EXHIBIT (A)1
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
RAMP NETWORKS, INC.
at
$5.80 NET PER SHARE
by
BLACKBIRD ACQUISITION, INC.
a direct wholly owned subsidiary of
NOKIA CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, JANUARY 16, 2001,
UNLESS THE OFFER IS EXTENDED
THE OFFER IS BEING MADE PURSUANT TO THE TERMS OF AN AGREEMENT AND PLAN OF
MERGER DATED AS OF DECEMBER 6, 2000 (THE "MERGER AGREEMENT") AMONG NOKIA
CORPORATION ("PARENT"), BLACKBIRD ACQUISITION, INC. ("PURCHASER") AND RAMP
NETWORKS, INC. (THE "COMPANY"). THE OFFER IS CONDITIONED UPON, AMONG OTHER
THINGS, (I) THERE HAVING BEEN VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE
EXPIRATION OF THE OFFER AT LEAST THE NUMBER OF SHARES (AS DEFINED HEREIN) THAT
SHALL CONSTITUTE 51% OF THE THEN OUTSTANDING SHARES ON A FULLY DILUTED BASIS
(DEFINED AS ALL OUTSTANDING SHARES TOGETHER WITH SHARES ISSUABLE UPON THE
CONVERSION OF ANY COMPANY CONVERTIBLE SECURITIES OR UPON THE EXERCISE OF ANY
VESTED OPTIONS, WARRANTS OR RIGHTS) (THE "MINIMUM CONDITION") AND (II) ANY
APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS
ACT OF 1976, AS AMENDED (THE "HSR ACT"), HAVING EXPIRED OR BEEN TERMINATED
PRIOR TO THE EXPIRATION OF THE OFFER (THE "HSR CONDITION"). THE OFFER IS ALSO
SUBJECT TO CERTAIN OTHER CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE. SEE
SECTIONS 1, 14 AND 15, WHICH SET FORTH IN FULL THE CONDITIONS TO THE OFFER.
---------------
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING EACH OF
THE OFFER AND THE MERGER (EACH AS DEFINED HEREIN), ARE FAIR TO, AND IN THE
BEST INTERESTS OF, THE HOLDERS OF SHARES, HAS APPROVED THE MERGER AGREEMENT
AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING EACH OF THE OFFER AND
MERGER, AND HAS RECOMMENDED THAT THE HOLDERS OF SHARES ACCEPT THE OFFER AND
TENDER SHARES PURSUANT TO THE OFFER.
---------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either (i) complete and sign the accompanying Letter of
Transmittal (or a manually signed facsimile thereof) in accordance with the
instructions in the Letter of Transmittal and mail or deliver it together with
the certificate(s) evidencing tendered Shares, and any other required
documents, to the Depositary or tender such Shares pursuant to the procedure
for book-entry transfer set forth in Section 3 or (ii) request such
stockholder's broker, dealer, commercial bank, trust company or other nominee
to effect the transaction for such stockholder. Any stockholder whose Shares
are registered in the name of a broker, dealer, commercial bank, trust company
or other nominee must contact such broker, dealer, commercial bank, trust
company or other nominee if such stockholder desires to tender such Shares.
A stockholder who desires to tender Shares and whose certificates
evidencing such Shares are not immediately available, or who cannot comply
with the procedure for book-entry transfer on a timely basis, may tender such
Shares by following the procedure for guaranteed delivery set forth in Section
3.
Questions or requests for assistance may be directed to the Information
Agent at its address and telephone number set forth on the back cover of this
Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of
Transmittal and the Notice of Guaranteed Delivery may also be obtained from
the Information Agent or from brokers, dealers, commercial banks or trust
companies.
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December 15, 2000
TABLE OF CONTENTS
Page
----
SUMMARY TERM SHEET........................................................ 1
INTRODUCTION.............................................................. 5
1.Terms of the Offer; Expiration Date .................................. 7
2.Acceptance for Payment and Payment for Shares ........................ 9
3.Procedures for Accepting the Offer and Tendering Shares .............. 10
4.Withdrawal Rights .................................................... 13
5.Certain U.S. Federal Income Tax Consequences ......................... 14
6.Price Range of Shares................................................. 15
7.Certain Information Concerning the Company ........................... 15
8.Certain Information Concerning Purchaser and Parent .................. 17
9.Financing of the Offer and the Merger ................................ 18
10.Background of the Offer; the Merger Agreement and Related
Agreements ......................................................... 18
11.Purpose of the Offer; Plans for the Company After the Offer and the
Merger ............................................................. 31
12.Dividends and Distributions .......................................... 34
13.Possible Effects of the Offer on the Market for Shares, The Nasdaq
Listing, Margin Regulations and Exchange Act Registration .......... 34
14.Certain Conditions of the Offer ...................................... 35
15.Certain Legal Matters and Regulatory Approvals ....................... 37
16.Fees and Expenses .................................................... 39
17.Miscellaneous ........................................................ 39
SCHEDULES
Schedule I. Directors and Executive Officers of Parent and Purchaser
Schedule II. Schedule of Transactions in Shares During the Past 60 Days
i
SUMMARY TERM SHEET
This summary term sheet highlights selected information from this Offer to
Purchase, and may not contain all of the information that is important to you.
To better understand our offer to you and for a complete description of the
legal terms of the offer, you should read this entire Offer to Purchase and the
accompanying Letter of Transmittal carefully. Questions or requests for
assistance may be directed to the Information Agent at its address and
telephone number on the last page of this Offer to Purchase.
WHO IS OFFERING TO BUY MY SECURITIES?
. We are Blackbird Acquisition, Inc., a newly formed Delaware corporation
and a direct wholly owned subsidiary of Nokia Corporation. We have been
organized in connection with this offer and have not carried on any
activities other than in connection with this offer. See Section 8--
"Certain Information Concerning Nokia and the Purchaser".
. Nokia is the world's leader in mobile communications. Backed by its
experience, innovation, user-friendliness and secure solutions, Nokia
has become the leading supplier of mobile phones and a leading supplier
of mobile, fixed and Internet Protocol ("IP") networks. By adding
mobility to the Internet, Nokia creates new opportunities for companies
and further enriches the daily lives of people. Nokia's shares, nominal
value 0.06 euros, are listed on the Helsinki Exchanges under the symbol
"NOK1V" and American Depositary Shares ("ADSs") of Nokia are traded on
the New York Stock Exchange under the symbol "NOK". Each ADS represents
one share. Nokia's shares are also traded on the Stockholm, London,
Frankfurt and Paris stock exchanges. See Section 8--"Certain Information
Concerning Nokia and the Purchaser".
WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THIS OFFER?
. We are seeking to purchase all the issued and outstanding shares of
common stock, par value $0.001 per share, of Ramp Networks, Inc. See the
"Introduction" and Section 1--"Terms of the Offer; Expiration Date".
HOW MUCH ARE YOU OFFERING TO PAY AND WHAT IS THE FORM OF PAYMENT?
. We are offering to pay $5.80 per share, net to each seller in cash
(subject to applicable withholding taxes), without interest thereon. See
the "Introduction" and Section 1--"Terms of the Offer; Expiration Date".
. If you tender your shares in the offer, you will not be obligated to pay
brokerage fees or commissions or, except as otherwise provided in
Instruction 6 of the Letter of Transmittal, stock transfer taxes with
respect to the sale of your shares pursuant to the offer. See the
"Introduction".
HAVE YOU ENTERED INTO ANY AGREEMENTS WITH RAMP NETWORK'S PRINCIPAL
STOCKHOLDERS?
. We have entered into Stockholder's Agreements with certain stockholders
of Ramp Networks pursuant to which such stockholders have agreed to
tender into the offer the shares of Ramp Networks common stock owned by
each of them, representing approximately 36% of the currently
outstanding number of shares of common stock of Ramp Networks. See
Section 10--"Background of the Offer; the Merger Agreement and Related
Agreements".
WHAT ARE THE MOST SIGNIFICANT CONDITIONS OF THE OFFER?
. We are not obligated to purchase any shares unless at least 51% of the
then outstanding shares on a fully diluted basis (defined as all
outstanding Ramp Networks shares together with all shares issuable
1
upon the conversion of any Ramp Networks convertible stock or upon the
exercise of any vested options, warrants or rights) are validly tendered
and not withdrawn prior to the expiration of the offer. See Section 1--
"Terms of the Offer; Expiration Date" and Section 14--"Certain
Conditions of the Offer".
. We are not obligated to purchase any shares unless prior to the offer
any applicable waiting period under the HSR Act has expired or been
terminated. See Section 15--"Certain Legal Matters and Regulatory
Approvals".
These and other conditions to our obligations to purchase shares tendered
in the offer are described in greater detail in Section 1--"Terms of the
Offer; Expiration Date", Section 14--"Certain Conditions of the Offer" and
Section 15--"Certain Legal Matters and Regulatory Approvals".
DO YOU HAVE FINANCIAL RESOURCES TO MAKE PAYMENT?
. Nokia or one of its affiliates will provide us with the funds necessary
to purchase the shares in the offer. See Section 9--"Financing of the
Offer and the Merger".
IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
. Because the form of payment consists solely of cash and all of the
funding that will be needed has already been arranged, and also because
of the lack of any relevant historical information concerning the
Purchaser, we do no think that our financial condition is relevant to
your decision to tender in the offer.
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
. You will have at least until 12:00 midnight, New York City time, on
Tuesday, January 16, 2001, to tender your shares of Ramp Networks common
stock in the offer. If you cannot deliver everything that is required in
order to make a valid tender by that time, you may be able to use a
guaranteed delivery procedure which is described in Section 3 of this
Offer to Purchase. See Section 3--"Procedures for Accepting the Offer
and Tendering Shares".
CAN THE OFFER BE EXTENDED, AND UNDER WHAT CIRCUMSTANCES?
. We expressly reserve the right, in our sole discretion but subject to
the terms of the Merger Agreement and applicable law, to extend the
period of time during which the offer remains open. We have agreed in
the Merger Agreement that we may extend the offer or will extend the
offer if certain conditions to the offer have not been satisfied. See
Section 1--"Terms of the Offer; Expiration Date".
HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
. If we decide to extend the offer, we will inform Citibank, N.A., the
Depositary, of that fact, and will issue a press release giving the new
expiration date no later than 9:00 a.m., New York City time, on the day
after the day on which the offer was previously scheduled to expire. See
Section 1--"Terms of the Offer; Expiration Date".
HOW DO I TENDER MY SHARES?
To tender your shares in the offer, you must:
. complete and sign the accompanying Letter of Transmittal (or a manually
signed facsimile of the Letter of Transmittal) in accordance with the
instructions in the Letter of Transmittal and mail or deliver it
together with your share certificates, and any other required documents,
to the Depositary; or
2
. tender your shares pursuant to the procedure for book-entry transfer set
forth in Section 3; or
. if your share certificates are not immediately available or if you
cannot deliver your share certificates, and any other required
documents, to Citibank, N.A., prior to the expiration of the offer, or
you cannot complete the procedure for delivery by book-entry transfer on
a timely basis, you may still tender your shares if you comply with the
guaranteed delivery procedures described in Section 3--"Procedures for
Accepting the Offer and Tendering Shares".
UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
. You may withdraw previously tendered shares any time prior to the
expiration of the offer, and, unless we have accepted the shares
pursuant to the offer, you may also withdraw any tendered shares at any
time after February 12, 2001. See Section 4--"Withdrawal Rights".
HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
. To withdraw previously tendered shares, you must deliver a written or
facsimile notice of withdrawal with the required information to
Citibank, N.A. while you still have the right to withdraw. If you
tendered shares by giving instructions to a broker or bank, you must
instruct the broker or bank to arrange for the withdrawal of your
shares. See Section 4--"Withdrawal Rights".
WHAT DOES THE BOARD OF DIRECTORS OF RAMP NETWORKS THINK OF THE OFFER?
. The Board of Directors of Ramp Networks has unanimously determined that
the Merger Agreement and the transactions contemplated thereby,
including the offer and the merger, are fair to, and in the best
interests of, Ramp Networks' stockholders, has approved the Merger
Agreement and the transactions contemplated thereby, and has recommended
that Ramp Networks' stockholders accept the offer and tender shares
pursuant to the offer. See the "Introduction".
WILL RAMP NETWORKS CONTINUE AS A PUBLIC COMPANY?
. No. If the merger occurs, Ramp Networks will no longer be publicly
owned. Even if the merger does not occur, if we purchase all the
tendered shares, there may be so few remaining stockholders and publicly
held shares that the shares may no longer be eligible to be traded
through the Nasdaq National Market or any other securities market, there
may not be a public trading market for the shares and Ramp Networks may
cease making filings with the SEC or otherwise cease being required to
comply with SEC rules relating to publicly held companies. See Section
13--"Possible Effects of the Offer on the Market for Shares; The Nasdaq
Listing, Margin Regulations and Exchange Act Registration".
WILL THE TENDER OFFER BE FOLLOWED BY A MERGER IF ALL THE SHARES ARE NOT
TENDERED?
. If we accept for payment and pay for at least 51% of the outstanding
shares on a fully diluted basis, we will merge with and into Ramp
Networks. If the merger occurs, Ramp Networks will become a direct
wholly owned subsidiary of Nokia, and each share that remains
outstanding (other than any shares held in the treasury of Ramp
Networks, or owned by Nokia, Blackbird Acquisition, Inc. or any of their
subsidiaries and any shares held by stockholders who have demanded and
perfected appraisal rights under Delaware law for their shares) will be
canceled and converted automatically into the right to receive $5.80 net
per share, in cash or any greater amount per share paid pursuant to the
offer (subject to the applicable withholding tax), without interest. See
the "Introduction".
3
IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
. If you decide not to tender your shares in the offer and the merger
occurs, you will receive in the merger the same amount of cash per share
as if you would have tendered your shares in the offer.
. If you decide not to tender your shares in the offer and the merger does
not occur, if we purchase all the tendered shares, there may be so few
remaining stockholders and publicly held shares that the shares will no
longer be eligible to be traded through the Nasdaq National Market or
any other securities market, there may not be a public trading market
for the shares and Ramp Networks may cease making filings with the SEC
or otherwise cease being required to comply with SEC rules relating to
publicly held companies. See Section 13--"Possible Effects of the Offer
on the Market for Shares; The Nasdaq Listing, Margin Regulations and
Exchange Act Registration".
WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
. On December 6, 2000, the last full trading day before we announced our
offer, the last reported closing price per share reported on the Nasdaq
National Market was $4.97 per share. See Section 7--"Certain Information
Concerning the Company".
WITH WHOM MAY I TALK IF I HAVE QUESTIONS ABOUT THE OFFER?
. Banks and brokers can call Georgeson Shareholder Communications Inc.,
the Information Agent, at (212) 440-9800 and all others can call toll-
free (800) 223-2064. See the back cover of this Offer to Purchase.
4
To the Holders of Common Stock of
Ramp Networks, Inc.:
INTRODUCTION
Blackbird Acquisition, Inc., a Delaware corporation ("Purchaser") and a
direct wholly owned subsidiary of Nokia Corporation, a public limited
liability company incorporated under the laws of the Republic of Finland
("Parent"), hereby offers to purchase all the shares of common stock, par
value $0.001 per share ("Shares"), of Ramp Networks, Inc., a Delaware
corporation (the "Company"), that are issued and outstanding for $5.80 per
Share, net to the seller in cash (subject to applicable withholding taxes),
without interest, upon the terms and subject to the conditions set forth in
this Offer to Purchase and in the related Letter of Transmittal (which,
together with this Offer to Purchase and any amendments or supplements hereto
or thereto, collectively constitute the "Offer"). See Section 8--"Certain
Information Concerning Purchaser and Parent" for additional information
concerning Parent and Purchaser.
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, stock transfer taxes with respect to the purchase of Shares by
Purchaser pursuant to the Offer. However, any tendering stockholder or other
payee who fails to complete and sign the Substitute Form W-9 that is included
in the Letter of Transmittal may be subject to a required back-up U.S. federal
income tax withholding of 31% of the gross proceeds payable to such
stockholder or other payee pursuant to the Offer. See Section 5--"Certain
Federal Income Tax Considerations". Purchaser or Parent will pay all charges
and expenses of Citibank, N.A. (the "Depositary"), which is acting as the
Depositary, and Georgeson Shareholder Communications Inc. (the "Information
Agent"), which is acting as the Information Agent, incurred in connection with
the Offer. See Section 16--"Fees and Expenses".
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") HAS UNANIMOUSLY
DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
THEREBY, INCLUDING EACH OF THE OFFER AND THE MERGER (EACH AS DEFINED HEREIN)
ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY'S STOCKHOLDERS, HAS
APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING THE OFFER AND MERGER AND HAS RECOMMENDED THAT THE COMPANY'S
STOCKHOLDERS ACCEPT THE OFFER AND TENDER SHARES PURSUANT TO THE OFFER.
Broadview International LLC ("Broadview") has delivered to the Board its
written opinion dated December 6, 2000 to the effect that, as of the date of
the opinion and based upon and subject to various considerations and
assumptions set forth in such opinion, the $5.80 per Share cash consideration
to be received by the stockholders pursuant to each of the Offer and the
Merger is fair, from a financial point of view, to the Company's stockholders.
A copy of the written opinion of Broadview is contained in the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-
9"), which has been filed with the Securities and Exchange Commission (the
"SEC") in connection with the Offer and which is being mailed to the Company's
stockholders concurrently herewith. Stockholders are urged to read such
opinion carefully in its entirety for a description of the assumptions made,
matters considered and limitations of the review undertaken by Broadview.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT
LEAST THE NUMBER OF SHARES THAT SHALL CONSTITUTE 51% OF THE THEN OUTSTANDING
SHARES ON A FULLY DILUTED BASIS (DEFINED AS ALL OUTSTANDING SHARES TOGETHER
WITH SHARES ISSUABLE UPON THE CONVERSION OF ANY COMPANY CONVERTIBLE SECURITIES
OR UPON THE EXERCISE OF ANY VESTED OPTIONS, WARRANTS OR RIGHTS) (THE "MINIMUM
CONDITION") AND (II) ANY APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR ACT"), HAVING EXPIRED
OR BEEN TERMINATED PRIOR TO
5
THE EXPIRATION OF THE OFFER (THE "HSR CONDITION"). THE OFFER IS ALSO SUBJECT
TO CERTAIN OTHER CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE. SEE SECTIONS
1 AND 14, WHICH SET FORTH IN FULL THE CONDITIONS TO THE OFFER.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of December 6, 2000 (the "Merger Agreement"), among Parent, Purchaser and
the Company. The Merger Agreement provides, among other things, that as
promptly as practicable after the purchase of Shares pursuant to the Offer and
the satisfaction or, if permissible, waiver of the conditions set forth in the
Merger Agreement, Parent, Purchaser and the Company shall cause the Merger to
be consummated by filing the Merger Agreement or a certificate of merger or
certificate of ownership and merger (in either case, the "Certificate of
Merger") with the Secretary of State of the State of Delaware, in such form as
is required by, and executed in accordance with, the relevant provisions of
the General Corporation Law of the State of Delaware ("Delaware Law") (the
date and time of such filing being the "Effective Time"), Purchaser will be
merged with and into the Company (the "Merger"). As a result of the Merger,
the separate corporate existence of Purchaser will cease and the Company will
continue as the surviving corporation of the Merger (the "Surviving
Corporation"). At the Effective Time, by virtue of the Merger and without any
action on the part of Purchaser, the Company or the holders of any Ramp
Networks securities, each Share issued and outstanding immediately prior to
the Effective Time (other than any Shares held in the treasury of the Company
or Shares owned by Purchaser, Parent or any direct or indirect wholly owned
subsidiary of Parent or of the Company, and other than Shares held by
stockholders who shall have demanded and perfected appraisal rights under
Section 262 of Delaware Law) shall be canceled and shall be converted
automatically into the right to receive $5.80 net in cash, or any higher price
that may be paid per Share in the Offer (subject to applicable withholding
taxes), without interest (the "Merger Consideration"). Stockholders who demand
and perfect appraisal rights under Delaware Law will be entitled to receive,
in connection with the Merger, cash for the fair value of their Shares as
determined pursuant to the procedures prescribed by Delaware Law. See Section
11--"Purpose of the Offer; Plans for the Company After the Offer and the
Merger". The Merger Agreement is more fully described in Section 10. Certain
federal income tax consequences of the sale of Shares pursuant to the Offer
and the Merger, as the case may be, are described in Section 5.
Concurrently with entering into the Merger Agreement, Parent and Purchaser
entered into Stockholder's Agreements, dated as of December 6, 2000 (the
"Stockholder's Agreements"), with the following stockholders of the Company:
Mahesh Veerina, Venrock Associates, Venrock Associates II, L.P., InterWest
Investors V, InterWest Partners V, L.P., Anthony Sun, Philip Gianos,
L. William Krause, Perry Grace, Richard Bridges, Ragu Bathina, Sri Bathina and
Kothandapani Ranganathan (collectively, the "Principal Stockholders").
Pursuant to the Stockholder's Agreements, the Principal Stockholders have
agreed, among other things, (i) to validly tender (and not withdraw) all of
their Shares into the Offer, (ii) if applicable, to vote their Shares in favor
of the approval and adoption of the Merger Agreement and the transactions
contemplated thereby, including the Merger, and (iii) to grant to Purchaser an
irrevocable option to purchase all, and not less than all, of their Shares at
a price per Share equal to $5.80, or any higher price per Share paid in the
Offer. On December 6, 2000, the Principal Stockholders owned 7,858,187 Shares,
constituting approximately 36% of the then outstanding Shares. For a more
detailed description of the terms and conditions of the Stockholder's
Agreements, see Section 10.
The Merger Agreement provides that, promptly upon the purchase by Purchaser
of Shares pursuant to the Offer and from time to time thereafter, Purchaser
shall be entitled to designate up to such number of directors, rounded up to
the next whole number, on the Board as will give Purchaser representation on
the Board equal to the product of the total number of directors on the Board
(giving effect to the directors elected pursuant to this section) multiplied
by the percentage that the aggregate number of Shares then beneficially owned
by Purchaser or any affiliate of Purchaser following such purchase bears to
the total number of Shares then outstanding. In the Merger Agreement, the
Company has agreed, at such time, to promptly take all actions necessary to
cause Purchaser's designees to be elected as directors of the Company,
including increasing the size of the Board or securing the resignations of
incumbent directors, or both.
The obligations of each party to effect the Merger are subject to the
satisfaction or waiver of certain conditions, including the consummation of
the Offer, and, if necessary, the approval and adoption of the Merger
6
Agreement and the Merger by the requisite vote of the stockholders of the
Company. For a more detailed description of the conditions to the Merger, see
Section 10. Under the Company's Amended and Restated By-Laws and Delaware Law,
the affirmative vote of the holders of a majority of the outstanding Shares is
required to approve and adopt the Merger Agreement and the Merger.
Consequently, if Purchaser acquires (pursuant to the Offer, the Stockholder's
Agreements or otherwise) at least 51% of the outstanding Shares, then
Purchaser will have sufficient voting power to approve and adopt the Merger
Agreement and the Merger without the vote of any other stockholder. See
Sections 10 and 11.
Under Delaware Law, if Purchaser acquires, pursuant to the Offer, the
Stockholder's Agreements or otherwise, at least 90% of the then outstanding
Shares, Purchaser will be able to approve and adopt the Merger Agreement and
the Merger without a vote of the Company's stockholders. In such event,
Parent, Purchaser and the Company have agreed to take, at the request of
Purchaser, all necessary and appropriate action to cause the Merger to become
effective in accordance with Delaware Law as promptly as reasonably
practicable after such acquisition, without a meeting of the Company's
stockholders. If, however, Purchaser does not acquire at least 90% of the then
outstanding Shares pursuant to the Offer, the Stockholder's Agreements or
otherwise and a vote of the Company's stockholders is required under Delaware
Law, a significantly longer period of time will be required to effect the
Merger. See Section 11.
The Company has advised Purchaser that as of December 6, 2000, 21,760,920
Shares were issued, consisting of 21,760,920 Shares outstanding and no Shares
held in the treasury of the Company. The Company has also advised Purchaser
that as of January 16, 2001, the scheduled expiration date for the Offer,
options to purchase 1,045,803 shares shall have become vested. Based on such
information, the Minimum Condition would be satisfied as of such date if
Purchaser acquired an aggregate of 11,631,429 Shares. Also, assuming
21,760,920 Shares are then outstanding Purchaser could cause the Merger to
become effective in accordance with Delaware Law, without a meeting of the
Company's stockholders, if Purchaser acquired 19,584,828 Shares. Based on such
information, if all of the 7,858,187 Shares owned by the Principal
Stockholders are tendered into the Offer as contemplated by the Stockholder's
Agreements, the Minimum Condition would be satisfied if Purchaser acquired an
additional 3,773,242 Shares pursuant to the Offer.
Purchaser does not intend to offer any subsequent offering period in
connection with the Offer unless Purchaser comes to a written agreement with
the Company that would provide for such subsequent offering period.
No appraisal rights are available in connection with the Offer; however,
stockholders may have appraisal rights in connection with the Merger
regardless of whether the Merger is consummated with or without a vote of the
Company's stockholders. See Section 11.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
1. Terms of the Offer; Expiration Date.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of such extension
or amendment), Purchaser will accept for payment and pay for all Shares
validly tendered (and not withdrawn in accordance with the procedures set
forth in Section 4) on or prior to the Expiration Date. "Expiration Date"
means 12:00 midnight, New York City time, on Tuesday, January 16, 2001, unless
and until Purchaser (subject to the terms and conditions of the Merger
Agreement) shall have extended the period during which the Offer is open, in
which case Expiration Date shall mean the latest time and date at which the
Offer, as may be extended by Purchaser, shall expire.
The obligation of Purchaser to accept for payment Shares tendered pursuant
to the Offer shall be subject to the satisfaction of the Minimum Condition,
the HSR Condition and to each of the other conditions set forth in
7
Section 14. Purchaser expressly reserves the right to waive any such
condition, to increase the price per Share payable in the Offer, and to make
any other changes in the terms and conditions of the Offer; provided, however,
that without the Company's prior written consent, Purchaser shall not waive
the Minimum Condition and no change may be made (i) which decreases the price
per Share payable in the Offer, or (ii) which reduces the maximum number of
Shares to be purchased in the Offer, or (iii) which changes the form of
consideration payable in the Offer, or (iv) which imposes conditions to the
Offer in addition to those set forth in Section 14, or (v) which, except as
provided by Law or in the following sentence, extends the Offer.
The Merger Agreement provides that Purchaser may, without the consent of
the Company, (i) extend the Offer beyond the scheduled expiration date, which
shall be 20 business days following the commencement of the Offer, if, at the
scheduled expiration of the Offer, any of the conditions to Purchaser's
obligation to accept Shares for payment, shall not be satisfied or waived,
(ii) extend the Offer for any period required by any rule, regulation or
interpretation of the Securities and Exchange Commission (the "SEC"), or the
staff thereof, applicable to the Offer, or (iii) extend (or re-extend) the
Offer for an aggregate period of not more than 10 business days beyond the
latest applicable date that would otherwise be permitted under clause (i) or
(ii) of this sentence, if, as of such date, all of the conditions to
Purchaser's obligations to accept for payment Shares are satisfied or waived,
but there shall not have been validly tendered and not withdrawn pursuant to
the Offer that number of Shares necessary to permit the Merger to be effected
without a meeting of the Company's stockholders in accordance with Delaware
Law. In addition, if, on the then applicable expiration date of the Offer, the
sole condition remaining unsatisfied is the failure of the waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR Act") or under any applicable material non-United States statutes or
regulations to have expired or been terminated, then Purchaser shall extend
the Offer from time to time until the earlier to occur of (i) February 15,
2001 and (ii) the fifth business day after the expiration or termination of
the applicable waiting period under the HSR Act or any applicable material
non-United States statutes or regulation. Parent and Purchaser further agree
that in the event of the failure of one or more of the conditions to the Offer
to be either satisfied or waived on any date on which the Offer would have
otherwise expired, Purchaser shall, if such condition or conditions could
reasonably be satisfied by February 15, 2001 and for so long as such condition
or conditions continue to reasonably be expected to be satisfied by February
15, 2001, extend the Offer until such condition or conditions shall have been
satisfied or waived; provided, however, that Purchaser shall not be required
to extend the Offer pursuant to this sentence beyond February 15, 2001. The
cash price per share paid pursuant to the Offer (the "Per Share Amount")
shall, subject to applicable withholding of taxes, be net to the seller in
cash, upon the terms and subject to the conditions of the Offer.
Purchaser shall pay for all Shares validly tendered and not withdrawn
promptly following the acceptance of Shares for payment pursuant to the Offer.
Notwithstanding the immediately preceding sentence and subject to the
applicable rules of the SEC and the terms and conditions of the Offer,
Purchaser expressly reserves the right to delay payment for Shares in order to
comply in whole or in part with applicable laws. Any such delay shall be
effected in compliance with Rule 14e-1(c) under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). If the payment equal to the Per Share
Amount in cash is to be made to a person other than the person in whose name
the surrendered certificate formerly evidencing Shares is registered on the
stock transfer books of the Company, it shall be a condition of payment that
the certificate so surrendered shall be endorsed properly or otherwise be in
proper form for transfer and that the person requesting such payment shall
have paid all transfer and other taxes required by reason of the payment of
the Per Share Amount to a person other than the registered holder of the
certificate surrendered, or shall have established to the satisfaction of
Purchaser that such taxes either have been paid or are not applicable.
Any such extension, delay, termination, waiver or amendment will be
followed as promptly as practicable by public announcement thereof, such
announcement in the case of an extension to be made no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date. Subject to applicable law (including Rules 14d-4(d), 14d-6(c)
and 14e-1 under the Exchange Act, which require that material changes be
promptly disseminated to stockholders in a manner reasonably designed to
inform them of such changes) and without limiting the manner in which
Purchaser may choose to make any public
8
announcement, Purchaser will have no obligation to publish, advertise or
otherwise communicate any such public announcement other than by issuing a
press release to the Dow Jones News Service or the Public Relations Newswire.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, Purchaser will extend the Offer to the extent required by
Rules l4d-4(c), l4d-6(d) and 14e-1 under the Exchange Act. Subject to the
terms of the Merger Agreement, if, prior to the Expiration Date, Purchaser
should decide to increase the consideration being offered in the Offer, such
increase in the consideration being offered will be applicable to all
stockholders whose Shares are accepted for payment pursuant to the Offer and,
if at the time notice of any such increase in the consideration being offered
is first published, sent or given to holders of such Shares, the Offer is
scheduled to expire at any time earlier than the period ending on the tenth
business day from and including the date that such notice is first so
published, sent or given, the Offer will be extended at least until the
expiration of such ten business day period.
Purchaser does not intend to offer any subsequent offering period in
connection with the Offer unless Purchaser comes to a written agreement with
the Company that would provide for such subsequent offering period. If
Purchaser agrees with the Company to provide for such subsequent offering
period, subject to the applicable rules and regulations of the SEC, Purchaser
may elect to extend its offer to purchase Shares beyond the Expiration Date
for a subsequent offering period of three business days to 20 business days
(the "Subsequent Offering Period"), if, among other things, upon the
Expiration Date (i) all of the conditions to Purchaser's obligations to accept
for payment, and to pay for, the Shares are satisfied or waived and (ii)
Purchaser immediately accepts for payment, and promptly pays for, all Shares
validly tendered (and not withdrawn in accordance with the procedures set
forth in Section 4) prior to the Expiration Date. Shares tendered during the
Subsequent Offering Period may not be withdrawn. See Section 4. Purchaser will
immediately accept for payment, and promptly pay for, all validly tendered
Shares as they are received during the Subsequent Offering Period. Any
election by the Purchaser to include a Subsequent Offering Period may be
effected by Purchaser giving oral or written notice of the Subsequent Offering
Period to the Depositary. If Purchaser decides to include a Subsequent
Offering Period, it will make an announcement to that effect by issuing a
press release to the Dow Jones News Service or the Public Relations Newswire
at least five business days in advance of the previously scheduled expiration
date of the Offer.
For purposes of the Offer, a "business day" means any day on which the
principal offices of the SEC in Washington, D.C. are open to accept filings,
or, in the case of determining a date when any payment is due, any day on
which banks are not required or authorized to close in The City of New York.
The Company has provided Purchaser with the Company's stockholder list and
security position listings, including the most recent list of names, addresses
and security positions of non-objecting beneficial owners in the possession of
the Company, for the purpose of disseminating the Offer to holders of Shares.
This Offer to Purchase and the related Letter of Transmittal will be mailed by
Purchaser to record holders of Shares whose names appear on the Company's
stockholder list and will be furnished, for subsequent transmittal to
beneficial owners of Shares, to brokers, dealers, commercial banks, trust
companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing.
2. Acceptance for Payment and Payment for Shares.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such
extension or amendment), Purchaser will accept for payment all Shares validly
tendered (and not properly withdrawn in accordance with Section 4) prior to
the Expiration Date promptly after the occurrence of the Expiration Date.
Purchaser shall pay for all Shares validly tendered and not withdrawn promptly
following the acceptance of Shares for payment pursuant to the Offer.
Notwithstanding the immediately preceding sentence and subject to applicable
rules and regulations of the SEC and the terms of the Merger Agreement,
Purchaser expressly reserves the right to delay payment for Shares in order to
comply in whole or in
9
part with applicable laws. See Sections 1 and 15. If Purchaser agrees with the
Company to include a Subsequent Offering Period, Purchaser will accept for
payment, and promptly pay for, all validly tendered Shares as they are
received during the Subsequent Offering Period. Purchaser does not intend to
offer any subsequent offering period in connection with the Offer unless
Purchaser comes to a written agreement with the Company that would provide for
such subsequent offering period. See Section 1.
In all cases (including during any Subsequent Offering Period), payment for
Shares tendered and accepted for payment pursuant to the Offer will be made
only after timely receipt by the Depositary of (i) the certificates evidencing
such Shares (the "Share Certificates") or timely confirmation (a "Book-Entry
Confirmation") of a book-entry transfer of such Shares into the Depositary's
account at The Depository Trust Company (the "Book-Entry Transfer Facility")
pursuant to the procedures set forth in Section 3, (ii) the Letter of
Transmittal (or a manually signed facsimile thereof), properly completed and
duly executed, with any required signature guarantees or an Agent's Message
(as defined below), in connection with the book-entry transfer and (iii) any
other documents required under the Letter of Transmittal. The term "Agent's
Message" means a message, transmitted by the Book-Entry Transfer Facility to,
and received by, the Depositary and forming a part of the Book-Entry
Confirmation which states that the Book-Entry Transfer Facility has received
an express acknowledgment from the participant in the Book-Entry Transfer
Facility tendering the Shares that are the subject of such Book-Entry
Confirmation, that such participant has received and agrees to be bound by the
Letter of Transmittal and that Purchaser may enforce such agreement against
such participant.
For purposes of the Offer (including during any Subsequent Offering
Period), Purchaser will be deemed to have accepted for payment (and thereby
purchased) Shares validly tendered and not properly withdrawn as, if and when
Purchaser gives oral or written notice to the Depositary of Purchaser's
acceptance for payment of such Shares pursuant to the Offer. Upon the terms
and subject to the conditions of the Offer, payment for Shares accepted for
payment pursuant to the Offer will be made by deposit of the purchase price
therefor with the Depositary, which will act as agent for tendering
stockholders for the purpose of receiving payments from Purchaser and
transmitting such payments to tendering stockholders whose Shares have been
accepted for payment. Under no circumstances will interest on the purchase
price for Shares be paid, regardless of any delay in making such payment.
If any tendered Shares are not accepted for payment for any reason pursuant
to the terms and conditions of the Offer, or if Share Certificates are
submitted evidencing more Shares than are tendered, Share Certificates
evidencing unpurchased Shares will be returned, without expense to the
tendering stockholder (or, in the case of Shares tendered by book-entry
transfer into the Depositary's account at a Book-Entry Transfer Facility
pursuant to the procedure set forth in Section 3, such Shares will be credited
to an account maintained at such Book-Entry Transfer Facility), as promptly as
practicable following the expiration or termination of the Offer.
Purchaser reserves the right to transfer or assign, in whole or from time
to time in part, to one or more of its affiliates, the right to purchase all
or any portion of the Shares tendered pursuant to the Offer, but any such
transfer or assignment will not relieve Purchaser of its obligations under the
Offer and will in no way prejudice the rights of tendering stockholders to
receive payment for Shares validly tendered and accepted for payment pursuant
to the Offer.
3. Procedures for Accepting the Offer and Tendering Shares.
In order for a holder of Shares validly to tender Shares pursuant to the
Offer, the Letter of Transmittal (or a manually signed facsimile thereof),
properly completed and duly executed, together with any required signature
guarantees or, in the case of a book-entry transfer, an Agent's Message, and
any other documents required by the Letter of Transmittal, must be received by
the Depositary at one of its addresses set forth on the back cover of this
Offer to Purchase and either (i) the Share Certificates evidencing tendered
Shares must be received by the Depositary at such address or such Shares must
be tendered pursuant to the procedure for book-entry transfer described below
and a Book-Entry Confirmation must be received by the Depositary (including an
Agent's
10
Message if the tendering stockholder has not delivered a Letter of
Transmittal), in each case prior to the Expiration Date, or (ii) the tendering
stockholder must comply with the guaranteed delivery procedures described
below.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT
THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Book-Entry Transfer. The Depositary will establish accounts with respect to
the Shares at the Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any
financial institution that is a participant in the system of the Book-Entry
Transfer Facility may make a book-entry delivery of Shares by causing the
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at the Book-Entry Transfer Facility in accordance with the Book-Entry
Transfer Facility's procedures for such transfer. However, although delivery
of Shares may be effected through book-entry transfer at the Book-Entry
Transfer Facility, the Letter of Transmittal (or a manually signed facsimile
thereof), properly completed and duly executed, together with any required
signature guarantees, or an Agent's Message, and any other required documents,
must, in any case, be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase prior to the Expiration
Date, or the tendering stockholder must comply with the guaranteed delivery
procedure described below. Delivery of documents to the Book-Entry Transfer
Facility does not constitute delivery to the Depositary.
Signature Guarantees. Signatures on all Letters of Transmittal must be
guaranteed by a firm which is a member of the Security Transfer Agent
Medallion Signature Program, or by any other "eligible guarantor institution,"
as such term is defined in Rule 17Ad-15 under the Exchange Act (each of the
foregoing being referred to as an "Eligible Institution"), except in cases
where Shares are tendered (i) by a registered holder of Shares who has not
completed either the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" on the Letter of Transmittal or (ii)
for the account of an Eligible Institution. If a Share Certificate is
registered in the name of a person other than the signer of the Letter of
Transmittal, or if payment is to be made, or a Share Certificate not accepted
for payment or not tendered is to be returned, to a person other than the
registered holder(s), then the Share Certificate must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear on the Share Certificate, with the
signature(s) on such Share Certificate or stock powers guaranteed by an
Eligible Institution. See Instructions 1 and 5 of the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates evidencing such Shares are
not immediately available or such stockholder cannot deliver the Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date, or such stockholder cannot complete the procedure for
delivery by book-entry transfer on a timely basis, such Shares may
nevertheless be tendered, provided that all the following conditions are
satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by Purchaser, is
received prior to the Expiration Date by the Depositary as provided below;
and
(iii) the Share Certificates (or a Book-Entry Confirmation) evidencing
all tendered Shares, in proper form for transfer, in each case together
with the Letter of Transmittal (or a manually signed facsimile thereof),
properly completed and duly executed, with any required signature
guarantees or, in the case of a book-entry transfer, an Agent's Message,
and any other documents required by the Letter of Transmittal are received
by the Depositary within three Nasdaq National Market ("Nasdaq") trading
days after the date of execution of such Notice of Guaranteed Delivery.
11
The Notice of Guaranteed Delivery may be delivered by hand or mail or by
facsimile transmission to the Depositary and must include a guarantee by an
Eligible Institution in the form set forth in the form of Notice of Guaranteed
Delivery made available by Purchaser. The procedures for guaranteed delivery
specified above may not be used during any Subsequent Offering Period.
In all cases (including during any Subsequent Offering Period), payment for
Shares tendered and accepted for payment pursuant to the Offer will be made
only after timely receipt by the Depositary of the Share Certificates
evidencing such Shares, or a Book-Entry Confirmation of the delivery of such
Shares, and the Letter of Transmittal (or a manually signed facsimile
thereof), properly completed and duly executed, with any required signature
guarantees or, in the case of a book-entry transfer, an Agent's Message, and
any other documents required by the Letter of Transmittal.
Determination of Validity. All questions as to the form of documents and
the validity, form, eligibility (including time of receipt) and acceptance for
payment of any tender of Shares will be determined by Purchaser, in its sole
discretion, which determination shall be final and binding on all parties.
Purchaser reserves the absolute right to reject any and all tenders determined
by it not to be in proper form or the acceptance for payment of which may, in
the opinion of its counsel, be unlawful. Purchaser also reserves the absolute
right to waive any condition of the Offer to the extent permitted by
applicable law and the Merger Agreement or any defect or irregularity in the
tender of any Shares of any particular stockholder, whether or not similar
defects or irregularities are waived in the case of other stockholders. No
tender of Shares will be deemed to have been validly made until all defects
and irregularities have been cured or waived. None of Purchaser, Parent or any
of their respective affiliates or assigns, the Depositary, the Information
Agent or any other person will be under any duty to give notification of any
defects or irregularities in tenders or incur any liability for failure to
give any such notification. Purchaser's interpretation of the terms and
conditions of the Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding.
A tender of Shares pursuant to any of the procedures described above will
constitute the tendering stockholder's acceptance of the terms and conditions
of the Offer, as well as the tendering stockholder's representation and
warranty to Purchaser that (i) such stockholder has the full power and
authority to tender, sell, assign and transfer the tendered Shares (and any
and all other Shares or other securities issued or issuable in respect of such
Shares), and (ii) when the same are accepted for payment by Purchaser,
Purchaser will acquire good and unencumbered title thereto, free and clear of
all liens, restrictions, charges and encumbrances and not subject to any
adverse claims.
The acceptance for payment by Purchaser of Shares pursuant to any of the
procedures described above will constitute a binding agreement between the
tendering stockholder and Purchaser upon the terms and subject to the
conditions of the Offer.
Appointment as Proxy. By executing the Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of Purchaser as
such stockholder's agents, attorneys-in-fact and proxies, each with full power
of substitution, in the manner set forth in the Letter of Transmittal, to the
full extent of such stockholder's rights with respect to the Shares tendered
by such stockholder and accepted for payment by Purchaser (and with respect to
any and all other Shares or other securities issued or issuable in respect of
such Shares on or after December 6, 2000). All such powers of attorney and
proxies shall be considered irrevocable and coupled with an interest in the
tendered Shares. Such appointment will be effective when, and only to the
extent that, Purchaser accepts such Shares for payment. Upon such acceptance
for payment, all prior powers of attorney and proxies given by such
stockholder with respect to such Shares (and such other Shares and securities)
will be revoked, without further action, and no subsequent powers of attorney
or proxies may be given nor any subsequent written consent executed by such
stockholder (and, if given or executed, will not be deemed to be effective)
with respect thereto. The designees of Purchaser will, with respect to the
Shares for which the appointment is effective, be empowered to exercise all
voting and other rights of such stockholder as they in their sole discretion
may deem proper at any annual or special meeting of the Company's stockholders
or any adjournment or postponement thereof, by written consent in lieu of any
such meeting or otherwise. Purchaser
12
reserves the right to require that, in order for Shares to be deemed validly
tendered, immediately upon Purchaser's payment for such Shares, Purchaser must
be able to exercise full voting rights with respect to such Shares (and such
other Shares and securities).
Under the "backup withholding" provisions of U.S. federal income tax law,
the Depositary may be required to withhold 31% of any payments of cash
pursuant to the Offer. To prevent backup federal income tax withholding with
respect to payment to certain stockholders of the purchase price of Shares
purchased pursuant to the Offer, each such stockholder must provide the
Depositary with such stockholder's correct taxpayer identification number and
certify that such stockholder is not subject to backup federal income tax
withholding by completing the Substitute Form W-9 in the Letter of
Transmittal. See Instruction 9 of the Letter of Transmittal.
4. Withdrawal Rights.
Tender of Shares made pursuant to the Offer are irrevocable except that
such Shares may be withdrawn at any time prior to the Expiration Date and,
unless theretofore accepted for payment by Purchaser pursuant to the Offer,
may also be withdrawn at any time after February 12, 2001. If Purchaser
extends the Offer, is delayed in its acceptance for payment of Shares or is
unable to accept Shares for payment pursuant to the Offer for any reason,
then, without prejudice to Purchaser's rights under the Offer, the Depositary
may, nevertheless, on behalf of Purchaser, retain tendered Shares, and such
Shares may not be withdrawn except to the extent that tendering stockholders
are entitled to withdrawal rights as described in this Section 4, subject to
Rule 14e-1(c) under the Exchange Act. Any such delay will be by an extension
of the Offer to the extent required by law. If Purchaser agrees with the
Company to include a Subsequent Offering Period, Shares tendered during the
Subsequent Offering Period may not be withdrawn. Purchaser does not intend to
offer any subsequent offering period in connection with the Offer unless
Purchaser comes to a written agreement with the Company that would provide for
such subsequent offering period. See Section 1.
For a withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover page of this Offer to Purchase. Any such
notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn and the name of
the registered holder of such Shares, if different from that of the person who
tendered such Shares. If Share Certificates evidencing Shares to be withdrawn
have been delivered or otherwise identified to the Depositary, then, prior to
the physical release of such Share Certificates, the serial numbers shown on
such Share Certificates must be submitted to the Depositary and the
signature(s) on the notice of withdrawal must be guaranteed by an Eligible
Institution, unless such Shares have been tendered for the account of an
Eligible Institution. If Shares have been tendered pursuant to the procedure
for book-entry transfer as set forth in Section 3, any notice of withdrawal
must specify the name and number of the account at the Book-Entry Transfer
Facility to be credited with the withdrawn Shares.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by Purchaser, in its sole
discretion, whose determination will be final and binding. None of Purchaser,
Parent or any of their respective affiliates or assigns, the Depositary, the
Information Agent or any other person will be under any duty to give any
notification of any defects or irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification.
Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn
will thereafter be deemed not to have been validly tendered for purposes of
the Offer. However, withdrawn Shares may be re-tendered at any time prior to
the Expiration Date (or during the Subsequent Offering Period, if any) by
following one of the procedures described in Section 3 (except Shares may not
be re-tendered using the procedures for guaranteed delivery during any
Subsequent Offering Period).
13
5. Certain U.S. Federal Income Tax Consequences.
The following is a summary of certain U.S. federal income tax consequences
of the Offer and the Merger to holders whose Shares are purchased pursuant to
the Offer or whose Shares are converted into the right to receive cash in the
Merger (whether upon receipt of the Merger Consideration or pursuant to the
proper exercise of dissenter's rights). The discussion applies only to holders
of Shares that are U.S. persons within the meaning of the U.S. Internal
Revenue Code of 1986 (including U.S. citizens or resident alien individuals,
and corporations or partnerships organized under the laws of the United States
or any political subdivision thereof), and that hold Shares as capital assets
(generally assets held for investment). The discussion does not address all of
the U.S. federal income tax considerations that may be relevant to the
particular circumstances of a holder of Shares, or to holders subject to
special tax rules (including holders of Shares received pursuant to the
exercise of employee stock options or otherwise as compensation).
The discussion set forth below is included for general information purposes
only and is based upon present U.S. federal income tax law (which may be
subject to change, possibly on a retroactive basis). Because individual
circumstances may differ, each holder of shares should consult such holder's
own tax advisor to determine the particular tax effects of the Offer and the
Merger to such holder, including the application and effect of state, local
and other tax laws.
The receipt of the Offer Price and the receipt of cash pursuant to the
Merger (whether as Merger Consideration or pursuant to the proper exercise of
dissenter's rights) will be a taxable transaction under U.S. federal income
tax law (and also may be a taxable transaction under applicable state, local
and other income tax laws). In general, for U.S. federal income tax purposes,
a holder of Shares will recognize gain or loss equal to the difference between
such holder's adjusted tax basis in the Shares sold pursuant to the Offer or
converted to cash in the Merger and the amount of cash received in exchange
therefor. Such gain or loss generally will be capital gain or loss. Certain
non-corporate holders (including individuals) will be subject to U.S. federal
income tax on the net amount of such capital gain at a maximum rate of 20%,
provided that the Shares were held for more than 12 months prior to their
disposition. The deduction of capital losses is subject to certain
limitations. under U.S. federal income tax law. Holders of Shares should
consult their own tax advisors in this regard.
Payments in connection with the Offer or the Merger may be subject to
backup withholding at a 31% rate. Backup withholding generally applies if a
holder (i) fails to furnish such holder's social security number or taxpayer
identification number ("TIN"), (ii) furnishes an incorrect TIN, (iii) fails
properly to report interest or dividends or (iv) under certain circumstances,
fails to provide a certified statement, signed under penalties of perjury,
that the TIN provided is such holder's correct number and that such holder is
not subject to backup withholding. Backup withholding is not an additional tax
but merely an advance payment, which may be refunded to the extent it results
in an overpayment of U.S. federal income tax, provided that certain
information is furnished to the Internal Revenue Service. Certain persons,
including corporations and financial institutions, generally, are exempt from
backup withholding. Certain penalties apply for failure to furnish correct
information and for failure to include reportable payments in income. Each
holder of Shares should consult with such holder's own tax advisor as to such
holder's qualifications for exemption from withholding and the procedure for
obtaining such exemption.
14
6. Price Range of Shares.
The Shares are listed and principally traded on Nasdaq. The following table
sets forth, for the quarters indicated, the high and low sales prices per
Share on Nasdaq as reported by the Dow Jones News Service and the amount of
cash dividends paid (or declared) per Share according to published financial
sources.
Shares Market Data
High Low
------- --------
1999:
First Quarter............................................... n/a n/a
Second Quarter.............................................. $18.375 $12.1875
Third Quarter............................................... $36.125 $13.375
Fourth Quarter.............................................. $25.00 $ 9.0625
2000:
First Quarter............................................... $26.75 $12.0625
Second Quarter.............................................. $22.00 $ 9.875
Third Quarter............................................... $14.00 $ 3.50
Fourth Quarter (through December 14, 2000).................. $ 5.75 $ 1.75
On December 6, 2000, the last full trading day prior to the announcement of
the execution of the Merger Agreement and of Purchaser's intention to commence
the Offer, the closing price per Share as reported on Nasdaq was $4.97. On
December 14, 2000, the last full trading day prior to the commencement of the
Offer, the closing price per Share as reported on Nasdaq was $5.69. As of
December 14, 2000, the approximate number of holders of record of the Shares
was 167.
Stockholders are urged to obtain a current market quotation for the Shares.
7. Certain Information Concerning the Company.
Except as otherwise set forth in this Offer to Purchase, all of the
information concerning the Company contained in this Offer to Purchase,
including financial information, has been furnished by the Company or has been
taken from or based upon publicly available documents and records on file with
the SEC and other public sources. Neither Purchaser nor Parent assumes any
responsibility for the accuracy or completeness of the information concerning
the Company furnished by the Company or contained in such documents and
records or for any failure by the Company to disclose events which may have
occurred or may affect the significance or accuracy of any such information
but which are unknown to Purchaser or Parent.
General. The Company is a Delaware corporation with its principal executive
offices located at 3100 De La Cruz Blvd., Santa Clara, California and its
telephone number is (408) 988-5353. The Company, formerly known as Trancell
Systems, was incorporated in California on February 17, 1994 and re-
incorporated in Delaware in June 1999.
The Company is a leading provider of shared Internet access solutions for
the small office market. Its WebRamp product family allows multiple users in a
small office to share the same Internet connection simultaneously while
optimizing each user's access speed. The WebRamp product family is a flexible
and scalable platform that provides software-based routing and bridging
functionality to deliver Internet-enabled applications and services. The
Company's products support existing analog phone lines, as well as integrated
services digital networks and emerging access technologies such as digital
subscriber line and cable modems. The Company's Connection Optimized Link
Technology enables multiple users to access the Internet simultaneously
through regular phone lines and analog modems at up to three times the access
speed of a single analog connection.
15
Certain Projected Financial Data of the Company. Prior to entering into the
Merger Agreement, Parent conducted a due diligence review of the Company and
in connection with such review received certain projections of the Company's
future operating performance. The Company does not in the ordinary course
publicly disclose projections and these projections were not prepared with a
view to public disclosure. The Company has advised Parent and Purchaser that
these projections were prepared by the Company's management based on numerous
assumptions including, among others, projections of revenues, operating
income, financings and cash flows, benefits and other expenses, depreciation
and amortization, capital expenditure, new product developments and working
capital requirements. No assurances can be given with respect to any such
assumptions. These projections do not give effect to the Offer or the
potential combined operations of Parent and the Company or any alterations
Parent may make to the Company's operations or strategy after the consummation
of the Offer. The information set forth below is presented for the limited
purpose of giving the stockholders access to the material financial
projections prepared by the Company's management that were made available to
Parent and Purchaser in connection with the Merger Agreement and the Offer.
(amounts in $ millions, except per share data)
Q4 Total Total Total
2000 2000 2001 2002
----- ------ ------ -----
Total revenue............................... $2.8 $14.3 $30.0 $70.4
Net income/(loss)........................... ($6.0) ($31.4) ($11.6) $24.0
Net income/(loss) per share................. ($0.27) ($1.46) ($0.52) $1.02
Certain matters discussed herein, including, but not limited to these
projections, are forward-looking statements that involve risks and
uncertainties. Forward-looking statements include the information set forth
above under "Certain Projected Financial Data of the Company". While presented
with numerical specificity, these projections were not prepared by the Company
in the ordinary course and are based upon a variety of estimates and
hypothetical assumptions which may not be accurate, may not be realized, and
are also inherently subject to significant business, economic and competitive
uncertainties and contingencies, all of which are difficult to predict, and
most of which are beyond the control of the Company. In addition, these
projections were prepared in light of the on-going strategic shift in the
Company's product lines and, hence, there is no historical basis for the
achievement of the projections. Accordingly, there can be no assurance that
any of the projections will be realized and the actual results for the fourth
quarter of fiscal year 2000 and the years ending December 31, 2000, 2001 and
2002, may vary materially from those shown above.
In addition, these projections were not prepared in accordance with
generally accepted accounting principles, and neither the Company's nor
Parent's independent accountants has examined or compiled any of these
projections or expressed any conclusion or provided any other form of
assurance with respect to these projections and accordingly assume no
responsibility for these projections. These projections were prepared with a
limited degree of precision, and were not prepared with a view to public
disclosure or compliance with the published guidelines of the SEC or the
guidelines established by the American Institute of Certified Public
Accountants regarding projections, which would require a more complete
presentation of data than as shown above. The inclusion of these projections
herein should not be regarded as a representation by the Company, Parent and
Purchaser or any other person to whom these projections were provided that the
projected results will be achieved. None of Parent, Purchaser, or any other
person to whom these projections were provided assumes any responsibility for
the accuracy or validity of the foregoing projections. Forward-looking
statements also include those preceded by, followed by or that include the
words "believes", "expects", "anticipates" or similar expressions.
Available Information. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is required to
file periodic reports, proxy statements and other information with the SEC
relating to its business, financial condition and other matters. Information
as of particular dates concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal holders of the
Company's securities and any material interest of such persons in transactions
with the Company
16
is required to be disclosed in proxy statements distributed to the Company's
stockholders and filed with the SEC. Such reports, proxy statements and other
information should be available for inspection at the public reference
facilities maintained by the SEC at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and also should be available for inspection at the
SEC's regional offices located at Seven World Trade Center, 13th Floor, New
York, New York 10048 and the Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such materials may
also be obtained by mail, upon payment of the SEC's customary fees, by writing
to its principal office at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. The SEC also maintains a World Wide Website on the
Internet at http://www.sec.gov that contains reports and other information
regarding issuers that file electronically with the SEC.
8. Certain Information Concerning Purchaser and Parent.
General. Purchaser is a newly incorporated Delaware corporation organized
in connection with the Offer and the Merger and has not carried on any
activities other than in connection with the Offer and the Merger. The
principal offices of Purchaser are located at 6000 Connection Drive, Irving,
Texas and its telephone number is (972) 894-5000. Purchaser is a direct wholly
owned subsidiary of Parent.
Until immediately prior to the time that Purchaser will purchase Shares
pursuant to the Offer, it is not anticipated that Purchaser will have any
significant assets or liabilities or engage in activities other than those
incident to its formation and capitalization and the transactions contemplated
by the Offer and the Merger. Because Purchaser is newly formed and has minimal
assets and capitalization, no meaningful financial information regarding
Purchaser is available.
The principal offices of Parent are located at Keilalahdentie 4, P.O. Box
226, FIN-00045 NOKIA GROUP, Finland and its telephone number is 011-358-9-180-
71. Parent is the world's leader in mobile communications. Backed by its
experience, innovation, user-friendliness and secure solutions, Nokia has
become the leading supplier of mobile phones and a leading supplier of mobile,
fixed and IP networks. By adding mobility to the Internet, Parent creates new
opportunities for companies and further enriches the daily lives of people.
Parent's shares, nominal value 0.06 euros, are listed on the Helsinki
Exchanges under the symbol "NOK1V" and American Depositary Shares ("ADSs") of
Nokia are traded on the New York Stock Exchange under the symbol "NOK". Each
ADS represents one share. Nokia's shares are also traded on the Stockholm,
London, Frankfurt and Paris stock exchanges.
The name, citizenship, business address, business telephone number,
principal occupation or employment, and five-year employment history for each
of the directors and executive officers of Purchaser and Parent and certain
other information are set forth in Schedule I hereto. Except as described in
this Offer to Purchase and in Schedule I hereto, none of Parent, Purchaser or,
to the best knowledge of such corporations, any of the persons listed on
Schedule I to the Offer of Purchase has during the last five years (i) been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) been a party to any judicial or administrative
proceeding (except for matters that were dismissed without sanction or
settlement) that resulted in a judgment, decree or final order enjoining the
person from future violations of, or prohibiting activities subject to,
federal or state securities laws or finding any violation of such laws.
Except as described in this Offer to Purchase and in Schedule II hereto,
(i) none of Purchaser, Parent nor, to the best knowledge of Purchaser and
Parent, any of the persons listed in Schedule I to this Offer to Purchase or
any associate or majority owned subsidiary of Purchaser, Parent or any of the
persons so listed, beneficially owns or has any right to acquire any Shares
and (ii) none of Purchaser, Parent nor, to the best knowledge of Purchaser and
Parent, any of the persons or entities referred to above nor any director,
executive officer or subsidiary of any of the foregoing has effected any
transaction in the Shares during the past 60 days.
Except as provided in the Merger Agreement, and the Stockholder's
Agreements and as otherwise described in this Offer to Purchase, none of
Purchaser, Parent nor, to the best knowledge of Purchaser and Parent, any of
the persons listed in Schedule I to this Offer to Purchase, has any contract,
agreement, arrangement,
17
understanding or relationship, whether or not legally enforceable, with any
other person with respect to any securities of the Company, including, but not
limited to, the transfer or voting of such securities, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guaranties of loans,
guaranties against loss or the giving or withholding of proxies, consents or
authorizations. Except as set forth in this Offer to Purchase, since
January 1, 1998 neither Purchaser nor Parent nor, to the best knowledge of
Purchaser and Parent, any of the persons listed on Schedule I hereto, has had
any transaction with the Company or any of its executive officers, directors
or affiliates that is required to be reported under the rules and regulations
of the SEC applicable to the Offer. Except as set forth in this Offer to
Purchase, since January 1, 1998, there have been no negotiations, transactions
or material contacts between any of Purchaser, Parent, or any of their
respective subsidiaries or, to the best knowledge of Purchaser and Parent, any
of the persons listed in Schedule I to this Offer to Purchase, on the one
hand, and the Company or its affiliates, on the other hand, concerning a
merger, consolidation or acquisition, tender offer for or other acquisition of
any class of the Company's securities, an election of the Company's directors
or a sale or other transfer of a material amount of assets of the Company.
9. Financing of the Offer and the Merger.
The total amount of funds required by Purchaser to consummate the Offer and
the Merger and to pay related fees and expenses is estimated to be
approximately $134,000,000. Purchaser will obtain all of such funds from
Parent or one of Parent's subsidiaries. Parent and its affiliates will provide
such funds from existing resources. Parent and Purchaser do not intend to rely
on debt or equity financing to finance the Offer and the Merger, but instead
will pay for the Shares purchased in the Offer and acquired in the Merger with
currently available cash on hand of Parent and its affiliates. Assuming
21,760,920 Shares outstanding as of January 16, 2001, the total amount of
funds required by Purchaser to purchase the maximum amount of Shares sought by
Purchaser in the Offer is $126,213,336.
10. Background of the Offer; the Merger Agreement and Related Agreements.
During the period from April to September 1998, the Company and a business
unit of Parent discussed entering into a potential original equipment
manufacturing ("OEM") relationship concerning the Company's asymmetric digital
subscriber line ("ADSL") technology. At that time, the Company's product was
still in development and the discussions did not result in any definitive OEM
relationship.
In 2000, the Company and a business unit of Parent entered into an
agreement pursuant to which a business unit of Parent granted to the Company,
on a royalty free basis, a license to use, reproduce and distribute certain
technology in connection with customer premises equipment.
On September 22, 2000, at a regularly scheduled meeting of the Company
Board, the Board discussed, among other things, the Company's business
prospects and a variety of financing alternatives, including a private
placement of common stock of the Company. The Company Board directed
management to continue to pursue financing alternatives and also directed
management to secure the services of an investment bank to act as its
financial advisor in exploring the sale of the Company.
On October 3, Anthony Sun, Chairman of the Company Board, discussed the
Company's financing options with Robert S. Abbe, Principal at Broadview. As
part of those discussions, Mr. Abbe and Mr. Sun discussed whether Parent would
make a strong candidate as a suitor to acquire the Company. Mr. Sun authorized
Mr. Abbe to contact Parent.
On October 4, 2000, Mr. Abbe contacted Per-Ake Stahl, Director of
Acquisitions of Parent, and presented the idea of potential strategic
cooperation between the Company and Parent.
On October 6, 2000, representatives from Parent, including Mika Vehvilainen
and other persons, met with Mahesh Veerina, President and Chief Executive
Officer of the Company, and Rahgu Bathina, Vice President Product Management
of the Company, together with Mr. Michael Burns, Associate at Broadview and
Mr. Abbe.
18
At this meeting, the representatives of the Company presented an overview of
the Company and the parties held preliminary discussions about potential
cooperation between the Company and Parent, including a potential investment
by Parent in the Company, a potential OEM relationship and a potential
acquisition of the Company by Parent.
On October 16, 2000, Nokia Internet Communications, Inc. ("NIC"), a
subsidiary of Parent, and the Company entered into the Confidentiality
Agreement.
On October 25, 2000, Mr. Vehvilainen and Mr. MacDonald met with Mr. Veerina
to further discuss potential cooperation between the Company and the Parent.
On November 6, 2000, the Group Executive Board of Parent authorized its
management to proceed with discussions and negotiations in connection with a
potential transaction with the Company.
On November 8, 2000, Mr. Vehvilainen and Mr. MacDonald met with Mr. Veerina
and presented Parent's interest in pursuing a potential acquisition
transaction and in commencing detailed due diligence investigations of the
Company. During this meeting, the representatives of the Company and Parent
discussed the principal terms and conditions of a potential transaction,
including an approximate maximum aggregate price that Parent was prepared to
offer, subject to the satisfactory completion of its due diligence,
negotiation of definitive agreements and obtaining corporate approvals, for
all of the outstanding shares of the Company. After considering the terms and
conditions of a potential acquisition transaction that were discussed at this
meeting and consulting with its financial advisor, the Company's
representatives advised Parent that, although they were interested in
continuing discussions with Parent regarding a potential acquisition
transaction, the proposed terms were inadequate.
During the following week, the Company and its advisors provided additional
due diligence information to Parent and had several additional discussions
with Parent and its advisors regarding the terms of a potential acquisition
transaction, including pricing.
On November 13, 2000, Mr Vehvilainen and Mr. MacDonald met with Mr. Veerina
and Mr. Sun to further discuss the proposed acquisition transaction and
indicated that, subject to satisfactory completion of its due diligence,
negotiation of definitive agreements and obtaining corporate approvals, Parent
was prepared to offer up to an aggregate of $125 million for all of the
outstanding shares of the Company.
On November 15, 2000, the Company held a special meeting of the Company
Board by telephone to discuss, among other things, the Company's business
prospects and a possible acquisition of the Company. Mr. Abbe and Mr. Bruns
presented to the Company Board Broadview's efforts to date, including Parent's
transaction proposal and a history of the discussions and negotiations between
Parent and the Company, discussed alternative parties approached or to be
approached by Broadview and highlighted Parent as the best possible business
fit for the Company. Members of the Company Board asked questions and held a
lengthy discussion regarding a potential acquisition transaction with Parent
and whether to proceed with due diligence investigations with Parent,
considering, among other things, the alternatives available to the Company and
the risks to the Company in executing plans as a stand alone company. Based on
the foregoing, the Company Board unanimously approved, among other things, a
decision to proceed with due diligence efforts with Parent, while at the same
time continuing efforts to develop other acquisition opportunities with the
highest probability strategic acquirors. Later that day, Mr. Abbe contacted
Mr. Stahl and indicated that the Company was prepared to proceed with further
negotiations.
During the period from November 17 to December 6, 2000, representatives of
Parent and its advisors conducted extensive business, financial, accounting,
technical and legal due diligence on the Company's business and operations,
including site visits to the Company's facilities. On November 22, 2000,
counsel to Parent distributed to the Company and the Company's counsel initial
drafts of the Merger Agreement and the Stockholder's Agreement. During the
period between November 27 and December 6, representatives of Parent and its
legal advisors held several negotiations with representatives of the Company
and its financial and legal advisors regarding the proposed offer price and
terms and conditions of the Merger Agreement and the Stockholder's Agreements.
19
During the period from November 17 to December 6, 2000, representatives of
Parent also met with senior executives of the Company, and, as an inducement
to Parent to proceed with an acquisition, representatives of Parent and the
Company negotiated employment agreements between the Company and five senior
executives of the Company, namely Mahesh Veerina, Raghu Bathina, Sridhar
Bathina, Elie Habib and Kothandapani Ranganathan, which agreements shall
become effective upon completion of the acquisition. Representatives of the
Company also discussed with representatives of Parent the employment policies
and programs of Parent or its subsidiaries that would be made available to the
Company's employees upon completion of the acquisition. Parent contemplates
that, after completion of the acquisition, employees of the Company will
participate in benefit programs of Parent or its subsidiaries. Parent also
intends to offer or implement, after completion of the acquisition,
performance-based incentive programs and other retention plans for employees
of the Company and contemplates granting to employees of the Company, after
completion of the acquisition, new options to purchase American Depositary
Shares of Parent under Parent's plans, which options will be subject to
vesting schedules dependent upon continued future employment and other
customary terms.
On November 29, 2000, members of the Group Executive Board of Parent met
and reviewed, among other things, the status of the possible transaction with
the Company. After discussion, Parent's Group Executive Board authorized its
officers and senior management to continue discussion of the possible
transaction with the Company and to present the matter to Parents board of
directors.
On December 4, 2000, the Company held a special meeting of the Company
Board to discuss, with the advice and assistance of the Company's management
and financial and legal advisors, among other things, the Company's business
prospects and the proposed terms of the acquisition by Parent. Mr. Abbe
summarized the principal terms of Parent's proposed tender offer for the
Company. Thereafter, the Company's financial advisors and legal counsel
discussed with members of the Company Board copies of documents distributed
prior to the meeting, including the terms of a draft form of the Merger
Agreement and the Stockholder's Agreements, the fiduciary obligations of the
Company Board with respect to the proposed acquisition and other business
conditions of the proposed acquisition. Representatives of Broadview reported
on the status of its discussions with other potential acquirors. Broadview
then discussed its valuation analysis with respect to the proposed transaction
with Parent. Thereafter, Broadview indicated that it was prepared, subject to
completion of final agreements, to render to the Company Board its opinion to
the effect that, as of the date of the meeting, and based upon and subject to
certain other matters, the $5.80 per Share offer price was fair, from a
financial point of view, to Company stockholders. Based on all of the
foregoing, the Company Board authorized management to proceed to finalize the
transaction on terms consistent with those presented at the meeting.
On December 5, 2000, following a review and discussion of the proposed
terms and conditions of the Merger Agreement and of other matters related
thereto, Parent's board of directors, by telephone meeting, approved the
Merger Agreement and the transactions contemplated thereby, including the
Offer and the Merger, and authorized the execution and delivery of the Merger
Agreement.
On December 6, 2000, the Company Board held a special telephonic meeting in
which all of the members were present. Broadview made a presentation regarding
certain financial analyses it had performed in connection with its review of
the Offer and Merger, and rendered its written opinion that, subject to
certain assumptions and qualifications, the $5.80 per Share offer price was
fair, from a financial point of view, to Company stockholders. Representatives
of Venture Law Group also gave a presentation regarding the various legal
aspects of the transaction as well as a summary of the principal terms of the
Merger Agreement. At the conclusion of the meeting, and based on all of the
foregoing, the Company Board unanimously determined that the Merger Agreement
and the transactions contemplated thereby, including the Offer and the Merger,
are fair and reasonable to, and adequate and otherwise in the best interests
of, the Company's stockholders, approved the Merger Agreement and the
transactions contemplated thereby, including the Offer and the Merger,
authorized the execution and delivery of the Merger Agreement, recommended
that the Company's stockholders accept the Offer and tender their Shares in
the Offer, and recommended that the Company's stockholders approve and adopt
the Merger Agreement.
On December 6, 2000, Parent, Purchaser and the Company agreed on the final
terms of the Merger Agreement and executed the Merger Agreement and Parent,
Purchaser and the Principal Stockholders executed the
20
Stockholders Agreements. The Company and five senior executives of the Company
also executed employment agreements, copies of which have been filed as
exhibits to the Schedule 14D-9 that the Company has filed with the SEC in
connection with the Offer.
On the morning of December 7, 2000, the Company and Parent issued a joint
press release announcing the execution of the Merger Agreement. A copy of this
press release has been filed as an exhibit to the Tender Offer Statement on
Schedule TO (the "Schedule TO") filed by Purchaser and Parent with the SEC in
connection with the Offer and is incorporated herein by reference.
The Merger Agreement
The following is a summary of certain provisions of the Merger Agreement.
This summary is qualified in its entirety by reference to the Merger
Agreement, which is incorporated herein by reference, and a copy of which has
been filed as an Exhibit to the Tender Offer Statement on Schedule TO filed by
Purchaser and Parent with the SEC in connection with the Offer. The Merger
Agreement may be examined and copies may be obtained at the places set forth
in Section 7. Capitalized terms not otherwise defined herein (including, but
not limited to, in Section 14 hereof) shall have the meanings ascribed thereto
in the Merger Agreement.
The Offer. The Merger Agreement provides that Purchaser shall commence
(within the meaning of Rule 14d-2(a) of the Exchange Act) the Offer as
promptly as reasonably practicable after the date of the Merger Agreement, but
in no event later than 10 business days after the initial public announcement
of Purchaser's intention to commence the Offer. The obligation of Purchaser to
accept for payment Shares tendered pursuant to the Offer shall be subject to
the Minimum Condition and certain other conditions that are described in
Section 14 hereof. Purchaser has agreed that it shall not, without the
Company's prior written consent, decrease the price per Share payable in the
Offer, reduce the maximum number of Shares to be purchased in the Offer or
impose conditions to the Offer in addition to those set forth in Section 14
hereof.
The Merger. The Merger Agreement provides that, upon the terms and subject
to the conditions set forth in Sections 14 and 15, and in accordance with
Delaware Law, Purchaser will be merged with and into the Company. As a result
of the Merger, the separate corporate existence of Purchaser will cease and
the Company will continue as the Surviving Corporation and will become a
wholly owned subsidiary of Parent. At the Effective Time, by virtue of the
Merger, each issued and then outstanding Share (other than any Shares held in
the treasury of the Company, or owned by Purchaser, Parent or any direct or
indirect wholly owned subsidiary of Parent or of the Company and any Shares
which are held by stockholders who properly exercised appraisal rights for
such Shares in accordance with Section 262 of Delaware Law) shall be canceled
and converted automatically into the right to receive the Merger
Consideration.
Pursuant to the Merger Agreement, each share of common stock, par value
$0.01 per share, of Purchaser issued and outstanding immediately prior to the
Effective Time shall be converted into and exchanged for one validly issued,
fully paid and non-assessable share of common stock, par value $0.001 per
share, of the Surviving Corporation.
The Merger Agreement provides that the directors of Purchaser at and
immediately prior to the Effective Time will be the initial directors of the
Surviving Corporation and that the officers of the Company immediately prior
to the Effective Time will be the initial officers of the Surviving
Corporation. Subject to the Merger Agreement, at the Effective Time, the
Certificate of Incorporation of Purchaser, as in effect immediately prior to
the Effective Time, will be the Certificate of Incorporation of the Surviving
Corporation; provided, however, that, at the Effective Time, Article I of the
Certificate of Incorporation of the Surviving Corporation will be amended to
read as follows: "The name of the corporation is Nokia RNI Acquisition, Inc."
Subject to the Merger Agreement, at the Effective Time, the By-laws of
Purchaser, as in effect immediately prior to the Effective Time, will be the
By-laws of the Surviving Corporation.
Stockholders' Meeting. Pursuant to the Merger Agreement, in order to
consummate the Merger, the Company shall, acting through the Board and in
accordance with applicable law and the Company's Certificate
21
of Incorporation and By-laws, duly call, give notice of, convene and hold an
annual or special meeting of its stockholders as promptly as practicable
following consummation of the Offer for the purpose of considering and taking
action on the Merger Agreement and the Transactions (the "Stockholders'
Meeting"). If Purchaser acquires at least a majority of the outstanding
Shares, Purchaser will have sufficient voting power to approve the Merger,
even if no other stockholder votes in favor of the Merger.
Proxy Statement. The Merger Agreement provides that the Company shall, if
approval of the Company's stockholders is required by applicable law to
consummate the Merger, promptly following consummation of the Offer, file a
proxy statement to be sent to the stockholders of the Company in connection
with the Stockholders' Meeting or the information statement to be sent to such
stockholders, as appropriate (such proxy statement or information statement,
as amended or supplemented (the "Proxy Statement")), with the SEC under the
Exchange Act, and shall use its best efforts to have the Proxy Statement
cleared by the SEC promptly. Parent, Purchaser and the Company shall cooperate
with each other in the preparation of the Proxy Statement, and the Company
shall notify Parent of the receipt of any comments of the SEC with respect to
the Proxy Statement and of any requests by the SEC for any amendment or
supplement thereto or for additional information and shall provide to Parent
promptly copies of all correspondence between the Company or any
representative of the Company and the SEC. The Company shall give Parent and
its counsel the opportunity to review the Proxy Statement, including all
amendments and supplements thereto, prior to its being filed with the SEC and
shall give Parent and its counsel the opportunity to review all responses to
requests for additional information and replies to comments prior to their
being filed with, or sent to, the SEC. Each of the Company, Parent and
Purchaser agrees to use its reasonable best efforts, after consultation with
the other parties hereto, to respond promptly to all such comments of and
requests by the SEC and to cause the Proxy Statement and all required
amendments and supplements thereto to be mailed to the holders of Shares
entitled to vote at the Stockholders' Meeting at the earliest practicable
time. The Merger Agreement further provides that, in the event that Purchaser
shall acquire at least 90% of the then outstanding Shares, Parent, Purchaser
and the Company will take all necessary and appropriate action to cause the
Merger to become effective, in accordance with Delaware Law, as promptly as
reasonably practicable after such acquisition, without a meeting of the
Company's stockholders.
Conduct of Business by the Company Pending the Merger. Pursuant to the
Merger Agreement, the Company agrees that, between the date of the Merger
Agreement and the first date on which designees of Purchaser shall constitute
a majority of the Company's Board, unless Parent shall otherwise agree in
writing, the businesses of the Company and its Subsidiaries shall be conducted
only in, and the Company and the Subsidiaries shall not take any action except
in, the ordinary course of business and in a manner consistent with past
practice; and the Company shall use its reasonable best efforts to preserve
substantially intact the business organization of the Company and the
Subsidiaries, to keep available the services of the current officers,
employees and consultants of the Company and the Subsidiaries and to preserve
the current relationships of the Company and the Subsidiaries with customers,
suppliers and other persons with which the Company or any Subsidiary has
significant business relations. The Merger Agreement provides that, by way of
amplification and not limitation, except as contemplated therein, neither the
Company nor any Subsidiary shall, between the date of the Merger Agreement and
the Effective Time, directly or indirectly, do, or propose to do, any of the
following, without the prior written consent of Parent: (a) amend or otherwise
change its Certificate of Incorporation or By-laws or equivalent
organizational documents; (b) issue, sell, pledge, dispose of, grant,
encumber, or authorize the issuance, sale, pledge, disposition, grant or
encumbrance of (i) any shares of any class of capital stock of the Company or
any Subsidiary, or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of such capital stock, or any other
ownership interest (including, without limitation, any phantom interest), of
the Company or any Subsidiary or (ii) except in the ordinary course of
business and in a manner consistent with past practice, any assets of the
Company or any Subsidiary; (c) declare, set aside, make or pay any dividend or
other distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock; (d) reclassify, combine, split, subdivide
or redeem or purchase or otherwise acquire, directly or indirectly, any of its
capital stock; (e) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets or any other business
combination) any corporation, partnership, other business organization or any
division thereof or any significant amount of assets, (ii) incur any
indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse, or otherwise become responsible for, the obligations of
any
22
person, or make any loans or advances, or grant any security interest in any
of its assets, (iii) enter into any contract or agreement other than in the
ordinary course of business and consistent with past practice, (iv) authorize,
or make any commitment with respect to capital expenditures which are, in the
aggregate, in excess of $100,000 for the Company and the Subsidiaries taken as
a whole, or (v) enter into or amend any contract, agreement, commitment or
arrangement with respect to any of the foregoing matters; (f) hire additional
employees or increase the compensation payable or to become payable or the
benefits provided to its directors, officers or employees, except for
increases in the ordinary course of business and consistent with past practice
in salaries or wages of employees of the Company or any Subsidiary who are not
directors or officers of the Company or any material subsidiary of the
Company, or grant any severance or termination pay to, or enter into any
employment or severance agreement with any director, officer or other employee
of the Company or of any Subsidiary, or establish, adopt, enter into or amend
any collective bargaining, bonus, profit-sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund,
policy or arrangement for the benefit of any director, officer or employee,
except for the stay put cash bonus payments to non-executive employees
approved by the Board on September 22, 2000 as described in a schedule to the
Merger Agreement; (g) change any of the accounting methods used by it unless
required by GAAP; (h) make any Tax election or settle or compromise any United
States federal, state, local or non-United States income Tax liability; (i)
pay, discharge or satisfy any claim, liability or obligation (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction, in the ordinary course of business and
consistent with past practice, of liabilities reflected or reserved against in
the consolidated balance sheet of the Company and the consolidated
Subsidiaries as at September 30, 2000, including the notes thereto, or
subsequently incurred in the ordinary course of business and consistent with
past practice; (j) amend, modify or consent to the termination of any material
contracts, or amend, waive, modify or consent to the termination of the
Company's or any Subsidiary's rights thereunder; (k) commence or settle any
litigation, suit, claim, action, proceeding or investigation; or (l) announce
an intention, enter into any formal or informal agreement or otherwise make a
commitment, to do any of the foregoing.
Company Board Representation; Section 14(f). The Merger Agreement provides
that, promptly upon the purchase by Purchaser of Shares pursuant to the Offer,
and from time to time thereafter, Purchaser shall be entitled to designate up
to such number of directors, rounded up to the next whole number, on the Board
as shall give Purchaser representation on the Board equal to the product of
the total number of directors on the Board (giving effect to the directors
elected pursuant to this sentence), multiplied by the percentage that the
aggregate number of Shares beneficially owned by Purchaser or any affiliate of
Purchaser following such purchase bears to the total number of Shares then
outstanding, and the Company shall, at such time, promptly take all actions
necessary to cause Purchaser's designees to be elected as directors of the
Company, including increasing the size of the Board or securing the
resignations of incumbent directors, or both. The Merger Agreement also
provides that, at such times, the Company shall use its reasonable best
efforts to cause persons designated by Purchaser to constitute the same
percentage as persons designated by Purchaser shall constitute of the Board of
(i) each committee of the Board, (ii) each board of directors of each
Subsidiary, and (iii) each committee of each such board, in each case only to
the extent permitted by applicable law. Notwithstanding the foregoing, until
the Effective Time, the Company has agreed to use its reasonable best efforts
to ensure that at least one member of the Board and each committee of the
Board and such boards and committees of the Subsidiaries, as of the date of
the Merger Agreement, who is not an employee of the Company or any Subsidiary
shall remain a member of the Board and of such boards and committees.
The Merger Agreement provides that, following the election of designees of
Purchaser in accordance with the immediately preceding paragraph and prior to
the Effective Time, any amendment of the Merger Agreement or the Certificate
of Incorporation or By-laws of the Company, any termination or amendment of
the Merger Agreement by the Company, any extension by the Company of the time
for the performance of any of the obligations or other acts of Parent or
Purchaser, or waiver of any of the Company's rights thereunder, will require
the concurrence of a majority of those directors of the Company then in office
who were neither designated by Purchaser nor are employees of the Company or
any Subsidiary.
23
Access to Information. Pursuant to the Merger Agreement, until the
Effective Time, the Company shall, and shall cause the Subsidiaries and the
officers, directors, employees, auditors and agents of the Company and the
Subsidiaries to, afford the officers, employees and agents of Parent and
Purchaser reasonable access during normal business hours to the officers,
employees, agents, properties, offices, plants and other facilities, books and
records of the Company and each Subsidiary, and shall furnish Parent and
Purchaser and persons providing or proposing to provide Parent or Purchaser
with financing for the Merger with such financial, operating and other data
and information as Parent or Purchaser, through its officers, employees or
agents, may reasonably request and Parent and Purchaser have agreed to keep
such information confidential, except in certain circumstances. Furthermore,
pursuant to the Merger Agreement, the Company shall permit Parent and/or
Purchaser to have one or more observers on the premises of the Company daily
until the earlier of the Effective Time or the termination of the Agreement.
No Solicitation of Transactions. The Company has agreed that, except to the
extent permitted under the Merger Agreement, neither it nor any Subsidiary
shall, directly or indirectly, through any officer, director, agent or
otherwise, (i) solicit, initiate or encourage the submission of, any
Acquisition Proposal or (ii) except as required by the fiduciary duties of the
Board under applicable law after having received advice from outside legal
counsel and after giving prior written notice to Parent and Purchaser and
entering into a customary confidentiality agreement on terms no less favorable
to the Company than those contained in the Confidentiality Agreement,
participate in any discussions or negotiations regarding, or furnish to any
person, any information with respect to, or otherwise cooperate in any way
with respect to, or assist or participate in, facilitate or encourage, any
unsolicited proposal that constitutes, or may reasonably be expected to lead
to, an Acquisition Proposal.
The Company has also agreed that, except to the extent permitted under the
Merger Agreement, neither the Board nor any committee thereof shall (i)
withdraw or modify, or propose to withdraw or modify, in a manner adverse to
Parent or Purchaser, the approval or recommendation by the Board or any such
committee of the Merger Agreement, the Offer, the Merger or any other
transaction contemplated thereby, (ii) approve or recommend, or propose to
approve or recommend, any Acquisition Proposal or (iii) enter into any
agreement with respect to any Acquisition Proposal. Notwithstanding the
foregoing, in the event that, prior to the time of acceptance for payment of
Shares pursuant to the Offer, the Board determines in good faith that it is
required to do so by its fiduciary duties under applicable law after having
received advice from outside legal counsel, the Board may withdraw or modify
its approval or recommendation of the Offer and the Merger, but only to
terminate the Merger Agreement in accordance with the termination provisions
specified therein (and, concurrently with such termination, to cause the
Company to enter into an agreement with respect to a Superior Proposal).
The Company has agreed to, and will direct or cause its directors,
officers, employees, representatives and agents to, immediately cease and
cause to be terminated any discussions or negotiations with any parties that
may be ongoing with respect to any Acquisition Proposal. The Company has also
agreed to promptly advise Parent orally and in writing of (i) any Acquisition
Proposal or any request for information with respect to any Acquisition
Proposal, the material terms and conditions of such Acquisition Proposal or
request and the identity of the person making such Acquisition Proposal or
request and (ii) any changes in any such Acquisition Proposal or request.
Expect as required by the Board's fiduciary duties under applicable law
after having received advice from outside legal counsel, the Company has
agreed not to release any third party from, or waive any provision of, any
confidentiality or standstill agreement to which the Company is a party.
Employee Stock Options. The Merger Agreement also provides that all options
(the "Company Stock Options") outstanding, whether or not exercisable and
whether or not vested, at the Effective Time under the Company's 2000 Non-
Statutory Stock Option Plan, 1999 Stock Incentive Plan and 1995 Stock Plan
(the "Company Stock Option Plans"), the Company Stock Option Plans shall be
canceled as of the Effective Time and the Company Stock Option Plans shall be
terminated. As of the Effective Time, each canceled Company
24
Stock Option that has an exercise price that is equal to or less than the
Merger Consideration shall be replaced with an option (a "Replacement Option")
to purchase Parent American Depositary Shares ("Parent ADSs"), each of which
represents the right to receive one share, nominal value 0.06 euros per share,
of Parent ("Parent Shares"), that will be granted pursuant to the terms of the
Parent Global Acquisition Equity Plan. Each Replacement Option shall be
exercisable for, and represent the right to acquire, that whole number of
Parent ADSs (rounded down to the nearest whole Parent ADS) equal to the number
of Shares subject to such Company Stock Option multiplied by a fraction the
numerator of which shall be equal to the Merger Consideration and the
denominator of which shall be equal to average closing price of Parent ADSs on
the New York Stock Exchange, as reported each day on the Bloomberg system
under NOK UN Equity, for the five (5) business day period ending on (and
including) the business day prior to the Effective Time (such fraction
(rounded down to the sixth decimal place) being hereinafter referred to as the
"Exchange Ratio") and the exercise price per Parent ADS shall be the amount
equal to the exercise price per share subject to such Company Stock Option
divided by the Exchange Ratio (rounded upward to the nearest full cent).
Except as provided in this and the preceding sentence, the terms of any
Replacement Option need not be equivalent to the terms of the corresponding
cancelled Company Stock Option; provided, however that the existing vesting
schedule of the Company Stock Options will not be adversely changed, except
that Replacement Options may vest on a quarterly rather than on a monthly
basis. No Replacement Options shall be granted in respect of Company Stock
Options that have an exercise price that exceeds the Merger Consideration.
The Merger Agreement further provides that, as soon as practicable after
the Effective Time, Parent shall deliver to each holder of a Replacement
Option an appropriate notice setting forth such holder's rights pursuant
thereto. Parent shall take all corporate action necessary to reserve for
issuance a sufficient number of Parent ADSs for delivery upon exercise of
Replacement Options pursuant to the terms set forth in the Merger Agreement.
As soon as practicable, but in no event later than thirty (30) days, after the
Effective Time, the Parent ADSs subject to Company Stock Options shall be
covered by an effective registration statement on Form S-8 (or any successor
form) or another appropriate form. Prior to the Effective Time, the Company
shall take all necessary action to approve the disposition of the Company
Stock Options and the shares of Company Common Stock in connection with the
transactions contemplated by the Merger Agreement to the extent necessary to
exempt such dispositions under Rule 16b-3 of the Exchange Act.
The Merger Agreement further provides that, effective as of the Effective
Time, the Company shall take all actions necessary to shorten any pending
Purchase Period and Offering Period (as each such term is defined in the
Company's 1999 Employee Stock Purchase Plan (the "ESPP")) and establish a New
Purchase Date (as contemplated in Section 20(b) of the ESPP) immediately prior
to the Effective Time and to terminate the ESPP as of the Effective Time,
conditioned upon the consummation of the transactions contemplated by the
Merger Agreement.
Employee Benefits. The Merger Agreement provides that as soon as
practicable after the Effective Time, the individuals who were employees of
the Company or any of its subsidiaries immediately prior to the Effective Time
and who become employed by Parent or the Surviving Corporation from and after
the Effective Time ("Affected Employees") will be eligible to participate in
the benefit programs, plans, arrangements, payroll practices (including
vacation or paid time off entitlement) established or maintained by, or
contributed to, the Surviving Corporation from time to time pursuant to the
terms of each such plan, or in the absence of plan terms or provisions, in
accordance with the regularly established policies or procedures of the
Surviving Corporation. The Surviving Corporation shall be responsible for
providing to individuals who terminate from employment with the Company in
connection with the transactions contemplated herein the coverage required
under Code Section 4980B.
The Merger Agreement further provides that Parent will cause the Surviving
Corporation to, recognize the employment service of each Affected Employee
with the Company for purposes of eligibility and vesting (but not benefit
accrual) under any applicable plan. Each Affected Employee's years of service
with the Company shall be otherwise recognized for all general employment
purposes including, without limitation, seniority, vacation, personal time and
similar general employment purposes, provided, that any vacation time offered
by
25
Parent or Surviving Corporation in the calendar year of the Effective Time to
any Affected Employee shall be offset by any vacation time used by or paid to
an Affected Employee by the Company in the calendar year of the Effective
Time.
The Company shall terminate its 401(k) plan and other pension benefit plans
(as defined in ERISA Section 3(2)) prior to the Effective Time. All of the
Company's employees participating in the plan(s) as of that date shall
automatically become fully vested in their account balances as of the date
that the 401(k) plan is terminated. The Company shall take all steps necessary
to maintain the qualified status of such plan(s) through and following
termination, and shall apply for an IRS determination letter upon termination
for each such terminated plan.
Directors' and Officers' Indemnification Insurance. The Merger Agreement
further provides that the Certificate of Incorporation and the By-laws of the
Surviving Corporation shall contain provisions no less favorable with respect
to indemnification than are set forth in Article XIII of the Certificate of
Incorporation of the Company and Article VI of the By-laws of the Company,
respectively, 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 prior
to the Effective Time, were directors, officers, employees, fiduciaries or
agents of the Company, unless such modification shall be required by law.
The Merger Agreement also provides that the Company shall use commercially
reasonable efforts to maintain in effect for six years from the Effective Time
(the "Tail Period") the Existing D&O Policies (provided that the Surviving
Corporation may substitute therefor policies of at least the same coverage
containing terms and conditions that are not materially less favorable) with
respect to matters occurring prior to the Effective Time; provided, however,
that in no event shall the Surviving Corporation be required to expend
pursuant to the Merger Agreement more than an amount equal to 175% of the
annual premium of the Existing D&O Policies for the entire Tail Period, in the
aggregate.
Parent, Purchaser and the Company have also agreed that in the event the
Company or the Surviving Corporation or any of their respective 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 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 Company or the Surviving Corporation,
as the case may be, or at Parent's option, Parent, shall assume the foregoing
indemnity obligations.
The Merger Agreement also provides that the Surviving Corporation and
Parent shall honor and fulfill in all respects the obligations of the Company
pursuant to indemnification agreements with the Company's directors and
officers existing at or before the Effective Time.
Further Action; Reasonable Best Efforts. The Merger Agreement provides
that, subject to its terms and conditions, each of the parties thereto shall
(i) make promptly its respective filings, and thereafter make any other
required submissions, under the HSR Act with respect to the transactions
contemplated thereby and (ii) use its reasonable best efforts to take, or
cause to be taken, all appropriate action, and to do or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the Merger including, without limitation, using
its reasonable best efforts to obtain all Permits, consents, approvals,
authorizations, qualifications and orders of Governmental Authorities and
parties to contracts with the Company and the Subsidiaries as are necessary
for the consummation of the Merger and to fulfill the conditions to the Offer
and the Merger; provided that neither Purchaser nor Parent will be required to
take any action, including entering into a consent decree, hold separate
orders or other arrangements, that (A) requires the divestiture of any assets
of any of the Purchaser, Parent, Company or any of their respective
subsidiaries, or (B) limits Parent's freedom of action with respect to, or its
ability to retain, the Company and the Subsidiaries or any portion thereof or
any of Parent's or its affiliates' other assets or businesses. In case, at any
time after the Effective Time, any further action is necessary or desirable to
carry out the purposes of the Merger Agreement, the proper officers and
directors of each party to the Merger Agreement are required to use their
reasonable best efforts to take all such action.
26
The Merger Agreement also provides that each of the parties thereto will
cooperate and use its reasonable best efforts to vigorously contest and resist
any Action, including administrative or judicial Action, and to have vacated,
lifted, reversed or overturned any decree, judgment, injunction or other order
(whether temporary, preliminary or permanent) that is in effect and that
restricts, prevents or prohibits consummation of the Merger including, without
limitation, by vigorously pursuing all available avenues of administrative and
judicial appeal.
Extension of Offer. The Merger Agreement provides that if (a) Purchaser
shall not have purchased all of the Shares validly tendered and not withdrawn
pursuant to the Offer on or prior to the fifth (5th) business day following
the initial date that the Offer would have otherwise first expired (the
"Extension Date") and (b) the Merger Agreement shall not have been terminated
in accordance with Article IX prior thereto, Purchaser agrees that commencing
as of the Extension Date, the Company may begin to solicit potential financial
investors to make private investments in the Company after any termination of
the Merger Agreement of up to ten million dollars (US$10,000,000) in cash;
provided, however, that the Company may not so solicit such investments if
Parent or the Purchaser, at their option, agree on or prior to the Extension
Date to loan (or cause to be loaned) to the Company an aggregate principal
amount of five million dollars (US$5,000,000) (the "Loan") pursuant to
mutually agreed upon loan documentation to be entered into at or prior to the
extension of the Loan. Any Loan made pursuant to the Merger Agreement: shall
(a) be conditioned upon the Company having provided to Purchaser customary
lending documents, including legal opinions; (b) be secured by liens on all of
the assets of the Company presently owned or acquired in the future; (c) be
made on commercially reasonable terms and shall accrue interest at competitive
fair market terms that the Company would otherwise then be in the position to
reasonably procure; and (d) be due and payable in full, together with accrued
interest thereon, the date that is 90 days after the advancement of such Loan.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto including
representations by the Company as to the absence of certain changes or events
concerning the Company's business, compliance with law, litigation, employee
benefit plans, labor matters, property and leases, intellectual property,
environmental matters, taxes, material contracts, insurance and brokers.
Conditions to the Merger. Under the Merger Agreement, the respective
obligations of each party to effect the Merger are subject to the
satisfaction, at or prior to the Effective Time, of the following conditions:
(a) if and to the extent required by Delaware Law and the Certificate of
Incorporation of the Company, the Merger Agreement and the Transaction shall
have been approved and adopted by the affirmative vote of the stockholders of
the Company; (b) any waiting period (and any extension thereof) applicable to
the consummation of the Merger under the HSR Act shall have expired or been
terminated; (c) no Governmental Authority in the United States or the European
Union shall have enacted, issued, promulgated, enforced or entered any Law
(whether temporary, preliminary or permanent) which is then in effect and has
the effect of making the acquisition of Shares by Parent or Purchaser or any
affiliate of either of them illegal or otherwise restricting, preventing or
prohibiting consummation of the Merger; and (d) Purchaser or its permitted
assignee shall have purchased all Shares validly tendered and not withdrawn
pursuant to the Offer; provided, however, that this condition shall not be
applicable to the obligations of Parent or Purchaser if, in breach of the
Merger Agreement, Purchaser fails to purchase any Shares validly tendered and
not withdrawn pursuant to the Offer.
Termination. The Merger Agreement provides that it may be terminated and
the Merger may be abandoned at any time prior to the Effective Time,
notwithstanding any requisite approval and adoption of the Merger Agreement
and the Merger by the stockholders of the Company (a) by mutual written
consent of each of Parent, Purchaser and the Company duly authorized by the
Boards of Directors of Parent, Purchaser and the Company; or (b) by either
Parent, Purchaser or the Company if (i) the Effective Time shall not have
occurred on or before February 15, 2001; provided, however, that the right to
terminate the Merger Agreement under (b)(i) shall not be available to any
party whose failure to fulfill any obligation under the Merger Agreement has
been the cause of, or resulted in, the failure of the Effective Time to occur
on or before such date or (ii) any Governmental Authority shall have enacted,
issued, promulgated, enforced or entered any injunction, order,
27
decree or ruling (whether temporary, preliminary or permanent) which has
become final and nonappealable and has the effect of making consummation of
the Offer or the Merger illegal or otherwise preventing or prohibiting
consummation of the Offer or the Merger; or (c) by Parent if (i) due to an
occurrence or circumstance that would result in a failure to satisfy any
condition set forth in Section 14 hereto, Purchaser shall have (A) failed to
commence the Offer within 60 days following the date of the Merger Agreement,
(B) terminated the Offer without having accepted any Shares for payment
thereunder or (C) failed to accept Shares for payment pursuant to the Offer
within 90 days following the commencement of the Offer (provided, however,
that the applicable time period specified in (A) and (C) above shall be
extended until the earlier to occur of (x) the fifth business day following
the expiration or termination of any applicable waiting period under the HSR
Act and (y) February 15, 2001), unless such action or inaction under (A), (B)
or (C) shall have been caused by or resulted from the failure of Parent or
Purchaser to perform, in any material respect, any of their material covenants
or agreements contained in the Merger Agreement, or the material breach by
Parent or Purchaser of any of their material representations or warranties
contained in the Merger Agreement or (ii) prior to the purchase of Shares
pursuant to the Offer, the Board or any committee thereof shall have withdrawn
or modified in a manner adverse to Purchaser or Parent its approval or
recommendation of the Merger Agreement, the Offer, the Merger or any other
transaction contemplated thereby, or shall have recommended or approved any
Acquisition Proposal, or shall have resolved to do any of the foregoing; or
(d) by the Company, upon approval of the Board, if (i) Purchaser shall have
(A) failed to commence the Offer within 60 days following the date of the
Merger Agreement, (B) terminated the Offer without having accepted any Shares
for payment thereunder or (C) failed to accept Shares for payment pursuant to
the Offer within 90 days following the commencement of the Offer (provided,
however, that the applicable time period specified in (A) and (C) above shall
be extended until the earlier to occur of (x) the fifth business day following
expiration or termination of any applicable waiting period under the HSR Act
and (y) February 15, 2001), unless such action or inaction under (A), (B) or
(C) shall have been caused by or resulted from the failure of the Company to
perform, in any material respect, any of its material covenants or agreements
contained in the Merger Agreement, or the material breach by the Company of
any of its material representations or warranties contained in the Merger
Agreement or (ii) prior to the purchase of Shares pursuant to the Offer, if
the Board determines in good faith that it is required to do so by its
fiduciary duties under applicable law after having received advice from
outside legal counsel in order to enter into a definitive agreement with
respect to a Superior Proposal, upon 72 hours' prior written notice to Parent,
setting forth in reasonable detail the identity of the person making, and the
final terms and conditions of, the Superior Proposal and after duly
considering any proposals that may be made by Parent during such 72 hour
period; provided, however, that any termination of the Merger Agreement
pursuant to (d)(ii) above shall not be effective until the Company has made
full payment of all amounts described below under the section entitled "Fees
and Expenses".
Effect of Termination. In the event of the termination of the Merger
Agreement, the Merger Agreement shall forthwith become void, and there shall
be no liability on the part of any party thereto, except (a) as set forth
below under the section entitled "Fees and Expenses" and (b) nothing in the
Merger Agreement shall relieve any party from liability for any intentional
breach thereof prior to the date of such termination, provided, however, that
the Confidentiality Agreement shall survive any termination of the Merger
Agreement.
Fees and Expenses. The Merger Agreement provides that (a) if it is
terminated pursuant to the provisions described above in clauses (c)(ii) or
(d)(ii) of the "Termination" section, then in any such event, the Company
shall pay Parent promptly (but in no event later than one business day after
termination) a fee of $4,000,000 (the "Fee"); (b) if it is terminated pursuant
to the provisions described above in clauses (b) or (c)(i) and the Company
shall have intentionally failed to perform, in any material respect, any of
its material covenants or agreements contained in the Merger Agreement, then
in any such event, the Company shall reimburse Parent and Purchaser (not later
than one business day after submission of statements therefor) for all
Expenses of Parent and Purchaser (up to a maximum of $750,000); and (c) if the
Company enters into an agreement related to an Acquisition Proposal within
nine (9) months after the date of the Merger Agreement, the Company shall pay
Parent the Fee promptly (but in no event later than one business day after)
consummation of such Acquisition Proposal. Notwithstanding the foregoing, no
Fee or Expenses shall be payable to Parent or Purchaser if the Merger
Agreement is terminated pursuant to the provisions described in clauses (b) or
(d)(i) to the extent that
28
termination, the failure to commence or failure to accept any Shares for
payment, as set forth in clause (d)(i), shall relate to a failure of either
Parent or Purchaser to perform, in any material respect, any material covenant
or agreement contained in the Merger Agreement or a material breach by Parent
or Purchaser of any of their material representations or warranties in the
Merger Agreement.
Except as set forth in the preceding paragraph, all costs and expenses
incurred in connection with the Merger Agreement, the Stockholder's
Agreements, the Offer and the Merger shall be paid by the party incurring such
expenses, whether or not any transaction contemplated thereby is consummated.
The Stockholder's Agreements
The following is a summary of certain provisions of the Stockholder's
Agreements. This summary is qualified in its entirety by reference to the
Stockholder's Agreements, which is incorporated herein by reference, and a
copy or form of which has been filed with the SEC as an exhibit to the
Schedule TO that has been filed by Purchaser and Parent with the SEC in
connection with the Offer. The Stockholder's Agreements may be examined and
copies may be obtained at the places set forth in Section 7. Capitalized terms
not otherwise defined herein shall have meanings ascribed thereto in the
Stockholder's Agreement.
Concurrently with entering into the Merger Agreement, Parent and Purchaser
entered into Stockholder's Agreements, dated as of December 6, 2000, with the
Principal Stockholders. Pursuant to the Stockholder's Agreements, the
Principal Stockholders have agreed, among other things, (i) to validly tender
(and not withdraw) all of their Shares into the Offer, (ii) if applicable, to
vote their Shares in favor of the approval and adoption of the Merger
Agreement and the transactions contemplated thereby, including the Merger, and
(iii) to grant to Purchaser an irrevocable option to purchase all, and not
less than all, of their Shares at a price per Share equal to $5.80, or any
higher price per Share paid in the Offer.
Tender of Shares. Each Principal Stockholder has agreed to validly tender,
pursuant to and in accordance with the terms of the Offer, as soon as
practicable after commencement of the Offer but in no event later than ten
business days after the date of commencement of the Offer, such Principal
Stockholder's Shares and to not withdraw such Shares, except following
termination of the Offer pursuant to its terms.
Voting Agreement. Each Principal Stockholder has also agreed that, from and
after the date of such Principal Stockholder's Stockholder's Agreement and
until the earlier to occur of (y) the consummation of the Offer in which each
Principal Stockholder's Shares are purchased and (z) the termination of the
Stockholders' Agreement, at any meeting of the stockholders of the Company,
however called, and in any action by consent of the stockholders of the
Company, each Principal Stockholder will vote (or cause to be voted) such
Principal Stockholder's Shares: (a) in favor of the approval and adoption of
the Merger Agreement, the Merger and all the transactions contemplated by the
Merger Agreement and such Principal Stockholder's Stockholder's Agreement and
otherwise in such manner as may be necessary to consummate the Merger; (b)
except as otherwise agreed to in writing in advance by Parent, against any
action, proposal, agreement or transaction that would result in a breach of
any covenant, obligation, agreement, representation or warranty of the Company
contained in the Merger Agreement or such Principal Stockholder contained its
the Stockholder's Agreement; and (c) against any action, proposal, agreement
or transaction, including, but not limited to, any Acquisition Proposal (other
than the Merger Agreement or the Transactions), that could be reasonably
expected to result in any of the conditions to the Company's obligations under
the Merger Agreement (whether or not theretofore terminated) not being
fulfilled or that could reasonably be expected to impede, interfere with or
prevent, delay, postpone, discourage or adversely affect the Merger Agreement,
the Offer, the Merger or such Principal Stockholder's Stockholder's Agreement.
Irrevocable Proxy. The Stockholder's Agreements also provides that each
Principal Stockholder irrevocably grants to and appoints each of Mika
Vehvilainen, Olli Huuskonen and Timo Ruikka, as such Principal Stockholder's
attorney and proxy pursuant to the provisions of Section 212(c) of Delaware
Law, each individually with full power of substitution, to vote and otherwise
act (by written consent or otherwise) with
29
respect to such Principal Stockholder's Shares at any meeting of stockholders
of the Company (whether annual or special and whether or not an adjourned or
postponed meeting) or consent in lieu of any such meeting or otherwise, on the
matters and in the manner specified in the foregoing paragraph (the
"Irrevocable Proxy").
Grant of Option. The Stockholder's Agreements provide that each Principal
Stockholder grants to Purchaser an irrevocable option (each, an "Option" and,
collectively, the "Options") to purchase all, and not less than all, of such
Principal Stockholder's Shares at the applicable Per Share Amount, net to such
Principal Stockholder in cash. The Stockholder's Agreements further provide
that the Options shall expire if not exercised prior to the close of business
on the tenth business day following termination of the Merger Agreement. The
Options may be exercised by Purchaser at any time and from time to time,
including, without limitation, following termination of the Merger Agreement
and prior to the expiration of the Options, only if the Offer is consummated
without Stockholder having tendered all its Shares in accordance with the
Stockholder's Agreements.
Option Closing. Pursuant to the Stockholder's Agreements, if Purchaser
wishes to exercise an Option, Purchaser shall send a written notice (the
"Exercise Notice") to the applicable Principal Stockholder of its intention to
exercise the Option, specifying the place, and, if then known, the time and
the date of the closing (the "Option Closing") of the purchase. At the Option
Closing, (i) each Principal Stockholder shall deliver to Purchaser (or its
designee) all of such Principal Stockholder's Shares by delivery of a
certificate or certificates evidencing such Shares in the denominations
designated by Purchaser, in its Exercise Notice delivered pursuant to the
foregoing paragraph duly endorsed to Purchaser or accompanied by stock powers
duly executed in favor of Purchaser, with all necessary stock transfer stamps
affixed, and (ii) Purchaser shall pay to each such Principal Stockholder the
aggregate Per Share Amount for such Principal Stockholder's Shares.
Conditions to Option Closing. The Option Closing shall be subject to the
satisfaction of each of the following conditions: (i) no Governmental
Authority shall have enacted, issued, promulgated, enforced or entered any Law
(whether temporary, preliminary or permanent) which is then in effect and has
the effect of making the acquisition of Shares by Purchaser pursuant to the
exercise of the Options illegal, or otherwise materially restricting,
preventing or prohibiting consummation of the purchase and sale of the Shares
pursuant to the exercise of the Options, (ii) no Governmental Authority or
court of competent jurisdiction shall have issued an order, decree, injunction
or ruling or taken any other action (which order, decree, injunction, ruling
or other action Purchaser and Parent shall have used their respective best
efforts to lift), in each case permanently restraining, enjoining or otherwise
prohibiting the purchase by Purchaser of the Shares to be sold to it pursuant
to the exercise of the Options and such order, decree, injunction, ruling or
other action shall have become final and non-appealable, and (iii) any waiting
period applicable to the consummation of the purchase and sale of the Shares
pursuant to the exercise of the Options under the HSR Act.
No Solicitation of Transactions. Each Principal Stockholder has agreed that
between the date of its Stockholder's Agreement and the date of termination of
the Merger Agreement, such Principal Stockholder will not, directly or
indirectly, through any officer, director, employee, agent or otherwise, (a)
solicit, initiate, accept or encourage the submission of any Acquisition
Proposal, or (b) participate in any discussions or negotiations regarding, or
furnish to any person any information with respect to, or otherwise cooperate
in any way with respect to, or assist or participate in, facilitate or
encourage any proposal that constitutes, or may reasonably be expected to lead
to, an Acquisition Proposal. Furthermore, each Principal Stockholder has
agreed that he, she or it (as applicable) shall, and shall direct or cause its
respective directors, officers, employees, representatives and agents (if
applicable) to, immediately cease and cause to be terminated any discussions
or negotiations with any parties that may be ongoing with respect to any
Acquisition Proposal. Each Principal Stockholder shall (within one business
day) advise Parent orally and in writing of (i) any proposal, discussion,
negotiation or inquiry received by such Principal Stockholder regarding any
Acquisition Proposal or any request for information with respect to any
Acquisition Proposal, the material terms and conditions of any proposal,
discussion, negotiation or inquiry received by such Principal Stockholder
regarding such Acquisition Proposal or request and the identity of the person
making such Acquisition Proposal or request and (ii) any changes in any such
Acquisition Proposal or request. Each Principal Stockholder shall promptly
provide to Parent copies of any written materials received
30
by such Principal Stockholder in connection with any proposal, discussion,
negotiation or inquiry regarding any Acquisition Proposal.
Release. The Stockholder's Agreements provide that each Stockholder shall
release the Company and its Subsidiary from any and all claims, except for any
claims arising in connection with or pursuant to (i) any employment
arrangement between such Stockholder and the Company, (ii) the Merger
Agreement, as applicable and (iii) the Merger Agreement and the Stockholder's
Agreements.
Termination. The Stockholder's Agreements provide that all rights and
obligations of the parties thereunder shall terminate upon the earlier of (a)
the date upon which Purchaser shall have purchased and paid for all of the
Shares of the Principal Stockholders in accordance with the terms of the Offer
or pursuant to the exercise of the Options granted by each Principal
Stockholder pursuant to their respective Stockholder's Agreements and (b) the
date on which the Options have expired in accordance with the Stockholder's
Agreements. Nothing in the Stockholder's Agreements shall relieve any party
thereto of liability for any breach of the Stockholder's Agreements.
On December 6, 2000, the Principal Stockholders owned 7,858,187 Shares,
constituting approximately 36% of the then outstanding Shares.
Confidentiality Agreement
The following is a summary of certain provisions of the Confidentiality
Agreement, dated October 16, 2000 (the "Confidentiality Agreement"), between
the Company and Nokia Internet Communications Inc., a subsidiary of Parent
("NIC"). This summary is qualified in its entirety by reference to the
Confidentiality Agreement, which is incorporated herein by reference, and a
copy of which has been filed with the SEC as an exhibit to the Schedule TO.
Capitalized terms not otherwise defined herein shall have the meanings
ascribed thereto in the Confidentiality Agreement. The Confidentiality
Agreement may be examined and copies may be obtained at the places set forth
set forth in Section 7.
NIC and the Company entered into a Confidentiality Agreement dated October
16, 2000. The Confidentiality Agreement provides that all Confidential
Information shall be kept strictly confidential and NIC shall not disclose in
whole or in part any Confidential Information to any person other than those
of NIC's Representatives who, in NIC's reasonable judgement, need to know any
Confidential Information for the purpose of evaluating the Proposed
Transaction and are informed of the confidential nature of the Confidential
Information. The Confidential Information shall be used by NIC and by any
person to whom it is properly disclosed in accordance with the Confidentiality
Agreement solely for the purpose of evaluating and negotiating the Proposed
Transaction and may not be used for any other purpose. The Confidentiality
Agreement provides that the obligation to maintain the confidentiality of the
Confidential Information shall terminate upon the earlier of (i) the
consummation of the Proposed Transaction or (ii) otherwise the third
anniversary of the Confidentiality Agreement.
Nothing in the Confidentiality Agreement shall be construed to limit NIC's
right and freedom to design and manufacture products that perform similar
functions or have similar features to those of the current and planned
products of the Company. NIC agrees that, without the prior written consent of
the Company, NIC will not, for a period of twelve months from the date of the
Confidentiality Agreement, directly solicit for employment any person who is
now employed by the Company and who is identified by NIC as a result of NIC's
evaluation or otherwise in connection with the Proposed Transaction. NIC also
agreed not to, among other things, purchase any securities of the Company or
publicly announce any extraordinary transaction involving the Company, without
the prior written consent of the Company until the earlier of twelve months
after the date of the Confidentiality Agreement or the occurrence of certain
events.
11. Purpose of the Offer; Plans for the Company After the Offer and the
Merger.
Purpose of the Offer. The Offer is being made pursuant to the Merger
Agreement. The purpose of the Offer and the Merger is for Parent to acquire
control of, and the entire equity interest in, the Company. The
31
purpose of the Merger is for Parent to acquire all Shares not purchased
pursuant to the Offer and the Stockholder's Agreements. Upon consummation of
the Merger, the Company will become a direct wholly owned subsidiary of
Parent.
Under Delaware Law, the approval of the Board and the affirmative vote of
the holders of a majority of the outstanding Shares is required to approve and
adopt the Merger Agreement and the transactions contemplated thereby,
including the Merger. The Board of Directors of the Company has unanimously
determined that each of the Offer and the Merger is fair to, and in the best
interests of, the Stockholders of the Company, has approved, adopted and
declared advisable the Merger Agreement and the Merger (such approval and
adoption having been made in accordance with Delaware Law, including, without
limitation, Section 203 thereof) and has resolved to recommend that
Stockholders accept the Offer and tender their Shares pursuant to the Offer.
Unless the Merger is consummated pursuant to the short-form merger provisions
under Delaware Law described below, the only remaining required corporate
action of the Company is the approval and adoption of the Merger Agreement and
the Merger by the affirmative vote of the holders of a majority of the Shares.
Accordingly, if the Minimum Condition is satisfied, Purchaser will have
sufficient voting power to cause the approval and adoption of the Merger
Agreement and the Merger without the affirmative vote of any other
stockholder.
The Merger Agreement provides that the Company shall, acting through the
Board, in accordance with applicable law and the Company's Certificate of
Incorporation and By-laws, give notice of, convene and hold an annual or
special meeting of its stockholders as promptly as practicable following
consummation of the Offer for the purpose of considering and taking action on
the Merger Agreement and the Merger, if such action is required by Delaware
Law. Parent and Purchaser have agreed that all Shares owned by them and their
subsidiaries will be voted in favor of the approval and adoption of the Merger
Agreement and the Merger.
The Merger Agreement provides that, promptly upon the purchase by Purchaser
of Shares pursuant to the Offer, Purchaser will be entitled to designate
representatives to serve on the Board in proportion to Purchaser's ownership
of Shares following such purchase. See Section 10. Purchaser expects that such
representation would permit Purchaser to exert substantial influence over the
Company's conduct of its business and operations.
Short-Form Merger. Under Delaware Law, if Purchaser acquires, pursuant to
the Offer, the Stockholder's Agreements or otherwise, at least 90% of the then
outstanding Shares, Purchaser will be able to approve the Merger without a
vote of the Company's stockholders. In such event, Parent, Purchaser and the
Company have agreed in the Merger Agreement to take, at the request of
Purchaser, all necessary and appropriate action to cause the Merger to become
effective as promptly as reasonably practicable after such acquisition,
without a meeting of the Company's stockholders. If, however, Purchaser does
not acquire at least 90% of the outstanding Shares pursuant to the Offer, the
Stockholder's Agreements or otherwise and a vote of the Company's stockholders
is required under Delaware Law, a significantly longer period of time would be
required to effect the Merger.
Appraisal Rights. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders who have not
tendered their Shares will have certain rights under Delaware Law to dissent
from the Merger and demand appraisal of, and to receive payment in cash of the
fair value of, their Shares. Stockholders who perfect such rights by complying
with the procedures set forth in Section 262 of the Delaware Law ("Section
262") will have the "fair value" of their Shares (exclusive of any element of
value arising from the accomplishment or expectation of the Merger) determined
by the Delaware Court of Chancery and will be entitled to receive a cash
payment equal to such fair value for the Surviving Corporation. In addition,
such dissenting stockholders would be entitled to receive payment of a fair
rate of interest from the date of consummation of the Merger on the amount
determined to be the fair value of their Shares. In determining the fair value
of the Shares, the court is required to take into account all relevant
factors. Accordingly, such determination could be based upon considerations
other than, or in addition to, the market value of the Shares, including,
among other things, asset values and earning capacity. In Weinberger v. UOP,
Inc., the Delaware Supreme Court stated, among other things, that "proof of
value by any techniques or methods which are generally considered acceptable
in the financial community and otherwise admissible in court" should be
considered in an appraisal proceeding. The Weinberger court also noted that
under Section 262, fair value is to
32
be determined "exclusive of any element of value arising from the
accomplishment or expectation of the merger." In Cede & Co. v. Technicolor,
Inc., however, the Delaware Supreme Court stated that, in the context of a
two-step cash merger, "to the extent that value has been added following a
change in majority control before cash-out, it is still value attributable to
the going concern," to be included in the appraisal process. As a consequence,
the value so determined in any appraisal proceeding could be the same, more or
less than the purchase price per Share in the Offer or the Merger
Consideration.
In addition, several decisions by Delaware courts have held that, in
certain circumstances, a controlling stockholder of a company involved in a
merger has a fiduciary duty to other stockholders which requires that the
merger be fair to such other stockholders. In determining whether a merger is
fair to minority stockholders, Delaware courts have considered, among other
things, the type and amount of consideration to be received by the
stockholders and whether there was fair dealing among the parties. The
Delaware Supreme Court stated in Weinberger and Rabkin v. Philip A. Hunt
Chemical Corp. that the remedy ordinarily available to minority stockholders
in a cash-out merger is the right to appraisal described above. However, a
damages remedy or injunctive relief may be available if a merger is found to
be the product of procedural unfairness, including fraud, misrepresentation or
other misconduct.
Parent does not intend to object, assuming the proper procedures are
followed, to the exercise of appraisal rights by any stockholder and the
demand for appraisal of, and payment in cash for the fair value of, the
Shares. Parent intends, however, to cause the Surviving Corporation to argue
in an appraisal proceeding that, for purposes of such proceeding, the fair
value of each Share is less than or equal to the Merger Consideration. In this
regard, stockholders should be aware that opinions of investment banking firms
as to the fairness from a financial point of view (including Broadview) are
not necessarily opinions as to "fair value" under Section 262.
The foregoing summary of the rights of dissenting stockholders under
Delaware Law does not purport to be a complete statement of the procedures to
be followed by stockholders desiring to exercise any dissenters' rights under
Delaware Law. The preservation and exercise of dissenters' rights require
strict adherence to the applicable provisions of Delaware Law.
Going Private Transactions. The SEC has adopted Rule 13e-3 under the
Exchange Act which is applicable to certain "going private" transactions and
which may under certain circumstances be applicable to the Merger or another
business combination following the purchase of Shares pursuant to the Offer or
the Stockholder's Agreements in which Purchaser seeks to acquire the remaining
Shares not held by it. Purchaser believes that Rule 13e-3 will not be
applicable to the Merger. Rule 13e-3 requires, among other things, that
certain financial information concerning the Company and certain information
relating to the fairness of the proposed transaction and the consideration
offered to minority stockholders in such transaction be filed with the SEC and
disclosed to stockholders prior to consummation of the transaction.
Plans for the Company. It is expected that, initially following the Merger,
the business and operations of the Company will, except as set forth in this
Offer to Purchase, be continued by the Company substantially as they are
currently being conducted. Parent will continue to evaluate the business and
operations of the Company during the pendency of the Offer and after the
consummation of the Offer and the Merger, and will take such actions as it
deems appropriate under the circumstances then existing. Parent intends to
seek additional information about the Company during this period. Thereafter,
Parent intends to review such information as part of a comprehensive review of
the Company's business, operations, capitalization and management with a view
to optimizing exploitation of the Company's potential in conjunction with
Parent's businesses. It is expected that the business and operations of the
Company would form an important part of Parent's future business plans. At
this time, Parent does not intend to (i) reduce, eliminate or sell any of the
Company's research and development facilities, (ii) change the quality of the
Company's products or (iii) shut down or move offshore any of the Company's
facilities in the United States.
Except as indicated in this Offer to Purchase, Parent does not have any
present plans or proposals which relate to or would result in (i) any
extraordinary corporate transaction, such as a merger, reorganization or
33
liquidation of the Company or any of its subsidiaries, (ii) any purchase, sale
or transfer of a material amount of assets of the Company or any of its
subsidiaries, (iii) any material change in the Company's present indebtedness,
capitalization or dividend policy, (iv) any change in the present board of
directors or management of the Company, (v) any other material change in the
Company's corporate structure or business, (vi) any class of equity security
of the Company being delisted from a national securities exchange or ceasing
to be authorized to be quoted in an automated quotation system operated by a
national securities association, (vii) any class of equity securities of the
Company becoming eligible for termination of registration under Section
12(g)(4) of the Exchange Act, (viii) the suspension of the Company's
obligation to file reports under Section 15(d) of the Act, (ix) the
acquisition by any person of additional securities of the Company or the
disposition of securities of the Company, or (x) any changes in the Company's
charter, bylaws or other governing instruments or other actions that could
impede the acquisition of control of the Company by any person.
12. Dividends and Distributions.
The Merger Agreement provides that the Company shall not, between the date
of the Merger Agreement and the Effective Time, without the prior written
consent of Parent, (a) issue, sell, pledge, dispose of, grant, encumber, or
authorize the issuance, sale, pledge, disposition, grant or encumbrance of (i)
any shares of any class of capital stock of the Company or any Subsidiary, or
any options, warrants, convertible securities or other rights of any kind to
acquire any shares of such capital stock, or any other ownership interest
(including, without limitation, any phantom interest), of the Company or any
Subsidiary or (ii) except in the ordinary course of business and in a manner
consistent with past practice, any assets of the Company or any Subsidiary;
(b) declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to any of its
capital stock; or (c) reclassify, combine, split, subdivide or redeem, or
purchase or otherwise acquire, directly or indirectly, any of its capital
stock. See Section 10.
13. Possible Effects of the Offer on the Market for Shares, The Nasdaq
Listing, Margin Regulations and Exchange Act Registration.
Possible Effects of the Offer on the Market for the Shares. The purchase of
Shares by Purchaser pursuant to the Offer will reduce the number of Shares
that might otherwise trade publicly and will reduce the number of holders of
Shares, which could adversely affect the liquidity and market value of the
remaining Shares held by the public.
Parent intends to cause the delisting of the Shares by Nasdaq following
consummation of the Offer.
Nasdaq Listing. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the standards for continued listing
on Nasdaq. According to Nasdaq's published guidelines, the Shares would not be
eligible to be included for listing if, among other things, the number of
Shares publicly held falls below 100,000, the number of holders of Shares
falls below 300 or the market value of such publicly held Shares is not at
least $200,000. If, as a result of the purchase of Shares pursuant to the
Offer, the Merger, the Stockholder's Agreements or otherwise, the Shares no
longer meet the requirements of Nasdaq for continued listing, the listing of
the Shares will be discontinued. In such event, the market for the Shares
would be adversely affected. In the event the Shares were no longer eligible
for listing on Nasdaq, quotations might still be available from other sources.
The extent of the public market for the Shares and the availability of such
quotations would, however, depend upon the number of holders of such Shares
remaining at such time, the interest in maintaining a market in such Shares on
the part of securities firms, the possible termination of registration of such
Shares under the Exchange Act as described below and other factors.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Such registration may be terminated upon application by the
Company to the SEC if the Shares are not listed on a "national securities
exchange" and there are fewer than 300 record holders. The termination of the
registration of the Shares under the Exchange Act would substantially reduce
the information required to be furnished by the Company to holders of Shares
and to the SEC and would make certain provisions of the Exchange Act, such as
the short-swing
34
profit recovery provisions of Section 16(b), the requirement of furnishing a
proxy statement in connection with stockholders' meetings pursuant to Section
14(a) or 14(c) of the Exchange Act and the related requirements of an annual
report, and the requirements of Rule 13e-3 under the Exchange Act with respect
to "going private" transactions, no longer applicable to the Shares. In
addition, "affiliates" of the Company and persons holding "restricted
securities" of the Company may be deprived of the ability to dispose of such
securities pursuant to Rule 144 promulgated under the Securities Act of 1933,
as amended. If registration of the Shares under the Exchange Act were
terminated, the Shares would no longer be eligible for Nasdaq reporting.
Purchaser currently intends to seek to cause the Company to terminate the
registration of the Shares under the Exchange Act as soon after consummation
of the Offer as the requirements for termination of registration are met.
Margin Regulations. The Shares are currently "margin securities", as such
term is defined under the rules of the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board"), which has the effect, among
other things, of allowing brokers to extend credit on the collateral of such
securities. Depending upon factors similar to those described above regarding
listing and market quotations, following the Offer it is possible that the
Shares might no longer constitute "margin securities" for purposes of the
margin regulations of the Federal Reserve Board, in which event such Shares
could no longer be used as collateral for loans made by brokers. In addition,
if registration of the Shares under the Exchange Act were terminated, the
Shares would no longer constitute "margin securities".
14. Certain Conditions of the Offer.
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment any Shares tendered pursuant to the Offer, and
may extend, terminate or amend the Offer, if (i) immediately prior to the
expiration of the Offer, the Minimum Condition shall not have been satisfied,
(ii) any applicable waiting period under the HSR Act or under any applicable
material foreign statutes or regulations shall not have expired or been
terminated prior to the expiration of the Offer or (iii) at any time on or
after the date of the Merger Agreement and prior to the expiration of the
Offer, any of the following conditions shall exist:
(a) there shall have been instituted or be pending any Action before any
Governmental Authority (i) challenging or seeking to make illegal,
materially delay, or otherwise, directly or indirectly, restrain or
prohibit or make materially more costly, the making of the Offer, the
acceptance for payment of any Shares by Parent, Purchaser or any other
affiliate of Parent, or the purchase of Shares pursuant to any
Stockholder's Agreement, or the consummation of any other Transaction, or
seeking to obtain damages in connection with any Transaction that are
material in relation to the Transactions taken as a whole; (ii) seeking to
prohibit or materially limit the ownership or operation by the Company,
Parent or any of their subsidiaries of all or any of the business or assets
of the Company, Parent or any of their subsidiaries or to compel the
Company, Parent or any of their subsidiaries, as a result of the
Transactions, to dispose of or to hold separate all or any material portion
of the business or assets of the Company, Parent or any of their
subsidiaries; (iii) seeking to impose or confirm any material limitation on
the ability of Parent, Purchaser or any other affiliate of Parent to
exercise effectively full rights of ownership of any Shares, including,
without limitation, the right to vote any Shares acquired by Purchaser
pursuant to the Offer or any Stockholder's Agreement or otherwise on all
matters properly presented to the Company's stockholders, including,
without limitation, the approval and adoption of the Merger Agreement and
the Transactions; (iv) seeking to require divestiture by Parent, Purchaser
or any other affiliate of Parent of any Shares; or (v) which otherwise
would prevent or materially delay consummation of the Offer or the Merger
or otherwise prevent or materially delay the Company from performing its
obligations under the Merger Agreement or would, individually or in the
aggregate, have a Material Adverse Effect;
(b) any Governmental Authority or court of competent jurisdiction shall
have issued an order, decree, injunction or ruling or taken any other
action permanently restraining, enjoining or otherwise prohibiting or
materially delaying or preventing the Transactions and such order, decree,
injunction, ruling or other action shall have become final and non-
appealable;
35
(c) there shall have been any statute, rule, regulation, legislation or
interpretation enacted, promulgated, amended, issued or deemed applicable
to (i) Parent, the Company or any subsidiary or affiliate of Parent or the
Company or (ii) any Transaction, by any United States or non-United States
legislative body or Governmental Authority with appropriate jurisdiction,
other than the routine application of the waiting period provisions of the
HSR Act to the Offer, the Stockholder's Agreements or the Merger, that is
reasonably likely to result, directly or indirectly, in any of the
consequences referred to in clauses (i) through (v) of paragraph (a) above;
(d) any Material Adverse Effect shall have occurred;
(e) there shall have occurred (i) a declaration of a banking moratorium
or any suspension of payments in respect of banks in the United States or
Finland that materially and adversely affects the ability of Parent to pay
for the Shares for more than five business days after the expiration of the
Offer or (ii) a commencement of a war or armed hostilities or other
national or international calamity directly or indirectly involving the
United States or Finland that materially and adversely affects the ability
of Purchaser and Parent to consummate the Offer or, in the case of such
calamity existing on the date hereof, a material acceleration or worsening
thereof;
(f) (A) the Board, or any committee thereof, shall have withdrawn or
modified, in a manner adverse to Parent or Purchaser, the approval or
recommendation of the Offer, the Merger, the Agreement or the Stockholder's
Agreements, or approved or recommended any Acquisition Proposal other than
the Offer, the Merger Agreement and the Stockholder's Agreements or (B) the
Board, or any committee thereof, shall have resolved to do any of the
foregoing;
(g) any representation or warranty of the Company in the Merger
Agreement, or of any Stockholder in the Stockholders Agreements, shall not
be true and correct as if such representation or warranty was made as of
such time on or after the date of the Merger Agreement (except for those
representations or warranties that address matters only as of a specific
date, which must be true and correct as of such date) (in each case,
without for this purpose giving effect to qualifications or limitations as
to materiality or the absence of a Material Adverse Effect on the Company
contained in such representations and warranties), except for such non-
intentional failures to be true and accurate as would not, individually or
in the aggregate, have, or be reasonably likely to result in, a Material
Adverse Effect;
(h) 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 the
Merger Agreement or the Stockholders 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 Stockholders to be performed or
complied with by them under the Stockholder's Agreements;
(i) the Merger Agreement shall have been terminated in accordance with
its terms; or
(j) Purchaser and the Company shall have agreed that Purchaser shall
terminate the Offer or postpone the acceptance for payment of Shares
thereunder;
which, in the reasonable judgment of Purchaser in any such case, and
regardless of the circumstances (including any action or inaction by Parent or
any of its affiliates) giving rise to any such condition, makes it inadvisable
to proceed with such acceptance for payment.
The foregoing conditions are for the sole benefit of Purchaser and Parent
and may be asserted by Purchaser or Parent regardless of the circumstances
giving rise to any such condition or, subject to the terms of the Merger
Agreement, may be waived by Purchaser or Parent in whole or in part at any
time and from time to time in their sole discretion. The failure by Parent or
Purchaser 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 other 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.
36
15. Certain Legal Matters and Regulatory Approvals.
General. Based upon its examination of publicly available information with
respect to the Company and the review of certain information furnished by the
Company to Parent and discussions between representatives of Parent with
representatives of the Company during Parent's investigation of the Company
(see Section 10), neither Purchaser nor Parent is aware of (i) any license or
other regulatory permit that appears to be material to the business of the
Company or any of its subsidiaries, taken as a whole, which might be adversely
affected by the acquisition of Shares by Purchaser pursuant to the Offer or
the Stockholder's Agreements or (ii) except as set forth below, of any
approval or other action by any domestic (federal or state) or foreign
Governmental Authority which would be required prior to the acquisition of
Shares by Purchaser pursuant to the Offer or the Stockholder's Agreements.
Should any such approval or other action be required, it is Purchaser's
present intention to seek such approval or action. Purchaser does not
currently intend, however, to delay the purchase of Shares tendered pursuant
to the Offer pending the outcome of any such action or the receipt of any such
approval (subject to Purchaser's right to decline to purchase Shares if any of
the conditions in Section 14 shall have occurred). There can be no assurance
that any such approval or other action, if needed, would be obtained without
substantial conditions or that adverse consequences might not result to the
business of the Company, Purchaser or Parent or that certain parts of the
businesses of the Company, Purchaser or Parent might not have to be disposed
of or held separate or other substantial conditions complied with in order to
obtain such approval or other action or in the event that such approval was
not obtained or such other action was not taken. Purchaser's obligation under
the Offer to accept for payment and pay for Shares is subject to certain
conditions, including conditions relating to the legal matters discussed in
this Section 15. See Section 14 for certain conditions of the Offer.
State Takeover Laws. The Company is incorporated under the laws of the
State of Delaware. In general, Section 203 of Delaware Law prevents an
"interested stockholder" (generally a person who owns or has the right to
acquire 15% or more of a corporation's outstanding voting stock, or an
affiliate or associate thereof) from engaging in a "business combination"
(defined to include mergers and certain other transactions) with a Delaware
corporation for a period of three years following the date such person became
an interested stockholder unless, among other things, prior to such date the
board of directors of the corporation approved either the business combination
or the transaction in which the interested stockholder became an interested
stockholder. On December 6, 2000, prior to the execution of the Merger
Agreement, the Board by unanimous vote of all directors present at a meeting
held on such date, approved the Merger Agreement, determined that each of the
Offer and the Merger is fair to, and in the best interest of, the stockholders
of the Company. Accordingly, Section 203 is inapplicable to the Offer and the
Merger.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In Edgar v. MITE Corp., the Supreme Court of
the United States invalidated on constitutional grounds the Illinois Business
Takeover Statute, which, as a matter of state securities law, made takeovers
of corporations meeting certain requirements more difficult. However, in 1987
in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the
State of Indiana may, as a matter of corporate law and, in particular, with
respect to those aspects of corporate law concerning corporate governance,
constitutionally disqualify a potential acquiror from voting on the affairs of
a target corporation without the prior approval of the remaining stockholders.
The state law before the Supreme Court was by its terms applicable only to
corporations that had a substantial number of stockholders in the state and
were incorporated there.
The Company, directly or through its subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws. Purchaser does not know whether any of these laws will, by
their terms, apply to the Offer or the Merger and has not complied with any
such laws. Should any person seek to apply any state takeover law, Purchaser
will take such action as then appears desirable, which may include challenging
the validity or applicability of any such statute in appropriate court
proceedings. In the
37
event it is asserted that one or more state takeover laws is applicable to the
Offer or the Merger, and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer, Purchaser might be required
to file certain information with, or receive approvals from, the relevant
state authorities. In addition, if enjoined, Purchaser might be unable to
accept for payment any Shares tendered pursuant to the Offer, or be delayed in
continuing or consummating the Offer, and the Merger. In such case, Purchaser
may not be obligated to accept for payment any Shares tendered. See Section
14.
Antitrust. Under the HSR Act and the rules that have been promulgated
thereunder by the FTC, certain acquisition transactions may not be consummated
unless certain information has been furnished to the Antitrust Division and
the FTC and certain waiting period requirements have been satisfied. The
acquisition of Shares by Purchaser pursuant to the Offer and the Stockholder's
Agreements is subject to such requirements. See Section 2, "Acceptance for
Payment and Payment for Shares".
Pursuant to the HSR Act, on December 8, 2000, Parent filed a Premerger
Notification and Report Form in connection with the purchase of Shares
pursuant to the Offer and, the Stockholder's Agreements with the Antitrust
Division and the FTC. Under the provisions of the HSR Act applicable to the
Offer and the Stockholder's Agreements, the purchase of Shares pursuant to the
Offer and the Stockholder's Agreements may not be consummated until the
expiration of a 15-calendar day waiting period following the filing by Parent.
Accordingly, the waiting period under the HSR Act applicable to the purchase
of Shares pursuant to the Offer and the Stockholder's Agreements will expire
at 11:59 p.m., New York City time, on December 23 2000, unless such waiting
period is earlier terminated by the FTC and the Antitrust Division or extended
by a request from the FTC or the Antitrust Division for additional information
or documentary material prior to the expiration of the waiting period.
Pursuant to the HSR Act, Parent has requested early termination of the waiting
period applicable to the Offer and the Stockholder's Agreements. There can be
no assurance, however, that the 15-day HSR Act waiting period will be
terminated early. If either the FTC or the Antitrust Division were to request
additional information or documentary material from Parent with respect to the
Offer or from Parent or the Company or the Principal Stockholders with respect
to the Stockholder's Agreements, the waiting period with respect to the Offer
or the Stockholder's Agreements would expire at 11:59 p.m., New York City
time, on the tenth calendar day after the date of substantial compliance with
such request. Thereafter, the waiting period could be extended only by court
order. If the acquisition of Shares is delayed pursuant to a request by the
FTC or the Antitrust Division for additional information or documentary
material pursuant to the HSR Act, the Offer may, but need not, be extended
and, in any event, the purchase of and payment for Shares will be deferred
until 10 days after the request is substantially complied with, unless the
waiting period is sooner terminated by the FTC and the Antitrust Division.
Only one extension of such waiting period pursuant to a request for additional
information is authorized by the HSR Act and the rules promulgated thereunder,
except by court order. Any such extension of the waiting period will not give
rise to any withdrawal rights not otherwise provided for by applicable law.
See Section 4. It is a condition to the Offer that the waiting period
applicable under the HSR Act to the Offer expire or be terminated. See Section
1 and Section 14.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares
by Purchaser pursuant to the Offer or the Stockholder's Agreements. At any
time before or after the purchase of Shares pursuant to the Offer or the
Stockholder's Agreements by Purchaser, the FTC or the Antitrust Division could
take such action under the antitrust laws as it deems necessary or desirable
in the public interest, including seeking to enjoin the purchase of Shares
pursuant to the Offer or the Stockholder's Agreements or seeking the
divestiture of Shares purchased by Purchaser or the divestiture of substantial
assets of Parent, the Company or their respective subsidiaries. Private
parties and state attorneys general may also bring legal action under federal
or state antitrust laws under certain circumstances. Based upon an examination
of information available to Parent relating to the businesses in which Parent,
the Company and their respective subsidiaries are engaged, Parent and
Purchaser believe that neither the Offer, nor the Stockholder's Agreements
will violate the antitrust laws. Nevertheless, there can be no assurance that
a challenge to the Offer, or the Stockholder's Agreements on antitrust grounds
will not be made or, if such a challenge is made, what the result would be.
See Section 14 for certain conditions to the Offer, including conditions with
respect to litigation.
38
Other Laws and Legal Matters. According to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1999 the Company markets and
distributes products in a number of foreign countries. In the event that one
or more foreign laws is deemed to be applicable to the Offer, Purchaser and/or
the Company may be required to file certain information or to receive the
approval of the relevant foreign authority. Such government may also attempt
to impose additional conditions on the Company's operations conducted in such
countries. After completion of the Offer, Purchaser will seek further
information regarding the applicability of any such laws and presently intends
to take such action as such laws may require.
16. Fees and Expenses.
Except as set forth below, Purchaser will not pay any fees or commissions
to any broker, dealer or other person for soliciting tenders of Shares
pursuant to the Offer.
Purchaser and Parent have retained Georgeson Shareholder Communications
Inc., as the Information Agent, and Citibank, N.A., as the Depositary, in
connection with the Offer. The Information Agent may contact holders of Shares
by mail, telephone, telex, telecopy, telegraph and personal interview and may
request banks, brokers, dealers and other nominee stockholders to forward
materials relating to the Offer to beneficial owners. Purchaser will pay the
Information Agent reasonable and customary compensation for its services in
connection with the Offer, plus reimbursement for out-of-pocket expenses, and
may be indemnified against certain liabilities and expenses in connection with
the Offer, including certain liabilities under the federal securities laws.
Purchaser will pay the Depositary reasonable and customary compensation for
its services in connection with the Offer, plus reimbursement for out-of-
pocket expenses, and will indemnify the Depositary against certain liabilities
and expenses in connection therewith, including under federal securities laws.
Brokers, dealers, commercial banks and trust companies will be reimbursed by
Purchaser for customary handling and mailing expenses incurred by them in
forwarding material to their customers.
17. Miscellaneous.
The Offer is being made solely by this Offer to Purchase and the related
Letter of Transmittal and is being made to holders of Shares. Purchaser is not
aware of any jurisdiction where the making of the Offer is prohibited by any
administrative or judicial action pursuant to any valid state statute. If
Purchaser becomes aware of any valid state statute prohibiting the making of
the Offer or the acceptance of Shares pursuant thereto, Purchaser will make a
good faith effort to comply with any such state statute. If, after such good
faith effort, Purchaser cannot comply with any such state statute, the Offer
will not be made to (nor will tenders be accepted from or on behalf of) the
holders of Shares in such state. In any jurisdiction where the securities,
blue sky or other laws require the Offer to be made by a licensed broker or
dealer, the Offer shall be deemed to be made on behalf of Purchaser by one or
more registered brokers or dealers licensed under the laws of such
jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER OR THE COMPANY NOT CONTAINED IN THIS
OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
Pursuant to Rule 14d-3 of the General Rules and Regulations under the
Exchange Act, Parent and Purchaser have filed with the SEC the Schedule TO,
together with exhibits, furnishing certain additional information with respect
to the Offer. The Schedule TO and any amendments thereto, including exhibits,
may be inspected at, and copies may be obtained from, the same places and in
the same manner as set forth in Section 7 (except that they will not be
available at the regional offices of the SEC).
BLACKBIRD ACQUISITION, INC.
Dated: December 15, 2000
39
SCHEDULE I
INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE
OFFICERS OF PARENT AND PURCHASER
1. Directors and Executive Officers of Parent.
The following table sets forth the name, current business address,
citizenship and current principal occupation or employment, and material
occupations, positions, offices or employments and business addresses thereof
for the past five years of each director and executive officer of Parent.
Unless otherwise indicated, the current business address of each person is
Keilalahdentie 4, P.O. Box 226, FIN-00045 NOKIA GROUP, Espoo, Finland. Unless
otherwise indicated, each such person is a citizen of the Republic of Finland.
Unless otherwise indicated, each occupation set forth opposite an individual's
name refers to employment with Parent.
Present Principal Occupation or Employment;
Material Positions Held
Name, Citizenship During the Past Five Years and Business
and Current Business Address Addresses Thereof
---------------------------- -------------------------------------------
Board of Directors
Jorma Ollila................. Chairman and CEO
Chairman of the Group Executive Board
Chairman of the Board since 1999, Board Member
1995-1999.
President and CEO, and Chairman of the Group
Executive Board 1992-1999. Member of the Board
of Directors of Ford Motor Company, Otava Books
and Magazines Group Ltd. and UPM-Kymmene
Corporation. Deputy Chairman of the Board of
the Confederation of Finnish Industry and
Employers and member of The European Round
Table of Industrialists.
Paul J. Collins.............. Vice Chairman of the Board since 2000. Board
Member 1998-2000.
Citizenship: United States. Vice Chairman of Citigroup Inc. 1998-2000, Vice
Chairman and member of the Board of Directors
of Citicorp and Citibank N.A. 1998-2000. Member
of the Board of Directors of BG Group, Genuity
Corporation and Kimberly-Clark Corporation.
Georg Ehrnrooth.............. Board Member since 2000.
President and CEO of Metra Corporation 1991-
2000.
Chairman of the Board of Directors of Assa Abloy
Corporation, Sanitec Corporation and Varma-
Sampo Mutual Pension Insurance Company. Member
of the Board of Directors of Sandvik AB, Sampo
Insurance Company plc, Oy Karl Fazer Ab and
Wartsila Corporation.
Bengt Holmstrom.............. Paul A. Samuelson Professor of Economics at MIT,
joint appointment at the MIT Sloan School of
Management
Board Member since 1999.
Member of the Board of Directors of Kuusakoski
Oy. Member of the American Academy of Arts and
Sciences.
Jouko K. Leskinen............ President and CEO of Sampo Group.
Board Member since 1994.
Vice Chairman of the Board of Directors of UPM-
Kymmene Corporation and member of the Board of
Directors of Finnlines Plc. Vice Chairman of
the Board of Federation of Finnish Insurance
Companies and member of the Board of Employers'
Confederation of Service Industries.
Chairman and CEO of Rodamco Continental Europe
Robert F.W. van Oordt........ N.V.
Citizenship: The Netherlands. Board Member since 1998.
Chairman of the Supervisory Board of NKF Holding
N.V. 1996-1999. Member of the Board of
Directors of Schering-Plough Inc. and N.V.
Union Miniere S.A. and member of the
Supervisory Board of Draka Holding N.V.
Present Principal Occupation or Employment; Material
Name, Citizenship Positions Held
and Current Business During the Past Five Years and Business Addresses
Address Thereof
-------------------- ----------------------------------------------------
Vesa Vainio............. Chairman of the Board of Directors of Nordea Plc.
Board Member since 1993.
Chairman of the Board of Management and CEO of
Merita Bank Ltd and CEO of Merita Ltd 1992-1997.
Vice Chairman of the Board of Directors of Wartsila
Corporation and member of the Board of Directors of
UPM-Kymmene Corporation. Chairman of the Board of
The Central Chamber of Commerce of Finland.
Board Member since 1996. Vice Chairman of the Board
Iiro Viinanen........... 1996-1999.
President and CEO of Pohjola Group Insurance
Corporation 1996-2000. Finland's Minister of
Finance 1991-1996. Member of the Finnish Parliament
1983-1996.
Member of the Board of Directors of Kone
Corporation.
Group Executive Board
Jorma Ollila............ Chairman and CEO
Chairman of the Group Executive Board since 1992
Board Member 1995-1999, President and CEO and
Chairman of the Group Executive Board 1992-1999.
Joined Nokia 1985.
Member of the Board of Directors of Ford Motor
Company, Otava Books and Magazines Group Ltd and
UPM-Kymmene Corporation. Deputy Chairman of the
Board of the Confederation of Finnish Industry and
Employers and member of The European Round Table of
Industrialists.
Pekka Ala-Pietila....... President
Group Executive Board Member since 1992
Executive Vice President and Deputy to the CEO 1998-
1999, President of Nokia Communications Products
1998-1999, President of Nokia Mobile Phones 1992-
1998. Joined Nokia 1984.
Member of the Board of Directors of Alma Media
Corporation. Member of the Board of Economic
Information Bureau and Finnish-Japanese Chamber of
Commerce.
Matti Alahuhta.......... President, Nokia Mobile Phones
Group Executive Board Member since 1993
President of Nokia Telecommunications 1993-1998.
With Nokia 1975-1982 and rejoined 1984.
Chairman of the Board of Federations of Finnish
Electrical and Electronics Industry, Vice Chairman
of the Board of the Federation of Finnish Metal,
Engineering and Electrotechnical Industries and of
the Technology Development Centre, Ministry of
Trade and Industry, and member of the Board of The
Central Chamber of Commerce of Finland and the
Advisory Board of the International Institute for
Management Development (IMD).
Sari Baldauf............ President, Nokia Networks
Group Executive Board Member since 1994
Executive Vice President of Nokia APAC 1997-1998,
President, Cellular Systems of Nokia
Telecommunications 1988-1996. Joined Nokia 1983.
Member of the Board of Technical Research Centre of
Finland and Finland-China Trade Association, and
member of the National Committee for the
Information Society Issues.
I-2
Present Principal Occupation or Employment; Material
Name, Citizenship Positions Held
and Current Business During the Past Five Years and Business Addresses
Address Thereof
-------------------- ----------------------------------------------------
Mikko Heikkonen......... Executive Vice President, General Manager, Customer
Operations, Nokia Networks
Group Executive Board Member since 1998
President, Network Systems of Nokia
Telecommunications 1997-1999, President, Network
and Access Systems of Nokia Telecommunications
1995-1996, Senior Vice President, Area Management
of Nokia Telecommunications 1993-1995. Joined Nokia
1975.
Olli-Pekka Kallasvuo.... Executive Vice President, CFO
Group Executive Board Member since 1990
Executive Vice President of Nokia Americas and
President of Nokia Inc. 1997-1998, Executive Vice
President, CFO of Nokia 1992-1996.
Joined Nokia 1980.
Chairman of the Board of Directors of Nextrom
Holding S.A. and Nokian Tyres plc, member of the
Board of Directors of F-Secure Corporation and
Finnish Broadcasting Company. Member of the Board
of Telecommunications Industry Association (USA).
Yrjo Neuvo.............. Executive Vice President, CTO, Nokia Mobile Phones
Group Executive Board Member since 1993.
Joined Nokia 1993.
Vice Chairman of the Board of Directors of Vaisala
Corporation. Member of Finnish Academy of Technical
Sciences, member of the Finnish Academy of Science
and Letters and Academiae Europae, Foreign member
of Royal Swedish Academy of Engineering Sciences,
and Fellow of the Institute of Electrical and
Electronics Engineers.
Executive Vice President, Corporate Relations and
Veli Sundback........... Trade Policy
Group Executive Board Member since 1996.
Joined Nokia 1996.
Secretary of State at the Ministry for Foreign
Affairs 1993-1995. Chairman of the Board of
Directors of Huhtamaki Van Leer Oyj. Vice Chairman
of the Board of the International Chamber of
Commerce, Finnish Section, and Chairman of the
Trade Policy Committee of the Confederation of
Finnish Industry and Employers.
Executive Vice President, Europe & Africa, Nokia
Anssi Vanjoki........... Mobile Phones
Group Executive Board Member since 1998
Vice President, Sales of Nokia Mobile Phones 1991-
1994. Joined Nokia 1991.
I-3
2. Directors and Executive Officers of Purchaser.
The following table sets forth the name, current business address,
citizenship and present principal occupation or employment, and material
occupations, positions, offices or employments and business addresses thereof
for the past five years of each director and executive officer of Purchaser.
Unless otherwise indicated, the current business address of each person is
6000 Connection Drive, Irving, TX 75039. Unless otherwise indicated, each such
person is a citizen of the Republic of Finland and each occupation set forth
opposite an individual's name, refers to employment with Purchaser or Parent.
Name, Citizenship and Present Principal Occupation or Employment; Material Positions Held During the Past Five Years and
Current Business Address Business Addresses Thereof
------------------------ --------------------------------------------------------------------------------------------------
Board of Directors
Mika Vehvilainen.......... Senior Vice President and General Manager, Nokia Internet Communications, since 1999.
313 Fairchild Drive, Senior Vice President, IP Solutions Group, Nokia Telecommunications 1998-1999. Senior Vice
Mountain View, CA U.S.A. President, Sales & Marketing, Nokia Telecommunications 1996-1998. Vice President Sales & Marketing,
Nokia Cellular Systems 1995-1996.
Kirsi Sormunen............ Senior Vice President, Finance, Control and Planning, The Americas Region, Nokia Inc., since 1999.
Senior Vice President, Finance & Control, Nokia Telecommunications 1996-1999. Vice President,
Finance, Corporate Treasurer, Nokia, 1993-1995.
Olli Huuskonen............ Senior Legal Counsel, Nokia Corporation, since 1999.
Senior Legal Counsel, Metso Corporation 1999. Senior Legal Counsel and Legal Counsel, Rauma
Corporation 1990-1999.
Executive Officers
Mika Vehvilainen.......... President, Blackbird Acquisition, Inc. Senior Vice President and General Manager, Nokia Internet
313 Fairchild Drive, Communications, since 1999.
Mountain View, CA U.S.A. Senior Vice President, IP Solutions Group, Nokia Telecommunications 1998-1999. Senior VP Sales &
Marketing, Nokia Telecommunications 1996-1998. Vice President, Sales & Marketing, Nokia Cellular
Systems 1995-1996.
Timo Ruikka............... Secretary, Blackbird Acquisition, Inc. Vice President of External Affairs, Nokia Internet
313 Fairchild Drive, Communications, since 1999.
Mountain View, CA U.S.A. Senior Vice President and Vice President, Group Legal Counsel, Nokia Telecommunications 1988-1999.
Scott Blaine..............
313 Fairchild Drive, Treasurer, Blackbird Acquisition, Inc., Vice President, Finance, Nokia Internet Communications,
Mountain View, CA U.S.A. since 1999.
Citizenship: United Senior Director of Finance, DSC Communications Denmark, 1996-1999. Director Finance, DSC
States. Communications, 1995-1996.
Jan-Erik Stenman.......... Assistant Secretary, Blackbird Acquisition, Inc., Treasurer, The Americas Region, Nokia Inc., since
1997.
Treasurer, The Americas Region, Nokia Mobile Phones, Inc. 1996-1997. Vice President, Project &
Trade Finance, Nokia Telecommunications, Inc. 1995-1996.
Richard Hutchins.......... Assistant Secretary, Blackbird Acquisition, Inc., Tax Director, Nokia Inc. and Nokia Holding Inc.,
Citizenship: United since 1999.
States. Tax Director, Zurn Industries, Inc. 1998. Director-Corporate Taxes, AAF-McQuay, Inc. 1990-1998.
I-4
SCHEDULE II
SCHEDULE OF TRANSACTIONS IN SHARES
DURING THE PAST 60 DAYS
None.
Manually signed facsimiles of the Letter of Transmittal, properly
completed, will be accepted. The Letter of Transmittal and certificates
evidencing Shares and any other required documents should be sent or delivered
by each stockholder or his broker, dealer, commercial bank, trust company or
other nominee to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
Citibank, N.A.
By Overnight
By Mail Courier By Hand
Citibank, N.A. Citibank, N.A. Citibank, N.A.
P.O. Box 685 915 Broadway Corporate Trust Window
Old Chelsea Station 5th Floor 111 Wall Street, 5th Floor
New York, NY 10113 New York, NY 10010 New York, NY 10043
By Facsimile
(212) 505-2248
To Confirm by Telephone
(800) 270-0808
Other Information:
Questions or requests for assistance may be directed to the Information
Agent at its address and telephone number listed below. Additional copies of
this Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may be obtained from the Information Agent. A stockholder may also
contact brokers, dealers, commercial banks or trust companies for assistance
concerning the Offer.
The Information Agent for the Offer is:
[GEORGESON SHAREHOLDER COMMUNICATIONS, INC. LOGO]
17 State Street, 10th Floor
New York, NY 10004
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064