(f) No claim has been made in the past five years by any authority
in a jurisdiction within which the Company or any Company Subsidiary does not
file Tax Returns that it is, or may be, subject to taxation by that
jurisdiction.
(g) Neither the Company nor any Company Subsidiary has constituted
either a "distributing corporation" or a "controlled corporation" (within the
meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock
qualifying or intended to qualify for tax-free treatment under Section 355 of
the Code (A) in the two years prior to the date of this Agreement or (B) in a
distribution that could otherwise constitute part of a "plan" or "series of
related transactions" (within the meaning of Section 355(e) of the Code) in
conjunction with the Merger.
(h) For purposes of this Agreement:
"Taxes" includes all forms of taxation imposed by any Federal,
state, local, foreign or other Governmental Entity, including income,
franchise, property, sales, use, excise, employment, unemployment, payroll,
social security, estimated, value added, ad valorem, transfer, recapture,
withholding and other Taxes of any kind, including all interest, penalties and
additions thereto.
"Tax Return" means all Federal, state, local, provincial and foreign
Tax returns, declarations, statements, reports, schedules, forms and
information returns and any amended Tax return relating to Taxes.
SECTION 3.10. Absence of Changes in Benefit Plans. Except as
disclosed in the Filed Company SEC Documents or in the Company Disclosure
Letter, from the date of the most recent audited financial statements included
in the Filed Company SEC Documents to the date of this Agreement, there has
not been any adoption or amendment in any material respect by the Company or
any Company Subsidiary of any collective bargaining agreement or any bonus,
pension, profit sharing, deferred compensation, incentive compensation, stock
ownership, stock purchase, stock option, phantom stock, retirement, vacation,
severance, disability, death benefit, hospitalization, medical or other plan
or arrangement providing benefits to any current or former employee, officer
or director of the Company or any Company Subsidiary (collectively, "Company
22
Benefit Plans"). Except as disclosed in the Filed Company SEC Documents or in
the Company Disclosure Letter, as of the date of this Agreement there are not
any employment, consulting, indemnification, severance or termination
agreements or arrangements between the Company or any Company Subsidiary and
any current or former employee, officer or director of the Company or any
Company Subsidiary, nor does the Company or any Company Subsidiary have any
general severance plan or policy.
SECTION 3.11. ERISA Compliance; Excess Parachute Payments. (a) The
Company Disclosure Letter contains a list and brief description of all
material "employee pension benefit plans" (as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
(sometimes referred to herein as "Company Pension Plans"), "employee welfare
benefit plans" (as defined in Section 3(1) of ERISA) and all other Company
Benefit Plans maintained, or contributed to, by the Company or any Company
Subsidiary for the benefit of any current or former employees, officers or
directors of the Company or any Company Subsidiary. The Company has made
available to Parent true, complete and correct copies of (i) each Company
Benefit Plan (or, in the case of any unwritten Company Benefit Plan, a
description thereof), (ii) the most recent annual report on Form 5500 filed
with the Internal Revenue Service with respect to each Company Benefit Plan
(if any such report was required), (iii) the most recent summary plan
description for each Company Benefit Plan for which such summary plan
description is required and (iv) each trust agreement and group annuity
contract relating to any Company Benefit Plan, if any.
(b) All Company Benefit Plans are in compliance in all material
respects with applicable Law (including, where applicable, the Code and
ERISA). All Company Pension Plans which are intended to be tax-qualified under
Section 401(a) of the Code have been the subject of determination letters from
the Internal Revenue Service to the effect that such Company Pension Plans are
qualified and their related trusts are exempt from Federal income taxes under
Sections 401(a) and 501(a), respectively, of the Internal Revenue Code of
1986, as amended (the "Code"), and no such determination letter has been
revoked nor, to the knowledge of the Company, has revocation been threatened.
No such Company Pension Plan been amended since the date of its most recent
determination letter or application therefor in any respect that would
adversely affect its qualification, nor has any such Company Pension Plan been
amended since December 31, 1998 in any respect that would materially increase
its costs.
23
(c) No Company Pension Plan is a "defined benefit plan" within the
meaning of Section 3(35) of ERISA or is subject to the minimum funding
standards of Section 412 of the Code or Section 302 of ERISA, and neither the
Company nor any Company Subsidiary has any actual or contingent liability
under any defined benefit plan which it (or any affiliate) previously
maintained or contributed to (or was obligated to maintain or contribute to).
None of the Company, any Company Subsidiary, any officer of the Company or any
Company Subsidiary or any of the Company Benefit Plans which are subject to
ERISA, including the Company Pension Plans, any trusts created thereunder or
any trustee or administrator thereof, has engaged in a "prohibited
transaction" (as such term is defined in Section 406 of ERISA or Section 4975
of the Code) or any other breach of fiduciary responsibility that could
subject the Company, any Company Subsidiary or any officer of the Company or
any Company Subsidiary to any material tax or penalty on prohibited
transactions imposed by such Section 4975 or to any material liability under
Section 502(i) or 502(l) of ERISA.
(d) With respect to any Company Benefit Plan that is an employee
welfare benefit plan, (i) all such Company Benefit Plans are unfunded and no
such Company Benefit Plan is funded through a "welfare benefits fund" (as such
term is defined in Section 419(e) of the Code), (ii) each such Company Benefit
Plan that is a "group health plan" (as such term is defined in Section
5000(b)(1) of the Code), complies in all material respects with the applicable
requirements of Section 4980B(f) of the Code and (iii) each such Company
Benefit Plan (including any such Plan covering retirees or other former
employees) may be amended or terminated without material liability to the
Company and the Company Subsidiaries on or at any time after the Effective
Time, except with respect to contributions, premiums or benefit claims (actual
or contingent) with respect to the period from the Effective Time to such
termination.
(e) Other than payments that may be made to the persons listed in
the Company Disclosure Letter (the "Primary Company Executives"), any amount
that could be received (whether in cash or property or the vesting of
property) as a result of the Offer, the Merger or any other Transaction by any
employee, officer or director of the Company or any of its affiliates who is a
"disqualified individual" (as such term is defined in proposed Treasury
Regulation Section 1.280G-1) under any employment, severance or termination
agreement, any other compensation arrangement or any Company Benefit Plan
currently in effect would not be characterized as an "excess parachute
payment" (as defined
24
in Section 280G(b)(1) of the Code). Set forth in the Company Disclosure Letter
is (i) the estimated maximum amount that could be paid to each Primary Company
Executive as a result of the Offer, the Merger and the other Transactions
under all employment, severance and termination agreements, other compensation
arrangements and Company Benefit Plans currently in effect and (ii) the "base
amount" (as defined in Section 280G(b)(3) of the Code) for each Primary
Company Executive calculated as of the date of this Agreement.
SECTION 3.12. Litigation. Except as disclosed in the Filed Company
SEC Documents or in the Company Disclosure Letter, there is no suit, action or
proceeding pending or, to the knowledge of the Company, threatened against or
affecting the Company or any Company Subsidiary (and, as of the date of this
Agreement, the Company is not aware of any basis for any such suit, action or
proceeding) that, individually or in the aggregate, has had or would
reasonably be expected to have a Company Material Adverse Effect, other than
any action, suit or proceeding filed or threatened after the date of this
Agreement that is based upon the same or substantially the same facts that
serve as the basis for any suit, action or proceeding disclosed in the Filed
Company SEC Documents or the Company Disclosure Letter, nor is there any
Judgment outstanding against the Company or any Company Subsidiary that has
had or would reasonably be expected to have a Company Material Adverse Effect.
SECTION 3.13. Compliance with Applicable Laws. Except as disclosed
in the Filed Company SEC Documents or in the Company Disclosure Letter, the
Company and the Company Subsidiaries are in compliance with all applicable
Laws, including those relating to occupational health and safety and the
environment, except for instances of noncompliance that, individually and in
the aggregate, have not had and would not reasonably be expected to have a
Company Material Adverse Effect. Except as set forth in the Filed Company SEC
Documents or in the Company Disclosure Letter, neither the Company nor any
Company Subsidiary has received any written communication during the past two
years from a Governmental Entity that alleges that the Company or a Company
Subsidiary is not in compliance in any material respect with any applicable
Law. Except as set forth in the Filed Company SEC Documents or in the Company
Disclosure Letter, the Company and the Company Subsidiaries are in compliance
in all material respects with the U.S. Federal Food, Drug and Cosmetic Act, as
amended (the "FDC Act"), and applicable regulations promulgated thereunder,
and are in compliance in all material respects with all FDA
25
regulations, including the FDA's Quality System Regulation, and any similar
Laws applicable to the Company or any Company Subsidiary, including the
European Union Medical Device Directives. The Company and the Company
Subsidiaries have maintained quality assurance/quality control practices and
procedures in compliance in all material respects with good manufacturing
practices within the meaning of the FDC Act and applicable regulations
promulgated thereunder. This Section 3.13 does not relate to matters with
respect to Taxes, which are the subject of Section 3.09.
SECTION 3.14. Contracts; Debt Instruments. Except as disclosed in
the Filed SEC Documents or the Company Disclosure Letter, there are no
contracts or agreements that are material to the business, assets, condition
(financial or otherwise) or results of operations of the Company and the
Company Subsidiaries taken as a whole. Neither the Company nor any Company
Subsidiary is in violation of or in default under (nor does there exist any
condition which upon the passage of time or the giving of notice or both would
cause such a violation of or default under) any loan or credit agreement,
note, bond, mortgage, indenture, lease, permit, concession, franchise, license
or any other contract, agreement, arrangement or understanding, to which it is
a party or by which it or any of its properties or assets is bound, except for
violations or defaults that, individually and in the aggregate, have not had
and would not reasonably be expected to have a Company Material Adverse
Effect.
SECTION 3.15. Intellectual Property. (a) The Company and the Company
Subsidiaries own, or are validly licensed or otherwise have the right to use,
all patents, patent rights (including patent applications and licenses),
know-how, trade secrets, trademarks, trademark rights, trade names, trade name
rights, service marks, service mark rights, copyrights and other proprietary
intellectual property rights and computer programs (collectively,
"Intellectual Property Rights") which are material to the conduct of the
business of the Company and the Company Subsidiaries taken as a whole and the
consummation of the Transactions (other than the transactions set forth in
Section 6.13) will not conflict with, alter or impair any such Intellectual
Property Rights. The Company Disclosure Letter sets forth a description of all
of the following with respect to the Company and the Company Subsidiaries:
material patents, material patent rights (including patent applications and
licenses), material inventions that have been identified as active patent
matters but for which applications have not yet been filed, registrations and
licenses of trademarks, trade names, service marks and
26
copyrights, and the geographical territories in which the foregoing are
applicable. Except as set forth in the Company Disclosure Letter, no claims
are pending or, to the knowledge of the Company, threatened that (i) the
Company or any of the Company Subsidiaries is infringing or otherwise
adversely affecting the rights of any person with regard to any Intellectual
Property Right or (ii) assert that any Intellectual Property Rights owned by
the Company or any Company Subsidiary ("Owned Intellectual Property Rights")
are invalid or unenforceable. To the knowledge of the Company, except as set
forth in the Filed Company SEC Documents or the Company Disclosure Letter, no
person is infringing the rights of the Company or any of the Company
Subsidiaries with respect to any Owned Intellectual Property Right.
(b) The Company has timely paid, or caused to be timely paid, all
maintenance, renewal and other similar fees, and has timely met any applicable
working requirements with respect to all Owned Intellectual Property Rights
listed in the Company Disclosure Letter or material to the Company and the
Company Subsidiaries taken as a whole, except as set forth in the Company
Disclosure Letter. With respect to Intellectual Property Rights other than
Owned Intellectual Property Rights ("Licensed Intellectual Property Rights")
that are listed in the Company Disclosure Letter or material to the Company
and the Company Subsidiaries taken at a whole, the Company is in compliance in
all material respects with any applicable license or similar agreement.
(c) All Owned Intellectual Property Rights listed in the Company
Disclosure Letter or material to the Company and its Subsidiaries taken as a
whole, are free and clear of any Liens (other than Liens that are not material
in amount or that would not reasonably be expected to materially interfere
with such Intellectual Property Rights) and may be freely transferred,
assigned, licensed or sublicensed except as set forth in the Company
Disclosure letter. The Company's licenses with respect to all Licensed
Intellectual Property Rights that are listed in the Company Disclosure Letter
or material to the Company and the Company Subsidiaries taken as a whole are
free and clear of any Liens (other than Liens that are not material in amount
or that would not reasonably be expected to materially interfere with such
Licensed Intellectual Property Rights).
SECTION 3.16. Brokers; Schedule of Fees and Expenses. No broker,
investment banker,financial advisor or other person, other than Chase Securities
Inc.,the fees and expenses of which will be paid by the Company, is
27
entitled to any broker's, finder's, financial advisor's or other similar fee
or commission in connection with the Offer, the Merger and the other
Transactions based upon arrangements made by or on behalf of the Company. The
estimated fees and expenses incurred and to be incurred by the Company in
connection with the Offer, the Merger and the other Transactions (including
the fees of Chase Securities Inc. and the fees of the Company's legal counsel)
are set forth in the Company Disclosure Letter.
SECTION 3.17. Opinion of Financial Advisor. The Company has received
the opinion of Chase Securities Inc., dated the date of this Agreement, to the
effect that, as of such date, the consideration to be received in the Offer
and the Merger by the holders of Company Common Stock is fair to such holders
from a financial point of view and a copy of the signed opinion has been
provided to Parent.
SECTION 3.18. Lens Express, Inc. Sale. Following the closing of the
sale pursuant to the Asset Purchase Agreement by and among Lens Express, Inc.,
the Company and Strategic Optical Holdings, Inc. dated May 4, 2000 (the "Lens
Express Sale Agreement"), neither the Company nor any Company Subsidiary will
have any material liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) with respect to the Business (as defined in
the Lens Express Sale Agreement) other than (i) the post-closing purchase
price adjustment provided in Section 3.3 of the Lens Express Sale Agreement,
if any, (ii) liabilities and obligations set forth in Section 2.3 of the Lens
Express Sale Agreement or Schedule 2.3 to the Lens Express Sale Agreement,
(iii) liabilities of Seller (as defined in the Lens Express Sale Agreement)
required to be set forth in Schedule 5.13 to the Lens Express Sale Agreement
but not set forth therein, (iv) the indemnity obligations set forth in Section
12.7 of the Lens Express Sale Agreement, (v) compliance with the post-closing
covenants set forth in the Lens Express Sale Agreement and (vi) liabilities
and obligations set forth in a letter agreement dated May 4, 2000, a true and
complete copy of which has been provided to Parent. To the knowledge of the
Company, except as set forth in the Company Disclosure Letter, no liabilities
that were required to be set forth in Schedule 5.13 were not set forth
therein. Exhibit 4.2 to the Company's Current Report on Form 8-K filed with
the SEC on May 12, 2000, together with the exhibits and schedules thereto that
the Company has provided to Parent and the letter agreement referred to in
clause (vi) above, constitute a true and complete copy of the Lens Express
Sale Agreement and there are no other agreements in effect among the parties
thereto relating to the subject matter thereof.
28
ARTICLE IV
Representations and Warranties of Parent and Sub
Parent and Sub, jointly and severally, represent and warrant to the
Company as follows:
SECTION 4.01. Organization, Standing and Power. Each of
Parent and Sub is duly organized, validly existing and in good standing under
the laws of the jurisdiction in which it is organized and has full corporate
power and authority and possesses all governmental franchises, licenses,
permits, authorizations and approvals in each case whether domestic or foreign
necessary to enable it to own, lease or otherwise hold its properties and
assets and to conduct its businesses as presently conducted, other than such
franchises, licenses, permits, authorizations and approvals the lack of which,
individually and in the aggregate, has not had and would not reasonably be
expected to have a material adverse effect on the ability of Parent or Sub to
perform its obligations under this Agreement or a material adverse effect on
the ability of Parent or Sub to consummate the Offer, the Merger and the other
Transactions (a "Parent Material Adverse Effect").
SECTION 4.02. Sub. (a) Since the date of its incorporation, Sub has
not carried on any business or conducted any operations other than the
execution of this Agreement, the performance of its obligations hereunder and
matters ancillary thereto. Sub was incorporated solely for the purpose of
consummating the Transactions.
(b) The authorized capital stock of Sub consists of 1,000 shares of
common stock, par value $0.01 per share, all of which have been validly
issued, are fully paid and nonassessable and are owned by Parent free and
clear of any Lien.
SECTION 4.03. Authority; Execution and Delivery; Enforceability.
Each of Parent and Sub has all requisite corporate power and authority to
execute and deliver this Agreement and to consummate the Transactions. The
execution and delivery by each of Parent and Sub of this Agreement and the
consummation by it of the Transactions have been duly authorized by all
necessary corporate action on the part of Parent and Sub. Parent, as sole
stockholder of Sub, has approved this Agreement. Each of Parent and Sub has
duly executed and delivered this Agreement, and this Agreement constitutes its
legal, valid and binding obligation, enforceable against it in accordance with
its terms, except to the extent that enforceability may be limited by
29
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
other similar laws of general applicability relating to or affecting the
enforcement of creditors' rights and by the effect of the principles of equity
(regardless of whether enforceability is considered in a proceeding in equity
or at law).
SECTION 4.04. No Conflicts; Consents. (a) The execution and delivery
by each of Parent and Sub of this Agreement, do not, and the consummation of
the Offer, the Merger and the other Transactions and compliance with the terms
hereof will not, result in any violation of or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancelation or acceleration of any obligation or to loss of a material benefit
under, or to increased, additional, accelerated or guaranteed rights or
entitlements of any person under, or result in the creation of any Lien upon
any of the properties or assets of Parent or any of its subsidiaries under,
any provision of (i) the charter, by-laws or other organizational documents of
Parent or any of its subsidiaries, (ii) any Contract to which Parent or any of
its subsidiaries is a party or by which any of their respective properties or
assets is bound or (iii) subject to the filings and other matters referred to
in Section 4.04(b), any Judgment or Law applicable to Parent or any of its
subsidiaries or their respective properties or assets, other than, in the case
of clauses (ii) and (iii) above, any such items that, individually and in the
aggregate, have not had and would not reasonably be expected to have a Parent
Material Adverse Effect.
(b) No Consent of, or registration, declaration or filing with, any
Governmental Entity is required to be obtained or made by or with respect to
Parent or any of its subsidiaries in connection with the execution, delivery
and performance of this Agreement or the consummation of the Transactions,
other than (i) compliance with and filings under the HSR Act, (ii) the filing
with the SEC of (A) the Offer Documents and (B) such reports under the
Exchange Act as may be required in connection with this Agreement, the Offer,
the Merger and the other Transactions, (iii) the filing of the Articles of
Merger with the Secretary of State of The Commonwealth of Massachusetts, (iv)
such filings as may be required in connection with the taxes described in
Section 6.09, (v) compliance with and filings under the Laws of the European
Union, Brazil, Germany, Ireland, Italy, the Netherlands and certain other
foreign jurisdictions, in each case if and to the extent required, and (vi)
such other items that, individually and in the aggregate, have not had
30
and would not reasonably be expected to have a Parent
Material Adverse Effect.
SECTION 4.05. Information Supplied. None of the information supplied
or to be supplied by Parent or Sub for inclusion or incorporation by reference
in (i) the Offer Documents, the Schedule 14D-9 or the Information Statement
will, at the time such document is filed with the SEC, at any time it is
amended or supplemented or at the time it is first published, sent or given to
the Company's stockholders, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, or (ii) the Proxy Statement will,
at the date it is first mailed to the Company's stockholders or at the time of
the Company Stockholders Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Offer Documents
will comply as to form in all material respects with the requirements of the
Securities Act and the rules and regulations thereunder, except that no
representation is made by Parent or Sub with respect to statements made or
incorporated by reference therein based on information supplied by the Company
for inclusion or incorporation by reference therein.
SECTION 4.06. Brokers. No broker, investment banker, financial
advisor or other person, other than Goldman, Sachs & Co., the fees and
expenses of which will be paid by Parent, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with the Offer, the Merger and the other Transactions based upon arrangements
made by or on behalf of Parent.
SECTION 4.07. Financial Ability to Perform. Parent and Sub will have
cash funds sufficient as and when needed to pay all cash payments for shares
of Company Common Stock and options in the Offer and the Merger and to pay all
related fees and expenses.
ARTICLE V
Covenants Relating to Conduct of Business
SECTION 5.01. Conduct of Business. (a) Conduct of Business by the
Company. Except for matters set forth in the Company Disclosure Letter,
expressly agreed to in
31
writing by Parent or otherwise expressly permitted by this Agreement, from the
date of this Agreement to the earliest to occur of the date of the termination
of this Agreement, the date directors designated by Parent or Sub have been
elected to and shall constitute a majority of the Company Board (the "Control
Date") or the Effective Time the Company shall, and shall cause each Company
Subsidiary to, conduct the business of the Company and the Company
Subsidiaries taken as a whole in the usual, regular and ordinary course in
substantially the same manner as previously conducted and use all reasonable
efforts to preserve intact its current business organization, keep available
the services of its current officers and employees and keep its relationships
with customers, suppliers, licensors, licensees, distributors and others
having business dealings with them to the end that its goodwill and ongoing
business shall be unimpaired in all material respects at the Effective Time.
In addition, and without limiting the generality of the foregoing, except for
matters set forth in the Company Disclosure Letter, expressly agreed to in
writing by Parent or otherwise expressly permitted by this Agreement, from the
date of this Agreement to the earliest to occur of the date of the termination
of this Agreement, the Control Date or the Effective Time, the Company shall
not, and shall not permit any Company Subsidiary to, do any of the following
without the prior written consent of Parent:
(i) (A) declare, set aside or pay any dividends on, or make
any other distributions in respect of, any of its capital stock,
other than dividends and distributions by a direct or indirect wholly
owned subsidiary of the Company to its parent, (B) split, combine or
reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock, or (C) purchase, redeem
or otherwise acquire any shares of capital stock of the Company or
any Company Subsidiary or any other securities thereof or any rights,
warrants or options to acquire any such shares or other securities;
(ii) issue, deliver, sell or grant (A) any shares of its
capital stock, (B) any Voting Company Debt or other voting
securities, (C) any securities convertible into or exchangeable for,
or any options, warrants or rights to acquire, any such shares,
Voting Company Debt, voting securities or convertible or exchangeable
securities or (D) any "phantom" stock, "phantom" stock rights, stock
appreciation rights or stock-based performance units, other than (1)
the issuance of Company Common Stock (and associated Company Rights)
32
upon the exercise of Company Stock Options outstanding on the date of
this Agreement and in accordance with their present terms and (2) the
issuance of Company Common Stock upon the exercise of Company Rights;
(iii) amend its articles of organization, by-laws or
other comparable charter or organizational documents;
(iv) acquire or agree to acquire (A) by merging or
consolidating with, or by purchasing a substantial equity interest in
or portion of the assets of, or by any other manner, any business or
any corporation, partnership, joint venture, association or other
business organization or division thereof or (B) any assets that are
material, individually or in the aggregate, to the Company and the
Company Subsidiaries taken as a whole, except for purchases of
inventory in the ordinary course of business consistent with past
practice;
(v) (A) grant to any current or former director, officer or
employee of the Company or any Company Subsidiary any increase in
compensation, except to the extent required under employment
agreements in effect as of the date of the most recent audited
financial statements included in the Filed Company SEC Documents or,
with respect to employees (other than directors, officers or key
employees) in the ordinary course of business consistent with prior
practice, (B) grant to any current or former employee, officer or
director of the Company or any Company Subsidiary any increase in
severance or termination pay, except to the extent required under any
agreement in effect as of the date of the most recent audited
financial statements included in the Filed Company SEC Documents, (C)
enter into any employment, consulting, indemnification, severance or
termination agreement with any such employee, officer or director,
(D) establish, adopt, enter into or amend in any material respect any
collective bargaining agreement or Company Benefit Plan or (E) take
any action to accelerate any rights or benefits, or make any material
determinations not in the ordinary course of business consistent with
prior practice, under any collective bargaining agreement or Company
Benefit Plan;
(vi) make any change in accounting methods, principles or
practices materially affecting the reported consolidated assets,
liabilities or results of operations of the Company, except insofar
as may have been required by a change in GAAP;
33
(vii) sell, lease (as lessor), license or otherwise dispose
of or subject to any Lien any material properties or assets, except
(A) sales of obsolete assets in the ordinary course of business
consistent with past practice, (B) sales of inventory in the ordinary
course of business consistent with prior practice and (C) the sale of
Lens Express, Inc. substantially on the terms set forth in the Lens
Express Sale Agreement;
(viii) (A) incur any indebtedness for borrowed money or
guarantee any such indebtedness of another person, issue or sell any
debt securities or warrants or other rights to acquire any debt
securities of the Company or any Company Subsidiary, guarantee any
debt securities of another person, enter into any "keep well" or
other agreement to maintain any financial statement condition of
another person or enter into any arrangement having the economic
effect of any of the foregoing, except for short-term borrowings from
persons that are not directors, officers or employees of the Company
or any Company Subsidiary incurred in the ordinary course of business
consistent with past practice, or (B) make any loans, advances or
capital contributions to, or investments in, any other person, other
than to or in the Company or any direct or indirect wholly owned
subsidiary of the Company or loans, investments and advances in
connection with the sale of the products of the Company and the
Company Subsidiaries in the ordinary course of business consistent
with prior practice to persons that are not directors, officers or
employees of the Company or any Company Subsidiary, not to exceed
$100,000 individually or $1,000,000 in the aggregate;
(ix) make or agree to make any new capital expenditure or
expenditures that are in excess of $50,000 individually or $250,000
in the aggregate;
(x) make or change any material Tax election or settle or
compromise any material Tax liability or refund, except for
liabilities not in excess of $100,000 individually or $1,000,000 in
the aggregate;
(xi) (A) pay, discharge or satisfy any claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent
or otherwise) in excess of $50,000 individually or $500,000 in the
aggregate, other than the payment, discharge or satisfaction, in the
ordinary course of business consistent with past practice or in
accordance with their terms, of
34
liabilities reflected or reserved against in, or contemplated by, the
most recent consolidated financial statements (or the notes thereto)
of the Company included in the Filed Company SEC Documents or
incurred in the ordinary course of business consistent with past
practice, (B) cancel any indebtedness in excess of $50,000
individually or $500,000 in the aggregate or waive any claims or
rights of substantial value or (C) waive the benefits of, or agree to
modify in any manner, any confidentiality, standstill or similar
agreement to which the Company or any Company Subsidiary is a party;
(xii) enter into, renew, extend, amend, modify, waive any
material provision of, or terminate any lease or similar commitment,
in each case providing for payments in excess of $100,000 over the
term of such lease or commitment (or until the date on which such
lease or commitment may be terminated by the Company without
penalty); or
(xiii) authorize, or commit or agree to take, any of
the foregoing actions.
(b) Other Actions. The Company and Parent shall not, and shall not
permit any of their respective subsidiaries to, take any action that would, or
that would reasonably be expected to, result in (i) any of the representations
and warranties of such party set forth in this Agreement that is qualified as
to materiality becoming untrue, (ii) any of such representations and
warranties that is not so qualified becoming untrue in any material respect or
(iii) any condition to the Offer set forth in Exhibit A, or any condition to
the Merger set forth in Article VII, not being satisfied; provided, however,
that the obligations set forth in this Section 5.01(b) shall not be deemed to
have been breached as a result of actions by the Company expressly permitted
under Section 5.02(b).
(c) Advice of Changes. The Company shall promptly advise Parent
orally and in writing of any change or event that has had or would reasonably
be expected to have a Company Material Adverse Effect.
SECTION 5.02. No Solicitation. (a) The Company shall not, nor shall
it authorize or permit any Company Subsidiary to, nor shall it authorize or
permit any officer, director or employee of, or any investment banker,
attorney or other advisor or representative (collectively, "Representatives")
of, the Company or any Company Subsidiary to, (i) directly or indirectly
solicit, initiate or
35
encourage the submission of, any Company Takeover Proposal (as defined in
Section 5.02(e)), (ii) enter into any agreement with respect to any Company
Takeover Proposal or (iii) directly or indirectly participate in any
discussions or negotiations regarding, or furnish to any person any
information with respect to, or take any other action to facilitate any
inquiries or the making of any proposal that constitutes, or may reasonably be
expected to lead to, any Company Takeover Proposal; provided, however, that
prior to the first acceptance for payment of shares of Company Common Stock
pursuant to the Offer the Company may, to the extent necessary to act in a
manner consistent with the fiduciary obligations of the Company Board, as
determined in good faith by it after consultation with outside counsel, in
response to a Company Takeover Proposal (as defined in Section 5.02(e)) that
the Company Board determines, in good faith after consultation with outside
counsel and Chase Securities Inc. or another nationally recognized independent
financial advisor, is reasonably likely to lead to a Superior Company Proposal
(as defined in Section 5.02(e)), that was not solicited by the Company and
that did not otherwise result from a breach or a deemed breach of this Section
5.02(a), and subject to compliance with Section 5.02(c),(x) furnish
information with respect to the Company to the person making such Company
Takeover Proposal and its Representatives pursuant to a customary
confidentiality agreement and (y) participate in discussions or negotiations
with such person and its Representatives regarding such Company Takeover
Proposal. Without limiting the foregoing, it is agreed that any violation of
the restrictions set forth in the preceding sentence by any Representative of
the Company or any Company Subsidiary, whether or not such person is
purporting to act on behalf of the Company or any Company Subsidiary or
otherwise, shall be deemed to be a breach of this Section 5.02(a) by the
Company.
(b) Unless the Company Board, after consultation with outside
counsel, determines in its good faith judgment that it is necessary to do so
in order to fulfill its fiduciary obligations under applicable Law, neither
the Company Board nor any committee thereof shall (i) withdraw or modify in a
manner adverse to Parent or Sub, or publicly propose to withdraw or modify in
a manner adverse to Parent or Sub, the approval or recommendation by the
Company Board or any such committee of this Agreement, the Offer or the
Merger, (ii) approve any letter of intent, agreement in principle, acquisition
agreement or similar agreement relating to any Company Takeover Proposal or
(iii) approve or recommend, or publicly propose to approve or recommend, any
Company Takeover Proposal. The Company shall not take
36
the actions set forth in clauses (ii) or (iii) of the preceding sentence
unless it has terminated this Agreement pursuant to Section 8.01(e).
(c) The Company promptly shall advise Parent orally and, within two
business days, in writing of any Company Takeover Proposal or any inquiry with
respect to or that could reasonably be expected to lead to any Company
Takeover Proposal, the material terms and conditions of any such Company
Takeover Proposal (including any changes thereto) and the identity of the
person making any such Company Takeover Proposal or inquiry. The Company shall
(i) keep Parent fully informed of the status and details (including any change
to the terms thereof) of any such Company Takeover Proposal and (ii) provide
to Parent as soon as practicable after receipt or delivery thereof with copies
of all correspondence and other written material sent or provided to the
Company by any third party in connection with any Company Takeover Proposal or
sent or provided by the Company to any third party in connection with any
Company Takeover Proposal.
(d) Nothing contained in this Section 5.02 shall prohibit the
Company from taking and disclosing to its stockholders a position contemplated
by Rule 14e-2(a) promulgated under the Exchange Act or from making any
required disclosure to the Company's stockholders if, in the good faith
judgment of the Company Board, after consultation with outside counsel,
failure so to disclose would be inconsistent with its obligations under
applicable law.
(e) For purposes of this Agreement:
"Company Takeover Proposal" means (i) any proposal or offer
for a merger, consolidation, dissolution, recapitalization or other
business combination involving the Company or any Significant
Subsidiary of the Company, (ii) any proposal for the issuance by the
Company of over 20% of its equity securities as consideration for the
assets or securities of another person or (iii) any proposal or offer
to acquire in any manner, directly or indirectly, over 20% of the
equity securities or consolidated total assets of the Company, in
each case other than pursuant to the Transactions.
"Superior Company Proposal" means any proposal made by a
third party to acquire substantially all the equity securities or
assets of the Company, pursuant to a tender or exchange offer, a
merger, a consolidation, a liquidation or dissolution, a
recapitalization or a sale of all or substantially all its assets,
(i) on
37
terms which the Company Board determines in good faith to be superior
from a financial point of view to the holders of Company Common Stock
to the Transactions (after consultation with the Company's financial
advisor, which shall be Chase Securities Inc. or another nationally
recognized independent financial advisor), taking into account all
the terms and conditions of such proposal and this Agreement
(including any proposal by Parent to amend the terms of the
Transactions) and (ii) that is reasonably capable of being completed,
taking into account all financial, regulatory, legal and other
aspects of such proposal.
ARTICLE VI
Additional Agreements
SECTION 6.01. Preparation of Proxy Statement; Stockholders Meeting.
(a) The Company shall, as soon as practicable following the expiration of the
Offer, prepare and file with the SEC the Proxy Statement in preliminary form,
and each of the Company, Parent and Sub shall use their best efforts to
respond as promptly as practicable to any comments of the SEC with respect
thereto. The Company shall notify Parent promptly of the receipt of any
comments from the SEC or its staff and of any request by the SEC or its staff
for amendments or supplements to the Proxy Statement or for additional
information and shall supply Parent with copies of all correspondence between
the Company or any of its representatives, on the one hand, and the SEC or its
staff, on the other hand, with respect to the Proxy Statement. If at any time
prior to receipt of the Company Stockholder Approval there shall occur any
event that should be set forth in an amendment or supplement to the Proxy
Statement, the Company shall promptly prepare and mail to its stockholders
such an amendment or supplement. The Company shall not mail any Proxy
Statement, or any amendment or supplement thereto, to which Parent reasonably
objects. The Company shall use its best efforts to cause the Proxy Statement
to be mailed to the Company's stockholders as promptly as practicable after
filing with the SEC.
(b) The Company shall, as soon as practicable following the
expiration of the Offer, duly call, give notice of, convene and hold a meeting
of its stockholders (the "Company Stockholders Meeting") for the purpose of
seeking the Company Stockholder Approval. Subject to Section 5.02(b), the
Company shall, through the Company Board, recommend to its stockholders that
they give the Company Stockholder Approval. Without limiting the
38
generality of the foregoing, the Company agrees that its obligations pursuant
to the first sentence of this Section 6.01(b) shall not be affected by the
commencement, public proposal, public disclosure or communication to the
Company of any Company Takeover Proposal. Notwithstanding the foregoing, if
Sub or any other subsidiary of Parent shall acquire at least 90% of the
outstanding shares of each series of Company Capital Stock, the parties shall,
at the request of Parent, take all necessary and appropriate action to cause
the Merger to become effective as soon as practicable after the expiration of
the Offer without a stockholders meeting in accordance with Section 82 of the
BCL.
(c) Parent shall cause all shares of Company Common Stock purchased
pursuant to the Offer and all other shares of Company Common Stock owned by
Parent, Sub or any other subsidiary of Parent to be voted in favor of the
approval of this Agreement.
SECTION 6.02. Access to Information; Confidentiality. The Company
shall, and shall cause each of its subsidiaries to, afford to Parent, and to
Parent's officers, employees, accountants, counsel, financial advisors and
other representatives, upon reasonable notice, reasonable access during normal
business hours during the period prior to the Effective Time to all their
respective properties, books, contracts, commitments, personnel and records
and, during such period, the Company shall, and shall cause each of its
subsidiaries to, furnish promptly to Parent (a) a copy of each report,
schedule, registration statement and other document filed by it during such
period pursuant to the requirements of Federal or state securities laws and
(b) all other information concerning its business, properties and personnel as
Parent may reasonably request; provided, however, that the Company may
withhold the documents and information described in the Company Disclosure
Letter to the extent required to comply with the terms of a confidentiality
agreement with a third party in effect on the date of this Agreement; provided
further, that the Company shall use all reasonable efforts to obtain, as
promptly as practicable, any consent from such third party required to permit
the Company to furnish such documents and information to Parent. All
information exchanged pursuant to this Section 6.02 shall be subject to the
confidentiality agreement dated November 5, 1999, between the Company and
Alcon Laboratories, Inc. (the "Confidentiality Agreement").
SECTION 6.03. Reasonable Efforts; Notification.(a) Upon the terms and
subject to the conditions set forth in this Agreement, each of the parties shall
use all
39
reasonable efforts to take, or cause to be taken, all reasonable actions, and
to do, or cause to be done, and to assist and cooperate with the other parties
in doing, all things reasonably necessary, proper or advisable to consummate
and make effective, in the most expeditious manner practicable, the Offer, the
Merger and the other Transactions, including (i) the obtaining of all
necessary actions or nonactions, waivers, consents and approvals from
Governmental Entities and the making of all necessary registrations and
filings (including filings with Governmental Entities, if any) and the taking
of all reasonable steps as may be necessary to obtain an approval or waiver
from, or to avoid an action or proceeding by, any Governmental Entity, (ii)
the obtaining of all necessary consents, approvals or waivers from third
parties, (iii) the defending of any lawsuits or other legal proceedings,
whether judicial or administrative, challenging this Agreement or the
consummation of the Transactions, including, when reasonable, seeking to have
any stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed and (iv) the execution and delivery of
any additional instruments necessary to consummate the Transactions and to
fully carry out the purposes of this Agreement; provided, however, that the
obligations set forth in this sentence shall not be deemed to have been
breached as a result of actions by the Company expressly permitted under
Section 5.02(b). In connection with and without limiting the foregoing, the
Company and the Company Board shall (i) take all action necessary to ensure
that no state takeover statute or similar statute or regulation is or becomes
applicable to any Transaction or this Agreement and (ii) if any state takeover
statute or similar statute or regulation becomes applicable to this Agreement,
take all action necessary to ensure that the Offer, the Merger and the other
Transactions may be consummated as promptly as practicable on the terms
contemplated by this Agreement and otherwise to minimize the effect of such
statute or regulation on the Offer, the Merger and the other Transactions.
Nothing in this Agreement shall be deemed to require any party to waive any
substantial rights or agree to any substantial limitation on its operations or
to dispose of any significant asset or collection of assets. As promptly as
practicable after the consummation of the Offer, the Company shall use all
reasonable efforts to notify Parent of any actions or nonactions of, waivers,
consents and approvals from, and registrations and filings with, Governmental
Entities, and any consents, approvals or waivers from third parties, that
would be required in connection with the consummation of the Merger in the
event that Parent elects pursuant to
40
Section 1.03 to merge the Company with and into Sub instead of merging Sub
into the Company.
(b) The Company shall give prompt notice to Parent, and Parent or
Sub shall give prompt notice to the Company, of (i) any representation or
warranty made by it contained in this Agreement that is qualified as to
materiality becoming untrue or inaccurate in any respect or any such
representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect or (ii) the failure by it to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement; provided, however, that
no such notification shall affect the representations, warranties, covenants
or agreements of the parties or the conditions to the obligations of the
parties under this Agreement.
SECTION 6.04. Stock Options. (a) As soon as practicable following
the date of this Agreement, the Company Board (or, if appropriate, any
committee administering the Company Stock Plans) shall adopt such resolutions
or take such other actions as are required to adjust the terms of all
outstanding Company Stock Options and all outstanding Company SARs, in each
case whether vested or unvested, heretofore granted under any Company Stock
Plan to provide that each such Company Stock Option (and any Company SAR
related thereto) outstanding immediately prior to the first acceptance for
payment of shares of Company Common Stock pursuant to the Offer shall be
canceled in exchange for a cash payment by the Company as soon as practicable
following the first acceptance for payment of shares of Company Common Stock
pursuant to the Offer of an amount equal to (i) the excess, if any, of (x) the
highest price per share of Company Common Stock to be paid pursuant to the
Offer over (y) the exercise price per share of Company Common Stock subject to
such Company Stock Option, multiplied by (ii) the number of shares of Company
Common Stock for which such Company Stock Option shall not theretofore have
been exercised. The Company will be responsible for any required reporting to
Federal, state or local tax authorities.
(b) All amounts payable pursuant to this Section 6.04 shall be
subject to any required withholding of Taxes or proof of eligibility of
exemption therefrom and shall be paid without interest by the Company as soon
as practicable following the first acceptance for payment of shares of Company
Common Stock pursuant to the Offer. The Company shall use its best efforts to
obtain all consents of the holders of Company Stock Options as shall be
necessary
41
to effectuate the foregoing. Notwithstanding anything to the contrary
contained in this Agreement, payment shall, at Parent's request, be withheld
in respect of any Company Stock Option until all necessary consents with
respect to such Company Stock Option are obtained.
(c) The Company Stock Plans shall terminate as of the Effective
Time, and the provisions in any other Benefit Plan providing for the issuance,
transfer or grant of any capital stock of the Company or any interest in
respect of any capital stock of the Company shall be deleted as of the
Effective Time, and the Company shall ensure that following the Effective Time
no holder of a Company Stock Option or Company SAR or any participant in any
Company Stock Plan or other Company Benefit Plan shall have any right
thereunder to acquire any capital stock of the Company or the Surviving
Corporation.
(d) In this Agreement:
"Company Stock Option" means any option to purchase Company
Common Stock granted under any Company Stock Plan.
"Company SAR" means any stock appreciation right linked to
the price of Company Common Stock and granted under any Company Stock
Plan.
"Company Stock Plans" means the 1992 Stock Option Plan for
Outside Directors, the 1999 Outside Director Compensation Plan, the
1987 Stock Option Plan, the 1997 Stock Option Plan, the Employee
Stock Purchase Plan and all agreements under which there are
outstanding options to purchase Company Common Stock granted to
employees, consultants or any other person.
SECTION 6.05. Benefit Plans. (a) Except as set forth in Section
6.04, Parent agrees to cause the Surviving Corporation (i) to maintain for a
period of one year after the Effective Time the Company Benefit Plans (other
than equity-based plans) in effect on the date of this Agreement or (ii) to
provide benefits (other than equity-based plans) to each current employee of
the Company and its subsidiaries that are not materially less favorable in the
aggregate to such employees than those benefits in effect for such employees
on the date of this Agreement.
(b) In addition to the agreement set forth in Section
6.05(a), from and after the Control Date and from and after the Effective
Time, Parent shall cause the Company or the Surviving Corporation, as
applicable, to honor in
42
accordance with their respective terms (as in effect on the date of this
Agreement), all the Company's employment, severance and termination
agreements, plans and policies disclosed in the Company Disclosure Letter,
including any change in control provisions contained therein.
(c) With respect to any "employee benefit plan", as defined in
Section 3(3) of ERISA, maintained by Parent or any of its subsidiaries
(including any severance plan), for all purposes, including determining
eligibility to participate and vesting, service with the Company or any
Company Subsidiary shall be treated as service with Parent or any of its
subsidiaries; provided, however, that such service need not be recognized to
the extent that such recognition would result in any duplication of benefits.
SECTION 6.06. Indemnification. (a) Parent shall, to the fullest
extent permitted by Law, cause the Company (from and after the Control Date)
and the Surviving Corporation (from and after the Effective Time) to honor all
the Company's obligations to indemnify, defend and hold harmless (including
any obligations to advance funds for expenses) the current and former
directors and officers of the Company and its subsidiaries against all losses,
claims, damages or liabilities arising out of acts or omissions by any such
directors and officers occurring prior to the Effective Time to the maximum
extent that such obligations of the Company exist on the date of this
Agreement, whether pursuant to the Company Charter, the Company By-laws, the
BCL, individual indemnity agreements or otherwise, and such obligations shall
survive the Merger and shall continue in full force and effect in accordance
with the terms of the Company Charter, the Company By-laws, the BCL and such
individual indemnity agreements from the Effective Time until the expiration
of the applicable statute of limitations with respect to any claims against
such directors or officers arising out of such acts or omissions. In the event
a current or former director or officer of the Company or any of its
subsidiaries is entitled to indemnification under this Section 6.06(a), such
director or officer shall be entitled to reimbursement from the Company (from
and after the Control Date) or the Surviving Corporation (from and after the
Effective Time) for reasonable attorney fees and expenses incurred by such
director or officer in pursuing such indemnification, including payment of
such fees and expenses by the Surviving Corporation or the Company, as
applicable, in advance of the final disposition of such action upon receipt of
an undertaking by such current or former director or officer to repay such
payment if it shall be adjudicated that such
43
current or former director or officer was not entitled to
such payment.
(b) From and after the Control Date and for a period of six years
after the Effective Time, Parent shall cause to be maintained in effect the
current policies of directors' and officers' liability insurance maintained by
the Company (provided that Parent may either (i) substitute therefor policies
with reputable and financially sound carriers or (ii) maintain self insurance
or similar arrangements through a financially sound insurance affiliate of
Parent, in each case of at least the same coverage and amounts containing
terms and conditions which are no less advantageous) with respect to claims
arising from or related to facts or events which occurred at or before the
Effective Time; provided, however, that Parent shall not be obligated to make
annual premium payments for such insurance to the extent such premiums exceed
200% of the annual premiums paid as of the date hereof by the Company for such
insurance (such 200% amount, the "Maximum Premium"). If such insurance
coverage cannot be obtained at all, or can only be obtained at an annual
premium in excess of the Maximum Premium, Parent shall maintain the most
advantageous policies of directors' and officers' insurance obtainable for an
annual premium equal to the Maximum Premium. The Company represents to Parent
that the Maximum Premium is $400,000.
(c) The Company will maintain, through the Effective Time, the
Company's existing directors' and officers' insurance in full force and effect
without reduction of coverage.
(d) The By-Laws of the Surviving Corporation shall contain the
provisions that are set forth, as of the date of this Agreement, in Article
VIII of the By-Laws of the Company, which provisions shall not be amended,
repealed or otherwise modified for a period of six years from the Effective
Time in any manner that would affect adversely the rights thereunder of
individuals who at or at any time prior to the Effective Time were directors,
officers, employees or other agents of the Company (and during such period the
Articles of Organization of the Company shall not be amended, repealed or
otherwise modified in any manner that would have the effect of so amending,
repealing or otherwise modifying such provisions of the By-Laws).
(e) If the Surviving Corporation or any of its successors or assigns
(i) consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or
44
merger and the continuing or surviving entity does not assume the obligations
of the Surviving Corporation set forth in this Section 6.06, or (ii) transfers
all or substantially all of its properties and assets to any person, then, and
in each such case, proper provision shall be made so that the successors and
assigns of the Surviving Corporation assume, as a matter of law or otherwise,
the obligations set forth in this Section 6.06.
(f) Parent guarantees that if for any reason the Company or the
Surviving Corporation, as the case may be, shall not meet its obligations
pursuant to this Section 6.06, it shall meet such obligations in full when and
as such obligations arise.
SECTION 6.07. Fees and Expenses. (a) Except as provided below, all
fees and expenses incurred in connection with the Merger and the other
Transactions shall be paid by the party incurring such fees or expenses,
whether or not the Merger is consummated.
(b) The Company shall pay to Parent a fee of $32.5 million if: (i)
this Agreement is terminated pursuant to Section 8.01(b)(iii) as a result of
the failure of the condition set forth in paragraph (d) of Exhibit A; (ii) the
Company terminates this Agreement pursuant to Section 8.01(e); (iii) Parent
terminates this Agreement pursuant to Section 8.01(d)(i) or 8.01(d)(ii) as a
result of a material breach of Section 5.02; (iv) after the date of this
Agreement, any person makes a Company Takeover Proposal, (A) the Offer shall
have remained open until the scheduled expiration date immediately following
the date such Company Takeover Proposal is made, (B) the Minimum Tender
Condition is not satisfied at such expiration date, (C) this Agreement is
terminated pursuant to Section 8.01(b)(i) or 8.01(b)(iii) (other than as a
result of the failure of the condition set forth in paragraph (d) of Exhibit
A) and (D) within 12 months of such termination the Company enters into a
definitive agreement to consummate, or consummates, the transactions
contemplated by a Company Takeover Proposal; or (v) subject to Section
6.07(c), this Agreement is terminated pursuant to Section 8.01(c) as a result
of a wilful breach by the Company and within 12 months of such termination the
Company enters into a definitive agreement to consummate, or consummates, the
transactions contemplated by a Company Takeover Proposal. Any fee due under
this Section 6.07(b) shall be paid by wire transfer of same-day funds on the
date of termination of this Agreement (except that in the case of clause (iv)
or (v) above such payment shall be made on the
45
date of execution of such definitive agreement or, if earlier, consummation of
such transactions).
(c) If the Company becomes obligated to pay a fee under Section
6.07(b) as a result of a termination pursuant to Section 8.01(c), Parent may
elect not to receive the fee and may instead pursue any and all rights, claims
and causes of action it may have under Law with respect to the breach giving
rise to such right of termination. If Parent elects to receive the fee, and
the Company pays the fee as required by Section 6.07(b), the payment by the
Company of such fee shall be Parent's sole remedy with respect to such breach
and Parent shall waive, to the fullest extent permitted by Law, any and all
rights, claims and causes of action (other than claims of, or causes of action
arising from, fraud) it may have against the Company with respect to such
breach.
SECTION 6.08. Public Announcements. Parent and Sub, on the one hand,
and the Company, on the other hand, shall consult with each other before
issuing, and provide each other the opportunity to review and comment upon,
any press release or other public statements with respect to the Offer, the
Merger and the other Transactions and shall not issue any such press release
or make any such public statement prior to such consultation, except as may be
required by applicable Law (including foreign regulations relating to
competition), court process or by obligations pursuant to any listing
agreement with any national securities exchange.
SECTION 6.09. Transfer Taxes. All stock transfer, real estate
transfer, documentary, stamp, recording and other similar Taxes (including
interest, penalties and additions to any such Taxes) ("Transfer Taxes")
incurred in connection with the Transactions shall be paid by the party upon
whom the primary burden for payment is placed by the applicable law. Each
party shall cooperate with the other in preparing, executing and filing any
Tax Returns with respect to such Transfer Taxes and shall use reasonable
efforts to avail itself of any available exemptions from such Transfer Taxes,
and shall cooperate in providing any information and documentation that may be
necessary to obtain such exemptions.
SECTION 6.10. Directors. Promptly upon the first acceptance for
payment of, and payment by Sub for, any shares of Company Common Stock
pursuant to the Offer, Sub shall be entitled to designate such number of
directors on the Company Board as will give Sub, subject to compliance with
Section 14(f) of the Exchange Act, representation on the Company Board equal
to at least that number of
46
directors, rounded up to the next whole number, which is the product of (a)
the total number of directors on the Company Board (giving effect to the
directors elected pursuant to this sentence) multiplied by (b) the percentage
that (i) such number of shares of Company Common Stock so accepted for payment
and paid for by Sub plus the number of shares of Company Common Stock
otherwise owned by Sub or any other subsidiary of Parent bears to (ii) the
number of such shares outstanding, and the Company shall, at such time, cause
Sub's designees to be so elected; provided, however, that in the event that
Sub's designees are appointed or elected to the Company Board, until the
Effective Time the Company Board shall have at least three directors who are
directors on the date of this Agreement and who are not officers of the
Company (the "Independent Directors"); and provided further that, in such
event, if the number of Independent Directors shall be reduced below three for
any reason whatsoever, any remaining Independent Directors (or Independent
Director, if there shall be only one remaining) shall be entitled to designate
persons to fill such vacancies who shall be deemed to be Independent Directors
for purposes of this Agreement or, if no Independent Directors then remain,
the other directors shall designate three persons to fill such vacancies who
are not officers, stockholders or affiliates of the Company, Parent or Sub,
and such persons shall be deemed to be Independent Directors for purposes of
this Agreement. Subject to applicable Law, the Company shall take all action
requested by Parent necessary to effect any such election, including mailing
to its stockholders the Information Statement containing the information
required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder, and the Company shall make such mailing with the mailing of the
Schedule 14D-9 (provided that Sub shall have provided to the Company on a
timely basis all information required to be included in the Information
Statement with respect to Sub's designees). In connection with the foregoing,
the Company shall promptly, at the option of Sub, either increase the size of
the Company Board or obtain the resignation of such number of its current
directors as is necessary to enable Sub's designees to be elected or appointed
to the Company Board as provided above.
SECTION 6.11. Rights Agreement; Consequences if Rights Triggered.
The Company Board shall take all action requested in writing by Parent in
order to render the Company Rights inapplicable to the Offer, the Merger and
the other Transactions. Except as approved in writing by Parent, the Company
Board shall not (i) amend the Company Rights Agreement, (ii) redeem the
Company Rights or (iii) take any action with respect to, or make any
47
determination under, the Company Rights Agreement, in each case in a manner
adverse to Parent or Sub. If any Distribution Date, Stock Acquisition Date or
Common Stock Event occurs under the Company Rights Agreement at any time
during the period from the date of this Agreement to the Effective Time, the
Company and Parent shall make such adjustment to the Offer Price as the
Company and Parent shall mutually agree so as to preserve the economic
benefits that the Company and Parent each reasonably expected on the date of
this Agreement to receive as a result of the consummation of the Offer, the
Merger and the other Transactions.
SECTION 6.12. Stockholder Litigation. The Company shall give Parent
the opportunity to participate in the defense or settlement of any stockholder
litigation against the Company and its directors relating to any Transaction;
provided, however, that Parent shall have the right to prevent the Company
from entering into any such settlement without Parent's consent if Parent
agrees to indemnify the Company and each director of the Company for the
amount of its, his or her liability, if any, arising from the underlying
claim, net of any insurance proceeds received by such person, that is in
excess of the amount for which such person would have been liable under such
settlement.
SECTION 6.13. Transfers of Certain Intangible Assets. No later than
simultaneously with the first acceptance for payment of, and payment by Sub
for, at least two-thirds of the Fully Diluted Shares (as defined in Exhibit A)
pursuant to the Offer, (a) the Company shall cause its subsidiary, Autonomous
Technologies Corp., a Delaware corporation ("Autonomous"), to transfer (x)
certain of the Intellectual Property Rights of Autonomous and its subsidiaries
and (y) certain licenses, approvals and registrations issued by, or filed
with, the FDA, and all other Governmental Entities performing similar
functions, and all rights therein, of Autonomous and its subsidiaries with
respect to any products of Autonomous and its subsidiaries to Alcon Universal
Ltd., a Swiss corporation ("AUL"), in exchange for a cash payment by AUL equal
to the fair market value of the transferred assets, and (b) the Company shall
transfer to AUL all of the outstanding shares of stock in its subsidiary,
Summit Technology Ireland B.V., a Netherlands corporation ("DutchCo"), in
exchange for a cash payment by AUL equal to the net book value of DutchCo). If
any consent required to transfer an asset pursuant to this Section 6.13 has
not been obtained prior to the time at which such transfer would otherwise
occur, Parent and the Company shall cooperate in any lawful and reasonable
48
arrangement proposed by Parent under which AUL shall obtain the economic
claims, rights and benefits under such asset until such consent has been
obtained.
ARTICLE VII
Conditions Precedent
SECTION 7.01. Conditions to Each Party's Obligation To Effect The
Merger. The respective obligation of each party to effect the Merger is
subject to the satisfaction or waiver on or prior to the Closing Date of the
following conditions:
(a) Stockholder Approval. The Company shall have obtained the
Company Stockholder Approval, if required.
(b) Antitrust. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or shall
have expired. Any consents, approvals and filings under any other foreign
antitrust Law the absence of which would prohibit the consummation of Merger,
shall have been obtained or made.
(c) No Injunctions or Restraints. No statute, rule, regulation,
executive order, decree, temporary restraining order, preliminary or permanent
injunction or other order enacted, entered, promulgated, enforced or issued by
any Governmental Entity or other legal restraint or prohibition preventing the
consummation of the Merger or the other Transactions shall be in effect;
provided, however, that prior to asserting this condition each of the parties
shall have used all reasonable efforts to prevent the entry of any such
injunction or other order and to appeal as promptly as possible any such
injunction or other order that may be entered.
(d) Acceptance of Shares Pursuant to the Offer. Sub shall have
accepted shares of Company Common Stock for payment pursuant to the Offer;
provided, that the obligation of a party to effect the Merger shall not be
conditioned on the fulfillment of the condition set forth in this clause (d)
if the failure of Sub to accept shares of Company Common Stock for payment
pursuant to the Offer shall have constituted or resulted from a material
breach of the Offer or this Agreement by such party.
49
ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.01. Termination. This Agreement may be terminated
at any time prior to the Effective Time, whether before or after receipt of
Company Stockholder Approval:
(a) by mutual written consent of Parent, Sub and
the Company;
(b) by either Parent or the Company:
(i) if the Offer is not consummated on or before
November 26, 2000 (the "Outside Date"), unless the failure
to consummate the Offer is the result of a wilful and
material breach of this Agreement by the party seeking to
terminate this Agreement;
(ii) if any Governmental Entity issues an order,
decree or ruling or takes any other action permanently
enjoining, restraining or otherwise prohibiting the
acceptance for payment of, or payment for, shares of Company
Common Stock pursuant to the Offer or the Merger and such
order, decree, ruling or other action shall have become
final and nonappealable;
(iii) if as the result of the failure of any of the
conditions set forth in Exhibit A to this Agreement, the
Offer shall have terminated or expired in accordance with
its terms without Sub having accepted shares of Company
Common Stock for payment pursuant to the Offer; provided,
however, that the right to terminate this Agreement pursuant
to this clause (iii) shall not be available to any party
whose failure to fulfill any of its obligations under this
Agreement results in the failure of any such condition or if
the failure of such condition results from facts or
circumstances that constitute a wilful breach of any
representation or warranty under this Agreement by such
party; or
(iv) if, upon a vote at a duly held meeting to
obtain the Company Stockholder Approval, the Company
Stockholder Approval is not obtained; provided, that Parent
may not terminate this Agreement under this Section
8.01(b)(iv) if the Company Common Stock owned by Sub, Parent
or any
50
other subsidiary of Parent shall not have been
voted in favor of obtaining the Company
Stockholder Approval;
(c) by Parent, if the Company breaches or fails to perform
in any material respect any of its representations, warranties or
covenants contained in this Agreement (other than a breach or failure
to perform for which Parent has the right to terminate this Agreement
pursuant to Section 8.01(d)(ii)), which breach or failure to perform
(i) would give rise to the failure of a condition set forth in
Exhibit A, and (ii) cannot be or has not been cured within 30 days
after the giving of written notice to the Company of such breach
(provided that Parent is not then in material breach of any
representation, warranty or covenant contained in this Agreement); or
(d) by Parent prior to the first acceptance of shares of
Company Common Stock for payment pursuant to the Offer:
(i) if the Company Board or any committee thereof
withdraws or modifies in a manner adverse to Parent or Sub,
or publicly proposes to withdraw or modify in a manner
adverse to Parent or Sub, its approval or recommendation of
this Agreement, the Offer or the Merger, fails to recommend
to the Company's stockholders that they accept the Offer and
give the Company Stockholder Approval or publicly approves
or recommends, or publicly proposes to approve or recommend,
any Company Takeover Proposal; or
(ii) if the Company or any of its officers,
directors, employees, representatives or agents takes any of
the actions that would be proscribed by Section 5.02 but for
the exceptions therein allowing certain actions to be taken
pursuant to the proviso in the first sentence of Section
5.02(a); or
(e) by the Company prior to the first acceptance of shares
of Company Common Stock for payment pursuant to the Offer in
accordance with Section 8.05(b); provided, however, that the Company
shall have complied with all provisions thereof, including the notice
provisions therein; or
(f) by the Company prior to the first acceptance of shares of
Company Common Stock for payment pursuant
51
to the Offer, if Parent breaches or fails to perform in any material
respect any of its representations, warranties or covenants contained
in this Agreement, which breach or failure to perform cannot be or
has not been cured within 30 days after the giving of written notice
to Parent of such breach (provided that the Company is not then in
material breach of any representation, warranty or covenant contained
in this Agreement).
SECTION 8.02. Effect of Termination. In the event of termination of
this Agreement by either the Company or Parent as provided in Section 8.01,
this Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of Parent, Sub or the Company, other than
Section 3.16, Section 4.06, the last sentence of Section 6.02, Section 6.07,
this Section 8.02 and Article IX, which provisions shall survive such
termination, and except to the extent that such termination results from the
wilful and material breach by a party of any representation, warranty or
covenant set forth in this Agreement.
SECTION 8.03. Amendment. This Agreement may be amended by the
parties at any time before or after receipt of the Company Stockholder
Approval; provided, however, that after receipt of the Company Stockholder
Approval, there shall be made no amendment that by Law requires further
approval by the stockholders of the Company without the further approval of
such stockholders; and provided, further, that after this Agreement is adopted
by the Company's stockholders, no such amendment or modification shall be made
that reduces the amount or changes the form of Merger Consideration or
otherwise materially and adversely affects the rights of the Company's
stockholders hereunder, without the further approval of such stockholders.
This Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties.
SECTION 8.04. Extension; Waiver. At any time prior to the Effective
Time, the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties contained in this Agreement or in any
document delivered pursuant to this Agreement or (c) subject to the proviso of
Section 8.03, waive compliance with any of the agreements or conditions
contained in this Agreement. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any party to this
Agreement to assert any of its
52
rights under this Agreement or otherwise shall not constitute a waiver of such
rights.
SECTION 8.05. Procedure for Termination, Amendment, Extension or
Waiver. (a) A termination of this Agreement pursuant to Section 8.01, an
amendment of this Agreement pursuant to Section 8.03 or an extension or waiver
pursuant to Section 8.04 shall, in order to be effective, require in the case
of Parent, Sub or the Company, action by its Board of Directors or the duly
authorized designee of its Board of Directors; provided, that in the case of
the Company, such action shall also require action by a majority of the
Independent Directors.
(b) The Company may terminate this Agreement pursuant to Section
8.01(e) only if (i) the Company Board has received a Superior Company
Proposal, (ii) in light of such Superior Company Proposal the Company Board
shall have determined in good faith, after consultation with outside counsel,
that it is necessary for the Company Board to withdraw or modify its approval
or recommendation of this Agreement, the Offer or the Merger in order to act
in a manner consistent with its fiduciary duty under applicable Law, (iii) the
Company has notified Parent in writing of the determinations described in
clause (ii) above, (iv) at least three business days following receipt by
Parent of the notice referred to in clause (iii) above, and taking into
account any revised proposal made by Parent since receipt of the notice
referred to in clause (iii) above, such Superior Company Proposal remains a
Superior Company Proposal and the Company Board has again made the
determinations referred to in clause (ii) above, (v) the Company is in
compliance with Section 5.02 (other than breaches that, individually and in
the aggregate, are not material and do not prejudice Parent's rights under
this Agreement), (vi) the Company has previously paid the fee due under
Section 6.07, (vii) the Company Board concurrently approves, and the Company
concurrently enters into, a definitive agreement providing for the
implementation of such Superior Company Proposal and (viii) Parent is not at
such time entitled to terminate this Agreement pursuant to Section 8.01(c).
ARTICLE IX
General Provisions
SECTION 9.01. Nonsurvival of Representations and Warranties. Except
as provided in the last sentence of this Section 9.01, none of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to
53
this Agreement shall survive the Effective Time. This Section 9.01 (including
any rights arising out of any breach of such representations and warranties)
shall not limit any covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time.
SECTION 9.02. Notices. All notices, requests, claims, demands and
other communications under this Agreement shall be in writing and shall be
deemed given (i) seven days after mailing by certified mail, (ii) when
delivered by hand, (iii) upon confirmation of receipt by telecopy or (iv) one
business day after sending by overnight delivery service, to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice):
(a) if to Parent or Sub, to
Alcon Holdings Inc.
6201 South Freeway
Fort Worth, TX 76134-2099
Attention: Elaine E. Whitbeck, Esq.
Facsimile: (817) 568-7579
with a copy to:
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
Attention: Alan C. Stephenson, Esq.
Facsimile: (212) 474-3700
(b) if to the Company, to
Summit Autonomous Inc.
21 Hickory Drive
Waltham, MA 02451
Attention: James A. Lightman, Esq.
Facsimile: (781) 890-6739
with a copy to:
Ropes & Gray
One International Place
Boston, MA 02110-2624
Attention: Keith F. Higgins, Esq.
Facsimile: (617) 951-7050
54
SECTION 9.03. Definitions. For purposes of this Agreement:
An "affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person.
A "key employee" means an employee of the Company or any Company
Subsidiary whose total annual compensation (including incentive compensation),
after giving effect to any increase after the date of this Agreement, exceeds
$85,000.
A "material adverse effect" on a party means a material
adverse effect on the business, assets, condition (financial or otherwise) or
results of operations of such party and its subsidiaries, taken as a whole.
A "person" means any individual, firm, corporation, partnership,
company, limited liability company, trust, joint venture, association,
Governmental Entity or other entity.
A "subsidiary" of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more
of the equity interests of which) is owned directly or indirectly by such
first person.
"to the knowledge" of any specified corporation means to the actual
knowledge of any director or officer of such corporation.
SECTION 9.04. Interpretation; Disclosure Letters. When a reference
is made in this Agreement to a Section, such reference shall be to a Section
of this Agreement unless otherwise indicated. The table of contents and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
Whenever the words "include", "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation". Any matter disclosed in any section of the Company Disclosure
Letter shall be deemed disclosed only for the purposes of the specific
Sections of this Agreement to which such section relates.
55
SECTION 9.05. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that transactions contemplated hereby are
fulfilled to the extent possible.
SECTION 9.06. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
SECTION 9.07. Entire Agreement; No Third-Party Beneficiaries. This
Agreement, taken together with the Company Disclosure Letter and the
Confidentiality Agreement, (a) constitute the entire agreement, and supersede
all prior agreements and understandings, both written and oral, among the
parties with respect to the Transactions and (b) except for the provisions of
Article II, Section 6.04 and Section 6.06, are not intended to confer upon any
person other than the parties any rights or remedies.
SECTION 9.08. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of The Commonwealth of
Massachusetts, regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof.
SECTION 9.09. Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties
without the prior written consent of the other parties, except that Sub may
assign, in its sole discretion, any of or all its rights, interests and
obligations under this Agreement to Parent or to any direct or indirect wholly
owned subsidiary of Parent, but no such assignment shall relieve Sub of any of
its obligations under this Agreement. Any purported assignment without such
consent shall be void. Subject to the preceding sentences, this Agreement will
be binding upon, inure to the benefit of, and be enforceable by, the parties
and their respective successors and assigns.
56
SECTION 9.10. Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any Massachusetts state court or
any Federal court located in The Commonwealth of Massachusetts, this being in
addition to any other remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of any Massachusetts state court or any Federal court
located in The Commonwealth of Massachusetts in the event any dispute arises out
of this Agreement or any Transaction, (b) agrees that it will not attempt to
deny or defeat such personal jurisdiction by motion or other request for leave
from any such court, (c) agrees that it will not bring any action relating to
this Agreement or any Transaction in any court other than any Massachusetts
state court or any Federal court sitting in The Commonwealth of Massachusetts
and (d) waives any right to trial by jury with respect to any action related to
or arising out of this Agreement or any Transaction.
SECTION 9.11. Consents. Whenever this Agreement requires or permits
consent by or on behalf of any party hereto, such consent shall be given in
writing in a manner consistent with the requirements for a waiver of
compliance as set forth in Sections 8.04 and 8.05. Sub hereby agrees that any
consent or waiver of compliance given by Parent hereunder shall be
conclusively binding upon it, whether given expressly on its behalf or not.
57
IN WITNESS WHEREOF, Parent, Sub and the Company have duly executed
this Agreement, all as of the date first written above.
ALCON HOLDINGS INC.,
by /s/ Timothy R.G. Sear
-------------------------------
Name: Timothy R.G. Sear
Title: Chairman of the Board,
Chief Executive Officer
and President
ALCON ACQUISITION CORP.,
by /s/ Elaine E. Whitbeck
-------------------------------
Name: Elaine E. Whitbeck
Title: President
by /s/ Douglas MacHatton
-------------------------------
Name: Douglas MacHatton
Title: Treasurer
SUMMIT AUTONOMOUS INC.,
by /s/ Robert J. Palmisano
-------------------------------
Name: Robert J. Palmisano
Title: President and
Chief Executive Officer
by /s/ Robert J. Kelly
-------------------------------
Name: Robert J. Kelly
Title: Treasurer
EXHIBIT A
Conditions of the Offer
Notwithstanding any other term of the Offer or this Agreement, Sub
shall not be required to accept for payment or, subject to any applicable rules
and regulations of the SEC, including Rule 14e-l(c) under the Exchange Act
(relating to Sub's obligation to pay for or return tendered shares of Company
Common Stock promptly after the termination or withdrawal of the Offer), to pay
for any shares of Company Common Stock tendered pursuant to the Offer unless
(i) there shall have been validly tendered and not withdrawn prior to the
expiration of the Offer that number of shares of Company Common Stock which,
together with that number of shares of Company Common Stock owned by Parent,
Sub and Parent's other subsidiaries, would represent at least two-thirds of the
Fully Diluted Shares (the "Minimum Tender Condition") and (ii) any waiting
period under the HSR Act applicable to the purchase of shares of Company Common
Stock pursuant to the Offer shall have expired or been terminated. The term
"Fully Diluted Shares" means all outstanding securities entitled generally to
vote in the election of directors of the Company on a fully diluted basis, after
giving effect to the exercise or conversion of all options, rights and
securities exercisable or convertible into such voting securities. Furthermore,
notwithstanding any other term of the Offer or this Agreement, Sub shall not be
required to accept for payment or, subject as aforesaid, to pay for any shares
of Company Common Stock not theretofore accepted for payment or paid for, and
may terminate or amend the Offer, (A) with the consent of the Company or (B)
without the consent of the Company at any time on or after the date of this
Agreement and before the first acceptance of such shares for payment or the
payment therefor when any of the following conditions exists:
(a) there shall be threatened or pending any suit, action or
proceeding by any Governmental Entity, or pending any suit, action or
proceeding with a reasonable likelihood of success by any other
person, (i) challenging the acquisition by Parent or Sub of any
Company Common Stock, seeking to restrain or prohibit the making or
consummation of the Offer or the Merger or any other Transaction, or
seeking to obtain from the Company, Parent or Sub any damages that
are material in relation to the Company and its subsidiaries taken as
a whole, (ii) seeking to prohibit or limit the ownership or operation
by the Company, Parent or any of their respective subsidiaries of any
material portion of the business or assets of the Company and its
subsidiaries taken as whole or Parent and its subsidiaries taken as
2
a whole, or to compel the Company, Parent or any of their respective
subsidiaries to dispose of or hold separate any material portion of
the business or assets of the Company and its subsidiaries taken as
whole or Parent and its subsidiaries taken as a whole, as a result of
the Offer, the Merger or any other Transaction, (iii) seeking to
impose limitations on the ability of Parent or Sub to acquire or
hold, or exercise full rights of ownership of, any shares of Company
Common Stock, including the right to vote the Company Common Stock
acquired by it on all matters properly presented to the stockholders
of the Company or (iv) seeking to prohibit Parent or any of its
subsidiaries from effectively controlling in any material respect the
business or operations of the Company and the Company Subsidiaries;
(b) any Law or Judgment enacted, entered, enforced,
promulgated, amended or issued with respect to, or deemed applicable
to, or any required consent or approval withheld with respect to, (i)
Parent, the Company or any of their respective subsidiaries or (ii)
the Offer, the Merger or any other Transaction, by any Governmental
Entity that is reasonably likely to result, directly or indirectly,
in any of the consequences referred to in paragraph (a) above;
(c) except as disclosed in the Filed Company SEC Documents or the
Company Disclosure Letter, since the date of the most recent audited
financial statements included in the Filed Company SEC Documents there
shall have occurred any event, change, effect or development that,
individually or in the aggregate, has had or would reasonably be expected
to have, a Company Material Adverse Effect;
(d) the Company Board or any committee thereof shall have
withdrawn or modified in a manner adverse to Parent or Sub, or
publicly proposed to withdraw or modify in a manner adverse to Parent
or Sub, its approval or recommendation of this Agreement, the Offer
or the Merger, failed to recommend to the Company's stockholders that
they accept the Offer and give the Company Stockholder Approval or
approved or recommended, or publicly proposed to approve or
recommend, any Company Takeover Proposal;
(e) any representation and warranty of the Company in this
Agreement that is qualified as to materiality shall not be true and
correct or any such representation and warranty that is not so
qualified
3
shall not be true and correct in any material respect, as of the date
of this Agreement and as of such time, except to the extent such
representation and warranty expressly relates to an earlier date (in
which case on and as of such earlier date);
(f) the Company shall have failed to perform in any material
respect any obligation or to comply in any material respect with any
agreement or covenant of the Company to be performed or complied with
by it under this Agreement, which failure to perform or comply cannot
be or has not been cured within five days after the giving of written
notice to the Company of such breach; or
(g) this Agreement shall have been terminated in accordance with its
terms;
which, in the sole and good faith judgment of Sub or Parent, in any such case,
and regardless of the circumstances giving rise to any such condition
(including any action or inaction by Parent or any of its affiliates), makes
it inadvisable to proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Sub and Parent
and, subject to Section 1.01(a), may be asserted by Sub or Parent regardless
of the circumstances giving rise to such condition or may be waived by Sub and
Parent in whole or in part at any time and from time to time in their sole
discretion (subject to the terms of this Agreement). The failure by Parent,
Sub or any other affiliate of Parent at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right, the waiver of
any such right with respect to particular facts and circumstances shall not be
deemed a waiver with respect to any other facts and circumstances and each
such right shall be deemed an ongoing right that may be asserted at any time
and from time to time.
EXHIBIT B
FEDERAL IDENTIFICATION
NO.
- -------------
|
| | The Commonwealth of Massachusetts
- ----------| William Francis Galvin
Examiner | Secretary of the Commonwealth
| One Ashburton Place, Boston, Massachusetts 02108-1512
|
|
| RESTATED ARTICLES OF ORGANIZATION
| (General Laws, Chapter 156B, Section 74)
|
- ----------| We,
Name | ------------------------------------------------------------,
Approved | *President / *Vice President,
|
|
| and
| ------------------------------------------------------------
| *Clerk / *Assistant Clerk,
|
|
| of Summit Autonomous Inc.
| ----------------------
| (Exact name of corporation)
|
| located at [address]
| ---------------- --------------------------------,
| (Street address of corporation in Massachusetts)
|
| do hereby certify that the following Restatement of the Articles
| of Organization was duly adopted at a meeting held on ,
| 2000 by a vote of the directors/or:
|
| shares of Common Stock of
| ---------------- ---------------------- ---------
| shares outstanding,
| (type, class & series, if any)
|
| being at least two-thirds of each type, class or series
| outstanding and entitled to vote thereon and of each type, class
| or series of stock whose rights are adversely affected thereby:
|
| ARTICLE I The name of
| the corporation is:
|
| Summit Autonomous Inc.
|
|
C | ARTICLE II
[ ] |
P |
[ ] | The purpose of the corporation is to engage in the
M | following business activity(ies):
[ ] |
R.A. | To engage in research and development, manufacture and sale
[ ] | of laser devices for use in any and all fields, and related
| components, parts and equipment.
|
| To carry on any business and engage in any other activity,
| whether or not related to those in the foregoing paragraph,
| which may be permitted by the laws of the Commonwealth of
| Massachusetts to a corporation organized under Chapter 156B of
| the General Laws of Massachusetts as the same may be amended
| from time to time.
|
| *Delete the inapplicable words. **Delete the inapplicable clause.
| Note: If the space provided under any article or item on this
| form is insufficient, additions shall be set forth on separate
| 8-1/2 x 11 sheets of paper with a left margin of at least 1
- ----------| inch. Additions to more than one article may be made on a single
P.C. | sheet so long as each article requiring each addition is clearly
| indicated.
2
ARTICLE III
State the total number of shares and par value, if any, of each class of stock
which the corporation is authorized to issue:
WITHOUT PAR VALUE WITH PAR VALUE
- --------------------------------- --------------------------------------------
NUMBER OF NUMBER OF
TYPE SHARES TYPE SHARES PAR VALUE
- -------------- ------------------ ------------ ---------------- --------------
Common: None Common: 100,000,000 $0.01
Preferred: None Preferred: 5,000,000 $0.01
ARTICLE IV
If more than one class of stock is authorized, state a distinguishing
designation for each class. Prior to the issuance of any shares of a class, if
shares of another class are outstanding, the corporation must provide a
description of the preferences, voting powers, qualifications, and special or
relative rights or privileges of that class and of each other class of which
shares are outstanding and of each series then established within any class.
Not applicable
ARTICLE V
The restrictions, if any, imposed by the Articles of Organization upon the
transfer of shares of stock of any class are:
None
ARTICLE VI
**Other lawful provisions, if any, for the conduct and regulation of the
business and affairs of the corporation, for its voluntary dissolution, or for
limiting, defining, or regulating the powers of the corporation, or of its
directors or stockholders, or of any class of stockholders:
See Continuation Sheet 6A
**If there are no provisions state "None".
Note: The preceding six (6) articles are considered to be permanent and may
ONLY be changed by filing appropriate Articles of Amendment.
3
ARTICLE VII
The effective date of the restated Articles of Organization of the corporation
shall be the date approved and filed by the Secretary of the Commonwealth. If
a later effective date is desired, specify such date which shall not be more
than thirty days after the date of filing.
ARTICLE VIII
The information contained in Article VIII is not a permanent part of the
Articles of Organization.
a. The street address (post office boxes are not acceptable) of the principal
office of the corporation in Massachusetts is:
[address]
b. The name, residential address and post office address of each director and
officer of the corporation is as follows:
RESIDENTIAL
NAME ADDRESS POST OFFICE ADDRESS
President: To be designated by Parent]
Treasurer: [To be designated by Parent]
Clerk: [To be designated by Parent]
Directors: [To be designated by Parent]
c. The fiscal year (i.e., tax year) of the corporation shall end on the last
day of the month of: December
d. The name and business address of the resident agent, if any, of the
corporation is:
Not applicable
**We further certify that the foregoing Restated Articles of Organization
affect no amendments to the Articles of Organization of the corporation as
heretofore amended, except amendments to the following articles. Briefly
describe amendments below:
Article VI of the Articles of Organization has been amended to read in its
entirety as set forth on Continuation Sheet 6A attached hereto.
SIGNED UNDER THE PENALTIES OF PERJURY, this day of ,2000,
- ----------------------------------------------- , * President/*Vice President,
- ---------------------------------------------------,* Clerk/*Assistant Clerk.
*Delete the inapplicable words. **If there are no amendments, state 'None'.
4
THE COMMONWEALTH OF MASSACHUSETTS
RESTATED ARTICLES OF ORGANIZATION
(General Laws, Chapter 156B, Section 74)
==========================================================
I hereby approve the within Restated Articles of
Organization and, the filing fee in the amount of $
_____________ having been paid, said articles are deemed to
have been filed with me this ______________ day of
______________________ , 19 _____.
Effective Date: _______________________________________
WILLIAM FRANCES GALVIN
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
Photocopy of document to be sent to:
[To be provided]
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
Telephone:
------------------------------------------------
5
Articles of Organization
Continuation Sheet 6A
ONE: The Board of Directors may make, amend or repeal the By-Laws of the
corporation in whole or in part, except with respect to any
provision thereof which by law or the By-Laws requires action by the
stockholders. Any by-law adopted by the Board of Directors may be
amended or repealed by the stockholders.
TWO: Meetings of the stockholders may be held anywhere in the United
States.
THREE: The corporation may be a partner, either general or limited, in any
business enterprise it would have the power to conduct by itself.
FOUR: Except as specifically authorized by statute, no stockholder shall
have any right to examine any property or any books, accounts or
other writings of the corporation if there is reasonable ground for
belief that such examination will for any reason be adverse to the
interests of the corporation, and a vote of the directors refusing
permission to make such examination and setting forth that in the
opinion of the directors such reexamination would be adverse to the
interests of the corporation shall be prima facie evidence that such
examination would be adverse to the interests of the corporation.
Every such examination shall be subject to such reasonable
regulations as the directors may establish in regard thereto.
FIVE: The Board of Directors may specify the manner in which the accounts
of the corporation shall be kept and may determine what constitutes
net earnings, profits and surplus, what amounts, if any, shall be
reserved for any corporate purpose, and what amounts, if any, shall
be declared as dividends. All surplus shall be available for any
corporate purpose, including the payment of dividends.
SIX: The purchase or other acquisition or retention by the corporation of
shares of its own capital stock shall not be deemed a reduction of
its capital stock. Upon any reduction of capital or capital stock,
no stockholder shall have any right to demand any distribution from
the corporation, except as and to the extent that the stockholders
shall have provided at the time of authorizing such reduction.
SEVEN: In the absence of fraud, no contract or transaction between the
corporation and one or more of its directors or officers, or between
the corporation and any other organization of which one or more of
its directors or officers are directors, trustees or officers, or in
which any of them has any financial or other interest, shall be void
or voidable, or in any way affected, solely for this reason, or
solely because the director or officer is present at or participates
in the meeting of the Board of Directors or committee thereof which
authorizes, approves or ratifies the contract or transaction, or
solely because his/her or their votes are counted for such purposes,
if:
6
(i) The material facts as to his/her relationship or interest
and as to the contract or transaction are disclosed or are
known to the Board of Directors or the committee which
authorizes, approves or ratifies the contract or
transaction, and the board or committee in good faith
authorizes, approves or ratifies the contract or
transaction by the affirmative vote of a majority of the
disinterested directors, even though the disinterested
directors be less than a quorum; or
(ii) The material facts as to his/her relationship or interest
and as to the contract or transaction are disclosed or are
known to the stockholders entitled to vote thereon, and
the contract or transaction is specifically authorized,
approved or ratified in good faith by vote of the
stockholders; or
(iii) The contract or transaction is fair as to the corporation
as of the time it is authorized, approved or ratified by
the Board of Directors, a committee thereof, or the
stockholders.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or of a
committee thereof which authorizes, approves or ratifies the
contract or transaction. No director or officer of the corporation
shall be liable or accountable to the corporation or to any of its
stockholders or creditors or to any other person, either for any
loss to the corporation or to any other person or for any gains or
profits realized by such director or officer, by reason of any
contract or transaction as to which clauses (i) or (ii) or (iii)
above are applicable.
EIGHT: No director of the corporation shall be personally liable to the
corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director notwithstanding any provision of law
imposing such liability; provided, however, that, to the extent
required by applicable law, this provision shall not eliminate or
limit the liability of a director, (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under
Section 61 or 62 or successor provisions of the Massachusetts
Business Corporation Law, or (iv) for any transaction from which the
director derived an improper personal benefit. This provision shall
not eliminate or limit the liability of a director for any act or
omission occurring prior to March 18, 1987. No amendment or repeal
of this provision shall apply to or have any effect on the liability
or alleged liability of any director for or with respect to any acts
or omissions of such director occurring prior to such amendment or
repeal.
NINE: Pursuant to a written consent of the sole stockholder of the
corporation dated as of [ ], the directors of the corporation
shall not be classified and the corporation shall be exempt from the
provisions of Chapter 156B,
7
Section 50A, paragraph (a) of the Massachusetts Business Corporation
Law.
ANNEX B
[LOGO]
CHASE SECURITIES INC.
270 Park Avenue
New York, NY 10017-2070
May 26, 2000
Board of Directors
Summit Autonomous Inc.
21 Hickory Drive
Waltham, Massachusetts 02451
Members of the Board:
You have informed us that Summit Autonomous Inc. (the
"Company"),Alcon Holdings Inc. (the "Acquiror") and Alcon Acquisition Corp., a
newly formed, wholly owned subsidiary of the Acquiror (the "Acquisition
Sub"),propose to enter into an Agreement and Plan of Merger (the "Agreement")
pursuant to which (i) the Acquiror and the Acquisition Sub would commence a
tender offer (the "Tender Offer") for all outstanding shares of the common
stock, par value $0.01 per share, of the Company (the "Company Shares") for
$19.00 per share, net to the seller in cash (the "Consideration"), and (ii)
the Acquisition Sub would be merged with the Company in a merger (the
"Merger"), in which each Company Share not acquired in the Tender Offer, other
than Company Shares held in treasury or owned by any subsidiary of the Company
or by the Acquiror or any subsidiary of the Acquiror, or as to which appraisal
rights have been perfected, would be converted into the right to receive the
Consideration. The Tender Offer and the Merger, taken together, are referred
to as the "Transaction".
You have asked us whether, in our opinion, the Consideration to be
received by the holders of the Company Shares pursuant to the Transaction is
fair, from a financial point of view, to such holders.
In arriving at the opinion set forth below, we have, among other
things:
(a) reviewed a draft dated May 26, 2000 of the Agreement;
(b) reviewed certain publicly available business and financial
information we deemed relevant relating to the Company and the
industries in which it operates;
(c) reviewed certain internal non-public financial and operating
data and forecasts provided to us by the management of the
Company relating to its business;
(d) discussed, with members of the senior management of the
Company, the Company's operations, historical financial
statements and future prospects;
(e) compared the financial and operating performance of the Company
with publicly available information concerning certain other
companies we deemed comparable and reviewed the relevant
historical stock prices of the Company Shares
B-2
and certain publicly traded securities of such other companies;
(f) compared the proposed financial terms of the Transaction with
the financial terms of certain other transactions we deemed
relevant; and
(g) made such other analyses and examinations as we have deemed
necessary or appropriate.
We have assumed and relied upon, without assuming any responsibility
for verification, the accuracy and completeness of all of the financial and
other information provided to, discussed with or reviewed by or for us, or
publicly available, for purposes of this opinion and have further relied upon
the assurance of the management of the Company that they are not aware of any
facts that would make such information inaccurate or misleading. We have
neither made nor obtained any independent evaluations or appraisals of the
assets or liabilities of the Company, nor have we conducted a physical
inspection of the properties or facilities of the Company. We have assumed
that the financial forecasts provided to or discussed with us by the Company
have been reasonably determined on bases reflecting the best currently
available estimates and judgments of the management of the Company as to the
future financial performance of the Company. We express no view as to such
forecast or projection information or the assumptions on which they were
based.
For purposes of rendering our opinion, we have assumed that, in all
respects material to our analysis, the representations and warranties of each
party contained in the Agreement are true and correct, that each party will
perform all of the covenants and agreements required to be performed by it
under the Agreement and that all conditions to the consummation of the Tender
Offer and the Merger will be satisfied without waiver thereof. We have also
assumed that the definitive Agreement will not differ in any material respects
from the draft thereof furnished to us.
Our opinion herein is necessarily based on market, economic and
other conditions as they exist and can be evaluated on the date of this
letter. Our opinion is limited to the fairness, from a financial point of
view, to the holders of the Company Shares of the Consideration, and we
express no opinion as to the merits of the underlying decision by the Company
to engage in the Transaction. Our opinion does not constitute a recommendation
to any holder of the Company Shares as to whether such holder should tender
any Company Shares pursuant to the Tender Offer or how such holder should vote
on the proposed Merger or any matter related thereto.
Chase Securities Inc., as part of its financial advisory business,
is continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions and valuations for estate, corporate
and other purposes. We have acted as financial
B-3
advisor to the Company in connection with the Transaction and will receive a
fee for our services, payment of a portion of which is contingent upon
delivery of this letter and payment of a significant portion of which is
contingent upon the consummation of the Tender Offer. In addition, the Company
has agreed to indemnify us for certain liabilities arising out of our
engagement. The Chase Manhattan Corporation and its affiliates, including
Chase Securities Inc., in the ordinary course of business, have from time to
time, provided investment banking services to the Company and commercial
banking services to the Acquiror and its affiliates, for which we received
usual and customary compensation, and in the future may continue to provide
such services. We have acted as financial advisor to the Company in connection
with the pending sale of the Company's contact lens sales and distribution
business. In the ordinary course of business, we or our affiliates may trade
in the debt and equity securities of the Company and the Acquiror and its
affiliates for our own accounts and for the accounts of our customers and,
accordingly, may at any time hold a long or short position in such securities.
Based upon and subject to the foregoing, we are of the opinion that,
as of the date hereof, the Consideration to be received by the holders of the
Company Shares pursuant to the Transaction is fair, from a financial point of
view, to such holders.
This opinion is for the use and benefit of the Board of Directors of
the Company in its evaluation of the Transaction and, except as set forth
below, shall not be used for any other purpose without the prior written
consent of Chase Securities Inc. This opinion shall not be reproduced,
disseminated, quoted, summarized or referred to at any time, in any manner or
for any purpose, nor shall any public references to Chase Securities Inc. be
made by the Company, without the prior written consent of Chase Securities
Inc., except that a copy of this opinion may be included in its entirety in
any proxy statement or Solicitation/Recommendation Statement on Schedule 14D-9
with respect to the Transaction.
Very truly yours,
CHASE SECURITIES INC.
ANNEX C
MASSACHUSETTS GENERAL LAWS
Business Corporation Law Chapter 156B
APPRAISAL
SECTION 86 SECTIONS APPLICABLE TO APPRAISAL; PREREQUISITES.
If a corporation proposes to take a corporate action as to which any
section of this chapter provides that a stockholder who objects to such action
shall have the right to demand payment for his shares and an appraisal
thereof, sections eighty-seven to ninety-eight, inclusive, shall apply except
as otherwise specifically provided in any section of this chapter. Except as
provided in sections eighty-two and eighty- three, no stockholder shall have
such right unless (1) he files with the corporation before the taking of the
vote of the shareholders on such corporate action, written objection to the
proposed action stating that he intends to demand payment for his shares if
the action is taken and (2) his shares are not voted in favor of the proposed
action.
SECTION 87 STATEMENT OF RIGHTS OF OBJECTING STOCKHOLDERS IN NOTICE OF
MEETING; FORM.
The notice of the meeting of stockholders at which the approval of
such proposed action is to be considered shall contain a statement of the
rights of objecting stockholders. The giving of such notice shall not be
deemed to create any rights in any stockholder receiving the same to demand
payment for his stock, and the directors may authorize the inclusion in any
such notice of a statement of opinion by the management as to the existence or
non-existence of the right of the stockholders to demand payment for their
stock on account of the proposed corporate action. The notice may be in such
form as the directors or officers calling the meeting deem advisable, but the
following form of notice shall be sufficient to comply with this section:
"If the action proposed is approved by the stockholders at the
meeting and effected by the corporation, any stockholder (1) who files with
the corporation before the taking of the vote on the approval of such action,
written objection to the proposed action stating that he intends to demand
payment for his shares if the action is taken and (2) whose shares are not
voted in favor of such action has or may have the right to demand in writing
from the corporation (or, in the case of a consolidation or merger, the name
of the resulting or surviving corporation shall be inserted), within twenty
days after the date of mailing to him of notice in writing that the corporate
action has become effective, payment for his shares and an appraisal of the
value thereof. Such corporation and any such stockholder shall in such cases
have the rights and duties and shall follow the procedure set forth in
sections 88 to 98, inclusive, of chapter 156B of the General Laws of
Massachusetts".
SECTION 88 NOTICE OF EFFECTIVENESS OF ACTION OBJECTED TO
The corporation taking such action, or in the case of a merger or
consolidation the surviving or resulting corporation, shall, within ten days
after the date on which such corporate action became effective, notify each
stockholder who filed a written objection meeting the requirements of section
eighty-six and whose shares were not voted in favor of the approval of such
action, that the action approved at the meeting of the corporation of which he
is a stockholder has become
C-2
effective. The giving of such notice shall not be deemed to create any rights
in any stockholder receiving the same to demand payment for his stock. The
notice shall be sent by registered or certified mail, addressed to the
stockholder at his last known address as it appears in the records of the
corporation.
SECTION 89 DEMAND FOR PAYMENT; TIME FOR PAYMENT
If within twenty days after the date of mailing of a notice under
subsection (e) of section eighty-two, subsection (f) of section eighty- three,
or section eighty-eight, any stockholder to whom the corporation was required
to give such notice shall demand in writing from the corporation taking such
action, or in the case of a consolidation or merger from the resulting or
surviving corporation, payment for his stock, the corporation upon which such
demand is made shall pay to him the fair value of his stock within thirty days
after the expiration of the period during which such demand may be made.
SECTION 90 DEMAND FOR DETERMINATION OF VALUE; BILL IN EQUITY; VENUE
If during the period of thirty days provided for in section
eighty-nine the corporation upon which such demand is made and any such
objecting stockholder fail to agree as to the value of such stock, such
corporation or any such stockholder may within four months after the
expiration of such thirty-day period demand a determination of the value of
the stock of all such objecting stockholders by a bill in equity filed in the
superior court in the county where the corporation in which such objecting
stockholder held stock had or has its principal office in the commonwealth.
SECTION 91 PARTIES TO SUIT TO DETERMINE VALUE; SERVICE
If the bill is filed by the corporation, it shall name as parties
respondent all stockholders who have demanded payment for their shares and
with whom the corporation has not reached agreement as to the value thereof.
If the bill is filed by a stockholder, he shall bring the bill in his own
behalf and in behalf of all other stockholders who have demanded payment for
their shares and with whom the corporation has not reached agreement as to the
value thereof, and service of the bill shall be made upon the corporation by
subpoena with a copy of the bill annexed. The corporation shall file with its
answer a duly verified list of all such other stockholders, and such
stockholders shall thereupon be deemed to have been added as parties to the
bill. The corporation shall give notice in such form and returnable on such
date as the court shall order to each stockholder party to the bill by
registered or certified mail, addressed to the last known address of such
stockholder as shown in the records of the corporation, and the court may
order such additional notice by publication or otherwise as it deems
advisable. Each stockholder who makes demand as provided in section
eighty-nine shall be deemed to have consented to the provisions of this
section relating to notice, and the giving of notice by the corporation to any
such stockholder in compliance with the order of the court shall be a
sufficient service of process on him. Failure to give notice to any
stockholder making demand shall not invalidate the proceedings as to other
stockholders to whom notice was properly given, and the court may at any time
before the entry of a final decree make supplementary orders of notice.
SECTION 92 DECREE DETERMINING VALUE AND ORDERING PAYMENT; VALUATION
DATE
C-3
After hearing the court shall enter a decree determining the fair
value of the stock of those stockholders who have become entitled to the
valuation of and payment for their shares, and shall order the corporation to
make payment of such value, together with interest, if any, as hereinafter
provided, to the stockholders entitled thereto upon the transfer by them to
the corporation of the certificates representing such stock if certificated or
if uncertificated, upon receipt of an instruction transferring such stock to
the corporation. For this purpose, the value of the shares shall be determined
as of the day preceding the date of the vote approving the proposed corporate
action and shall be exclusive of any element of value arising from the
expectation or accomplishment of the proposed corporate action.
SECTION 93 REFERENCE TO SPECIAL MASTER
The court in its discretion may refer the bill or any question
arising thereunder to a special master to hear the parties, make findings and
report the same to the court, all in accordance with the usual practice in
suits in equity in the superior court.
SECTION 94 NOTATION ON STOCK CERTIFICATES OF PENDENCY OF BILL
On motion the court may order stockholder parties to the bill to
submit their certificates of stock to the corporation for the notation thereon
of the pendency of the bill, and may order the corporation to note such
pendency in its records with respect to any uncertificated shares held by such
stockholder parties, and may on motion dismiss the bill as to any stockholder
who fails to comply with such order.
SECTION 95 COSTS; INTEREST
The costs of the bill, including the reasonable compensation and
expenses of any master appointed by the court, but exclusive of fees of
counsel or of experts retained by any party, shall be determined by the court
and taxed upon the parties to the bill, or any of them, in such manner as
appears to be equitable, except that all costs of giving notice to
stockholders as provided in this chapter shall be paid by the corporation.
Interest shall be paid upon any award from the date of the vote approving the
proposed corporate action, and the court may on application of any interested
party determine the amount of interest to be paid in the case of any
stockholder.
SECTION 96 DIVIDENDS AND VOTING RIGHTS AFTER DEMAND FOR PAYMENT
Any stockholder who has demanded payment for his stock as provided
in this chapter shall not thereafter be entitled to notice of any meeting of
stockholders or to vote such stock for any purpose and shall not be entitled
to the payment of dividends or other distribution on the stock (except
dividends or other distributions payable to stockholders of record at a date
which is prior to the date of the vote approving the proposed corporate
action) unless:
(1) A bill shall not be filed within the time provided in section
ninety;
(2) A bill, if filed, shall be dismissed as to such stockholder;
or
(3) Such stockholder shall with the written approval of the
corporation, or in the case of a consolidation or merger, the
resulting or surviving corporation, deliver to it a
C-4
written withdrawal of his objections to and an acceptance of
such corporate action.
Notwithstanding the provisions of clauses (1) to (3), inclusive,
said stockholder shall have only the rights of a stockholder who did not so
demand payment for his stock as provided in this chapter.
SECTION 97 STATUS OF SHARES PAID FOR
The shares of the corporation paid for by the corporation pursuant
to the provisions of this chapter shall have the status of treasury stock, or
in the case of a consolidation or merger the shares or the securities of the
resulting or surviving corporation into which the shares of such objecting
stockholder would have been converted had he not objected to such
consolidation or merger shall have the status of treasury stock or securities.
SECTION 98 EXCLUSIVE REMEDY; EXCEPTION
The enforcement by a stockholder of his right to receive payment for
his shares in the manner provided in this chapter shall be an exclusive remedy
except that this chapter shall not exclude the right of such stockholder to
bring or maintain an appropriate proceeding to obtain relief on the ground
that such corporate action will be or is illegal or fraudulent as to him.