-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Kb6Vynz8QPWyDDtk9zQbkGLB0Gz4fT2AKFKmZ5wBUcoxNnX3yjnxdMpcj6Gwc/qV Q6kot8dQsjp3p71xFH02HQ== /in/edgar/work/20000606/0000950130-00-003293/0000950130-00-003293.txt : 20000919 0000950130-00-003293.hdr.sgml : 20000919 ACCESSION NUMBER: 0000950130-00-003293 CONFORMED SUBMISSION TYPE: SC TO-T PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 20000606 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: WESLEY JESSEN VISIONCARE INC CENTRAL INDEX KEY: 0001027584 STANDARD INDUSTRIAL CLASSIFICATION: [3851 ] IRS NUMBER: 364023739 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-T SEC ACT: SEC FILE NUMBER: 005-52301 FILM NUMBER: 650033 BUSINESS ADDRESS: STREET 1: 333 EAST HOWARD AVE CITY: DES PLAINES STATE: IL ZIP: 60018-5903 BUSINESS PHONE: 8472943000 MAIL ADDRESS: STREET 1: 333 EAST HOWARD AVE CITY: DES PLAINES STATE: IL ZIP: 60018-5903 FORMER COMPANY: FORMER CONFORMED NAME: WESLEY JESSEN HOLDING INC DATE OF NAME CHANGE: 19961126 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: NOVARTIS INC CENTRAL INDEX KEY: 0001030617 STANDARD INDUSTRIAL CLASSIFICATION: [ ] FILING VALUES: FORM TYPE: SC TO-T BUSINESS ADDRESS: STREET 1: SCHWARZWALDALLEE 215 STREET 2: 4002 BASEL CITY: SWITZERLAND BUSINESS PHONE: 2128302413 MAIL ADDRESS: STREET 1: SCHWARZWALDALLEE 215 STREET 2: 4002 BASEL CITY: SWITZERLAND STATE: V8 SC TO-T 1 0001.txt SCHEDULE TO - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE TO TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 WESLEY JESSEN VISIONCARE, INC. (NAME OF SUBJECT COMPANY (ISSUER)) WJ ACQUISITION CORP. NOVARTIS AG (NAMES OF FILING PERSONS (OFFERORS)) COMMON STOCK, PAR VALUE $0.01 PER SHARE PREFERRED SHARE PURCHASE RIGHTS (TITLE OF CLASS OF SECURITIES) 951018100 (CUSIP NUMBER OF CLASS OF SECURITIES) ROBERT THOMPSON WJ ACQUISITION CORP. NOVARTIS AG C/O NOVARTIS CORPORATION 608 FIFTH AVENUE NEW YORK, NY 10020 (212) 307-1122 (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF FILING PERSONS) COPY TO: DAVID W. HELENIAK, ESQ. SHEARMAN & STERLING 599 LEXINGTON AVENUE NEW YORK, NEW YORK 10022 (212) 848-4000 CALCULATION OF FILING FEE TRANSACTION VALUATION* AMOUNT OF FILING FEE** - --------------------------------------------------------------------------------------- $783,887,758.50 $156,777.56
* Estimated for purposes of calculating the amount of the filing fee only. Calculated by multiplying $38.50, the per share tender offer price, by 20,360,721, the sum of (i) 17,671,246 currently outstanding shares of Common Stock sought in the Offer, (ii) outstanding options with respect to 2,677,475 shares of Common Stock and (iii) 12,000 shares of Common Stock that could be purchased under the Company's employee discount purchase plans, in each case as of May 23, 2000. ** Calculated as 1/50 of 1% of the transaction value. [_]Check the box if any part of the fee is offset as provided by Rule 0- 11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: None Filing Party: Not applicable Form or Registration No.: Not applicable Date Filed: Not applicable [_]Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes to designate any transactions to which the statement relates: [X]third-party tender offer subject to Rule 14d-1. [_]issuer tender offer subject to Rule 13e-4. [_]going-private transaction subject to Rule 13e-3. [_]amendment to Schedule 13D under Rule 13d-2. Check the following box if the filing is a final amendment reporting the results of the tender offer: - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- This Tender Offer Statement on Schedule TO (this "Schedule TO") is filed by WJ Acquisition Corp., a Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of Novartis AG, a Swiss corporation ("Parent"). This Schedule TO relates to the offer by Purchaser to purchase all outstanding shares of common stock, par value $0.01 per share, including the associated preferred share purchase rights (together, the "Shares"), of Wesley Jessen VisionCare, Inc., a Delaware corporation (the "Company"), at a purchase price of $38.50 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase dated June 6, 2000 (the "Offer to Purchase"), and in the related Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2) (which, together with any amendments or supplements thereto, collectively constitute the "Offer"). The information set forth in the Offer to Purchase and the related Letter of Transmittal is incorporated herein by reference with respect to Items 1 through 9 and 11 of this Schedule TO. The Agreement and Plan of Merger, dated as of May 30, 2000, among Parent, Purchaser and the Company, a copy of which is attached as Exhibit (d)(1) hereto is incorporated herein by reference with respect to Items 5 and 11 of this Schedule TO. ITEM 10. FINANCIAL STATEMENTS OF CERTAIN BIDDERS. Not applicable. ITEM 12. MATERIAL TO BE FILED AS EXHIBITS. (a)(1) Offer to Purchase, dated June 6, 2000. (a)(2) Form of Letter of Transmittal. (a)(3) Form of Notice of Guaranteed Delivery. Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies (a)(4) and Other Nominees. (a)(5) Form of Letter to clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. Form of Guidelines for Certification of Taxpayer Identification Number (a)(6) on Substitute Form W-9. Summary Advertisement as published in The Wall Street Journal on June (a)(7) 6, 2000. (a)(8) Joint Press Release issued by CIBA Vision Corporation, an indirect wholly owned subsidiary of Parent, and the Company on May 30, 2000. (1) (b) None. (d)(1) Agreement and Plan of Merger, dated as of May 30, 2000, among Parent, Purchaser and the Company. (d)(2) Confidentiality Agreement, dated May 10, 2000, between CIBA Vision Corporation and the Company. (g) None. (h) None.
- -------- (1) Incorporated by reference to the Parent's Schedule TO-C, filed May 30, 2000. ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3. Not applicable. 2 After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: June 6, 2000 WJ Acquisition Corp. By: /s/ Robert Thompson ----------------------------------- Name: Robert Thompson Title: Chief Executive Officer and President Novartis AG By: /s/ Urs Barlocher ----------------------------------- Name: Urs Barlocher Title: General Counsel By: /s/ Christoph Mader ----------------------------------- Name: Christoph Mader Title: Associate General Counsel 3 EXHIBIT INDEX
EXHIBIT NO. ----------- (a)(1) Offer to Purchase, dated June 6, 2000. (a)(2) Form of Letter of Transmittal. (a)(3) Form of Notice of Guaranteed Delivery. (a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(5) Form of Letter to clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(6) Form of Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(7) Summary Advertisement as published in The Wall Street Journal on June 6, 2000. (a)(8) Joint Press Release issued by CIBA Vision Corporation, an indirect wholly owned subsidiary of Parent, and the Company on May 30, 2000. (1) (b) None. (d)(1) Agreement and Plan of Merger, dated as of May 30, 2000, among Parent, Purchaser and the Company. (d)(2) Confidentiality Agreement, dated May 10, 2000, between CIBA Vision Corporation and the Company. (g) None. (h) None.
- -------- (1)Incorporated by reference to the Parent's Schedule TO-C, filed May 30, 2000. 4 EX-99.(A)(1) 2 0002.txt OFFER TO PURCHASE, DATED JUNE 6, 2000 EXHIBIT (a)(1) OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS) OF WESLEY JESSEN VISIONCARE, INC. AT $38.50 NET PER SHARE BY WJ ACQUISITION CORP. AN INDIRECT WHOLLY OWNED SUBSIDIARY OF NOVARTIS AG THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, JULY 3, 2000, UNLESS THE OFFER IS EXTENDED. THE OFFER IS BEING MADE PURSUANT TO THE TERMS OF AN AGREEMENT AND PLAN OF MERGER, DATED AS OF MAY 30, 2000 (THE "MERGER AGREEMENT"), AMONG NOVARTIS AG ("PARENT"), WJ ACQUISITION CORP. ("PURCHASER") AND WESLEY JESSEN VISIONCARE, 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 (INCLUDING, WITHOUT LIMITATION, ALL SHARES ISSUABLE UPON THE CONVERSION OF ANY CONVERTIBLE SECURITIES OR UPON THE EXERCISE OF ANY 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 AND 14, 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 ADVISABLE AND FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND THE HOLDERS OF SHARES, HAS APPROVED AND ADOPTED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING EACH OF THE OFFER AND THE MERGER, AND HAS RECOMMENDED THAT THE HOLDERS OF SHARES ACCEPT THE OFFER AND TENDER THEIR 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 or the Dealer Manager at their respective addresses and telephone numbers 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 be obtained from the Information Agent. --------------- The Dealer Manager for the Offer is: LEHMAN BROTHERS June 6, 2000 TABLE OF CONTENTS
PAGE ---- SUMMARY TERM SHEET....................................................... i INTRODUCTION............................................................. 1 1. Terms of the Offer; Expiration Date................................. 4 2. Acceptance for Payment and Payment for Shares....................... 6 3. Procedures for Accepting the Offer and Tendering Shares............. 7 4. Withdrawal Rights................................................... 11 5. Certain Federal Income Tax Consequences............................. 12 6. Price Range of Shares; Dividends.................................... 13 7. Certain Information Concerning the Company.......................... 13 8. Certain Information Concerning Purchaser and Parent................. 15 9. Financing of the Offer and the Merger............................... 17 10. Background of the Offer; Contacts with the Company; the Merger Agreement........................................................... 17 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, Nasdaq Listing, Margin Regulations and Exchange Act Registration........... 35 14. Certain Conditions of the Offer..................................... 36 15. Certain Legal Matters and Regulatory Approvals...................... 38 16. Fees and Expenses................................................... 40 17. Miscellaneous....................................................... 41
SCHEDULES Schedule I--Directors and Executive Officers of Parent and Purchaser 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 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 or the Dealer Manager at their addresses and telephone numbers on the back cover of this offer to purchase. WHO IS OFFERING TO BUY MY SECURITIES? . We are WJ Acquisition Corp., a newly formed Delaware corporation and an indirect wholly owned subsidiary of Novartis AG. We have been organized in connection with this offer and have not carried on any activities other than in connection with this offer. . Novartis is a world leader, both in sales and in innovation, in its continued core businesses: pharmaceuticals, generics, eyecare products and medicines, consumer health and animal health. Novartis also is a world leader in agribusiness, the operations of which will be spun off to form Syngenta AG in 2000. The common stock of Novartis is listed on the Swiss Stock Exchange under the symbol "SWX" and the American Depositary Shares of Novartis are traded on the New York Stock Exchange under the symbol "NVS". 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 $0.01 per share, of Wesley Jessen VisionCare, Inc., as well as the rights that are associated with the common stock. See the "Introduction" and Section 1. HOW MUCH ARE YOU OFFERING TO PAY AND WHAT IS THE FORM OF PAYMENT? . We are offering to pay $38.50 per share, net to each seller in cash and without interest. See the "Introduction" and Section 1. . 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. See the "Introduction". WHAT ARE THE MOST SIGNIFICANT CONDITIONS OF THE OFFER? . We are not obligated to purchase any shares unless at least 51% of the outstanding shares are validly tendered and not withdrawn prior to the expiration of the offer. See Sections 1 and 14. . We are not obligated to purchase any shares unless and until the applicable waiting period under the HSR Act has expired or been terminated. See Section 15. These and other conditions to our obligation to purchase shares tendered in the offer are described in greater detail in Sections 1 and 14. DO YOU HAVE FINANCIAL RESOURCES TO MAKE PAYMENT? . Novartis will provide us with the funds necessary to purchase the shares in the offer. See Section 9. i 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 which will be needed has already been arranged, and also because of the lack of any relevant historical information concerning WJ Acquisition Corp., we do not think 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 Monday, July 3, 2000, to tender your shares of Wesley Jessen 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. 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 if certain conditions to the offer have not been satisfied. See Section 1. HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED? . If we decide to extend the offer, we will inform ChaseMellon Shareholder Services, L.L.C., 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. 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; . 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 ChaseMellon, 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. 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 August 4, 2000. See Section 4. 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 ChaseMellon 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. ii WHAT DOES WESLEY JESSEN'S BOARD OF DIRECTORS THINK OF THE OFFER? . The Board of Directors of Wesley Jessen has unanimously determined that the Merger Agreement and the transactions contemplated thereby, including each of the offer and the merger, are fair to, and in the best interests of, the holders of shares, has approved, adopted and declared advisable the Merger Agreement and the transactions contemplated thereby, and has recommended that the holders of shares accept the offer and tender shares pursuant to the offer. WILL WESLEY JESSEN CONTINUE AS A PUBLIC COMPANY? . No. If the merger occurs, Wesley Jessen 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 System or any other securities market, there may not be a public trading market for the shares and Wesley Jessen 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. 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 Wesley Jessen. If the merger occurs, Wesley Jessen will become an indirect wholly owned subsidiary of Novartis, and each share that remains outstanding (other than any shares held in the treasury of Wesley Jessen VisionCare, Inc., or owned by Novartis, WJ Acquisition Corp. or any of their subsidiaries, and any shares held by stockholders seeking appraisal for their shares) will be canceled and converted automatically into the right to receive $38.50 per share in cash (or any greater amount per share paid pursuant to the offer). 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 Nasdaq National Market or any other securities market, there may not be a public trading market for the shares and Wesley Jessen VisionCare, Inc. 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. WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE? . On May 26, 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 $33.19 per share. See Section 7. WITH WHOM MAY I TALK IF I HAVE QUESTIONS ABOUT THE OFFER? . You can call Innisfree M&A Incorporated, the Information Agent, at (212) 750-5833 or (888) 750-5834 or Lehman Brothers, the Dealer Manager, at (212) 526-5044 or (212) 526-6105. See the back cover of this Offer to Purchase. iii To All Holders of Common Stock of Wesley Jessen VisionCare, Inc.: INTRODUCTION WJ Acquisition Corp., a Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of Novartis AG, a Swiss corporation ("Parent"), hereby offers to purchase all the shares of common stock, par value $0.01 per share ("Common Stock"), of Wesley Jessen VisionCare, Inc., a Delaware corporation (the "Company"), that are issued and outstanding, together with the associated preferred share purchase rights (the "Rights" and, together with the Common Stock, the "Shares") issued pursuant to the Rights Agreement, dated as of November 16, 1999, as amended, between the Company and American Stock Transfer and Trust Company, as Rights Agent (the "Rights Agreement"), for $38.50 per Share, net to the seller in cash, 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 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. Purchaser or Parent will pay all charges and expenses of Lehman Brothers Inc. ("Lehman"), which is acting as Dealer Manager for the Offer (the "Dealer Manager"), ChaseMellon Shareholder Services, L.L.C. (the "Depositary") and Innisfree M&A Incorporated (the "Information Agent") incurred in connection with the Offer. See Section 16. 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 ADVISABLE AND FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND THE HOLDERS OF SHARES, HAS APPROVED AND ADOPTED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING EACH OF THE OFFER AND THE MERGER, AND HAS RECOMMENDED THAT THE HOLDERS OF SHARES ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER. Bear, Stearns & Co. Inc. ("Bear Stearns") has delivered to the Board its written opinion dated May 29, 2000 to the effect that, based upon and subject to various considerations and assumptions set forth in such opinion, the consideration to be received by the stockholders pursuant to each of the Offer and the Merger is fair to such stockholders from a financial point of view. A copy of the written opinion of Bear Stearns 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 stockholders concurrently herewith, and 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 Bear Stearns. 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 (INCLUDING, WITHOUT LIMITATION, ALL SHARES ISSUABLE UPON THE CONVERSION OF ANY CONVERTIBLE SECURITIES OR UPON THE EXERCISE OF ANY 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 1 (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 May 30, 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 of the other conditions set forth in the Merger Agreement and in accordance with the relevant provisions of the General Corporation Law of the State of Delaware ("Delaware Law"), Purchaser will be merged with and into the Company (the "Merger"). As a result of the Merger, the Company will continue as the surviving corporation (the "Surviving Corporation") and will become an indirect wholly owned subsidiary of Parent. At the effective time of the Merger (the "Effective Time"), each Share issued and outstanding immediately prior to the Effective Time (other than 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 Delaware Law) shall be canceled and converted automatically into the right to receive $38.50 in cash, or any higher price that may be paid per Share in the Offer, without interest (the "Merger Consideration"). Stockholders who demand and fully 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. 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. The Merger Agreement provides that, promptly following the purchase of, and payment for, a number of Shares that satisfies the Minimum Condition pursuant to the Offer and from time to time thereafter, Purchaser shall be entitled to designate the number of directors, rounded up to the next whole number, on the Board that equals the product of the total number of directors on the Board (giving effect to the election of any additional directors pursuant to this paragraph) and the percentage that the number of Shares beneficially owned by Parent or 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 within its power to cause Purchaser's designees to be elected or appointed to the Board, including increasing the number of directors, and seeking and accepting resignations of incumbent directors. The consummation of the Merger is 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 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 Certificate of Incorporation 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 or otherwise) at least a majority 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 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 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 May 23, 2000, 18,175,585 shares of Common Stock were issued, consisting of 17,671,246 shares of Common Stock outstanding and 504,339 shares of Common Stock held in the treasury of the Company. In addition, the Company has advised Parent that as of May 23, 2000, 2,689,475 shares of Common Stock are reserved for issuance pursuant to employee stock options. As a result, as of such date, the Minimum Condition would be satisfied if Purchaser acquired 10,383,968 Shares. Also, as of such date, Purchaser could cause the Merger to become 2 effective in accordance with Delaware Law, without a meeting of the Company's stockholders, if Purchaser acquired 18,324,649 Shares. 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 Monday, July 3, 2000, 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 it may be extended by Purchaser, shall expire. The Offer is subject to the conditions set forth under Section 14, including the satisfaction of the Minimum Condition and the HSR Condition. Subject to the applicable rules and regulations of the SEC and subject to the terms and conditions of the Merger Agreement, Purchaser expressly reserves the right to waive any such condition (other than the Minimum Condition) in whole or in part, in its sole discretion. Subject to the applicable rules and regulations of the SEC and subject to the terms and conditions of the Merger Agreement, Purchaser expressly reserves the right 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 Purchaser may not, without the prior written consent of the Company, (i) decrease the price per Share payable in the Offer, (ii) decrease the number of Shares sought in the Offer, (iii) change the form of consideration payable in the Offer, (iv) impose conditions to the Offer in addition to those set forth in Section 14 hereof, (v) except as provided in the Merger Agreement or required by any rule, regulation, interpretation or position of the SEC applicable to the Offer, change the expiration date of the Offer, or (vi) otherwise amend or change any term or condition of the Offer in a manner materially adverse to the holders of Shares. The Merger Agreement also provides that, without the consent of the Company, Purchaser shall have the right to extend the Offer beyond the initial expiration date, which shall be the twentieth business day from and after the date the Offer is commenced, in the following events: (i) from time to time, if, at the initial expiration date (or extended expiration date of the Offer, if applicable), any of the conditions to the Offer (other than the Minimum Condition) shall not have been satisfied or waived, until such conditions are satisfied or waived; (ii) for any period required by any rule, regulation, interpretation or position of the SEC or the staff thereof applicable to the Offer or any period required by applicable law; (iii) if all conditions to the Offer other than the Minimum Condition are satisfied or waived, but the Minimum Condition has not been satisfied, for one or more periods not to exceed ten (10) business days each (or an aggregate of thirty (30) business days for all such extensions); or (iv) if all of the conditions to the Offer are satisfied or waived but the number of Shares validly tendered and not withdrawn is less than ninety percent (90%) of the then outstanding number of Shares on a diluted basis, for an aggregate period not to exceed twenty (20) business days (for all such extensions); provided that Purchaser shall accept and promptly pay for all securities tendered prior to the date of such extension, and shall otherwise meet the requirements of Rule 14d-11 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), in connection with each such extension. In addition, pursuant to the Merger Agreement, Parent and Purchaser agreed that Purchaser shall, from time to time, extend the Offer, if requested by the Company, if, at the initial expiration date (or any extended date of the Offer, if applicable), all of the conditions to the Offer other than the Minimum Condition and/or the HSR Condition or the condition that no impeding governmental order exists shall have been waived or satisfied and the Minimum Condition and/or the HSR Condition or the condition that no impeding governmental order exists shall not have been satisfied, until the earlier of ten (10) business days after such expiration date (or extended expiration date of the Offer, if applicable) or September 30, 2000, in the case of the Minimum Condition, or November 30, 2000, in the case of the HSR Condition or the condition that no impeding 3 governmental order exists, or such earlier date upon which either such condition shall not be reasonably capable of being satisfied prior to November 30, 2000. During any such extension, all Shares previously tendered and not withdrawn will remain subject to the Offer and subject to the right of a tendering stockholder to withdraw such stockholder's Shares. See Section 4. Under no circumstances will interest be paid on the purchase price for tendered Shares, whether or not the Offer is extended. Any extension of the Offer may be effected by Purchaser giving oral or written notice of such extension to the Depositary. 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 and the Merger Agreement, Purchaser also expressly reserves the right (i) 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 Exchange Act, which requires Purchaser to pay the consideration offered or to return Shares deposited by or on behalf of stockholders promptly after the termination or withdrawal of the Offer), (ii) to extend or terminate the Offer and not to accept for payment or pay for any Shares not theretofore accepted for payment or paid for, upon the occurrence of any of the conditions to the Offer specified in Section 14, and (iii) to amend the Offer or to waive any conditions to the Offer in any respect consistent with the provisions of the Merger Agreement described above, in each case by giving oral or written notice of such delay, termination, waiver or amendment to the Depositary and by making public announcement thereof. 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(c), 14d-6(d) 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 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. 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, and consists of the time period from 12:01 a.m. through 12:00 midnight, New York City time. 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. 4 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 part with applicable laws. See Sections 1 and 15. In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (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, 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. 3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES. Valid Tender of 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 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. 5 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, IN ACCORDANCE WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES, 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. 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. In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of 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. 6 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 DEALER MANAGER, 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 May 30, 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 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 August 4, 2000. 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 7 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. 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 DEALER MANAGER, 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 by following one of the procedures described in Section 3. 5. CERTAIN 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 in whose hands Shares are capital assets (generally assets held for investment), and may not apply to Shares received pursuant to the exercise of employee stock options or otherwise as compensation, or to holders of Shares who are not citizens or residents of the United States of America. THE TAX DISCUSSION SET FORTH BELOW IS INCLUDED FOR GENERAL INFORMATION PURPOSES ONLY AND IS BASED UPON PRESENT 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 for U.S. federal income tax purposes (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 therefor. Such gain or loss generally will be capital gain or loss. Certain non-corporate holders (including individuals) will be subject to 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. 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 8 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 the 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. 6. PRICE RANGE OF SHARES; DIVIDENDS. The Shares are listed and principally traded on Nasdaq. The following table sets forth, for the quarters indicated, the high and low closing 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 DIVIDENDS ------ ------ --------- 1998: First Quarter................................... $40.25 $32.13 $ 0 Second Quarter.................................. 34.00 18.38 0 Third Quarter................................... 25.75 17.00 0 Fourth Quarter.................................. 27.75 16.88 0 1999: First Quarter................................... $27.56 $20.50 $ 0 Second Quarter.................................. 34.88 26.75 0 Third Quarter................................... 32.75 27.13 0 Fourth Quarter.................................. 39.94 25.31 0 2000: First Quarter................................... $40.00 $22.94 $ 0 Second Quarter (through June 5, 2000)........... 39.38 31.00 0
On May 26, 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 $33.19. On June 5, 2000, the last full trading day prior to the commencement of the Offer, the closing price per Share as reported on Nasdaq was $36.98. As of June 5, 2000, the approximate number of holders of record of the Shares was 180. 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 333 East Howard Avenue, Des Plaines, Illinois 60018, and its telephone number is (847) 294-3000. The Company is the leading worldwide developer, manufacturer and marketer of specialty soft contact lenses, based on its share of the specialty lens market, and 9 ranks fourth in the contact lens market overall in terms of net revenues. The Company was founded by Drs. Newton K. Wesley and George Jessen in 1946. From 1980 to 1995, the Company operated as a wholly owned subsidiary of Schering- Plough Corporation. In June 1995, Bain Capital, Inc. and management acquired the Company from Schering-Plough in a leveraged acquisition. In 1997, the Company made its initial public offering of common stock, which trades in Nasdaq under the symbol "WJCO". 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, benefits and other expenses, depreciation and amortization, capital expenditure 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. WESLEY JESSEN VISIONCARE, INC. PROJECTED FINANCIAL PERFORMANCE*
DESCRIPTION FY 2000 FY 2001 FY 2002 ----------- -------- -------- -------- Net sales.................................... $341,500 $374,300 $411,356 Cost of Goods Sold........................... 107,051 113,600 124,846 Gross Profit................................. 234,449 260,700 286,510 Income from Operations (EBIT)................ 67,372 79,421 87,198 Net Income................................... 42,260 50,900 55,882
------- * All amounts in thousands. 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. ACCORDINGLY, THERE CAN BE NO ASSURANCE THAT ANY OF THE PROJECTIONS WILL BE REALIZED AND THE ACTUAL RESULTS FOR 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 have 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. These projections should be read in conjunction with the historical financial information of the Company. 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. 10 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 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 608 Fifth Avenue, New York, New York 10020 and its telephone number is (212) 307-1122. Purchaser is an indirect 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. Parent is a corporation organized under the laws of Switzerland. Its principal offices are located at Schwarzwaldallee 215, CH-4058 Basel, Switzerland, and its telephone number is 011-41-61-324-8000. Parent is a world leader, both in sales and in innovation, in its continued core businesses: pharmaceuticals, generics, eyecare products and medicines, consumer health and animal health. Parent also is a world leader in agribusiness, the operations of which will be spun off to form Syngenta AG in 2000. The common stock of Parent is listed on the Swiss Stock Exchange under the symbol "SWX" and the American Depositary Shares of Parent are traded on the New York Stock Exchange under the symbol "NVS". 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, (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 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 agreement, arrangement, understanding, 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, joint ventures, loan or 11 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 $791 million. Purchaser will obtain all of such funds from Parent or one of Parent's subsidiaries. Parent and its subsidiary will provide such funds from existing resources. 10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY; THE MERGER AGREEMENT. Over the past several years, CIBA Vision Corporation, an indirect wholly owned subsidiary of Parent ("CIBA Vision"), and the Company have engaged in various commercial transactions, including licensing arrangements, in the ordinary course of their respective businesses. During the first week of May 2000, a representative of Lehman Brothers, financial advisor to Parent, telephoned a representative of Bear Stearns, financial advisor to the Company, to discuss a potential transaction. On May 10, 2000, Dr. Glen Bradley, Chief Executive Officer of CIBA Vision, and representatives of Parent's financial advisor, met with Kevin Ryan, Chief Executive Officer of the Company, Edward Kelley, Chief Financial Officer of the Company, and a representative of the Company's financial advisor to discuss a potential transaction. On the same day, CIBA Vision entered into a confidentiality agreement with the Company. During the period from May 10 through May 24, 2000, representatives of CIBA Vision, the financial, legal and accounting advisers to Parent and CIBA Vision conducted a due diligence review of the Company and attended presentations made by the management of the Company. In addition, during this period representatives of CIBA Vision also visited certain facilities of the Company. On May 24, 2000, Parent's financial advisers telephoned the Company's financial advisers to inform them that Parent was prepared to make a proposal to acquire all of the outstanding Shares for a price of $38.00 per Share, subject to satisfactory agreement between Parent and the Company on other aspects of the proposed transaction, including the terms of a draft merger agreement. The Company informed Parent that it was unwilling to commence negotiations at that price. On May 24, 2000 and May 25, 2000, the financial advisers continued discussions regarding the proposed acquisition of the Company by Parent, including the proposed purchase price. On May 25, 2000, Parent's financial advisers informed the Company's financial advisers that Parent was prepared to make a proposal to acquire all of the outstanding Shares for a price of $38.50 per Share. In the evening of May 25, 2000, the Company's financial advisers informed Parent's financial advisers, on behalf of the Board, that the Company would consider the proposed acquisition by Parent at such price, subject to satisfactory negotiation of the terms of the draft merger agreement. During the period from May 25, 2000 through May 29, 2000, representatives of Parent, CIBA Vision and the Company and their respective legal and financial advisers negotiated the terms of the Merger Agreement. 12 The Merger Agreement was finalized and executed, and a joint press release announcing the proposed Offer and the Merger was issued, on May 30, 2000. On June 6, 2000, Parent and Purchaser commenced the Offer. 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 (THE "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. DEFINED TERMS USED HEREIN AND NOT DEFINED HEREIN SHALL HAVE THE RESPECTIVE MEANINGS ASSIGNED TO THOSE TERMS IN THE MERGER AGREEMENT. The Offer. The Merger Agreement provides for the commencement of the Offer as promptly as practicable, but in no event later than five business days after the public announcement of the terms of the Merger Agreement. The obligation of Purchaser to accept for payment Shares tendered pursuant to the Offer is subject to the satisfaction of the Minimum Condition and certain other conditions that are described in Section 14 hereof. Purchaser and Parent have agreed that they shall not, without the prior written consent of the Company, (i) decrease the price per Share payable in the Offer, (ii) decrease the number of Shares sought in the Offer, (iii) change the form of consideration payable in the Offer, (iv) impose conditions to the Offer in addition to those set forth in Section 14 hereof, (v) except as provided in the Merger Agreement or required by any rule, regulation, interpretation or position of the SEC applicable to the Offer, change the expiration date of the Offer, or (vi) otherwise amend or change any term or condition of the Offer in a manner materially adverse to the holders of Shares. The Merger. The Merger Agreement provides that, upon the terms and subject to the conditions thereof, and in accordance with Delaware Law, Purchaser will be merged with and into the Company. As a result of the Merger, the Company will continue as the Surviving Corporation and will become an indirect wholly owned subsidiary of Parent, and the separate corporate existence of Purchaser will cease in accordance with Delaware Law. Upon consummation of the Merger, each issued and outstanding Share (other than any Shares held in the treasury of the Company, or owned by Parent, Purchaser or any subsidiary of Parent or of the Company and any Shares which are held by stockholders who have not voted in favor of the Merger or consented thereto in writing and who shall have demanded properly in writing appraisal for such Shares in accordance with Delaware Law) will convert 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 will be converted into and become one fully paid and non- assessable share of common stock, par value $0.01 per share, of the Surviving Corporation. The Merger Agreement provides that the directors of Purchaser at the Effective Time will be the initial directors of the Surviving Corporation, and that the officers of the Company as of the Effective Time will be the initial officers of the Surviving Corporation. Subject to the Merger Agreement, the Certificate of Incorporation and Bylaws of Purchaser in effect immediately prior to the Effective Time will become the Certificate of Incorporation and Bylaws of the Surviving Corporation. Stockholders' Meeting. Pursuant to the Merger Agreement, the Company, acting through the Board, shall, if required by applicable law to consummate the Merger, duly call, give notice of, convene and hold a special meeting of its stockholders as soon as practicable following the date on which Purchaser completes the purchase of Shares pursuant to the Offer for the purpose of considering and taking action upon the Merger Agreement (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, acting through the Board, shall, if required by applicable law to consummate the Merger, prepare and file with the SEC a preliminary proxy or information statement (the "Proxy Statement") relating to the Merger Agreement and the Merger and shall use its reasonable best efforts to cause a 13 definitive Proxy Statement to be mailed to its stockholders at the earliest practicable time following the expiration or termination of the Offer. The Company, subject to its fiduciary duties under applicable law, has agreed to include in the Proxy Statement, the recommendation of the Board that stockholders of the Company vote in favor of the approval and adoption of the Merger Agreement and the Merger. Parent and Purchaser and any of their respective subsidiaries have agreed to vote, or cause to be voted, all Shares owned by them in favor of the Merger Agreement and the Merger. The Merger Agreement provides that, in the event Parent, Purchaser, or any other subsidiary of Parent shall acquire at least 90% of the outstanding Shares, Parent, Purchaser and the Company will take all necessary and appropriate action to cause the Merger to be effective, as soon as practicable after such acquisition, without the Stockholders' Meeting. Conduct of Business by the Company Pending the Merger. Pursuant to the Merger Agreement, the Company has covenanted and agreed that, between the date of the Merger Agreement and the earlier of the termination of the Merger Agreement or the completion date of the Offer, unless Parent shall otherwise agree in writing (and except as set forth in Section 5.1 of the Company Disclosure Letter or as contemplated in the Merger Agreement), the Company shall conduct its business and shall cause the businesses of its subsidiaries to be conducted only in, and the Company and its 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 reasonable commercial efforts to preserve substantially intact the business organization of the Company and its subsidiaries, to keep available the services of the present officers, employees and consultants of the Company and its subsidiaries and to preserve the present relationships of the Company and its subsidiaries with customers, suppliers and other persons with which the Company or any of its subsidiaries has significant business relations. The Merger Agreement provides that, by way of amplification and not limitation, except as contemplated by the Merger Agreement, or as required by applicable law or rule of any stock exchange or over-the-counter market, neither the Company nor any of its subsidiaries shall, during the period of the date of the Merger Agreement and continuing until the earlier of the termination of the Merger Agreement or the completion date of the Offer and except as set forth in Section 5.1 of the Company Disclosure Letter, 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 amend the Rights Agreement or reduce the rights issued thereunder; (b) issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including, without limitation, any phantom interest) in the Company, any of its subsidiaries or affiliates (except for the issuance of Shares issuable pursuant to Company Stock Options under the Company Stock Option Plans, which options are outstanding on the date of the Merger Agreement; provided that the occurrence of a separation of the rights under the Rights Agreement, and the related issuance of Shares to the Company's stockholders thereunder shall not be deemed a breach of the Merger Agreement to the extent that (i) the occurrence of such separation occurred as a result of an unsolicited acquisition of Shares by a third party, and (ii) such acquisition did not occur as a result of the Company breaching the non-solicitation covenant under the Merger Agreement described below under the heading "No Solicitation of Transactions"); (c) sell, pledge, dispose of or encumber any assets of the Company or any of its subsidiaries (except for (i) sales of inventory in the ordinary course of business and in a manner consistent with past practice, and (ii) dispositions of obsolete or worthless assets); (d) (i) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, except that a wholly owned subsidiary of the Company may declare and pay a dividend to its parent, (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, (iii) except as required by the terms of any security as in effect on the date of the Merger Agreement or expressly permitted thereunder, amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any subsidiary to amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, any of its securities or any securities of its subsidiaries, including, without limitation, Shares or any option, warrant or right, directly or indirectly, to acquire any such securities, or propose to do any of the foregoing, or (iv) commence any claim, suit or other action or settle, pay or discharge any claim, suit or other action brought or threatened against the Company, other than any claim, suit or action with respect to or arising out of the ordinary course of business which is not material to the Company considered as a whole; (e) (i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof; (ii) incur any indebtedness for borrowed money, except in the ordinary course of business, or issue any debt securities or assume, guarantee (other than guarantees of the Company's subsidiaries entered into in the ordinary course of business) or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any 14 loans or advances, except in the ordinary course of business consistent with past practice; (iii) commit to make any capital expenditures or purchases of fixed assets, except in the ordinary course of business consistent with past practice; or (iv) enter into any lease agreement, other than in the ordinary course of business consistent with past practice; (f) increase the compensation or severance payable or to become payable to its directors, officers or employees, except for increases in salary or wages of employees of the Company or its subsidiaries (who are not directors or executive officers of the Company) in accordance with past practices, or grant any severance or termination pay (except payments required to be made under obligations existing on the date of the Merger Agreement that are disclosed to Parent and Purchaser in accordance with the terms of such obligations) to, or enter into any employment or severance agreement with, any employee of the Company or any of its subsidiaries, except for agreements with new employees entered into in the ordinary course of business and providing for annual base and bonus compensation not to exceed $150,000, or establish, adopt, enter into or amend any collective bargaining agreement, any of the Company's benefit plans, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees or any of their beneficiaries, except, in each case, as may be required by law or as would not result in a material increase in the cost of maintaining such collective bargaining agreement, benefit plan, trust, fund, policy or arrangement; (g) take any action to change material accounting policies or procedures (including, without limitation, procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable), except as required by a change in GAAP or the SEC's position occurring after the date of the Merger Agreement; (h) except in the ordinary course of business, make any tax election or settle or compromise any material United States federal, state, local or non-United States tax liability; (i) pay, discharge or satisfy any claims, liabilities or obligations (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 financial statements contained in the Company's reports or incurred in the ordinary course of business and consistent with past practice; (j) enter into any contract or agreement which is material to the Company, other than in the ordinary course of business and consistent with past practices, or amend, modify or consent to the termination of any material contract other than in the ordinary course of business and consistent with past practices; or (k) take, or agree in writing or otherwise to take, any of the foregoing actions or any action which would make any of the representations or warranties of the Company contained in the Merger Agreement untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants under the Merger Agreement. Company Board Representation. The Merger Agreement provides that, promptly following the purchase of, and payment for, a number of Shares that satisfies the Minimum Condition, and from time to time thereafter, Purchaser shall be entitled to designate the number of directors, rounded up to the next whole number, on the Board that equals the product of the total number of directors on the Board (giving effect to the election of any additional directors pursuant to this sentence), and the percentage that the number of Shares beneficially owned by Parent or Purchaser following such purchase bears to the total number of Shares then outstanding, and the Company shall take all action within its power to cause Purchaser's designees to be elected or appointed to the Board, including, without limitation, increasing the number of directors, and seeking and accepting resignations of incumbent directors. The Merger Agreement also provides that, at such time, the Company shall use its best efforts to cause individual directors designated by Purchaser to constitute the number of members, rounded up to the next whole number, on (i) each committee of the Board, other than any such committee of such Board established to take action under the Merger Agreement, and (ii) each board of directors of each subsidiary of the Company, and each committee thereof, that represents the same percentage as such individuals represent on the Board. Notwithstanding the foregoing, in the event that Purchaser's designees are to be appointed or elected to the Board, until the Effective Time, such board of directors shall have at least two directors who are directors on the date of the Merger Agreement and who are not officers of the Company. The Merger Agreement provides that, following the election or appointment of Purchaser's designees, in accordance with the immediately preceding paragraph and prior to the Effective Time, the approval of those directors of the Company who were directors on the date of the Merger Agreement and who are not officers of the Company shall be required to authorize any termination of the Merger Agreement by the Company, any amendment thereto requiring action by the Company's board of directors, any amendment of the Certificate of Incorporation or Bylaws of the Company, any extension of time for performance of any obligation or action thereunder by Parent or Purchaser, any waiver of compliance with any of the agreements or conditions contained therein for the benefit of the Company and any material transaction with Parent, Purchaser or any of their affiliates. 15 Access to Information. Pursuant to the Merger Agreement, the Company shall, and shall cause its subsidiaries to, afford to the officers, employees, accountants, counsel, financing sources and other representatives of Parent reasonable access during normal business hours to its properties, books, contracts, commitments and records; shall furnish to Parent all information concerning its business, properties and personnel as Parent may reasonably request or has reasonably requested; and make available during normal business hours to the officers, employees, accountants, counsel, financing sources and other representatives of Parent the appropriate individuals for discussion of the Company's business, properties, prospects and personnel as Parent may reasonably request and Parent has agreed to keep such information confidential, in accordance with the terms of the Confidentiality Letter described below. No Solicitation of Transactions. The Company has agreed that it shall not, directly or indirectly, or through any officer, director, employee, representative or agent of the Company or any of its subsidiaries, and shall not permit any such officer, director, employee, representative or agent to, solicit or encourage the initiation of any inquiries or proposals regarding, or participate in negotiations or discussions concerning, any merger, sale of assets, sale of shares of capital stock or similar transactions involving the Company or any subsidiaries of the Company that if consummated would constitute an Alternative Transaction (any of the foregoing inquiries or proposals being referred to as an "Acquisition Proposal"). The Company may furnish information in response to unsolicited requests by, and participate in discussions and negotiations with, third parties in connection with any such transaction or Acquisition Proposal only if such person has submitted a bona fide written proposal which the Board reasonably determines is likely to lead to a Superior Proposal not solicited in violation of the Merger Agreement and has executed a confidentiality agreement with the Company, provided that such actions occur prior to the consummation of the Offer and the Board determines in good faith (based on the advice of its financial advisor and counsel) that the failure to take such actions would be inconsistent with its fiduciary duties. The Company has agreed to immediately cease any discussions or negotiations with any person, entity or group concerning any such transaction or any Acquisition Proposal that were continuing as of the date of the Merger Agreement. The Company has also agreed to notify Parent promptly orally and in writing upon receipt of any Acquisition Proposal, or any modification or amendment thereto, or any request for non-public information relating to the Company or any of its subsidiaries in connection with an Acquisition Proposal or for access to the properties, books or records of the Company or any subsidiary by any person or entity that informs the Board or such subsidiary that it is considering making, or has made, an Acquisition Proposal. The Company has also agreed that neither the Company nor the Board shall withdraw or modify in a manner adverse to Parent or Purchaser, or propose to withdraw or modify in a manner adverse to Parent or Purchaser, or fail at Parent's request to reaffirm, the approval by the Board of the Merger Agreement, the Offer or the Merger or the favorable recommendation of the Board with respect thereto. Notwithstanding the foregoing, in the event that, after the Company has received a bona fide written Acquisition Proposal not solicited in violation of the Merger Agreement, the Board determines (based on the advice of its counsel), prior to the consummation of the Offer, that the failure to take such actions would be inconsistent with its fiduciary duties to the Company's stockholders under applicable law, the Board may withdraw or modify its approval or recommendation of the Merger Agreement, the Offer or the Merger or approve or recommend such an Acquisition Proposal that is a Superior Proposal, provided, however, that in no event may the Board take either such action earlier than the second full business day following Parent's receipt of written notice of the intention of the Board to do so. The Company and the Board shall not (i) redeem the rights under the Rights Agreement, or waive or amend any provision of the Rights Agreement, in any such case to permit or facilitate the consummation of any Acquisition Proposal or Alternative Transaction, or (ii) enter into any agreement with respect to, or otherwise approve or recommend to stockholders, or publicly propose to approve or recommend, any Acquisition Proposal or Alternative Transaction, unless the Merger Agreement has been terminated in accordance with its terms. "Alternative Transaction" means any of (i) a transaction pursuant to which any person (or group of persons) other than Parent or its affiliates (a "Third Party") acquires or would acquire more than 30% of the outstanding shares of any class of equity securities of the Company, whether from the Company or pursuant to a tender offer or exchange offer or otherwise, (ii) a merger or other business combination involving the Company pursuant to which any Third Party acquires more than 30% of the outstanding equity securities of the Company or the entity surviving such merger or business combination, (iii) any transaction pursuant to which any Third Party acquires or would acquire control of assets of the Company or any of its Subsidiaries having a fair market value equal to more than 30% of the fair market value of all the assets of the Company 16 and its Subsidiaries, taken as a whole, immediately prior to such transaction, or (iv) any other consolidation, business combination, recapitalization or similar transaction involving the Company or any of its Subsidiaries that are "significant" under Regulation S-X at a level of 30% or more, other than the Transactions; provided, however, that the term "Alternative Transaction" shall not include any acquisition of securities by a broker dealer in connection with a bona fide public offering of such securities. "Superior Proposal" means any written proposal made by a third person to acquire, directly or indirectly, for consideration consisting of cash and/or securities, all of the equity securities of the Company entitled to vote generally in the election of directors or all or substantially all the assets of the Company, if, and only if, the Board reasonably determines (i) that the proposed transaction would be more favorable from a financial point of view to its stockholders than the Offer and the Merger and the Transactions, taking into account, at the time of determination, any changes to the terms of the Merger Agreement which, as of that time, had been proposed by Parent, and (ii) that the person or entity making such Acquisition Proposal is capable of consummating such Acquisition Proposal. The Company has agreed not to release any Third Party from confidentiality provisions of any agreement to which the Company is a party. Employee Stock Options and Other Employee Benefits. The Merger Agreement also provides that, prior to the Expiration Date, the Company will take all actions necessary and appropriate to provide that, upon the Effective Time, each outstanding Company Stock Option granted under any of the Company's 1995 Stock Purchase and Option Plan, 1996 Stock Option Plan, Stock Incentive Plan and Non-Employee Director Stock Option Plan (collectively, the "Company Stock Option Plans") or under any other plan or arrangement, each outstanding warrant and option to purchase shares, whether or not then exercisable or vested, and each right to purchase Shares under the Company's Employee Stock Discount Purchase Plan and the International Employee Discount Purchase Plan (collectively, the "Company Purchase Plans"), shall be cancelled and, in exchange therefor, each holder of such Company Stock Option, warrant, option or right to purchase shall receive an amount in cash in respect thereof, if any, equal to the product of (i) the excess, if any, of the Merger Consideration over the per share exercise price thereof and (ii) the number of shares subject thereto (such payment to be net of applicable withholding taxes). The Company shall use its reasonable best efforts to obtain all necessary waivers, consents or releases from holders of Company Stock Options, other options, warrants and rights to purchase Shares and shall take any such action as may be reasonably necessary to give effect to, and to accomplish the above transactions involving Company Stock Options. Effective as of the Effective Time and for a one-year period thereafter, Parent agreed to provide, or cause the Surviving Corporation and its subsidiaries to provide, those persons who, immediately prior to the Effective Time, were employees of the Company and its subsidiaries and who continue in such employment ("Continuing Employees") with benefits and compensation that are substantially comparable, in the aggregate, to the compensation and benefits provided to such employees as of the date of the Merger Agreement; provided that Parent or the Surviving Corporation may terminate the employment of any such Continuing Employees in accordance with applicable laws and contractual rights, if any, of such Continuing Employees. Except with respect to accruals under any defined benefit pension plan, Parent will, or will cause the Surviving Corporation and its subsidiaries to, give Continuing Employees full credit for purposes of eligibility, vesting and determination of the level of benefits under any employee benefit plans or arrangements maintained by Parent, the Surviving Corporation or any of their subsidiaries for such Continuing Employees' service with the Company or any subsidiary of the Company, to the same extent recognized by the Company for similar purposes immediately prior to the Effective Time. Directors' and Officers' Indemnification and Insurance. The Merger Agreement further provides that the Certificate of Incorporation and Bylaws of the Surviving Corporation shall contain provisions with respect to indemnification substantially to the same effect as those set forth in the Certificate of Incorporation and Bylaws of the Company on the date of the Merger Agreement, which provisions shall not be amended, modified or otherwise repealed for a period of six years after the Effective Time in any manner that would adversely affect the rights thereunder of individuals who, at the Effective Time, were directors, officers, employees, or agents of the Company, unless such modification shall be required by law. 17 The Merger Agreement provides that Parent shall cause the Surviving Corporation, to the fullest extent permitted under applicable law or under the Surviving Corporation's Certificate of Incorporation or Bylaws, to indemnify and hold harmless each present and former director, officer or employee of the Company or any of its subsidiaries against the costs or expenses (including attorneys' fees), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, (x) arising out of or pertaining to the Transactions or (y) otherwise with respect to any acts or omissions occurring at or prior to the Effective Time, to the same extent as provided in the Company's Certificate of Incorporation or Bylaws or any applicable contract or agreement as in effect on the date of the Merger Agreement, in each case for a period of six years after the date of the Merger Agreement. The Merger Agreement also provides that Parent will provide, or cause the Surviving Corporation to provide, for a period of not less than six years after the Effective Time, the Company's current directors and officers with an insurance and indemnification policy that provides coverage for events occurring at or prior to the Effective Time (the "D&O Insurance") that is no less favorable than the existing policy or, if substantially equivalent insurance coverage is unavailable, the best available coverage; provided, however, that Parent and the Surviving Corporation shall not be required to pay an annual premium for the D&O Insurance in excess of twice the annual premium currently paid by the Company for such insurance, but in such case shall purchase as much such coverage as possible for such amount. Consents; Approvals; Reasonable Best Efforts. The Merger Agreement provides that, subject to its terms and conditions, Parent and the Company shall (i) promptly make all filings necessary in connection with their respective Necessary Consents (defined as consents, approvals, orders, authorizations, registrations, declarations and filings required under or in relation to the HSR Act, state securities or "blue sky" laws, the Securities Act of 1933, as amended (the "Securities Act"), the Exchange Act, Delaware Law with respect to the filing of the Certificate of Merger and the rules and regulations of the Nasdaq, antitrust or other competition laws of other jurisdictions) and (ii) use reasonable best efforts to cooperate with one another in (y) determining whether any filings are required to be made with, or consents, permits, authorizations or approvals are required to be obtained from, any third party or other governmental entity in connection with the execution and delivery of the Merger Agreement and the consummation of the Transactions and (z) timely making all such filings and timely seeking all such consents, permits, authorizations or approvals, including such party's Necessary Consents. The parties shall cooperate with one another in connection with the making of all such filings, including providing copies of all such documents to the non- filing or non-submitting party and its advisors prior to filing or otherwise submitting. Without limiting the generality of the foregoing, Parent and Purchaser agree to (i) promptly effect all necessary registrations and filings, including, but not limited to, filings and submissions of information under the HSR Act, and applicable foreign laws that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization, restraint of trade or limitation of competition (collectively, "Antitrust Laws"), and (ii) use reasonable best efforts to promptly take, or cause their affiliates to take, if required by the Federal Trade Commission (the "FTC") or its staff, the Assistant Attorney General in charge of the Antitrust Division and his staff, or any state attorney general or its staff, or any comparable person under applicable foreign Antitrust Laws, in each case in order to consummate the Transactions, all commercially reasonable actions and things to secure federal, state and applicable foreign antitrust clearance. The existence of the conditions set forth in clause (b) under "Conditions to the Merger" and in Section 14, clauses (a) and (b), will not limit or diminish Parent's obligations pursuant to the foregoing sentence or relieve Parent of any liability or damages that may result from its breach of its obligations under such sentence. In connection with the foregoing, the Company will cooperate with and assist Parent, and, with respect to matters that are within its power or control will use its reasonable best efforts to promptly (x) take, or cause to be taken, all actions and to do, or cause to be done, all commercially reasonable things necessary, proper or advisable under applicable Antitrust Laws to consummate the Transactions as soon as practicable, including, without limitation, preparing and filing as promptly as practicable all documentation to effect all necessary filings, notices, petitions, statements, registrations, submissions of information, applications and other documents and (y) obtain and maintain all approvals, consents, registrations, permits, authorizations and other confirmations required to be obtained from any third party that are necessary, proper or advisable to consummate the Merger and the other Transactions. Subject to applicable laws relating to the exchange of information, Parent and the Company shall have the right to review in advance, and to the extent practicable each will consult with the other on, all the information relating to their respective subsidiaries that appears in any filing made with, or written materials submitted to, any third party and/or any governmental entity in connection with the Merger and the other Transactions. 18 Other Cooperation and Further Assurances. Parent, Purchaser and the Company have also agreed that if required by applicable law, as soon as practicable following consummation of the Offer, Parent and the Company shall together, or pursuant to any reasonable allocation of responsibility between them, cooperate with one another in taking all commercially reasonable efforts in order to lift any injunctions or remove any other impediment to the consummation of the Transactions. 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 of the parties to the Merger Agreement shall take all such necessary action. 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 matters, labor matters, intellectual property, environmental matters, taxes, amendments to the Rights Agreement, material contracts and brokers. Conditions to the Merger. Under the Merger Agreement, the respective obligations of each party to effect the Merger are subject to the fulfillment or waiver at or prior to the Effective Time of the following conditions: (a) the Offer Completion Date shall have occurred, which is the date on which Purchaser completes the purchase of Shares pursuant to the Offer; (b) if required by applicable law, the Merger Agreement shall have been adopted at or prior to the Effective Time by the requisite vote of the stockholders of the Company in accordance with Delaware Law; and (c) no order, statute, rule, regulation, executive order, stay, decree, judgment or injunction shall have been enacted, entered, promulgated or enforced by any court or other governmental entity which prohibits or prevents the consummation of the Merger which has not been vacated, dismissed or withdrawn prior to the Effective Time. The Company and Parent shall use reasonable best efforts to have any of the foregoing vacated, dismissed or withdrawn by the Effective Time. Termination. The Merger Agreement provides that it may be terminated at any time prior to the Effective Time, notwithstanding approval thereof by the stockholders of the Company: (a) by mutual written consent duly authorized by the Boards of Directors of Parent and the Company; or (b) by either Parent or the Company if the initial consummation of the Offer shall not have occurred on or prior to September 30, 2000, provided, however, that either party may, by written notice to the other party delivered on or prior to September 30, 2000, extend such date until November 30, 2000, if the failure to consummate the Offer on or prior to September 30, 2000 shall have resulted from the failure of the conditions set forth in clause (a) of Section 14 and/or clause (b) of Section 14 to be satisfied, and provided further that the right to terminate the Merger Agreement pursuant to this clause (b) shall not be available to any party whose failure to fulfill any obligation under the Merger Agreement pursuant to this clause (b) has been the cause of, or resulted in, the failure of the Offer to be consummated on or prior to such date; or (c) by either Parent or the Company if, as the result of the failure of the Minimum Condition or any of the other conditions set forth in Section 14, the Offer shall have terminated or expired in accordance with its terms without Purchaser having purchased any Shares pursuant to the Offer; or (d) by either Parent or the Company if a court of competent jurisdiction or governmental, regulatory or administrative agency or commission shall have issued a nonappealable final order, decree or ruling or taken any other nonappealable final action having the effect of permanently restraining, enjoining or otherwise prohibiting the Offer or the Merger; provided that the party seeking to terminate the Merger Agreement shall have used its reasonable best efforts to remove or lift such order decree or ruling; or (e) by Parent, if, whether or not permitted to do so by the Merger Agreement, the Board or the Company shall, prior to the Offer Completion Date, (x) (i) withdraw, modify or change its approval or recommendation of the Offer, the Merger Agreement or the Merger in a manner adverse to Parent; (ii) approve or recommend to the stockholders of the Company an Acquisition Proposal or Alternative Transaction; or (iii) approve or recommend that the stockholders of the Company tender their shares in any tender or exchange offer that is an Alternative Transaction or (y) take any public position or make any disclosures to the Company's stockholders, whether or not permitterd by the non-solicitation covenant, which has the effect of any of the foregoing; or (f) by Parent or the Company, upon a material breach of any representation, warranty, covenant or agreement on the part of the Company or Parent, respectively, set forth in the Merger Agreement; provided that, except for any breach of the Company's obligations under the non-solicitation covenant, if such breach is curable prior to the initial expiration date of the Offer (or any extension thereof) by the Company or Parent, as the case may be, through the exercise of its reasonable best efforts and for so long as the Company or Parent, as the case may be, continues to exercise such reasonable best efforts, neither Parent nor the Company, respectively, may terminate the Merger Agreement under this clause (f) until such date; or (g) by the Company, in order to accept a Superior Proposal; provided that (A) the Offer shall not theretofore have been 19 consummated (or, if the Offer is consummated and extended, initially consummated); (B) the Board determines (based on the advice of counsel) that the failure to take such actions would be inconsistent with its fiduciary duties to the Company's stockholders under applicable law; (C) the Company has given Parent two full business days' advance notice of the Company's intention to accept such Superior Proposal; (D) the Company shall have the paid the Fees and the Expenses described below under the section entitled "Fees and Expenses"; and (E) the Company shall have complied in all respects with the non-solicitation covenant. Notwithstanding the foregoing, the right to terminate the Merger Agreement pursuant to clauses (e) and (f) above shall not be available to Parent if Purchaser or any other affiliate of Parent shall have acquired the Shares pursuant to the Offer. Effect of Termination. In the event of the termination of the Merger Agreement, written notice thereof shall forthwith be given to the other party or parties specifying the provision thereof pursuant to which such termination is made, and the Merger Agreement shall forthwith become void and there shall be no liability on the part of any party thereto or any of its affiliates, directors, officers or stockholders except for any obligation of the Company or Parent set forth below under the section entitled "Fees and Expenses". Notwithstanding the foregoing, nothing in the Merger Agreement shall relieve the Company or Parent from liability for any wilful breach thereof. Fees and Expenses. The Merger Agreement provides that all fees and expenses incurred in connection with the Merger Agreement and the Transactions shall be paid by the party incurring such expenses, whether or not the Merger is consummated. The Company shall pay Parent a fee of $30,000,000 (the "Fee") and shall also pay Parent up to $1,000,000 to reimburse Parent for its itemized out-of-pocket expenses in connection with the Transactions (the "Expense Reimbursement") upon the first to occur of any of the following events: (1) the termination of the Merger Agreement by Parent pursuant to the provisions described above in clause (e) or (f); or (2) the termination of the Merger Agreement by the Company pursuant to the provisions described above in clause (g). Parent shall reimburse the Company for the fee of $25,000,000 paid to Ocular Sciences, Inc. in connection with the termination of the Ocular Merger Agreement (the "Parent Expense Reimbursement") upon the termination of the Merger Agreement (i) by either Parent or the Company pursuant to the provisions described above in clause (b), (c) or (d), if the failure to consummate the Offer is the result of the failure of the conditions set forth in any of clause (a) or (b) of Section 14 herein to be satisfied, or (ii) by the Company pursuant to the provision described above in clause (f); provided, however, that if within twelve months of termination of the Merger Agreement pursuant to clause (i) of this sentence, an Alternative Transaction is consummated, the Company shall pay to Parent, not later than two days after the date such Alternative Transaction is consummated, an amount equal to $25,000,000, previously reimbursed to the Company by Parent pursuant to the provisions of the Merger Agreement. The Fee and the Expense Reimbursement and the Parent Expense Reimbursement shall be paid by wire transfer of same day funds to an account designated by Parent or the Company, as applicable, within two business days after a demand for payment following (i) in the case of the Fee and the Expense Reimbursement, the first to occur of any of the events described above in the second sentence of this paragraph; provided that, in the event of a termination of the Merger Agreement pursuant to the provision described above in clause (g), the Fee and the Expense Reimbursement shall be paid as therein provided as a condition to the effectiveness of such termination and (ii) in the case of the Parent Expense Reimbursement, the first to occur of any of the events described above in the third sentence of this paragraph. The agreements regarding the Fee and Expense Reimbursement are an integral part of the Transaction and do not constitute a penalty. THE CONFIDENTIALITY AGREEMENT THE FOLLOWING IS A SUMMARY OF CERTAIN PROVISIONS OF THE CONFIDENTIALITY AGREEMENT, DATED MAY 10, 2000, BETWEEN THE COMPANY AND CIBA VISION (THE "CONFIDENTIALITY AGREEMENT"). 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. THE CONFIDENTIALITY AGREEMENT MAY BE EXAMINED AND COPIES MAY BE OBTAINED AT THE PLACES SET FORTH IN SECTION 7. On May 10, 2000, the Company and CIBA Vision executed the Confidentiality Agreement. Pursuant to the terms of the Confidentiality Agreement, each party agreed to provide to the other party certain non-public information concerning such party (the "Confidential Information"). 20 As a condition for the disclosure of the Confidential Information to each other, the Company and CIBA Vision each agreed, among other things: (1) to treat confidentially the Confidential Information, (2) to use the Confidential Information only for the purposes of evaluation of a possible business transaction with each other, (3) to disclose Confidential Information to its directors, officers, employees, affiliates, prospective capital or financing sources, advisors or other representatives (collectively, a party's "Representatives") on a need-to-know basis only; provided that the Representatives have agreed to be bound by that party's obligations under the Confidentiality Agreement, (4) not to disclose to any third party other than a party's Representatives, without the prior written consent of the other party, any of the Confidential Information, the fact that discussions or negotiations are taking place concerning a possible transaction, or any terms, conditions or the status thereof, unless in the unqualified opinion of that party's counsel, disclosure is required to be made under the Securities Act or the Exchange Act, or other applicable law, (5) to immediately notify the other party of the receipt of any demand or request by subpoena, civil investigative demand, interrogatories, requests for information or other similar process to disclose any portion of the Confidential Information and the terms of such demand or request, and, if disclosure of the Confidential Information is required, to exercise its best efforts to obtain an order or other reliable assurance that confidential treatment will be accorded to the Confidential Information, and (6) to promptly destroy or return to the other party, upon request, all Confidential Information, without retaining any copy thereof. The Confidentiality Agreement shall remain in effect for five years commencing on May 10, 2000. 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 purpose of the Merger is for Parent to acquire all Shares not purchased pursuant to the Offer. Upon consummation of the Merger, the Company will become an indirect 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 the 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. In the Merger Agreement, the Company has agreed to duly call, give notice of, convene and hold a 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 following the purchase by Purchaser of a number of Shares that satisfies the Minimum Condition, 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 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 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 21 pursuant to the Offer 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 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 Bear Stearns) 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 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 22 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. 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 liquidation, relocation of any operations of the Company or any of its subsidiaries, (ii) any purchase, sale or transfer of a material amount of assets, involving 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 securities of the Company being delisted from a national stock 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 Exchange 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. 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 or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of any shares of any class of capital stock, 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 of its subsidiaries or affiliates (except for the issuance of Shares issuable pursuant to options granted under the Company's 1995 Stock Purchase and Option Plan, 1996 Stock Option Plan, Stock Incentive Plan and Non-Employee Director Stock Option Plan outstanding on the date hereof); provided that the occurrence of a separation of the rights under the Rights Agreement and the related issuance of Common Stock to the Company's stockholders thereunder shall not be deemed a breach of the Merger Agreement to the extent that (A) the occurrence of such separation occurred as a result of an unsolicited acquisition of Common Stock by a third party, and (B) such acquisition did not occur as a result of the Company breaching the "No Solicitation" covenant under the Merger Agreement; (b) sell, pledge, dispose of or encumber any assets of the Company or any of its subsidiaries, except for (i) sales of inventory in the ordinary course of business consistent with past practices and (ii) dispositions of obsolete or worthless assets; or (c) (i) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or any combination thereof, with respect to any of its capital stock, except for dividends by any wholly owned subsidiary to the Company, (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (iii) except as required by the terms of any security as in effect on the date of the Merger Agreement or expressly permitted under the Merger Agreement, amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any subsidiary of the Company to amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, any of its securities or any securities of its subsidiaries, including, without limitation, Common Stock, or any option, warrant or right, directly or indirectly, to acquire any such securities, or propose to do any of the foregoing. See Section 10. If, however, the Company should, during the pendency of the Offer, (i) split, combine or otherwise change the Common Stock or its capitalization, (ii) acquire or otherwise cause a reduction in the number of outstanding Common Stock or (iii) issue or sell any additional Common Stock, shares of any other class or series of capital stock, other voting securities or any securities convertible into, or options, rights, or warrants, conditional or otherwise, to acquire, any of the foregoing, then, without prejudice to Purchaser's rights under Section 14, Purchaser may (subject to the provisions of the Merger Agreement) make such adjustments to the purchase price and other terms of the Offer (including the number and type of securities to be purchased) as it deems appropriate to reflect such split, combination or other change. 23 If, on or after May 30, 2000, the Company should declare, set aside, make or pay any dividend on the Common Stock or make any other distribution (including the issuance of additional shares of capital stock pursuant to a stock dividend or stock split, the issuance of other securities or the issuance of rights for the purchase of any securities) with respect to the Common Stock that is payable or distributable to stockholders of record on a date prior to the transfer to the name of Purchaser or its nominee or transferee on the Company's stock transfer records of the Common Stock purchased pursuant to the Offer, then, without prejudice to Purchaser's rights under Section 14, (i) the purchase price per Common Share payable by Purchaser pursuant to the Offer will be reduced (subject to the provisions of the Merger Agreement) to the extent that any such dividend or distribution is payable in cash and (ii) any non-cash dividend, distribution or right shall be received and held by the tendering stockholder for the account of Purchaser and will be required to be promptly remitted and transferred by each tendering stockholder to the Depositary for the account of Purchaser, accompanied by appropriate documentation of transfer. Pending such remittance and subject to applicable law, Purchaser will be entitled to all of the rights and privileges as owner of any such non-cash dividend, distribution or right and may withhold the entire purchase price or deduct from the purchase price the amount or value thereof, as determined by Purchaser in its sole discretion. 13. POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR SHARES, 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 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 that 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 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 (the "Securities Act"). 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 24 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 or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) promulgated under the Exchange Act (relating to the obligation of Purchaser to pay for or return tendered Shares promptly after termination or withdrawal of the Offer), pay for, and (subject to any such rules or regulations) may delay the acceptance for payment of or the payment for any tendered Shares and (except as provided in the Merger Agreement) amend or terminate the Offer if (i) the Minimum Condition has not been satisfied or (ii) at any time on or after the date of the Merger Agreement and before the Expiration Date, any of the following conditions exists: (a) there shall be in effect an injunction or other order, decree, judgment or ruling by a governmental entity of competent jurisdiction or a law, rule or regulation shall have been promulgated, or enacted by a governmental entity of competent jurisdiction which in any such case (i) restrains or prohibits the making or consummation of the Offer or the consummation of the Merger, or (ii) prohibits or restricts the ownership by Parent (or any of its affiliates or subsidiaries) of any material portion of the Company's business or assets or which would substantially deprive Parent and/or its affiliates or subsidiaries of the benefit of ownership of the Company's business or assets, or (iii) imposes material limitations on the ability of Purchaser or Parent effectively to acquire the Shares; or (b) any applicable waiting period under all necessary registration and filings, including, but not limited to, filings and submissions of information, under the HSR Act and applicable foreign laws that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization, restraint of trade or limitation of competition, shall not have expired or been terminated; or (c) the Merger Agreement shall have been terminated by the Company or Parent in accordance with its terms; or (d) Parent and the Company shall have agreed in writing that Purchaser shall amend the Offer to terminate the Offer or postpone the payment for Shares pursuant thereto; or (e) the representations and warranties of the Company set forth in the Merger Agreement shall not have been true and accurate as of the date made (except for those representations and warranties that address matters only as of a particular date or only with respect to a specific period of time which need only be true and accurate as of such date or with respect to such period) (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 failures to be true and correct as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company, or the Company shall have breached or failed to perform or comply in any material respect with any material obligation, agreement or covenant required by the Merger Agreement to be performed or complied with by it; provided, however, that such breach or failure to perform is incapable of being cured or has not been cured prior to the initial expiration date of the Offer (or such later date upon which the Offer shall expire); or (f) the Board shall have modified or amended its recommendation of the Offer in any manner adverse to Parent, or shall have withdrawn its recommendation of the Offer, or shall have recommended acceptance of any Acquisition Proposal, or shall have resolved to do any of the foregoing; which, in the reasonable judgment of Parent or Purchaser, in any such case, and regardless of the circumstances giving rise to such condition, makes it inadvisable to proceed with the Offer and/or with such acceptance for payment or payments. The foregoing conditions are for the sole benefit of Parent and Purchaser and may be asserted by Parent and Purchaser regardless of the circumstances giving rise to any such condition, and, except for the Minimum Condition and otherwise subject to the terms of the Merger Agreement, may be waived by Parent and Purchaser, in whole or in part, any time and from time to time, in the sole discretion of Parent and Purchaser. 25 The determination as to whether any condition has been satisfied shall be deemed a continuing right which may be asserted by Parent and Purchaser at any time and from time to time. Notwithstanding the fact that Parent and Purchaser reserve the right to assert the failure of a condition following acceptance for payment but prior to payment in order to delay payment or cancel their obligation to pay for properly tendered Shares, Parent and Purchaser will either promptly pay for such Shares or promptly return such Shares. Should the Offer be terminated pursuant to the foregoing provisions, all tendered Shares not theretofore accepted for payment pursuant thereto shall forthwith be returned to the tendering stockholders. 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 (i) of 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 (ii) except as set forth below, of any approval or other action by any domestic (federal or state) or foreign governmental entity which would be required prior to the acquisition of Shares by Purchaser pursuant to the Offer. 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 May 29, 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 advisable and 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 26 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 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 to the FTC and certain waiting period requirements have been satisfied. The acquisition of Shares by Purchaser pursuant to the Offer is subject to such requirements. See Section 2. Pursuant to the HSR Act, Parent expects to file a Premerger Notification and Report Form in connection with the purchase of Shares pursuant to the Offer with the Antitrust Division and the FTC on or about June 9, 2000. Under the provisions of the HSR Act applicable to the Offer, the purchase of Shares pursuant to the Offer may not be consummated until the expiration of a 15- calendar day waiting period following the filing by Parent, unless such waiting period is earlier terminated by the FTC and the Antitrust Division. Such waiting period may be 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. 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, the waiting period with respect to the Offer 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 ten 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 Sections 1 and 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. At any time before or after the purchase of Shares pursuant to the Offer 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 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 the Offer will not violate the antitrust laws. Nevertheless, there can be no assurance that a challenge to the Offer 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. 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. 27 Lehman Brothers is acting as Dealer Manager in connection with the Offer and has provided certain financial advisory services to Parent in connection with the acquisition of the Company. Parent has agreed to pay Lehman Brothers reasonable and customary compensation for such services. Parent has also agreed to reimburse Lehman Brothers for all reasonable out-of-pocket expenses incurred by Lehman Brothers, including the reasonable fees and expenses of legal counsel, and to indemnify Lehman Brothers against certain liabilities and expenses in connection with its engagement, including certain liabilities under the federal securities laws. Purchaser and Parent have retained Innisfree M&A Incorporated, as the Information Agent, and ChaseMellon Shareholder Services, L.L.C., 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. As compensation for acting as Information Agent in connection with the Offer, Innisfree will be paid a fee of $15,000 and will also be reimbursed for certain 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 the Dealer Manager or 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). WJ Acquisition Corp. Dated: June 6, 2000 28 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 Novartis AG, Schwarzwaldallee 215, CH-4058 Basel, Switzerland.
CURRENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL POSITIONS NAME AND HELD DURING THE PAST FIVE YEARS CURRENT BUSINESS ADDRESS AND BUSINESS ADDRESSES THEREOF CITIZENSHIP ------------------------ ---------------------------------------------------- ----------- Dr. Daniel Vasella.......... Chairman of the Board of Directors, Chief Executive Switzerland Officer of Parent and Head of the Executive Committee. Dr. Vasella assumed the position of Chairman in April 1999, having served as President, Chief Executive Officer and Head of the Executive Committee since December 1996. From April 1995 until December 1996, Dr. Vasella was a member of the Sandoz Group Executive Committee and served as Chief Executive Officer of Sandoz Pharma Ltd. Prior to his appointment as Chief Executive Officer of Sandoz Pharma Ltd., Dr. Vasella was Chief Operating Officer of Sandoz Pharma Ltd. Dr. Vasella currently is a member of the Board of Directors of Credit Suisse Group, the Supervisory Board of Siemens AG in Munich, Germany and the International Board of Governors of the Press Center of Peace in Tel Aviv, Israel. In addition, Dr. Vasella is a member of several industry associations, including the International Business Leaders Advisory Council for the Mayor of Shanghai, a member of the Board of INSEAD (Institute Europeen d'Administration des Affaires, i.e., the European Institute for Business Administration), IMD (International Institute of Management Development) and a member of the Global Leaders for Tomorrow Group of the World Economic Forum in Davos, Switzerland. The business address of Sandoz Pharma Ltd. was Lichtstrasse 35, CH-4002 Basel, Switzerland. Hans-Jorg Rudloff........... Vice Chairman of the Board of Directors of Parent Switzerland since December 1996. From 1995 to December 1996, Mr. Rudloff was Vice Chairman of the Board of Directors of Sandoz AG. He was elected a Director of Sandoz AG in 1994. Mr. Rudloff has been the Head of Investment Banking of the Barclays Group since 1998. From 1995 to 1998, he served as Chairman of Marcuard Cook & Cie S.A. and Chairman of MC-BBL Securities Ltd. Mr. Rudloff also is a member of the boards of various companies, including Pargesa S.A. in Geneva, Switzerland and TBG (Thyssen-Bornemisza Group). He also serves on the Advisory Board of the Landeskreditbank in Baden-Wurttemberg. The business address of Sandoz AG was Lichtstrasse 35, CH-4002 Basel, Switzerland. The business address of Barclays Group is 54 Lombard Street, London EC3P 3AH, United Kingdom. The business address of Marcuard Cook & Cie S.A. is P.O. Box, CH-1211 Geneva, Switzerland. The business address of MC-BBL Securities Ltd. is London, United Kingdom.
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CURRENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL POSITIONS NAME AND HELD DURING THE PAST FIVE YEARS CURRENT BUSINESS ADDRESS AND BUSINESS ADDRESSES THEREOF CITIZENSHIP ------------------------ ---------------------------------------------------- ----------- Prof. Dr. Helmut Sihler..... Vice Chairman of the Board of Parent and a member of Austria the Chairman's Committee since December 1996. From 1983 until December 1996, Prof. Sihler was a member of the Board of Directors and the Chairman's Committee of CIBA-Geigy AG, and Vice Chairman of the Board since 1993. Prof. Sihler also is Chairman of the Supervisory Boards of Deutsche Telekom AG, Bonn, Germany and Dr. Ing. H.c. F. Porsche AG in Stuttgart, Germany. Prof. Sihler serves as honorary professor for economics in Munster, Germany. The business address of CIBA-Geigy AG was Klybeckstrasse 141, CH-4002 Basel, Switzerland. Heini Lippuner.............. Director of Parent and a member of the Chairman's Switzerland Committee. Mr. Lippuner has served as Director of Parent since December 1996 and as a member of the Chairman's Committee since April 1999. From 1986 to December 1996, Mr. Lippuner was a member of the Executive Committee as well as Chief Operating Officer of the CIBA-Geigy Group. Mr. Lippuner is a member of the Boards of Directors of Credit Suisse Group, Buhler AG in Uzwil, Switzerland and Winterthur Insurance Ltd. in Winterthur, Switzerland. The business address of CIBA-Geigy AG was Klybeckstrasse 141, CH-4002 Basel, Switzerland. Birgit Breuel............... Director of Parent. Mrs. Breuel has served as a Germany Director since December 1996 and prior to that, she was a Director of CIBA-Geigy AG since 1994. Since 1995, Mrs. Breuel has been acting as the General Commissioner and since 1997, she has been a member of the Executive Board of Expo 2000 Hannover GmbH, the company organizing the World Exposition EXPO 2000 in Hannover, Germany. Mrs. Breuel also serves as a member of the Board of Gruner+Jahr AG in Hamburg, Germany and as a member of the Advisory Board of J.P. Morgan GmbH in Frankfurt, Germany. The business address of CIBA-Geigy AG was Klybeckstrasse 141, CH-4002 Basel, Switzerland. The business address of Expo 2000 Hannover GmbH is 30510 Hannover, Germany. Prof. Dr. Peter Burckhardt.. Director of Parent since December 1996. Prof. Switzerland Burckhardt has been Professor of Internal Medicine and Chairman of the Department of Internal Medicine at the University of Lausanne since 1982. Prof. Burckhardt also serves as the Head of Medical Service at the University Hospital of Lausanne since 1992. Prof. Burckhardt also serves as Chairman of the Board of National Osteoporosis Societies, trustee of the International Foundation of Osteoporosis and member of the Committee of Appeal of the Swiss Inter-Cantonal Office for the Control of Drugs. Until 1995, Prof. Burckhardt was President of the Swiss Society of Internal Medicine and the Swiss Osteoporosis Association. The address of the Medical Faculty at the University of Lausanne is CHUV, CH-1011 Lausanne, Switzerland.
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CURRENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL POSITIONS NAME AND HELD DURING THE PAST FIVE YEARS CURRENT BUSINESS ADDRESS AND BUSINESS ADDRESSES THEREOF CITIZENSHIP ------------------------ ---------------------------------------------------- ------------- Dr. Hans-Ulrich Doerig...... Director of Parent since December 1996. Since 1998, Switzerland Dr. Doerig has served as Vice Chairman of the Executive Board and Chief Risk Officer of Credit Suisse Group. With the merger of the former Credit Suisse International and the former CS First Boston in 1997, he became Chief Executive Officer of Credit Suisse First Boston in Zurich. In 1996, he was appointed President of the General Management of Credit Suisse in Zurich, in view of the Credit Suisse Group restructuring. From 1993 to 1996, Dr. Doerig served as full-time Vice Chairman of the Board of Credit Suisse, heading the Credit and Finance Committee as well as the Audit Committee of the Board. Dr. Doerig is also Vice Chairman of the Board of the University of Zurich. The business address of Credit Suisse Group is Paradeplatz 8, P.O. Box, CH-8070 Zurich, Switzerland. Walter G. Frehner........... Director of Parent. Mr. Frehner has served as a Switzerland Director since December 1996, and prior to that, as Director of CIBA-Geigy AG since 1994. From 1993 until his retirement in May 1996, Mr. Frehner served as Chairman of the Board of Directors of Swiss Bank Corporation, which merged with Union Bank of Switzerland in June 1998. Mr. Frehner is also a Director of Schindler Holding AG and Vice Chairman of the insurance company Baloise Holding AG, in Basel, Switzerland. The business address of Swiss Bank Corporation was Aeschenvorstadt 1, P.O. Box, CH-4002 Basel, Switzerland. William W. George........... Director of Parent since May 1999. Mr. George has United States been Chairman (since 1996) and Chief Executive Officer (since 1991) of Medtronic, Inc. in Minneapolis, Minnesota, where he also served as President and Chief Operating Officer from 1989 to 1991. Mr. George is also a member of the Boards of Directors of Dayton Hudson, Imitation, and Allina Health Systems. The business address of Medtronic, Inc. is 7000 Central Avenue, Minneapolis, Minnesota 55303. Alexandre F. Jetzer......... Director of Parent since December 1996. From Switzerland December 1996 until July 1999, Mr. Jetzer was a member of the Executive Committee and Head of International Coordination, Legal & Taxes of Parent. From May 1995 to December 1996, Mr. Jetzer was Vice Chairman and Chief Executive Officer of Sandoz Corporation in New York, New York and Chief Executive Officer of Sandoz Pharmaceuticals Corporation in East Hanover, New Jersey. From 1981 to 1995, he was a member of the Sandoz Group Executive Committee. The business address of Sandoz Corporation was 608 Fifth Avenue, New York, New York 10020. The business address of Sandoz Pharmaceuticals Corporation was 59 State Route 10, East Hanover, New Jersey 07936-1005.
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CURRENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL POSITIONS NAME AND HELD DURING THE PAST FIVE YEARS CURRENT BUSINESS ADDRESS AND BUSINESS ADDRESSES THEREOF CITIZENSHIP ------------------------ ---------------------------------------------------- ----------- Pierre Landolt.............. Director of Parent. Mr. Landolt has held this Switzerland position since December 1996, and prior to that, was a Director of Sandoz AG since 1986. He has been the President of the Sandoz family foundation since 1994. Mr. Landolt is a member of various boards, including Emasan AG, Basel, Switzerland; Curacao International Trust Company, Curacao; and Parmigiani Mesure et Art du Temps, Fleurier, Switzerland. The business address of the Sandoz family foundation is Sandoz Family Offices, 85 Avenue General Guisan, CH-1009 Pully, Switzerland. Prof. Dr. Rolf M. Director of Parent since May 1999. Prof. Zinkernagel Switzerland Zinkernagel................ has been Professor and Director of the Institute of Experimental Immunology at the University of Zurich since 1992. Prof. Zinkernagel won the Nobel Prize for Medicine (Immunology) in 1996. He is a member of the Swiss Society of Allergy and Immunology (President, 1993 to 1994), the American Associations of Immunologists and of Pathologists, the ENI European Network of Immunological Institutions, the International Society for Antiviral Research, the Scientific Advisory Board of Cytos in Zurich, CTL Toronto/Delaware and Lombard & Odier Bank in Zurich. The address of the Institute of Experimental Immunology at the University of Zurich is Universitatsspital/Dept. Path., Institut fur Exp. Immunologie, Schmelzbergstr. 12, CH-8091 Zurich, Switzerland. Dr. Raymund Breu............ Chief Financial Officer and a member of the Switzerland Executive Committee since December 1996. Dr. Breu was Head of Group Finance and a member of the Sandoz Group Executive Committee from 1993 until December 1996. The business address of Sandoz AG was Lichtstrasse 35, CH-4002 Basel, Switzerland. Dr. Hans Kindler............ Head of Novartis Switzerland and of Group Technology Switzerland Novartis AG and a member of the Executive Committee since Lichtstrasse 35 December 1996. From 1990 until 1996, Dr. Kindler CH-4058, Basel served as a member of the Executive Committee of the Switzerland former CIBA-Geigy AG, where he was responsible for personnel, production and technology, as well as for safety and environmental protection. The business address of CIBA-Geigy AG was Klybeckstrasse 141, CH-4002 Basel, Switzerland.
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CURRENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL POSITIONS NAME AND HELD DURING THE PAST FIVE YEARS CURRENT BUSINESS ADDRESS AND BUSINESS ADDRESSES THEREOF CITIZENSHIP ------------------------ ---------------------------------------------------- ------------- Dr. A. N. "Jerry" Head of Novartis' Healthcare Division and Chief United States Karabelas.................. Executive Officer of its pharmaceutical operations, as well as a member of the Executive Committee since January 1998. Until January 1997, Dr. Karabelas held various positions of increasing responsibility with SmithKline Beecham Pharmaceuticals: in 1997, he was Executive Vice President; from 1995 until January 1997, he was a member of the Executive Management Team; and from 1994 to 1996, he was Head of Diversified Pharmaceutical Services and President of U.S. Pharmaceuticals. In addition to his responsibilities at Parent, Dr. Karabelas serves on the Boards of Directors of the Philadelphia College of Pharmacy and Science and the Fox Chase Cancer Center. He is also a member of the Scientific Advisory Committee of the Massachusetts General Hospital. The business address of SmithKline Beecham Pharmaceuticals is P.O. Box 7929, 1 Franklin Plaza, Philadelphia, Pennsylvania 19101. Thomas Ebeling.............. Chief Operating Officer of Novartis Pharmaceuticals Germany Novartis AG (since December 1999) and member of the Executive Lichtstrasse 35 Committee (since September 1998). From September CH-4002, Basel 1998 to December 1999, Mr. Ebeling was Chief Switzerland Executive Officer of Novartis' Consumer Health Division. Prior to that, he was Chief Executive Officer of Novartis' global nutrition operations, a position he assumed in December 1997. Mr. Ebeling joined Parent in May 1997 as General Manager of Novartis Nutrition for Germany and Austria. Before joining Parent, Mr. Ebeling worked for Pepsi-Cola Germany for six years, during which time he served in various capacities: from 1996 to 1997, he was General Manager of Pepsi-Cola in Germany; and from 1994 to 1996, he served as National Sales and Franchise Director. The business address of Pepsi-Cola GmbH in Germany is Martin Behaimstrasse 12, 63263 Neu Isenburg, Germany. Al Piergallini.............. Chief Executive Officer of Novartis' Consumer Health United States Novartis Consumer Health Division and member of the Executive Committee since Inc. December 1999. Prior to that, Mr. Piergallini was 560 Morris Ave. President and Chief Executive Officer of Novartis Summit, New Jersey Consumer Health North America starting in January 1999. Before that, he was Chairman, President and Chief Executive Officer of Gerber Products Company. He joined Gerber in 1989 as President and Chief Operating Officer. The business address of Gerber Products Company is 445 State Street, Freemont, Michigan.
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CURRENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL POSITIONS NAME AND HELD DURING THE PAST FIVE YEARS CURRENT BUSINESS ADDRESS AND BUSINESS ADDRESSES THEREOF CITIZENSHIP ------------------------ ---------------------------------------------------- -------------- Heinz Imhof................. Head of Novartis' Agribusiness Division and a member Switzerland of the Executive Committee since June 1999. Since December 1996, Mr. Imhof has been Head of Parent Seeds. From 1995 until December 1996, he served as a member of the Sandoz Group Executive Committee. From 1993 to 1995, he was Chairman and Chief Executive Officer of Sandoz Corporation, New York, New York. Additionally, he was Chairman and Chief Executive Officer of Sandoz Pharmaceuticals Corporation in East Hanover, New Jersey. The business address of Sandoz AG was Lichtstrasse 35, CH-4002 Basel, Switzerland. Dr. Urs Barlocher........... Head of International Coordination, Legal and Taxes Switzerland and Corporate Security, as well as a member of the Executive Committee, since June 1999. From December 1996 until May 1999, Dr. Barlocher was Head of Corporate Legal, Taxes and Insurance. From May 1995 until December 1996, Dr. Barlocher served as Chairman of the Board of Sandoz Deutschland GmbH (Germany) and Biochemie GmbH (Austria). Prior to that, he was Chief Executive Officer of Sandoz Pharma Ltd. for three years. The business address of Sandoz Deutschland GmbH was Wiesentalstrasse 27, 79540 Loerrach, Germany. The business address of Biochemie GmbH is Biochemiestrasse 10, A-6250 Kundl, Austria. The business address of Sandoz Pharma Ltd. was Lichtstrasse 35, CH-4002 Basel, Switzerland. Norman C. Walker............ Head of Human Resources since May 1998 and a member United Kingdom of the Executive Committee since June 1999. Before joining Parent, Mr. Walker worked for Kraft Jacobs Suchard in Zurich for seven years, serving as Head of Human Resources. The business address of Kraft Jacobs Suchard is Klausstrasse 6, Zurich, Switzerland. Dr. John Atkin.............. Chief Executive Officer of Novartis Crop Protection United Kingdom since June 1999. From January to May 1999, Dr. Atkin served as Chief Operating Officer of Novartis Crop Protection. From February 1997 to July 1998, Dr. Atkin was Head of Insecticides and Patron for Asia (area responsibility), and thereafter until December 1998, he was Head of Product Portfolio Management of Novartis Crop Protection. Dr. Atkin was General Manager of Sandoz Agro France from May 1995 to January 1997 and before that, since July 1993, Head of Sandoz Agro Northern Europe. Earlier appointments were in crop protection with FMC Europe in Brussels (marketing and sales manager), Rhone-Poulenc (product development) and the British Ministry for Agriculture. The business address of Sandoz AG and Sandoz Agro Northern Europe was Lichtstrasse 35, CH-4002 Basel, Switzerland. The business address of Sandoz Agro France was St.-Germain-En-Laye, France.
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CURRENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL POSITIONS NAME AND HELD DURING THE PAST FIVE YEARS CURRENT BUSINESS ADDRESS AND BUSINESS ADDRESSES THEREOF CITIZENSHIP ------------------------ ---------------------------------------------------- -------------- Dr. Glen Bradley............ Chief Executive Officer of CIBA Vision since 1990. United States CIBA Vision Corporation Dr. Bradley is a director of Summit Technology, 11460 Johns Creek Pkwy. E-Doctor Network, CIBA Vision AG, CIBA Vision Duluth, Georgia Corporation, CIBA Vision Puerto Rico, Inc., CIBA Vision Surgical Products, Inc. and Biocure, Inc. Hans-Beat Gurtler........... Head of Novartis Animal Health since December 1996. Switzerland From 1990 to 1996, Mr. Gurtler was the Head of the Animal Health Sector of the former CIBA-Geigy Group. The business address of the CIBA-Geigy AG was Klybeckstrasse 141, CH-4002 Basel, Switzerland. Dr. Oswald Sellemond........ Chief Executive Officer of Novartis Generics since Austria Biochemie GmbH December 1996. Since 1990, Dr. Sellemond has been Biochemiestrasse 10 Chief Executive Officer of Biochemie GmbH in Kundl, A-6250 Kundl Austria, formerly a division of the Sandoz Group, Austria and in 1999, he became Chairman of Biochemie GmbH. 2. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER. 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 Purchaser. Unless otherwise indicated, the current business address of each person is Novartis Corporation, 608 Fifth Avenue, New York, New York 10020. CURRENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL POSITIONS NAME AND HELD DURING THE PAST FIVE YEARS CURRENT BUSINESS ADDRESS AND BUSINESS ADDRESSES THEREOF CITIZENSHIP ------------------------ ---------------------------------------------------- -------------- Robert L. Thompson, Jr...... Director of Purchaser and Chief Executive Officer United States and President of Purchaser. Executive Vice President and General Counsel of Novartis Corporation since January 1997. From January 1990 to December 1996, Mr. Thompson served as Vice President, General Counsel and Secretary of Sandoz Corporation. The business address of Sandoz Corporation was 608 Fifth Avenue, New York, New York. Terence A. Barnett.......... Chief Financial Officer of Purchaser. President and United Kingdom Chief Executive Officer of Novartis Corporation since June 1999. From September 1996 to June 1999, Mr. Barnett served as President and Chief Executive Officer of Novartis China in Beijing, China. Mr. Barnett is a Director of Novartis Corporation and several of its subsidiaries. The business address of Novartis China is No. 1 Jian Guo Men Wai Avenue, Beijing 100004, P.R. China.
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CURRENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL POSITIONS NAME AND HELD DURING THE PAST FIVE YEARS CURRENT BUSINESS ADDRESS AND BUSINESS ADDRESSES THEREOF CITIZENSHIP ------------------------ ---------------------------------------------------- ------------- Mr. Tim Barabe.............. Chief Operating Officer of Purchaser. Chief United States CIBA Vision Corporation Financial Officer of CIBA Vision Corporation since 11460 Johns Creek Pkwy. 1993. Mr. Barabe is a director of CIBA Vision Puerto Duluth, Georgia Rico, Inc., CIBA Vision Surgical Products, Inc., Biocure, Inc. and Fernbank Natural History Museum. Jeff Benjamin............... Vice President and Secretary of Purchaser. Vice United States President and Associate General Counsel of Novartis Corporation since January 1997. From January 1995 to December 1996, Mr. Benjamin was at Ciba-Geigy Corporation, serving as Vice President and Associate General Counsel in 1995 and Vice President and General Counsel in 1996. The business address of Ciba-Geigy Corporation was 520 White Plains Road, Tarrytown, New York. Wayne P. Merkelson.......... Treasurer and Assistant Secretary of Purchaser. Vice United States President and Associate General Counsel of Novartis Corporation since January 1997. From April 1989 to December 1996, Mr. Merkelson served as Associate General Counsel to Sandoz Corporation, becoming a Vice President of that company in 1996. The business address of Sandoz Corporation was 608
Fifth Avenue, New York, New York. 8 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: CHASEMELLON SHAREHOLDER SERVICES, L.L.C. By Facsimile Transmission (for Eligible Institutions only): (201) 296-4293 Confirm by Telephone: (201) 296-4860 By Overnight Courier: By Mail: By Hand: Reorganization Department Reorganization Department Reorganization Department 85 Challenger Road P.O. Box 3301 120 Broadway Mail Stop--Reorg. South Hackensack, NJ 07606 13th Floor Ridgefield Park, NJ 07660 New York, NY 10271 OTHER INFORMATION: Questions or requests for assistance may be directed to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers 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: INNISFREE M&A INCORPORATED 501 Madison Avenue, 20th Floor New York, New York 10022 Bankers and Brokers Call Collect: (212) 750-5833 All Others Call Toll Free: (888) 750-5834 The Dealer Manager for the Offer is: LEHMAN BROTHERS Three World Financial Center 200 Vesey Street New York, New York 10285 Call Collect: (212) 526-5044 or (212) 526-6105 EX-99.(A)(2) 3 0003.txt FORM OF LETTER OF TRANSMITTAL EXHIBIT (a)(2) LETTER OF TRANSMITTAL TO TENDER SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS) OF WESLEY JESSEN VISIONCARE, INC. PURSUANT TO THE OFFER TO PURCHASE DATED JUNE 6, 2000 BY WJ ACQUISITION CORP. AN INDIRECT WHOLLY OWNED SUBSIDIARY OF NOVARTIS AG THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, JULY 3, 2000, UNLESS THE OFFER IS EXTENDED. The Depositary for the Offer is: CHASEMELLON SHAREHOLDER SERVICES, L.L.C. By Facsimile Transmission (for Eligible Institutions only): (201) 296-4293 Confirm by Telephone: (201) 296-4860 By Overnight By Mail: By Hand: Courier: Reorganization Department Reorganization Reorganization P.O. Box 3301 Department Department 85 South Hackensack, NJ 07606 120 Broadway Challenger Road 13th Floor Mail Stop--Reorg. New York, NY 10271 Ridgefield Park, NJ 07660 This Letter of Transmittal is to be completed by stockholders of Wesley Jessen VisionCare, Inc. either if certificates evidencing Shares (as defined below) are to be forwarded herewith or if delivery of Shares is to be made by book-entry transfer to an account maintained by the Depositary at the Book- Entry Transfer Facility (as defined in and pursuant to the procedures set forth in Section 3 of the Offer to Purchase). DELIVERY OF DOCUMENTS TO A BOOK- ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. DESCRIPTION OF SHARES TENDERED - -------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) (PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) SHARE CERTIFICATE(S) AND SHARES TENDERED ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY) - ---------------------------------------------------------------------------------------------------------- TOTAL NUMBER OF SHARES EVIDENCED BY NUMBER OF SHARE CERTIFICATE SHARE SHARES NUMBER(S)* CERTIFICATE(S)* TENDERED** -------------------------------------------------------- -------------------------------------------------------- -------------------------------------------------------- -------------------------------------------------------- -------------------------------------------------------- TOTAL SHARES - ----------------------------------------------------------------------------------------------------------
* Need not be completed by stockholders delivering Shares by book-entry transfer. ** Unless otherwise indicated, it will be assumed that all Shares evidenced by each Share Certificate delivered to the Depositary are being tendered hereby. See Instruction 4. Stockholders whose certificates evidencing Shares ("Share Certificates") are not immediately available or who cannot deliver their Share Certificates and all other documents required hereby to the Depositary prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase) or who cannot complete the procedure for delivery by book-entry transfer on a timely basis and who wish to tender their Shares must do so pursuant to the guaranteed delivery procedure described in Section 3 of the Offer to Purchase. See Instruction 2. NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY [_]CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of Tendering Institution: __________________________________________ Account Number: _________________________________________________________ Transaction Code Number: ________________________________________________ [_]CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of Registered Holder(s): ________________________________________ Window Ticket Number (if any): __________________________________________ Date of Execution of Notice of Guaranteed Delivery: _____________________ Name of Institution that Guaranteed Delivery: ___________________________ If delivery is by book-entry transfer, give the following information: Account Number: _________________________________________________________ Transaction Code Number: ________________________________________________ DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. 2 Ladies and Gentlemen: The undersigned hereby tenders to WJ Acquisition Corp., a Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of Novartis AG, a Swiss corporation ("Parent"), the above-described shares of common stock, par value $0.01 per share, including associated preferred share purchase rights ("Shares"), of Wesley Jessen VisionCare, Inc., a Delaware corporation (the "Company"), pursuant to Purchaser's offer to purchase all Shares at $38.50 per Share, net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 6, 2000 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which, together with the Offer to Purchase and any amendments or supplements hereto or thereto, collectively constitute the "Offer"). The undersigned understands that 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 Shares tendered pursuant to the Offer. Upon the terms and subject to the conditions of the Offer (and if the Offer is extended or amended, the terms of any such extension or amendment), and subject to, and effective upon, acceptance for payment of Shares tendered herewith, in accordance with the terms of the Offer, the undersigned hereby sells, assigns and transfers to or upon the order of, Purchaser all right, title and interest in and to all Shares that are being tendered hereby and all dividends, distributions (including, without limitation, distributions of additional Shares) and rights declared, paid or distributed in respect of such Shares on or after May 30, 2000 (collectively, "Distributions") and irrevocably appoints the Depositary the true and lawful agent and attorney-in- fact of the undersigned with respect to such Shares (and all Distributions), with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (i) deliver Share Certificates evidencing such Shares (and all Distributions), or transfer ownership of such Shares (and all Distributions) on the account books maintained by the Book- Entry Transfer Facility, together, in either case, with all accompanying evidences of transfer and authenticity, to or upon the order of Purchaser, (ii) present such Shares (and all Distributions) for transfer on the books of the Company and (iii) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and all Distributions), all in accordance with the terms of the Offer. By executing this Letter of Transmittal, the undersigned hereby irrevocably appoints Purchaser and Parent and each of them, as the attorneys and proxies of the undersigned, each with full power of substitution, to vote in such manner as each such attorney and proxy or his substitute shall, in his sole discretion, deem proper and otherwise act (by written consent or otherwise) with respect to all Shares tendered hereby which have been accepted for payment by Purchaser prior to the time of such vote or other action and all Shares and other securities issued in Distributions in respect of such Shares, which the undersigned is entitled to vote 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. This proxy and power of attorney is coupled with an interest in Shares tendered hereby, is irrevocable and is granted in consideration of, and is effective upon, the acceptance for payment of such Shares by Purchaser in accordance with other terms of the Offer. Such acceptance for payment shall revoke all other proxies and powers of attorney granted by the undersigned at any time with respect to such Shares (and all Shares and other securities issued in Distributions in respect of such Shares), and no subsequent proxies, powers of attorney, consents or revocations may be given by the undersigned with respect thereto (and if given will not be deemed effective). The undersigned understands that, in order for Shares or Distributions to be deemed validly tendered, immediately upon Purchaser's acceptance of such Shares for payment, Purchaser must be able to exercise full voting and other rights with respect to such Shares (and any and all Distributions), including, without limitation, voting at any meeting of the Company's stockholders then scheduled. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer Shares tendered hereby and all Distributions, that when such Shares are accepted for payment by Purchaser, Purchaser will acquire good, marketable and unencumbered title thereto and to all Distributions, free and clear of all liens, restriction, charges and encumbrances, and that none of such Shares and Distributions will be subject to any adverse claim. The undersigned, upon request, shall execute and deliver all additional documents deemed by the Depositary or Purchaser to be necessary or desirable to complete the sale, assignment and transfer of Shares tendered hereby and all Distributions. In addition, the undersigned shall remit and transfer promptly to the Depositary for the account of Purchaser all Distributions 3 in respect of Shares tendered hereby, accompanied by appropriate documentation of transfer, and pending such remittance and transfer or appropriate assurance thereof, Purchaser shall be entitled to all rights and privileges as owner of each such Distribution and may withhold the entire purchase price of Shares tendered hereby, or deduct from such purchase price, the amount or value of such Distribution as determined by Purchaser in its sole discretion. No authority herein conferred or agreed to be conferred shall be affected by, and all such authority shall survive, the death or incapacity of the undersigned. All obligations of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Except as stated in the Offer to Purchase, this tender is irrevocable. The undersigned understands that the valid tender of Shares pursuant to any one of the procedures described in Section 3 of the Offer to Purchase and in the Instructions hereto will constitute the undersigned's acceptance of the terms and conditions of the Offer. Purchaser's acceptance of such Shares for payment will constitute a binding agreement between the undersigned and Purchaser upon the terms and subject to the conditions of the Offer (and if the Offer is extended or amended, the terms or conditions of any such extension or amendment). Unless otherwise indicated below in the box entitled "Special Payment Instructions", please issue the check for the purchase price of all Shares purchased and return all Share Certificates evidencing Shares not tendered or not accepted for payment in the name(s) of the registered holder(s) appearing above under "Description of Shares Tendered". Similarly, unless otherwise indicated below in the box entitled "Special Delivery Instructions", please mail the check for the purchase price of all Shares purchased and return all Share Certificates evidencing Shares not tendered or not accepted for payment (and accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing above under "Description of Shares Tendered" on the reverse hereof. In the event that the boxes below entitled "Special Payment Instructions" and "Special Delivery Instructions" are both completed, please issue the check for the purchase price of all Shares purchased and return all Share Certificates evidencing Shares not tendered or not accepted for payment in the name(s) of, and deliver such check and return such Share Certificates (and any accompanying documents, as appropriate) to, the person(s) so indicated. Unless otherwise indicated below in the box entitled "Special Payment Instructions", please credit any Shares tendered hereby and delivered by book-entry transfer that are not accepted for payment by crediting the account at the Book-Entry Transfer Facility designated above. The undersigned recognizes that Purchaser has no obligation, pursuant to the Special Payment Instructions, to transfer any Shares from the name of the registered holder(s) thereof if Purchaser does not accept for payment any Shares tendered hereby. 4 SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if the check To be completed ONLY if the check for the purchase price of Shares for the purchase price of Shares and Share Certificates evidencing purchased and Share Certificates Shares not tendered or not evidencing Shares not tendered or purchased are to be issued in the not purchased are to be mailed to name of someone other than the someone other than the undersigned, undersigned. or the undersigned at an address other than that shown under Issue Check and Share "Description of Shares Tendered". Certificate(s) to: Mail Check and Share Certificate(s) Name: ______________________________ to: (PLEASE PRINT) Address: ___________________________ Name: ______________________________ (PLEASE PRINT) ____________________________________ Address: ___________________________ ____________________________________ ____________________________________ (ZIP CODE) ____________________________________ ____________________________________ (ZIP CODE) (TAX IDENTIFICATION OR SOCIAL ____________________________________ SECURITY NUMBER) (TAX IDENTIFICATION OR SOCIAL (SEE SUBSTITUTE FORM W-9 ON REVERSE SECURITY NUMBER) SIDE) (SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE) Account Number: ____________________________ 5 IMPORTANT STOCKHOLDERS: SIGN HERE (Please Complete Substitute Form W-9 Below) ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ SIGNATURE(S) OF HOLDER(S) Dated: ______________ , 2000 (Must be signed by registered holder(s) exactly as name(s) appear(s) on Share Certificates or on a security position listing by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please provide the following information and see Instruction 5.) Name(s): ____________________________________________________________________ PLEASE PRINT Capacity (full title): ______________________________________________________ Address: ____________________________________________________________________ ------------------------------------------------------------------------------ INCLUDE ZIP CODE Daytime Area Code and Telephone No: _________________________________________ Taxpayer Identification or Social Security No.: ________________________________________________________ (SEE SUBSTITUTE FORM W-9 on REVERSE SIDE) GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5) FOR USE BY FINANCIAL INSTITUTIONS ONLY FINANCIAL INSTITUTIONS: PLACE MEDALLION GUARANTEE IN SPACE BELOW 6 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. Guarantee of Signatures. All signatures on this Letter 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 promulgated under the Securities Exchange Act of 1934, as amended (each of the foregoing being an "Eligible Institution") unless (i) this Letter of Transmittal is signed by the registered holder(s) of Shares (which term, for purposes of this document, shall include any participant in the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Shares) tendered hereby and such holder(s) has (have) not completed the box entitled "Special Payment Instructions" or "Special Delivery Instructions" on the reverse hereof or (ii) such Shares are tendered for the account of an Eligible Institution. See Instruction 5. 2. Delivery of Letter of Transmittal and Share Certificates. This Letter of Transmittal is to be used either if Share Certificates are to be forwarded herewith or if tenders are to be made pursuant to the procedures for tenders by book-entry transfer pursuant to the procedure set forth in Section 3 of the Offer to Purchase. Share Certificates evidencing all physically tendered Shares, or a confirmation of a book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility of all Shares delivered by book- entry transfer, as well as a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth below prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase). If Share Certificates are forwarded to the Depositary in multiple deliveries, a properly completed and duly executed Letter of Transmittal must accompany each such delivery. Stockholders whose Share Certificates are not immediately available, who cannot deliver their Share Certificates and all other required documents to the Depositary prior to the Expiration Date or who cannot complete the procedure for delivery by book- entry transfer on a timely basis may tender their Shares pursuant to the guaranteed delivery procedure described in Section 3 of the Offer to Purchase. Pursuant to such procedure: (i) such tender must be 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, must be received by the Depositary prior to the Expiration Date; and (iii) the Share Certificates evidencing all physically delivered Shares in proper form for transfer by delivery, or a confirmation of a book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility of all Shares delivered by book-entry transfer, in each case together with a Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees (or in the case of a book-entry transfer, an Agent's Message (as defined in Section 3 of the Offer to Purchase)) and any other documents required by this Letter of Transmittal, must be received by the Depositary within three Nasdaq National Market ("Nasdaq") trading days after the date of execution of such Notice of Guaranteed Delivery, all as described in Section 3 of the Offer to Purchase. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, 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. No alternative, conditional or contingent tenders will be accepted and no fractional Shares will be purchased. By execution of this Letter of Transmittal (or a manually signed facsimile hereof), all tendering stockholders waive any right to receive any notice of the acceptance of their Shares for payment. 3. Inadequate Space. If the space provided on the reverse hereof under "Description of Shares Tendered" is inadequate, the Share Certificate numbers, the number of Shares evidenced by such Share Certificates and the number of Shares tendered should be listed on a separate signed schedule and attached hereto. 4. Partial Tenders (not applicable to stockholders who tender by book-entry transfer). If fewer than all Shares evidenced by any Share Certificate delivered to the Depositary herewith are to be tendered hereby, fill in the number of Shares that are to be tendered in the box entitled "Number of Shares Tendered". In such cases, new Share Certificate(s) evidencing the remainder of Shares that were evidenced by the Share Certificates delivered to the Depositary herewith will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the box entitled "Special Delivery Instructions" on the reverse hereof, as soon as practicable after the Expiration Date or the termination of the Offer. All Shares evidenced by Share Certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 7 5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If this Letter of Transmittal is signed by the registered holder(s) of Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the Share Certificates evidencing such Shares without alteration, enlargement or any other change whatsoever. If any Shares tendered hereby is held of record by two or more persons, all such persons must sign this Letter of Transmittal. If any Shares tendered hereby are registered in different names, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of such Shares. If this Letter of Transmittal is signed by the registered holder(s) of Shares tendered hereby, no endorsements of Share Certificates or separate stock powers are required, unless payment is to be made to, or Share Certificates evidencing Shares not tendered or not accepted for payment are to be issued in the name of, a person other than the registered holder(s). If the Letter of Transmittal is signed by a person other than the registered holder(s) of the Share Certificate(s) evidencing Shares tendered, the Share Certificate(s) tendered hereby must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on such Share Certificate(s). Signatures on such Share Certificate(s) and stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered holder(s) of Shares tendered hereby, the Share Certificate(s) evidencing Shares tendered hereby must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on such Share Certificate(s). Signatures on such Share Certificate(s) and stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal or any Share Certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to Purchaser of such person's authority so to act must be submitted. 6. Stock Transfer Taxes. Except as otherwise provided in this Instruction 6, Purchaser will pay all stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price of any Shares purchased is to be made to, or Share Certificate(s) evidencing Shares not tendered or not accepted for payment are to be issued in the name of, any person other than the registered holder(s) or if tendered certificates are registered in the name of any person other than the person(s) signing the Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s), or such other person, or otherwise) payable on account of the transfer to such other person will be deducted from the purchase price of such Shares purchased, unless evidence satisfactory to Purchaser of the payment of such taxes, or exemption therefrom, is submitted. EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE CERTIFICATES EVIDENCING SHARES TENDERED HEREBY. 7. Special Payment and Delivery Instructions. If a check for the purchase price of any Shares tendered hereby is to be issued in the name of, and/or Share Certificate(s) evidencing Shares not tendered or not accepted for payment are to be issued in the name of and/or returned to, a person other than the person(s) signing this Letter of Transmittal or if such check or any such Share Certificate is to be sent to a person other than the signor of this Letter of Transmittal or to the person(s) signing this Letter of Transmittal but at an address other than that shown in the box entitled "Description of Shares Tendered" on the reverse hereof, the appropriate boxes herein must be completed. 8. Questions and Requests for Assistance or Additional Copies. Questions and requests for assistance may be directed to the Information Agent or the Dealer Manager at their respective addresses or telephone numbers set forth below. Additional copies of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery and the Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 may be obtained from the Information Agent. 8 9. Substitute Form W-9. Each tendering stockholder is required to provide the Depositary with a correct Taxpayer Identification Number ("TIN") on the Substitute Form W-9 which is provided under "Important Tax Information" below, and to certify, under penalty of perjury, that such number is correct and that such stockholder is not subject to backup withholding of federal income tax. If a tendering stockholder has been notified by the Internal Revenue Service that such stockholder is subject to backup withholding, such stockholder must cross out item (2) of the Certification box of the Substitute Form W-9, unless such stockholder has since been notified by the Internal Revenue Service that such stockholder is no longer subject to backup withholding. Failure to provide the information on the Substitute Form W-9 may subject the tendering stockholder to 31% federal income tax withholding on the payment of the purchase price of all Shares purchased from such stockholder. If the tendering stockholder has not been issued a TIN and has applied for one or intends to apply for one in the near future, such stockholder should write "Applied For" in the space provided for the TIN in Part I of the Substitute Form W-9, and sign and date the Substitute Form W-9. If "Applied For" is written in Part I and the Depositary is not provided with a TIN within 60 days, the Depositary will withhold 31% on all payments of the purchase price to such stockholder until a TIN is provided to the Depositary. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR MANUALLY SIGNED FACSIMILE HEREOF), 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 SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE). Facsimilies of the Letter of Transmittal, properly completed and duly signed, will be accepted. The Letter of Transmittal and Share Certificates and any other required documents should be sent or delivered by each stockholder or such stockholder's broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of its addresses or to the facsimile number set forth above. IMPORTANT TAX INFORMATION Under U.S. federal income tax law, a stockholder whose tendered Shares are accepted for payment is generally required to provide the Depositary (as payer) with such stockholder's correct TIN on Substitute Form W-9 provided herewith. If such stockholder is an individual, the TIN generally is such stockholder's social security number. If the Depositary is not provided with the correct TIN, the stockholder may be subject to a $50 penalty imposed by the Internal Revenue Service and payments that are made to such stockholder with respect to Shares purchased pursuant to the Offer may be subject to backup withholding of 31%. In addition, if a stockholder makes a false statement that results in no imposition of backup withholding, and there was no reasonable basis for making such statement, a $500 penalty may also be imposed by the Internal Revenue Service. Certain stockholders (including, among others, corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, such individual must submit a statement (Internal Revenue Service Form W-8), signed under penalties of perjury, attesting to such individual's exempt status. Forms of such statements can be obtained from the Depositary. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional instructions. A stockholder should consult his or her tax advisor as to such stockholder's qualification for exemption from backup withholding and the procedure for obtaining such exemption. If backup withholding applies, the Depositary is required to withhold 31% of any payments made to the stockholder. Backup withholding is not an additional tax. Rather, the federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained provided that the required information is furnished to the Internal Revenue Service. 9 PURPOSE OF SUBSTITUTE FORM W-9 To prevent backup withholding on payments that are made to a stockholder with respect to Shares purchased pursuant to the Offer, the stockholder is required to notify the Depositary of such stockholder's correct TIN by completing the form below certifying that (a) the TIN provided on Substitute Form W-9 is correct (or that such stockholder is awaiting a TIN), and (b)(i) such stockholder has not been notified by the Internal Revenue Service that he is subject to backup withholding as a result of a failure to report all interest or dividends or (ii) the Internal Revenue Service has notified such stockholder that such stockholder is no longer subject to backup withholding. WHAT NUMBER TO GIVE THE DEPOSITARY The stockholder is required to give the Depositary the TIN (e.g., social security number or employer identification number) of the record holder of Shares tendered hereby. If Shares are in more than one name or are not in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report. If the tendering stockholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future, the stockholder should write "Applied For" in the space provided for the TIN in Part I, and sign and dated the Substitute Form W-9. If "Applied For" is written in Part I and the Depositary is not provided with a TIN within 60 days, the Depositary will withhold 31% of all payments of the purchase price to such stockholder until a TIN is provided to the Depositary. 10 TO BE COMPLETED BY ALL TENDERING HOLDERS PAYER'S NAME: CHASEMELLON SHAREHOLDER SERVICES, L.L.C. - ------------------------------------------------------------------------------- PART 1--Taxpayer Identification Number--For Social Security Number all accounts, enter your or Employer taxpayer identification Identification Number number in the box at right. (For most individuals, this ---------------------- is your social security number. If you do not have a number, see "Obtaining a Number" in the enclosed Guidelines.) Certify by signing and dating below. Note: If the account is in more than one name, see the chart in the enclosed Guidelines to determine which number to give the payer. SUBSTITUTE FORM W-9 DEPARTMENT OF THE TREASURY INTERNAL REVENUE SERVICE (If awaiting TIN write PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER ("TIN")"Applied For") -------------------------------------------------------- PART 2--For Payees Exempt from Backup Withholding, see the enclosed Guidelines and complete as instructed therein. CERTIFICATION Under penalties of perjury, I certify that: (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me), and (2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to back-up withholding as a result of failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out item (2). (Also see instructions in the enclosed Guidelines.) -------------------------------------------------------- SIGNATURE ________________________________________ DATE _______________________________________, 2000 NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THIS OFFER. PLEASE REVIEW THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS. NOTE: YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING A TAXPAYER IDENTIFICATION NUMBER. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration office or (2) I intend to mail or deliver an application in the near future. I understand that If I do not provide a taxpayer identification number by the time of payment, 31% of all reportable cash payments made to me thereafter will be withheld until I provide a taxpayer identification number. Signature: ______________________________________ __________________________ Date: ______________ 11 The Information Agent for the Offer is: INNISFREE M&A INCORPORATED 501 Madison Avenue, 20th Floor New York, NY 10022 Bankers and Brokers Call Collect: (212) 750-5833 All Others Call Toll Free: (888) 750-5834 The Dealer Manager for the Offer is: LEHMAN BROTHERS Three World Financial Center 200 Vesey Street New York, New York 10285 Call Collect: (212) 526-5044 or (212) 526-6105 June 6, 2000 EX-99.(A)(3) 4 0004.txt FORM OF NOTICE OF GUARANTEED DELIVERY EXHIBIT (a)(3) NOTICE OF GUARANTEED DELIVERY FOR TENDER OF SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS) OF WESLEY JESSEN VISIONCARE, INC. TO WJ ACQUISITION CORP. AN INDIRECT WHOLLY OWNED SUBSIDIARY OF NOVARTIS AG (NOT TO BE USED FOR SIGNATURE GUARANTEES) This Notice of Guaranteed Delivery, or one substantially in the form hereof, must be used to accept the Offer (as defined below) (i) if certificates ("Share Certificates"), evidencing shares of common stock, par value $0.01 per share ("Shares"), of Wesley Jessen VisionCare, Inc., a Delaware corporation (the "Company"), are not immediately available, (ii) if Share Certificates and all other required documents cannot be delivered to ChaseMellon Shareholder Services, L.L.C., as Depositary (the "Depositary"), prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase (as defined below)) or (iii) if the procedure for delivery by book-entry transfer cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be delivered by hand or mail or transmitted by telegram, or facsimile transmission to the Depositary. See Section 3 of the Offer to Purchase. The Depositary for the Offer is: CHASEMELLON SHAREHOLDER SERVICES, L.L.C. By Facsimile Transmission (for Eligible Institutions only): (201) 296-4293 Confirm by Telephone: (201) 296-4860 By Overnight By Mail: By Hand: Courier: Reorganization Department Reorganization Reorganization P.O. Box 3301 Department 120 Department 85 South Hackensack, NJ 07606 Broadway 13th Floor Challenger Road New York, NY 10271 Mail Stop--Reorg. Ridgefield Park, NJ 07660 DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED. THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL. Ladies and Gentlemen: The undersigned hereby tender(s) to WJ Acquisition Corp., a Delaware corporation and an indirect wholly owned subsidiary of Novartis AG, a Swiss corporation, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 6, 2000 (the "Offer to Purchase"), and the related Letter of Transmittal (which, together with the Offer to Purchase and any amendments or supplements thereto, collectively constitute the "Offer"), receipt of each of which is hereby acknowledged, the number of Shares specified below pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. Number of Shares: Name(s) of Holders: ------------------------------------ ------------------------------------ Certificate No.(s) (If Available): ------------------------------------ (PLEASE TYPE OR PRINT) ------------------------------------ Address(es): _______________________ ------------------------------------ ------------------------------------ Check this box if Shares will be (ZIP CODE) delivered by book-entry transfer: [_] Daytime Area Code and Telephone No. _________________ Account No. ________________________ Signature(s) Dated: __________________, 2000 of Holder(s) ______________________ -------------------------- GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a participant in the Security Transfer Agents Medallion Program or an "eligible guarantor institution," as such term is defined in Rule 17 Ad-15 under the Securities Exchange Act of 1934, as amended, guarantees to deliver to the Depositary either certificates representing the Shares tendered hereby, in proper form for transfer, or confirmation of book- entry transfer of such Shares into the Depositary's account at The Depositary Trust Company, in each case with delivery of a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees, or an Agent's Message (as defined in the Offer to Purchase), and any other documents required by the Letter of Transmittal, within three Nasdaq trading days (as defined in the Offer to Purchase) after the date hereof. The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal and certificates for Shares to the Depositary within the time period shown herein. Failure to do so could result in a financial loss to such Eligible Institution. Name of Firm _______________________________________________________________ ------------------------------------------------------------------ AUTHORIZED SIGNATURE Address ____________________________________________________________________ ---------------------------------------------------------------------- ZIP CODE Title ______________________________________________________________________ Name: ______________________________________________________________________ PLEASE TYPE OR PRINT Area Code and Telephone No. ________________________________________________ Dated: _________________ , 2000 NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE. SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL 2 EX-99.(A)(4) 5 0005.txt FORM OF LETTER TO BROKERS, DEALERS EXHIBIT (a)(4) OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS) OF WESLEY JESSEN VISIONCARE, INC. AT $38.50 NET PER SHARE BY WJ ACQUISITION CORP. AN INDIRECT WHOLLY OWNED SUBSIDIARY OF NOVARTIS AG THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, JULY 3, 2000 UNLESS THE OFFER IS EXTENDED. June 6, 2000 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We have been appointed by WJ Acquisition Corp, a Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of Novartis AG, a Swiss corporation ("Parent"), to act as Dealer Manager in connection with Purchaser's offer to purchase all the shares of common stock, par value $0.01 per share ("Common Stock"), of Wesley Jessen VisionCare, Inc., a Delaware corporation (the "Company"), that are issued and outstanding, together with the associated preferred share purchase rights (the "Rights" and, together with the Common Stock, the "Shares") issued pursuant to the Rights Agreement, dated as of November 16, 1999, as amended, between the Company and American Stock Transfer and Trust Company, as Rights Agent, for $38.50 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in Purchaser's Offer to Purchase, dated June 6, 2000 (the "Offer to Purchase"), and the related Letter of Transmittal (which, together with the Offer to Purchase and any amendments or supplements thereto, collectively constitute the "Offer") enclosed herewith. Please furnish copies of the enclosed materials to those of your clients for whose accounts you hold Shares registered in your name or in the name of your nominee. 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 (INCLUDING, WITHOUT LIMITATION, ALL SHARES ISSUABLE UPON THE CONVERSION OF ANY CONVERTIBLE SECURITIES OR UPON THE EXERCISE OF ANY OPTIONS, WARRANTS, OR RIGHTS) AND (II) ANY APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, HAVING EXPIRED OR BEEN TERMINATED PRIOR TO THE EXPIRATION OF THE OFFER. For your information and for forwarding to your clients for whom you hold Shares registered in your name or in the name of your nominee, we are enclosing the following documents: 1. Offer to Purchase, dated June 6, 2000; 2. Letter of Transmittal for your use in accepting the Offer and tendering Shares and for the information of your clients; 3. Notice of Guaranteed Delivery to be used to accept the Offer if the Shares and all other required documents are not immediately available or cannot be delivered to ChaseMellon Shareholder Services, L.L.C. (the "Depositary") prior to the Expiration Date (as defined in the Offer to Purchase) or if the procedure for book-entry transfer cannot be completed prior to the Expiration Date; 4. A letter to stockholders of the Company from Kevin Ryan, Chief Executive Officer of the Company, together with a Solicitation/Recommendation Statement on Schedule 14D-9 filed with the Securities and Exchange Commission by the Company; 5. A letter which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Offer; 6. Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9; and 7. Return envelope addressed to the Depositary. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, JULY 3, 2000, UNLESS THE OFFER IS EXTENDED. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) certificates evidencing such Shares (or a confirmation of a book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility (as defined in the Offer to Purchase)), (ii) a Letter of Transmittal (or 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 (as defined in the Offer to Purchase) and (iii) any other required documents. If holders of Shares wish to tender, but it is impracticable for them to forward their certificates or other required documents prior to the expiration of the Offer, a tender may be effected by following the guaranteed delivery procedure described in Section 3 of the Offer to Purchase. Purchaser will not pay any fees or commissions to any broker, dealer or other person (other than the Dealer Manager, the Depositary and Innisfree M&A Incorporated (the "Information Agent") (as described in the Offer to Purchase)) in connection with the solicitation of tenders of Shares pursuant to the Offer. However, Purchaser will reimburse you for customary mailing and handling expenses incurred by you in forwarding any of the enclosed materials to your clients. Purchaser will pay or cause to be paid any stock transfer taxes payable with respect to the transfer of Shares to it, except as otherwise provided in Instruction 6 of the Letter of Transmittal. Any inquiries you may have with respect to the Offer should be addressed to Lehman Brothers Inc., the Dealer Manager or the Information Agent at their respective addresses and telephone numbers set forth on the back cover page of the Offer to Purchase. Additional copies of the enclosed material may be obtained from the Information Agent, at the address and telephone number set forth on the back cover page of the Offer to Purchase. Very truly yours, LEHMAN BROTHERS NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON THE AGENT OF PARENT, PURCHASER, THE COMPANY, THE DEALER MANAGER, THE INFORMATION AGENT OR THE DEPOSITARY, OR OF ANY AFFILIATE OF ANY OF THE FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR TO MAKE ANY STATEMENT ON BEHALF OF ANY OF THE FOREGOING IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN. 2 EX-99.(A)(5) 6 0006.txt FORM OF LETTER TO CLIENTS EXHIBIT (a)(5) OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS) OF WESLEY JESSEN VISIONCARE, INC. AT $38.50 NET PER SHARE BY WJ ACQUISITION CORP. AN INDIRECT WHOLLY OWNED SUBSIDIARY OF NOVARTIS AG THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, JULY 3, 2000, UNLESS THE OFFER IS EXTENDED. June 6, 2000 To Our Clients: Enclosed for your consideration is an Offer to Purchase, dated June 6, 2000 (the "Offer to Purchase"), and the related Letter of Transmittal (which, together with the Offer to Purchase and any amendments or supplements thereto, collectively constitute the "Offer") in connection with the offer by WJ Acquisition Corp., a Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of Novartis AG, a Swiss corporation ("Parent"), to purchase all the shares of common stock, par value $0.01 per share ("Common Stock") of Wesley Jessen VisionCare, Inc., a Delaware corporation (the "Company"), that are issued and outstanding, together with the associated preferred share purchase rights (the "Rights" and, together with the Common Stock, the "Shares") issued pursuant to the Rights Agreement dated as of November 16, 1999, as amended, between the Company and American Stock Transfer and Trust Company, as Rights Agent, for $38.50 per share (such amount being the "Per Share Amount"), net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase. WE ARE (OR OUR NOMINEE IS) THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT. We request instructions as to whether you wish to have us tender on your behalf any or all Shares held by us for your account, upon the terms and subject to the conditions set forth in the Offer. Your attention is directed to the following: 1. The offer price is $38.50 per Share, net to you in cash, without interest thereon. 2. The Offer is being made for all of the outstanding Shares. 3. 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, are fair to, and in the best interest of, the holders of Shares, has approved, adopted and declared advisable the Merger Agreement and the transactions contemplated thereby, including each of the Offer and the Merger, and has resolved to recommend that the holders of Shares accept the Offer and tender their Shares pursuant to the Offer. 4. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, JULY 3, 2000, UNLESS THE OFFER IS EXTENDED. 5. 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 (including, without limitation, all Shares issuable upon the conversion of any convertible securities or upon the exercise of any options, warrants, or rights) and (ii) any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, having expired or been terminated prior to the expiration of the Offer. 6. 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. The Offer is being made solely by the Offer to Purchase and the related Letter of Transmittal and is being made to all 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 such state statute. If, after such good faith effort, Purchaser cannot comply with 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 Lehman Brothers Inc., as Dealer Manager, or one or more registered brokers or dealers licensed under the laws of such jurisdiction. IF YOU WISH TO HAVE US TENDER ANY OR ALL OF YOUR SHARES HELD BY US FOR YOUR ACCOUNT, PLEASE SO INSTRUCT US BY COMPLETING, EXECUTING AND RETURNING TO US THE INSTRUCTION FORM CONTAINED IN THIS LETTER. AN ENVELOPE IN WHICH TO RETURN YOUR INSTRUCTIONS TO US IS ENCLOSED. IF YOU AUTHORIZE THE TENDER OF YOUR SHARES, ALL SUCH SHARES WILL BE TENDERED UNLESS OTHERWISE SPECIFIED IN YOUR INSTRUCTIONS. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER. 2 INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS) OF WESLEY JESSEN VISIONCARE, INC. BY WJ ACQUISITION CORP. AN INDIRECT WHOLLY OWNED SUBSIDIARY OF NOVARTIS AG The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated June 6, 2000, and the related Letter of Transmittal (which, together with the Offer to Purchaser and any amendments or supplements thereto, collectively constitute the "Offer") in connection with the offer by WJ Acquisition Corp., a Delaware corporation and an indirect wholly owned subsidiary of Novartis AG, a Swiss corporation, to purchase all the shares of common stock, par value $0.01 per share ("Shares"), of Wesley Jessen VisionCare, Inc., a Delaware corporation, that are issued and outstanding. This will instruct you to tender the number of Shares indicated below (or, if no number is indicated below, all Shares) that are held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer. Number of Shares To Be Tendered*: _______________________ Shares Dated: ________________ , 2000 SIGN HERE ---------------------------------------------------------------------------- SIGNATURE(S) ---------------------------------------------------------------------------- PLEASE TYPE OR PRINT NAMES(S) ---------------------------------------------------------------------------- PLEASE TYPE OR PRINT ADDRESS ---------------------------------------------------------------------------- AREA CODE AND TELEPHONE NUMBER ---------------------------------------------------------------------------- TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER - ------- * Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered. 3 EX-99.(A)(6) 7 0007.txt FORM OF GUIDELINES EXHIBIT (a)(6) GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER FOR THE PAYEE (YOU) TO GIVE THE PAYER--Social Security numbers have nine digits separated by two hyphens: i.e. 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e. 00-0000000. The table below will help determine the number to give the payer. - -------------------------------------------------------------------------------
GIVE THE FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY NUMBER OF -- - -------------------------------------------------------------------------------- 1. An individual's account The individual 2. Two or more individuals (joint account) The actual owner of the account or, if combined funds, the first individual on the account(1) 3. Custodian account of a minor (Uniform Gift to Minors Act) The minor(2) 4. a. The usual revocable savings trust (grantor is also The grantor- trustee) trustee(1) b. So-called trust account that is not a legal or valid The actual trust under State law owner(1) 5. Sole proprietorship account The owner(3)
- ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
GIVE THE EMPLOYER FOR THIS TYPE OF ACCOUNT: IDENTIFICATION NUMBER OF -- - ------------------------------------------------------------------------------ 6. A valid trust, estate, The legal or pension trust entity(4) 7. Corporate account The corporation 8. Partnership account held in the name of the business The partnership 9. Association, club, or other tax-exempt organization The organization account 10. A broker or registered nominee The broker or nominee 11. Account with the Department of Agriculture in the name The public of a public entity (such as a State or local government, entity school district, or prison) that receives agriculture program payments
- ------------------------------------------------------------------------------- (1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's social security number. (3) Show the name of the owner. The name of the business or the "doing business as" name may also be entered. Either the social security number or the employer identification number may be used. (4) List first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the taxpayer identification number of the personal representative or trustee unless the legal entity itself is not designated in the account title.) NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 OBTAINING A NUMBER If you do not have a taxpayer identification number ("TIN") or you don't know your number, obtain Form SS-5, Application for a Social Security Number Card or Form SS-4, Application for Employer Identification Number, at the local of- fice of the Social Security Administration or the Internal Revenue Service and apply for a number. PAYEES EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from backup withholding on all dividend and in- terest payments and on broker transactions include the following: . A corporation. . A financial institution. . An organization exempt from tax under section 501(a), or an individual re- tirement plan, or a custodial account under Section 403(b)(7). . The United States or any agency or instrumentality thereof. . A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof. . An international organization or any agency or instrumentality thereof. . A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof. . A registered dealer in securities or commodities registered in the United States or a possession of the United States. . A real estate investment trust. . A common trust fund operated by a bank under Section 584(a). . An entity registered at all times during the tax year under the Investment Company Act of 1940. . A foreign central bank of issue. . An exempt charitable remainder trust, or a non-exempt trust described in section 6967(a)(1). Payments of dividends and patronage dividends not generally subject to backup withholding include the following: . Payments to nonresident aliens subject to withholding under Section 1441. . Payments to partnerships not engaged in a trade or business in the United States and which have at least one nonresident partner. . Payments of patronage dividends where the amounts received are not paid in money. . Payments made by certain foreign organizations. . Payments made to a nominee. Payments of interest not generally subject to backup withholding include the following: . Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. . Payments of tax-exempt interest (including exempt-interest dividends under Section 852). . Payments described in section 6049(b)(5) to non-resident aliens. . Payments on tax-free covenant bonds under section 1451. . Payments made by certain foreign organizations. . Payments made to a nominee. Exempt payees described above should file the substitute Form W-9 to avoid possible erroneous backup witholding. Complete the substitute Form W-9 as fol- lows: ENTER YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ACROSS THE FACE OF THE FORM, AND RETURN THE FORM TO THE PAYER. Certain payments, other than payments of interest, dividends, and patronage dividends, that are subject to information reporting are also not subject to backup withholding. For details, see sections 6041, 6041A(a), 6042, 6044, 6045, 6050A and 6050N and the regulations thereunder. PRIVACY ACT NOTICE.--Section 6109 requires you to provide your correct tax- payer identification number to payers, who must report the payments to the IRS. The IRS uses the number for identification purposes and may also provide this information to various government agencies for tax enforcement or litiga- tion purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 31% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER--If you fail to furnish your correct taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING--If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION--Willfully falsifying certifi- cations or affirmations may subject you to criminal penalties including fines and/or imprisonment. (4) MISUSE OF TAXPAYER IDENTIFICATION NUMBERS--If the payer discloses or uses taxpayer identification numbers in violation of Federal law, the payer may be subject to civil and criminal penalties. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE EX-99.(A)(7) 8 0008.txt SUMMARY ADVERTISEMENT EXHIBIT (a)(7) This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares (as defined below). The Offer (as defined below) is being made solely by the Offer to Purchase dated June 6, 2000 and the related Letter of Transmittal, and is being made to all holders of Shares. Purchaser (as defined below) 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 such state statute. If, after such good faith effort, Purchaser cannot comply with 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 Lehman Brothers Inc., as Dealer Manager, or by one or more registered brokers or dealers licensed under the laws of such jurisdiction. Notice of Offer to Purchase for Cash All Outstanding Shares of Common Stock (Including the Associated Preferred Share Purchase Rights) of Wesley Jessen VisionCare, Inc. at $38.50 Net Per Share by WJ Acquisition Corp. an indirect wholly owned subsidiary of Novartis AG WJ Acquisition Corp., a Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of Novartis AG, a Swiss corporation ("Parent"), is offering to purchase all the issued and outstanding shares of common stock, par value $0.01 per share (the "Common Stock"), of Wesley Jessen VisionCare, Inc., a Delaware corporation (the "Company"), including the associated rights to purchase preferred stock (the "Rights" and, together with the Common Stock, the "Shares") issued pursuant to the Rights Agreement, dated as of November 16, 1999, as amended, between the Company and American Stock Transfer and Trust Company, as Rights Agent, for $38.50 per Share, net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 6, 2000 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, together with the Offer to Purchase and any amendments or supplements thereto, collectively constitute the "Offer"). Following the Offer, Purchaser intends to effect the Merger described below. - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, JULY 3, 2000, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- 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 (including, without limitation, all Shares issuable upon the conversion of any convertible securities or upon the exercise of any options, warrants or rights) and (ii) any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, having expired or been terminated prior to the expiration of the Offer. The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of May 30, 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 of the other conditions set forth in the Merger Agreement and in accordance with the relevant provisions of the General Corporation Law of the State of Delaware ("Delaware Law"), Purchaser will be merged with and into the Company (the "Merger"). As a result of the Merger, the Company will continue as the surviving corporation and will become an indirect wholly owned subsidiary of Parent. At the effective time of the Merger (the "Effective Time"), each Share issued and outstanding immediately prior to the Effective Time (other than 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 Delaware Law) shall be canceled and converted automatically into the right to receive $38.50 in cash, or any higher price that may be paid per Share in the Offer, without interest. 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, are advisable and fair to, and in the best interests of, the Company and the holders of Shares, has approved and adopted the Merger Agreement and the transactions contemplated thereby, including each of the Offer and the Merger, and has recommended that the holders of Shares accept the Offer and tender their Shares pursuant to the Offer. For purposes of the Offer, 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 ChaseMellon Shareholder Services, L.L.C. (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. In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) the certificates evidencing such Shares (the "Share Certificates") or timely confirmation of a book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility (as defined in Section 2 of the Offer to Purchase) pursuant to the procedures set forth in Section 3 of the Offer to Purchase, (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 in Section 2 of the Offer to Purchase), in connection with the book-entry transfer, and (iii) any other documents required under the Letter of Transmittal. Purchaser expressly reserves the right, in its sole discretion (but subject to the terms and conditions of the Merger Agreement), at any time and from time to time, to extend for any reason the period of time during which the Offer is open, including the occurrence of any condition specified in Section 14 of the Offer to Purchase, by giving oral or written notice of such extension to the Depositary. Any such extension will be followed as promptly as practicable by public announcement thereof, such announcement 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 of the Offer. During any such extension, all Shares previously tendered and not withdrawn will remain subject to the Offer and subject to the right of a tendering stockholder to withdraw such stockholder's Shares. Shares may be withdrawn at any time prior to 12:00 Midnight, New York City time, on Monday, July 3, 2000 (or the latest time and date at which the Offer, if extended by Purchaser, shall expire) and, unless theretofore accepted for payment by Purchaser pursuant to the Offer, may also be withdrawn at any time after August 4, 2000. 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 the 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 (as defined in Section 3 of the Offer to Purchase), 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 of the Offer to Purchase, 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 the time of receipt) of any notice of withdrawal will be determined by Purchaser, in its sole discretion, which determination will be final and binding. The information required to be disclosed by Rule 14d-6(d)(1) of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is incorporated herein by reference. 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. The 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. The 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. Questions or requests for assistance may be directed to the Information Agent or the Dealer Manage at their respective addresses and telephone numbers listed below. Additional copies of the Offer to Purchase and the related Letter of Transmittal and other tender offer materials may be obtained from the Information Agent. No fees or commissions will be paid to brokers, dealers or other persons (other than the Information Agent, the Dealer Manager and the Depositary) for soliciting tenders of Shares pursuant to the Offer. The Information Agent for the Offer is: [LOGO] Innisfree M&A Incorporated 501 Madison Avenue, 20th Floor New York, New York 10022 Bankers and Brokers Call Collect: (212) 750-5833 All Others Call Toll-Free: (888) 750-5834 The Dealer Manager for the Offer is: LEHMAN BROTHERS Three World Financial Center 200 Vesey Street New York, New York 10285 Call Collect:(212) 526-5044 or (212) 526-6105 June 6, 2000 EX-99.(D)(1) 9 0009.txt AGREEMENT AND PLAN OF MERGER, DATED MAY 30, 2000 EXHIBIT (d)(1) EXECUTION COPY -------------- AGREEMENT AND PLAN OF MERGER by and among NOVARTIS AG, WJ ACQUISITION CORP. and WESLEY JESSEN VISIONCARE, INC. dated as of May 30, 2000 TABLE OF CONTENTS
Page ---- ARTICLE I THE OFFER 1.1 The Offer............................................................................... 2 1.2 Company Action.......................................................................... 4 1.3 Directors............................................................................... 6
ARTICLE II THE MERGER 2.1 The Merger.............................................................................. 8 2.2 Effective Time.......................................................................... 8 2.3 Closing of the Merger................................................................... 8 2.4 Effects of the Merger................................................................... 8 2.5 Certificate of Incorporation and By-laws................................................ 8 2.6 Directors............................................................................... 9 2.7 Officers................................................................................ 9 2.8 Conversion of Shares.................................................................... 9 2.9 Delivery of Merger Consideration........................................................ 9 2.10 Dissenting Shares...................................................................... 12 2.11 Treatment of Company Options........................................................... 12 2.12 Adjustments............................................................................ 13 2.13 Shareholders Meeting................................................................... 13 2.14 Merger Without Meeting of Shareholders................................................. 14
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY 3.1 Organization, Standing and Power; Subsidiaries.......................................... 14 3.2 Capital Structure....................................................................... 15 3.3 Authority; No Conflicts................................................................. 17 3.4 Reports and Financial Statements........................................................ 18 3.5 Litigation; Compliance with Laws........................................................ 19 3.6 Absence of Certain Changes or Events.................................................... 19 3.7 Environmental Matters................................................................... 20 3.8 Intellectual Property................................................................... 21 3.9 Brokers or Finders...................................................................... 22 3.10 Employment Agreements.................................................................. 22
-i- 3.11 Taxes.................................................................................. 22 3.12 Certain Contracts...................................................................... 24 3.13 Company Shareholder Rights Plan........................................................ 24 3.14 ERISA Compliance....................................................................... 24 3.15 Schedule 14D-9; Proxy Statement; Schedule TO........................................... 27
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER 4.1 Organization, Standing and Power........................................................ 28 4.2 Authority; No Conflicts................................................................. 28 4.3 Financial Capability.................................................................... 29 4.4 Capitalization of Purchaser............................................................. 29 4.5 No Prior Activities..................................................................... 29 4.6 Offer Documents......................................................................... 29
ARTICLE V COVENANTS 5.1 Conduct of Business by the Company Pending the Merger................................... 30 5.2 No Solicitation......................................................................... 33 5.3 Access to Information; Confidentiality.................................................. 35 5.4 Consents; Approvals..................................................................... 36 5.5 Indemnification and Insurance........................................................... 37 5.6 Employee Benefits....................................................................... 38 5.7 Notification of Certain Matters......................................................... 40 5.8 Other Cooperation and Further Assurances................................................ 40 5.9 Public Announcements.................................................................... 40 5.10 Financial Information.................................................................. 41
ARTICLE VI CONDITIONS TO THE MERGER 6.1 Offer................................................................................... 41 6.2 Shareholder Approval.................................................................... 41 6.3 No Injunction or Action................................................................. 41
ARTICLE VII TERMINATION 7.1 Termination............................................................................ 41
-ii- 7.2 Effect of Termination.................................................................. 44 7.3 Fees and Expenses...................................................................... 44
ARTICLE VIII GENERAL PROVISIONS 8.1 Nonsurvival of Representations, Warranties and Agreements............................... 45 8.2 Notices................................................................................. 45 8.3 Assignment; Binding Effect.............................................................. 47 8.4 Entire Agreement........................................................................ 47 8.5 Amendment............................................................................... 48 8.6 Governing Law; Consent to Jurisdiction.................................................. 48 8.7 Counterparts............................................................................ 48 8.8 Headings................................................................................ 48 8.9 Interpretation.......................................................................... 48 8.10 Waivers................................................................................ 49 8.11 Incorporation of Company Disclosure Letter............................................. 49 8.12 Severability........................................................................... 49 8.13 Enforcement of Agreement............................................................... 50 8.14 Waiver of Jury Trial................................................................... 50 8.15 Company Disclosure Letter.............................................................. 50 8.16 Execution.............................................................................. 50 8.17 Personal Liability..................................................................... 50 8.18 Date for any Action.................................................................... 51 8.19 Obligation of Parent and the Company................................................... 51 8.20 Certain Definitions.................................................................... 51 ANNEX A....................................................................................Annex A-1
-iii- AGREEMENT AND PLAN OF MERGER This AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of May --------- 30, 2000, is by and among Novartis AG, a Swiss corporation ("Parent"), WJ ------ Acquisition Corp., a Delaware corporation and an indirect wholly owned subsidiary of Parent ("Purchaser"), and Wesley Jessen VisionCare, Inc., a --------- Delaware corporation (the "Company"). ------- RECITALS WHEREAS, the Company and Parent have determined to engage in the transactions (the "Transactions") contemplated by this Agreement, including (a) ------------ the commencement of an Offer (as defined below) by Purchaser to purchase for cash all of the outstanding shares of common stock, $.01 par value, of the Company (the "Company Common Stock") together with the associated rights to -------------------- purchase preferred stock (the "Rights"), issued pursuant to the Rights ------ Agreement, dated as of November 16, 1999, as amended (the "Rights Agreement"), ---------------- between the Company and American Stock Transfer and Trust Company, as Rights Agent, and (b) a business combination whereby Purchaser will be merged with and into the Company in accordance with the Delaware General Corporation Law (the "DGCL"), with the Company continuing as the surviving corporation of such - ----- merger and an indirect wholly-owned subsidiary of Parent (the "Merger"); ------ WHEREAS, the respective boards of directors of the Company, Parent and Purchaser have each approved and declared advisable this Agreement and the Transactions; WHEREAS, the Board of Directors of the Company (the "Board") (i) has ----- determined that the Merger is advisable and in the best interests of the Company and its shareholders, (ii) has approved the Merger, the Offer, this Agreement and the other transactions contemplated hereby and (iii) recommends that the Company's shareholders adopt this Agreement and the Merger and that the Company's shareholders tender their shares pursuant to the Offer; WHEREAS, the Agreement and Plan of Merger (the "Ocular Merger ------------- Agreement"), dated as of March 19, 2000, among the Company, OSI Acquisition - --------- Corp. and Ocular Sciences, Inc. ("Ocular") has been terminated; ------ WHEREAS, the Company has entered into an agreement to pay Ocular a fee of $25,000,000 (the "Ocular Fee") in connection with the termination of the ---------- Ocular Merger Agreement; WHEREAS, the Company, Parent and Purchaser desire to make certain representations, warranties, covenants and agreements in connection with the Offer and the Merger and also to prescribe various conditions to the Offer and the Merger. NOW, THEREFORE, in consideration of the premises and of the mutual covenants, representation, warranties and agreements contained herein, the parties hereto agree as follows: ARTICLE I THE OFFER 1.1 The Offer. ---------- (a) Provided that this Agreement shall not have been terminated in accordance with Article VII and none of the events set forth in Annex A hereto ------- shall have occurred or be existing, Purchaser shall, and Parent shall cause Purchaser to, as promptly as practicable after the date hereof (but in no event later than the fifth business day after the public announcement of the terms of this Agreement), commence (within the meaning of Rule 14d-2(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), an offer (the "Offer") ------------ ----- to purchase all of the outstanding shares of Company Common Stock (and associated Rights) at a price of 38.50 United States Dollars ($38.50) per share and associated Right (the "Offer Price"), net to the seller in cash, subject to ----------- reduction for any applicable withholding taxes and, but only if such payment is to be made other than to the registered holder, any applicable stock transfer taxes payable by such holder. The Offer will be made pursuant to an Offer to Purchase and related Letter of Transmittal containing the terms and conditions set forth in this Agreement. The initial expiration date of the Offer shall be the twentieth business day from and after the date the Offer is commenced (the "Initial Expiration Date"). The obligation of Purchaser to accept for payment, ----------------------- purchase and pay for any shares of Company Common Stock (and associated Rights) tendered pursuant to the Offer shall be subject, except as provided in Section 1.1(b), only to the satisfaction of (i) the condition that a number of shares of Company Common Stock representing not less than fifty-one percent (51%) of the total issued and outstanding shares of Company Common Stock on a diluted basis (after giving effect to the conversion or exercise of all outstanding options, warrants and other rights or securities convertible into shares of Company Common Stock) (excluding any shares of Company Common Stock held by the Company or any of its Subsidiaries (as defined below)) on the date such shares are purchased pursuant to the Offer have been validly tendered and not withdrawn prior to the expiration of the Offer (the "Minimum Condition") and (ii) the ----------------- other conditions set forth in Annex A hereto; provided, however, that Purchaser ------- -------- ------- expressly reserves the right to waive any of the conditions to the Offer (other than the 2 Minimum Condition) and to make any change in the terms or conditions of the Offer in its sole discretion, subject to Section 1.1(b). (b) Without the prior written consent of the Company, neither Parent nor Purchaser will (i) decrease the price per share of Company Common Stock payable in the Offer, (ii) decrease the number of shares of Company Common Stock sought in the Offer, (iii) change the form of consideration payable in the Offer, (iv) impose conditions to the Offer in addition to those set forth in Annex A, (v) except as provided below or required by any rule, regulation, - ------- interpretation or position of the Securities and Exchange Commission (the "SEC") applicable to the Offer, change the expiration date of the Offer, or (vi) --- otherwise amend or change any term or condition of the Offer in a manner materially adverse to the holders of shares of Company Common Stock. Notwithstanding anything in this Agreement to the contrary, without the consent of the Company, Purchaser shall have the right to extend the Offer beyond the Initial Expiration Date in the following events: (i) from time to time if, at the Initial Expiration Date (or extended expiration date of the Offer, if applicable), any of the conditions to the Offer (other than the Minimum Condition to which this clause does not apply) shall not have been satisfied or waived, until such conditions are satisfied or waived; (ii) for any period required by any rule, regulation, interpretation or position of the SEC or the Staff thereof applicable to the Offer or any period required by applicable law; (iii) if all conditions to the Offer other than the Minimum Condition are satisfied or waived, but the Minimum Condition has not been satisfied, for one or more periods not to exceed ten (10) business days each (or an aggregate of thirty (30) business days for all such extensions); or (iv) if all of the condi- tions to the Offer are satisfied or waived but the number of shares of Company Common Stock validly tendered and not withdrawn is less than ninety percent (90%) of the then outstanding number of shares of Company Common Stock on a diluted basis, for an aggregate period not to exceed twenty (20) business days (for all such extensions), provided that Purchaser shall accept and promptly pay -------- for all securities tendered prior to the date of such extension and shall otherwise meet the requirements of Rule 14d-11 under the Exchange Act in connection with each such extension. In addition, Parent and Purchaser agree that Purchaser shall from time to time extend the Offer, if requested by the Com pany, if at the Initial Expiration Date (or any extended expiration date of the Offer, including pursuant to this sentence, if applicable), all of the conditions to the Offer other than the Minimum Condition and/or the conditions set forth in clause (a) or clause (b) of Annex A shall have been waived or satisfied and the Minimum Condition and/or the conditions set forth in clause (a) or clause (b) of Annex A shall not have been satisfied, until the earlier of ten (10) business days after such expiration date or September 30, 2000 in the case of the Minimum Condition or November 30, 2000 in the case of clause (a) or clause (b) or such earlier date upon which either such condition shall not be reasonably capable of being satisfied prior to November 30, 2000. Upon the prior satisfaction or waiver of all the conditions to the Offer, and subject to the terms and conditions of this 3 Agreement, Purchaser will, and Parent will cause Purchaser to, accept for payment, pur chase and pay for, in accordance with the terms of the Offer, all shares of Company Com mon Stock validly tendered and not withdrawn pursuant to the Offer as soon as reasonably practicable after the expiration of the Offer. (c) As soon as reasonably practicable on the date of commencement of the Offer, Parent and Purchaser shall file or cause to be filed with the SEC a Tender Offer Statement on Schedule TO (together with any amendments or supplements thereto, the "Schedule TO") with respect to the Offer. The Schedule ----------- TO will comply as to form and content in all material respects with the applicable provisions of the federal securities laws and will contain the offer to purchase and form of the related letter of transmittal (such Schedule TO and such documents included therein pursuant to which the Offer will be made, together with any supplements or amendments thereto, the "Offer Documents"). --------------- Parent and the Company each agrees to correct promptly any information provided by it for use in the Offer Documents if and to the extent that such information shall have be come false or misleading in any material respect and to supplement the information provided by it specifically for use in the Schedule TO or the other Offer Documents to include any information that shall become necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Parent and Purchaser agree to take all steps necessary to cause the Offer Documents as so corrected or supplemented to be filed with the SEC and be disseminated to holders of shares of Company Common Stock, in each case, as and to the extent required by applicable federal securities laws. The Company and its counsel shall be given a reasonable opportunity to review and comment on the Offer Documents prior to their being filed with the SEC. Parent and Purchaser agree to provide to the Company and its counsel any comments or other communications which Parent, Purchaser or their counsel may receive from the Staff of the SEC with respect to the Offer Documents promptly after receipt thereof. 1.2 Company Action. -------------- (a) The Company hereby consents to the Offer and represents and war- rants that the Board, at a meeting duly called and held, has unanimously (i) determined that this Agreement and the Transactions, including the Offer, the Merger, and the purchase of shares of Company Common Stock and associated Rights contemplated by the Offer, are advisable and fair to and in the best interests of the Company and the Company's shareholders, (ii) approved and adopted this Agreement and the Transactions, including the Offer, the Merger, and the purchase of shares of Company Common Stock and associated Rights contemplated by the Offer, in accordance with the requirements of the DGCL, which approval satisfies in full the requirements of prior approval contained in Section 203(a)(1) of the DGCL, (iii) resolved to recommend that the shareholders of 4 the Company accept the Offer, tender their shares of Company Common Stock and associated Rights pursuant to the Offer and approve and adopt this Agreement and the Merger and (iv) resolved to amend the Rights Agreement as contemplated herein. The Company hereby consents to the inclusion in the Offer Documents, the Schedule 14D-9 (as defined below) and the Proxy Statement (as defined below) (if any) of such recommendation of the Board. The Company represents that the Board has received the written opinion (the "Bear Stearns Fairness Opinion") of Bear, ----------------------------- Stearns & Co. Inc. ("Bear Stearns"), stating that the proposed consideration to ------------ be received by the holders of shares of Company Common Stock pursuant to the Offer and the Merger is fair to such holders from a financial point of view. The Company has been authorized by Bear Stearns to permit, subject to the prior review and consent by Bear Stearns (such consent not to be unreasonably with- held), the inclusion of the Bear Stearns Fairness Opinion (or a reference thereto) in the Offer Documents and the Schedule 14D-9. The Company has been advised by each of its directors and by each executive officer of the Company who as of the date hereof is actually aware (to the knowledge of the Company) of the Transactions that each such person intends to tender pursuant to the Offer all shares of Company Common Stock owned by such person. (b) The Company will cause its transfer agent to promptly furnish Parent and Purchaser with a list of the Company's shareholders, mailing labels and any available listing or computer file containing the names and addresses of all record holders of shares of Company Common Stock and lists of securities positions of shares of Company Common Stock held in stock depositories and to provide to Parent and Purchaser such additional information (including, without limitation, updated lists of shareholders, mailing labels and lists of securities positions) and such other assistance as Parent or Purchaser or their agents may reasonably request in connection with the Offer. Subject to the require ments of applicable law, and except for such steps as are necessary to disseminate the Offer Documents and any other documents necessary to consummate the Transactions, Parent and Purchaser and each of their affiliates, associates and agents will hold in confidence the information contained in any such labels, listings and files, will use such information only in connection with the Offer and the Merger and, if this Agreement is terminated, will deliver, and will use their reasonable efforts to cause their agents to deliver, to the Company all copies and any extracts or summaries from such information then in their possession or control. (c) As soon as reasonably practicable on the date of commencement of the Offer, the Company shall file with the SEC and disseminate to holders of shares of Company Common Stock, in each case as and to the extent required by applicable federal securities laws, a Solicitation/Recommendation Statement on Schedule 14D-9 (together with any amendments or supplements thereto, the "Schedule 14D-9") that shall reflect the recommendations of the Board referred -------------- to above. The Company and Parent each agrees 5 promptly to correct any information provided by it for use in the Schedule 14D-9 if and to the extent that it shall have become false or misleading in any material respect and to supplement the information provided by it specifically for use in the Schedule 14D-9 to include any information that shall become necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The Company agrees to take all steps necessary to cause the Schedule 14D-9 as so corrected or supplemented to be filed with the SEC and to be disseminated to holders of shares of Company Common Stock, in each case, as and to the extent required by applicable federal securities laws. Parent and its counsel shall be given a reasonable opportunity to review and comment on the Schedule 14D-9 prior to its being filed with the SEC. The Company agrees to provide to Parent and Purchaser and their counsel with any comments or other communications which the Company or its counsel may receive from the Staff of the SEC with respect to the Schedule 14D-9 promptly after receipt thereof. Parent, Purchaser and the Company each hereby agree to provide promptly such information necessary to the preparation of the exhibits and schedules to the Schedule 14D-9 and the Offer Documents which the respective party responsible therefor will reasonably request. 1.3 Directors. --------- (a) Promptly following the purchase of and payment for a number of shares of Company Common Stock that satisfies the Minimum Condition, and from time to time thereafter, Purchaser shall be entitled to designate the number of directors, rounded up to the next whole number, on the Board that equals the product of (i) the total number of directors on the Board (giving effect to the election of any additional directors pursuant to this Section) and (ii) the percentage that the number of shares of Company Common Stock beneficially owned by Parent and Purchaser (including shares of Company Common Stock paid for pursuant to the Offer), upon such acceptance for payment, bears to the total number of shares of Company Common Stock outstanding, and the Company shall take all action within its power to cause Purchaser's designees to be elected or appointed to the Board, including, without limitation, increasing the number of directors, and seeking and accepting resignations of incumbent directors. At such time, the Company will also use its best efforts to cause individual directors designated by Purchaser to constitute the number of members, rounded up to the next whole number, on (i) each committee of the Board other than any such committee of such board established to take action under this Agreement and (ii) each board of directors of each Subsidiary (as defined below) of the Company, and each committee thereof, that represents the same percentage as such individuals represent on the Board. Notwithstanding the foregoing, in the event that Purchaser's designees are to be appointed or elected to the Board, until the Effective Time (as defined below), such board of directors shall have at least two directors who are directors on the date of this Agreement and who are not officers of the Company (the "Continuing Directors"); provided that in the -------------------- event that the number of Continu- 6 ing Directors shall be reduced below two for any reason whatsoever, any remaining Con tinuing Directors (or Continuing Director, if there shall be only one remaining) shall be entitled to designate persons to fill such vacancies who shall be deemed to be Continuing Directors for purposes of this Agreement. As used in this Agreement, the term "Subsidiary" when used with respect to any ---------- party means any corporation or other organization, whether incorporated or unincorporated, of which such party directly or indirectly owns or controls at least a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization, or any organization of which such party is a general partner. (b) The Company's obligations to appoint Purchaser's designees to the Board shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. The Company shall promptly take all actions, and shall include in the Schedule 14D-9 such information with respect to the Company and its officers and directors, as Section 14(f) and Rule 14f-1 require in order to fulfill its obligations under this Section. Parent and Purchaser shall supply to the Company, and be solely responsible for, any information with respect to themselves and their nominees, officers, directors and affiliates required by Section 14(f) and Rule 14f-1. (c) Following the election or appointment of Purchaser's designees pursuant to Section 1.3(a) and until the Effective Time, the approval of the Continuing Directors shall be required to authorize (and such authorization shall constitute the authorization of the Company's board of directors and no other action on the part of the Company, including any action by any other director of the Company, shall be required to authorize) any termination of this Agreement by the Company, any amendment of this Agree ment requiring action by the Company's board of directors, any amendment of the certificate of incorporation or bylaws of the Company, any extension of time for performance of any obligation or action hereunder by Parent or Purchaser, any waiver of compliance with any of the agreements or conditions contained herein for the benefit of the Company and any material transaction with Parent, Purchaser or any affiliate thereof. ARTICLE II ---------- THE MERGER ---------- 7 2.1 The Merger. At the Effective Time (as defined in Section 2.2 ---------- below) and upon the terms and subject to the conditions of this Agreement and in accordance with the DGCL, Purchaser will be merged with and into the Company. Following the Merger, the Company will continue as the surviving corporation (the "Surviving Corporation") and as an indirect wholly owned subsidiary of --------------------- Parent, and the separate corporate existence of Purchaser will cease in accordance with the DGCL. Subject to the terms and conditions of this Agreement, Parent and Purchaser agree to use all reasonable efforts to cause the Effective Time to occur as soon as practicable after the Shareholders Meeting (as defined below) with respect to the Merger or the purchase by Purchaser of 90% or more of the outstanding shares of Company Common Stock pursuant to the Offer. 2.2 Effective Time. Subject to the provisions of this Agreement, the -------------- parties will cause the Merger to be consummated by filing an appropriate certificate of merger (the "Certificate of Merger") with the Secretary of State --------------------- of the State of Delaware in such form as required by, and executed in accordance with, the relevant provisions of the DGCL as soon as practicable on or after the Closing Date (as defined in Section 2.3 below). The Merger will become effective upon such filing or at such time thereafter as is provided in the Certificate of Merger (the "Effective Time," and the date of such effectiveness -------------- shall be the "Effective Date"). -------------- 2.3 Closing of the Merger. The closing of the Merger (the "Closing") --------------------- ------- will take place at the offices of Skadden, Arps, Slate, Meagher & Flom (Illinois), 333 West Wacker Drive, Suite 2100, Chicago, Illinois 60606, on a date to be specified by the parties, which shall be no later than the second business day after satisfaction or waiver (as permitted by this Agreement and applicable law) of all of the conditions set forth in ARTICLE VI hereof (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the fulfillment or waiver of those conditions) (the "Closing ------- Date"), unless the parties agree to another time, date or place in writing. 2.4 Effects of the Merger. The Merger will have the effects set --------------------- forth in the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all properties, rights, privileges, powers and franchises of the Company and Purchaser will vest in the Surviving Corporation, and all debts, liabilities and duties of the Company and Purchaser will become the debts, liabilities and duties of the Surviving Corporation. 2.5 Certificate of Incorporation and By-laws. Subject to the ---------------------------------------- provisions of Section 5.5, the certificate of incorporation and bylaws of Purchaser in effect immediately prior to the Effective Time will be the certificate of incorporation and bylaws of the Surviving Corporation until respectively amended in accordance with their terms and applicable law. 8 2.6 Directors. The directors of Purchaser at the Effective Time will --------- be the initial directors of the Surviving Corporation, each to hold office in accordance with the certificate of incorporation and bylaws of the Surviving Corporation until such director's successor is duly elected and qualified. 2.7 Officers. The officers of the Company as of the Effective Time -------- will be the initial officers of the Surviving Corporation until such officer's successor is duly elected or appointed and qualified. 2.8 Conversion of Shares. At the Effective Time and without any -------------------- action on the part of the holder thereof, subject to Section 2.10, each issued and outstanding share of Company Common Stock will convert into the right to receive an amount in cash, without interest, equal to 38.50 United States Dollars ($38.50) (the "Merger Consideration"). As a result of the Merger, each -------------------- issued and outstanding share of common stock of Purchaser will be converted into and become one fully paid and non-assessable share of common stock of the Surviving Corporation. Notwithstanding anything con tained in this Section 2.8 to the contrary, each share of Company Common Stock issued and held in the Company's treasury immediately before the Effective Time, and each share of Company Common Stock held by Parent, Purchaser, any other Subsidiary of Parent or any Subsidiary of the Company immediately before the Effective Time, will, by virtue of the Merger, cease to be outstanding and will be cancelled and retired without payment of any consideration therefor. 2.9 Delivery of Merger Consideration. -------------------------------- (a) Promptly after the Effective Time, Parent shall deposit or cause to be deposited in trust (the "Payment Fund") with an agent designated by Parent ------------ (the "Payment Agent") for the benefit of the holders of certificates -------------- representing the shares of Com pany Common Stock issued and outstanding as of the Effective Time (collectively "Certificates"), the aggregate Merger ------------ Consideration to be paid in respect of the shares of Com pany Common Stock. The Payment Fund shall not be used for any other purpose. The Payment Fund may be invested by the Payment Agent, as directed by Surviving Corporation, in (i) obligations of or guaranteed by the United States, (ii) commercial paper rated A-1, P-1 or A-2, P-2, and (iii) certificates of deposit, bank repurchase agreements and bankers acceptances of any bank or trust company organized under federal law or under the law of any state of the United States or of the District of Columbia that has capital, surplus and undivided profits of at least $1 billion or in money market funds which are invested substantially in such investments. Any net earnings with respect thereto shall be paid to the Surviving Corporation as and when requested by the Surviving Corporation. 9 (b) As soon as reasonably practicable after the Effective Time, Parent will instruct the Payment Agent to mail to each holder of record of Company Common Stock immediately before the Effective Time (excluding any shares of Company Common Stock cancelled pursuant to Section 2.8): (1) a letter of transmittal (the "Letter of Transmittal") (whic -------------------------- will specify that delivery will be effected, and risk of loss and title to the Certificates will pass, only upon delivery of such Certificates to the Payment Agent and will be in such form and have such other provisions as Parent reasonably specifies), and (2) instructions for use in effecting the surrender of each Certifi cate in exchange for the aggregate Merger Consideration with respect to the shares of Company Common Stock formerly represented thereby. (c) Parent and the Surviving Corporation shall cause the Payment Agent to pay to the holders of a Certificate, as soon as practicable after receipt of any Certificate (or in lieu of any such Certificate which has been lost, stolen or destroyed, an affidavit of lost, stolen or destroyed share certificates (including customary indemnity or bond against loss) in form and substance reasonably satisfactory to Parent) together with the Letter of Transmittal, duly executed, and such other documents as Parent or the Payment Agent reasonably request, in exchange therefor a check in the amount equal to the cash, if any, which such holder has the right to receive pursuant to the provisions of this ARTICLE II. No interest shall be paid or accrued on any cash payable upon the surrender of any Certificate. Each Certificate surrendered in accordance with the provisions of this Section 2.9(c) shall be cancelled forthwith. (d) In the event of a transfer of ownership of shares of Company Common Stock which is not registered in the transfer records of the Company, the Merger Consideration may be paid to the transferee only if (i) the Certificate representing such shares of Company Common Stock surrendered to the Payment Agent in accordance with Section 2.9(c) hereof is properly endorsed for transfer or is accompanied by appropriate and prop erly endorsed stock powers and is otherwise in proper form to effect such transfer, (ii) the person requesting such transfer pays to the Payment Agent any transfer or other taxes payable by reason of such transfer or establishes to the satisfaction of the Payment Agent that such taxes have been paid or are not required to be paid, and (iii) such person establishes to the reasonable satisfaction of Parent that such transfer would not violate any applicable federal or state securities laws. (e) At and after the Effective Time, each holder of a Certificate that represented issued and outstanding shares of Company Common Stock immediately prior to the Effective Time shall cease to have any rights as a shareholder of the Company, except 10 for the right to surrender his or her Certificate in exchange for the Merger Consideration multiplied by the number of shares represented by such Certificate and except as other wise provided by applicable law, and no transfer of shares of Company Common Stock shall be made on the stock transfer books of the Surviving Corporation. If, after the Effective Time, Certificates are presented to the Surviving Corporation or the Payment Agent for any reason, they will be canceled and exchanged as provided in this ARTICLE II, except as otherwise provided by applicable law. (f) The Merger Consideration paid in the Merger shall be net to the holder of shares of Company Common Stock in cash, and without interest thereon, subject to reduction only for any applicable withholding taxes and, but only if the Merger Consideration is to be paid other than to the registered holder, any applicable stock transfer taxes payable by such holder. To the extent that amounts are withheld by the Surviving Corporation, such amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the shares. (g) Promptly following the date which is six (6) months after the Effective Time, the Payment Agent shall deliver to the Surviving Corporation all cash, certificates and other documents in its possession relating to the Transactions, and the Payment Agent's duties shall terminate. Thereafter, each holder of a certificate representing shares of Company Common Stock (other than certificates representing dissenting shares of Company Common Stock) may surrender such certificate to the Surviving Corporation and (subject to any applicable abandoned property, escheat or similar law) receive in consideration therefor the aggregate Merger Consideration relating thereto, without any interest thereon. Any portion of the Merger Consideration remaining unclaimed by holders of shares of Company Common Stock five years after the Effective Time (or such earlier date immediately prior to such time as such amounts would otherwise escheat to or become property of any Governmental Entity (as defined in Section 3.3(c)) shall, to the extent permitted by law, become the property of the Surviving Corporation free and clear of any claims or interest of any person previously entitled thereto. Notwithstanding the foregoing, none of Parent, the Surviving Corporation, the Company or the Payment Agent shall be liable to a holder of a Certificate for any Merger Consideration properly delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. (h) Any portion of the Merger Consideration made available to the Payment Agent pursuant to Section 2.9(a) to pay for shares of Company Common Stock for which appraisal rights have been perfected shall be returned to Parent upon demand. 11 2.10 Dissenting Shares. Notwithstanding anything in this Agreement to ----------------- the contrary, shares of Company Common Stock that are issued and outstanding immediately before the Effective Time and that are held by shareholders who have not voted in favor of the Merger or consented thereto in writing and who have properly exercised appraisal rights with respect thereto in accordance with Section 262 of the DGCL (insofar as such Section is applicable to the Merger and provides for appraisal rights with respect to it), shall not be converted into the right to receive the Merger Consideration as provided in Section 2.8 hereof, unless such holders fail to perfect or withdraw or otherwise lose their rights to appraisal. Instead, ownership of such shares will entitle the holder thereof to receive the consideration determined pursuant to Section 262 of the DGCL; provided, however, that if such holder fails to perfect or effectively -------- ------- withdraws such holder's right to appraisal and payment under the DGCL, each of such shares shall there upon be deemed to have been converted, at the Effective Time, into the right to receive the Merger Consideration, without any interest thereon, upon surrender of the Certificate or Certificates in the manner provided in Section 2.8 hereof. The Company will give Parent (a) prompt notice of any demands (or withdrawals of demands) for appraisal received by the Company pursuant to the applicable provisions of the DGCL and any other instruments served pursuant to the DGCL and received by the Company and (b) the opportunity to direct all negotiations and proceedings with respect to demands for appraisal under the DGCL. The Company will not, except with the prior consent of Parent, make any payment with respect to any such demands for appraisal or offer to settle, or settle, any such demands. 2.11 Treatment of Company Options. ---------------------------- (a) Prior to the Initial Expiration Date, the Company shall take all actions necessary and appropriate to provide that, upon the Effective Time, each outstanding Company Stock Option (as defined in Section 3.2(a)) granted under any of the Company Stock Option Plans (as defined in Section 3.2(a)) or under any other plan or arrangement, each outstanding warrant and option to purchase shares described in Section 3.2 of the Company Disclosure Letter, whether or not then exercisable or vested, and each right to purchase shares of Company Common Stock under the Company Purchase Plans (as defined in Section 3.2(a)), shall be cancelled and, in exchange therefor, each holder of such Company Stock Option, warrant, option or right to purchase shall receive an amount in cash in respect thereof, if any, equal to the product of (i) the excess, if any, of the Merger Consideration over the per share exercise price thereof and (ii) the number of shares subject thereto (such payment to be net of applicable withholding taxes). (b) The Company shall use its reasonable best efforts to obtain all necessary waivers, consents or releases from holders of Company Stock Options, other options, warrants, and rights to purchase shares of Common Stock and shall take any such action 12 as may be reasonably necessary to give effect to, and to accomplish the transactions con templated by, this Section 2.11. 2.12 Adjustments. If, during the period between the date of this ----------- Agreement and the Effective Time, any change in the outstanding shares of Company Common Stock shall occur, including by reason of any reclassification, recapitalization, stock split or combination, exchange or readjustment of shares of Company Common Stock, or stock dividend thereon with a record date during such period, the cash payable pursuant to the Offer, the Merger Consideration and any other amounts payable pursuant to this Agreement shall be appropriately adjusted. 2.13 Shareholders Meeting. If required by applicable law to -------------------- consummate the Merger, the Company, acting through the Board, shall, in accordance with and to the extent permitted by applicable law: (a) duly call, give notice of, convene and hold a special meeting of its shareholders (the "Shareholders Meeting") as soon as practicable following -------------------- the date on which Purchaser completes the purchase of shares of Company Common Stock pursuant to the Offer (the "Offer Completion Date") for the purpose of --------------------- considering and taking action upon this Agreement; (b) subject to its fiduciary duties under applicable law, include in the Proxy Statement (as defined below) the recommendation of the Board that shareholders of the Company vote in favor of the approval and adoption of this Agreement and the Merger; and (c) prepare and file with the SEC a preliminary proxy or information statement relating to this Agreement and the Merger and use its reasonable best efforts to obtain and furnish the information required to be included in the Proxy Statement and, after consultation with Parent and Purchaser, respond promptly to any comments made by the SEC with respect to the preliminary proxy statement or information statement and cause a definitive proxy or information statement relating to this Agreement and the Merger (such proxy or information statement together with any and all amendments or supplements thereto, the "Proxy Statement") to be mailed to its shareholders at the earliest practicable --------------- time following the expiration or termination of the Offer. At the Shareholders Meeting, Parent and Purchaser and any of their respective Subsidiaries will vote, or cause to be voted, all shares of Company Common Stock owned by them in favor of this Agreement and the Transactions. 13 2.14 Merger Without Meeting of Shareholders. If Parent, Purchaser or -------------------------------------- any other Subsidiary of Parent shall acquire at least 90% of the outstanding shares of Company Common Stock pursuant to the Offer or otherwise, the parties hereto agree, subject to satisfaction or (to the extent permitted hereunder) waiver of all conditions to the Merger, to take all necessary and appropriate action to cause the Merger to be effective as soon as practicable after the acceptance for payment and purchase of shares of Company Common Stock pursuant to the Offer without the Shareholders Meeting. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY Except as set forth in the disclosure letter delivered prior to the execution of this Agreement to Parent (the "Company Disclosure Letter"), the Company represents and warrants to Parent and Purchaser as of the date of this Agreement as follows: 3.1 Organization, Standing and Power; Subsidiaries. ---------------------------------------------- (a) Each of the Company and each of its Subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization, has the requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted, except where the failures to be so organized, existing and in good standing or to have such power and authority, in the aggregate, would not reasonably be expected to have a Material Adverse Effect on the Company, and is duly qualified and in good standing to do business in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification necessary other than in such jurisdictions where the failures so to qualify or to be in good standing, in the aggregate, would not reasonably be expected to have a Material Adverse Effect on the Company. The copies of the certificate of incorporation and bylaws of the Company, which were previously furnished or made available to Parent, are true, complete and correct copies of such documents as in effect on the date of this Agreement. As used in this agreement, the term "Material Adverse Effect" means, ----------------------- with respect to any entity, any event, change, circumstance or effect that is or is reasonably likely to be materially adverse to (i) the business, financial condition or results of operations of such entity and its Subsidiaries taken as a whole, other than any event, change, circumstance or effect relating to (v) the economy or financial markets in general, (w) the industries in which such entity operates in general and not specifically relating to (or having the effect of specifically relating to or having a materially disproportionate effect (relative to most other industry participants) on) such entity, (x) the announcement or pendency of the Offer or the Merger, (y) changes after the date hereof 14 in laws or regulations relating to the design, manufacture or distribution of contact lenses or (z) a change in the market price or trading volume of the shares of such entity (provided that a change in the market price or trading price may be used, if applicable, as evidence of some other event, change, circumstance or effect that has or is reasonably likely to have a Material Adverse Effect), or (ii) the ability of such entity to consummate the Transactions. (b) Section 3.1(b) of the Company Disclosure Letter sets forth all the Subsidiaries of the Company which, as of the date of this Agreement, are Significant Subsidiaries (as defined in Rule 1-02 of Regulation S-X of the SEC) . All the outstanding shares of capital stock of, or other equity interests in, each such Significant Subsidiary have been validly issued and are fully paid and nonassessable and are, except as set forth on the Company Disclosure Letter, owned directly or indirectly by the Company, free and clear of all pledges, claims, liens, charges, encumbrances and security interests of any kind or nature whatsoever (collectively "Liens") and free of any other restriction ----- (including any restriction on the right to vote, sell or otherwise dispose of such capital stock or other ownership interests), except for restrictions imposed by applicable securities laws. Except as set forth in the Company Reports (as defined below) filed prior to the date hereof, as of the date of this Agreement, neither the Company nor any of its Subsidiaries directly or indirectly owns any equity or similar interest in, or any interest convertible into or exchangeable or exercisable for, any corporation, partnership, joint venture or other business association or entity (other than Subsidiaries), that is or would reasonably be expected to be material to the Company and its Subsidiaries taken as a whole. 3.2 Capital Structure. ----------------- (a) As of May 23, 2000, the authorized capital stock of the Company consisted of (A) 50,000,000 shares of Company Common Stock of which 18,175,585 shares were issued, consisting of 17,671,246 shares outstanding and 504,339 shares held in the treasury of the Company and (B) 5,000,000 shares of Preferred Stock, par value $0.01 per share, of which 50,000 shares have been designated Junior Participating Preferred Stock, Series A and reserved for issuance upon exercise of the Rights. Since May 23, 2000 to the date of this Agreement, there have been no issuances of shares of the capital stock of the Company or any other securities of the Company other than issuances of shares (and accompanying Rights) pursuant to options or rights outstanding as of May 23, 2000 under the Company's Benefit Plans (as defined below). All issued and outstanding shares of the capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable and free of any preemptive rights. There were outstanding as of May 23, 2000, no options, warrants or other rights to acquire capital stock from the Company other than (w) options, warrants or other rights to acquire capital stock from the Company disclosed in Section 3.2(a) of the Company Disclosure Letter, (x) the Rights, 15 (y) options to acquire capital stock from the Company representing in the aggregate the right to purchase approximately 2,677,475 shares of Company Common Stock (collectively, the "Company Stock Options") under the Company's 1995 --------------------- Stock Purchase and Option Plan, 1996 Stock Option Plan, Stock Incentive Plan and Non-Employee Director Stock Option Plan (collectively, the "Company Stock Option -------------------- Plans") and (z) rights to purchase an aggregate of no more than approximately - ----- 12,000 shares of Company Common Stock under the Company's Employee Stock Discount Purchase Plan and the International Employee Discount Purchase Plan (collectively, the "Company Purchase Plans"). Section 3.2(a) of the Company ---------------------- Disclosure Letter sets forth a complete and correct list, as of May 23, 2000, of the number of shares of Company Common Stock subject to Company Stock Options or other rights to purchase or receive Company Common Stock granted under the Company's Benefit Plans or otherwise, the dates of grant and the exercise prices thereof. For purposes of this agreement, "Benefit Plans" means, with respect to ------------- any Person, each employee benefit plan, program, arrangement and contract (including, without limitation, any "employee benefit plan," as defined in Section (3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and any bonus, deferred compensation, stock bonus, stock purchase, ----- restricted stock, stock option, employment, termination, stay agreement or bonus, change in control and severance plan, program, arrangement and contract) in effect on the date of this Agreement or disclosed on the Company Disclosure Letter, to which such Person or its Subsidiary is a party, which is maintained or contributed to by such Person, or with respect to which such Person could incur material liability under Section 4069, 4201 or 4212(c) of ERISA. (ii) No bonds, debentures, notes or other indebtedness of the Company having the right to vote on any matters on which holders of capital stock of the Company may vote are issued or outstanding. (iii) Except as otherwise set forth in this Section 3.2 or in Section 3.2 of the Company Disclosure Letter, as of the date of this Agreement, there are no securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which the Company or any of its Subsidiaries is a party or by which any of them is bound obligating the Company or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other voting securities of the Company or any of its Subsidiaries or obligating the Company or any of its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. As of the date of this Agreement, there are no outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its Subsidiaries. 16 3.3 Authority; No Conflicts. ----------------------- (a) The Company has all requisite corporate power and authority to enter into this Agreement and to consummate the Transactions. The execution and delivery of this Agreement and the consummation of the Transactions have been duly authorized by all necessary corporate action on the part of the Company. This Agreement has been duly executed and delivered by the Company and constitutes the valid and binding agreement of the Company, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws relating to or affecting creditors generally or by general equity principles (regardless of whether such enforceability is considered in a proceeding in equity or at law). (b) Except as set forth in Section 3.3(b) of the Company Disclosure Letter, the execution and delivery of this Agreement by the Company does not, and the consummation by the Company of the Merger and the other Transactions will not, conflict with, or result in any violation of, or constitute a default (with or without notice or lapse of time, or both) under, or give rise to a right of, or result by its terms in the, termination, amendment, cancellation or acceleration of any obligation or the loss of a material benefit under, or the creation of a lien, pledge, security interest, charge or other encumbrance on, or the loss of, any assets, including Intellectual Property (any such conflict, violation, default, right of termination, amendment, cancellation or acceleration, loss or creation, a "Violation") pursuant to: (A) any provision of --------- the certificate of incorporation or bylaws of the Company or any material Subsidiary of the Company, or (B) except as, in the aggregate, would not reasonably be expected to have a Material Adverse Effect on the Company, subject to obtaining or making the consents, approvals, orders, authorizations, registrations, declarations and filings referred to in paragraph (c) below, any loan or credit agreement, note, mortgage, bond, indenture, lease, benefit plan or other agreement, obligation, instrument, permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Company, any material Subsidiary, or their respective properties or assets. (c) No consent, approval, order or authorization of, or registration, decla ration or filing with, any supranational, national, state, municipal, local or foreign government, any instrumentality, subdivision, court, administrative agency or commission or other authority thereof, or any quasi- governmental or private body exercising any regulatory, taxing, importing or other governmental or quasi-governmental authority (a "Governmental Entity"), ------------------- is required by or with respect to the Company or any Subsidiary of the Company in connection with the execution and delivery of this Agreement by the Company or the consummation of the Merger and the other Transactions, except for those required under or in relation to (A) the Hart-Scott-Rodino Antitrust Improvements Act of 17 1976, as amended (the "HSR Act"), (B) state securities or "blue sky" laws (the ------- "Blue Sky Laws"), (C) the Securities Act of 1933, as amended (the "Securities ------------- ---------- Act"), (D) the Exchange Act, (E) the DGCL with respect to the filing of the - --- Certificate of Merger, (F) rules and regulations of the Nasdaq, (G) antitrust or other competition laws of other jurisdictions, and (H) such consents, approvals, orders, authorizations, registrations, declarations and filings the failures of which to make or obtain, in the aggregate, would not reasonably be expected to have a Material Adverse Effect on the Company. Consents, approvals, orders, authorizations, registrations, declarations and filings required under or in relation to any of the foregoing clauses (A) through (G) are hereinafter referred to as "Necessary Consents." ------------------ 3.4 Reports and Financial Statements. -------------------------------- (a) The Company has filed all required registration statements, prospectuses, reports, schedules, forms, statements and other documents required to be filed by it with the SEC since January 1, 1999 (collectively, including all exhibits thereto, the "Company Reports"). No Subsidiary of the --------------- Company is required to file any form, report, registration statement, prospectus or other document with the SEC. None of the Company Reports, as of their respective dates (and, if amended or superseded by a filing prior to the date of this Agreement or the Closing Date, then on the date of such filing), contained or will contain any untrue statement of a material fact or omitted or will omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Each of the financial statements (including the related notes) included in the Company Reports presents fairly, in all material respects, the consolidated financial position and consolidated results of operations and cash flows of the Company and its consolidated Subsidiaries as of the respective dates or for the respective periods set forth therein, all in conformity with generally accepted accounting principles ("GAAP") consistently applied during ---- the periods involved except as otherwise noted therein, and subject, in the case of the unaudited interim financial statements, to the absence of notes and normal year-end adjustments that have not been and are not expected to be material in amount. All of such Company Reports, as of their respective dates (and as of the date of any amendment to the respective Company Report), complied as to form in all material respects with the applicable requirements of the Securities Act and the Exchange Act and the rules and regulations promulgated thereunder. (b) Except as disclosed in the Company Reports filed prior to the date hereof, since December 31, 1999, the Company and its Subsidiaries have not incurred any liabilities that are of a nature that would be required to be disclosed on a balance sheet of the Company and its Subsidiaries or the footnotes thereto prepared in conformity with GAAP, other than (A) liabilities incurred in the ordinary course of business or (B) liabili- 18 ties that, in the aggregate, would not reasonably be expected to have a Material Adverse Effect on the Company. 3.5 Litigation; Compliance with Laws. -------------------------------- (a) Except as disclosed in the Company Reports filed prior to the date of this Agreement, there are no suits, actions or proceedings (collectively "Actions") pending or, to the knowledge of the Company, threatened, against or ------- affecting the Company or any Subsidiary of the Company which, in the aggregate, would reasonably be expected to have a Material Adverse Effect on the Company, nor are there any judgments, decrees, injunctions, rules or orders of any Governmental Entity or arbitrator outstanding against the Company or any Subsidiary of the Company which, in the aggregate, would reasonably be expected to have a Material Adverse Effect on the Company. (b) Except as disclosed in the Company Reports filed prior to the date of this Agreement and except as, in the aggregate, would not reasonably be expected to have a Material Adverse Effect on the Company, the Company and its Subsidiaries hold all permits, licenses, variances, exemptions, orders and approvals of all Governmental Entities which are necessary for the operation of the businesses of the Company and its Subsidiaries, taken as a whole (the "Company Permits"). The Company and its Subsidiaries are in compliance with the --------------- terms of the Company Permits, except where the failures to so comply, in the aggregate, would not reasonably be expected to have a Material Adverse Effect on the Company. Except as disclosed in the Company Reports filed prior to the date of this Agreement, neither the Company nor its Subsidiaries is in violation of, and the Company and its Subsidiaries have not received any notices of violations with respect to, any laws, ordinances or regulations of any Governmental Entity, except for violations which, in the aggregate, would not reasonably be expected to have a Material Adverse Effect on the Company. 3.6 Absence of Certain Changes or Events. ------------------------------------ (a) Except for liabilities incurred in connection with this Agreement or the Transactions, except as disclosed in the Company Reports filed prior to the date of this Agreement or as set forth in Section 3.6(a) of the Company Disclosure Letter, and except as permitted by ARTICLE V, since December 31, 1999, (i) the Company and its Subsidiaries have conducted their business only in the ordinary course and (ii) there has not been any action taken by the Company or any of its Subsidiaries during the period from December 31, 1999 through the date of this Agreement that, if taken during the period from the date of this Agreement through the Effective Time, would constitute a breach of ARTICLE V. Except as disclosed in the Company Reports filed prior to the date of this Agreement, since December 31, 1999, there have not been any changes, circumstances or 19 events which, in the aggregate, have had, or would reasonably be expected to have, a Material Adverse Effect on the Company. (b) Since December 31, 1999 and except for as set forth in Section 3.6(b) of the Company Disclosure Letter, there has not been any (i) adoption by the Company or any of its Subsidiaries of any Benefit Plan to which any of the Company's officers or employees is a participant or (ii) amendment to any of the Company's Benefit Plans that resulted in material increase in the benefits received or to be received thereunder by any officer or employees of the Company. Since December 31, 1999, there has not been any material increase in the aggregate benefits provided under the Company's Benefit Plans. 3.7 Environmental Matters. Except as, in the aggregate, would not --------------------- reasonably be expected to have a Material Adverse Effect on the Company and except as disclosed in the Company Reports filed prior to the date of this Agreement or as set forth in Section 3.7 of the Company Disclosure Letter (i) the operations of the Company and its Subsidiaries have been and are in compliance with all Environmental Laws (as defined below), and with all Company Permits required by Environmental Laws, (ii) there are no pending or, to the knowledge of the Company, threatened, Actions under or pursuant to Environmental Laws against the Company or its Subsidiaries or involving any real property currently or, to the knowledge of the Company, formerly owned, operated or leased by the Company or its Subsidiaries, (iii) the Company and its Subsidiaries are not subject to any Environmental Liabilities (as defined below), and, to the knowledge of the Company, no facts, circumstances or conditions relating to, arising from, associated with or attributable to any real property currently or, to the knowledge of the Company, formerly owned, operated or leased by the Company or its Subsidiaries or operations thereon would reasonably be expected to result in Environmental Liabilities, (iv) all real property owned and, to the knowledge of the Company, all real property operated or leased by the Company or its Subsidiaries is free of contamination from Hazardous Material (as defined below) that would have an adverse effect on human health or the environment and (v) there is not now, nor, to the knowledge of the Company, has there been in the past, on, in or under any real property owned, leased or operated by the Company or any of its predecessors (a) any underground storage tanks regulated pursuant to 40 C.F.R. Part 280 or delegated state programs, dikes or impoundments containing more than a reportable quantity of Hazardous Materials, (b) any friable asbestos-containing materials or (c) any polychlorinated biphenyls. As used in this Agreement, "Environmental Laws" means any and all federal, ------------------ state, foreign, interstate, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decisions, injunctions, orders, decrees, requirements of any Governmental Entity, any and all common law requirements, rules and bases of liability regulating, relating to or imposing liability or standards of conduct concerning pollution, Hazardous 20 Materials or protection of human health, safety or the environment, as currently in effect and includes, without limitation, 42 U.S.C. ss. 7401 et seq., the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. ss. 9601 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. ss. 5101 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. ss. 6901 et seq., the Clean Water Act, 33 U.S.C. ss. 1251 et seq., the Clean Air Act, 42 U.S.C. ss. 7401 et seq., the Toxic Substances Control Act, 15 U.S.C. ss. 2601 et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. ss. 136 et seq., Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq. and the Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et seq., as such laws have been amended or supplemented, and the regulations promulgated pursuant thereto, and all analogous state or local statutes. As used in this Agreement, "Environmental ------------- Liabilities" with respect to any person means any and all liabilities of or - ----------- relating to such person or any of its Subsidiaries (including any entity which is, in whole or in part, a predecessor of such person or any of such Subsidiaries), whether vested or unvested, contingent or fixed, actual or potential, known or unknown, which (i) arise under or relate to matters covered by Environmental Laws and (ii) relate to actions occurring or conditions existing on or prior to the Closing Date. As used in this Agreement, "Hazardous --------- Materials" means any materials or wastes, defined, listed, classified or - --------- regulated as hazardous, toxic, a pollutant, a contaminant or dangerous in or under any Environmental Laws which includes petroleum, petroleum products, friable asbestos, urea formaldehyde, radioactive materials and polychlorinated biphenyls. 3.8 Intellectual Property. Except as, in the aggregate, would not --------------------- reason ably be expected to have a Material Adverse Effect on the Company and except as disclosed in the Company Reports filed prior to the date of the Agreement: (a) the Company and each of its Subsidiaries owns, controls or is licensed to use (in each case, free and clear of any Liens), all Intellectual Property (as defined below) used in or necessary for the conduct of its business as currently conducted; (b) the Company and its Subsidiaries are not infringing or otherwise violating the Intellectual Property of any Person and are acting in accordance with any applicable license pursuant to which the Company or any Subsidiary acquired the right to use any Intellectual Property; (c) no Person is challenging or claiming the invalidity or unenforceability of any Intellectual Property owned or con trolled by and/or licensed to the Company or its Subsidiaries used in or necessary for the conduct of its business as currently conducted; and (d) neither the Company nor any of its Subsidiaries has received any written notice or otherwise has knowledge of any pending or threatened claim, order or proceeding with respect to any Intellectual Property owned, controlled, licensed or used by the Company or its Subsidiaries and no Intellectual Property owned, controlled and/or licensed by the Company or its Subsidiaries is being used or enforced in a manner that would reasonably be expected to result in the abandonment, cancellation or unenforceability of such Intellectual Property. For purposes of this Agree ment, "Intellectual Property" --------------------- shall mean trademarks, service marks, brand names, certifi- 21 cation marks, trade dress and other indications of origin, the goodwill associated with the foregoing and registrations in any jurisdiction of, and applications in any jurisdiction to register, the foregoing, including any extension, modification or renewal of any such registration or application; inventions, discoveries and ideas, whether patentable or not, in any jurisdiction; patents, applications for patents (including, without limitation, utility models and all divisions, continuations, continuations in part and renewal applications), and any renewals, extensions or reissues thereof, in any jurisdiction; nonpublic informa tion, trade secrets and confidential or proprietary information and rights in any jurisdiction to limit the use or disclosure thereof by any person; writings and other works, whether copyrightable or not, in any jurisdiction; and registrations or applications for registration of copyrights in any jurisdiction, and any renewals or extensions thereof; any similar intellectual property or proprietary rights. 3.9 Brokers or Finders. No agent, broker, investment banker, ------------------ financial advisor or other firm or Person is or will be entitled to any broker's or finder's fee or any other similar commission or fee in connection with any of the Transactions based upon arrangements made by or on behalf of the Company except as disclosed in Section 3.9 of the Company Disclosure Letter, each of whose fees and expenses will be paid by the Company in accordance with the Company's agreement with such firm, copies of which have been provided to Parent. 3.10 Employment Agreements. Except as disclosed in the Company --------------------- Reports or Section 3.10 of the Company Disclosure Letter, there are no employment, consulting, severance or indemnification arrangements, agreements or understandings between the Company or any Subsidiary, on the one hand, and any directors, officers or other management employees of the Company or any Subsidiary, on the other hand. 3.11 Taxes. ----- (a) Each of the Company and its Subsidiaries has filed all Tax Returns required to have been filed (or extensions have been duly obtained) and has paid all Taxes required to have been paid by it, except where failure to file such Tax Returns or pay such Taxes would not, in the aggregate, have a Material Adverse Effect on the Company. All such Tax Returns are correct and complete in all material respects. (b) Each of the Company and its Subsidiaries has paid all Taxes which have become due and payable, except where the failure to pay such Taxes would not have a Material Adverse Effect on the Company. Each of the Company and its Subsidiaries has made adequate provision in reserves established in its financial statements and accounts for all Taxes which have accrued but are not yet due and payable. 22 (c) Except as set forth in Section 3.11(c) of the Company Disclosure Let ter, there is no action, suit, taxing authority proceeding or audit now in progress or pending with respect to the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries has waived or extended, or requested any waiver of extension of, any limitation period for audit or assessment of any Tax liability. (d) Except as set forth in Section 3.11(c) of the Company Disclosure Letter, no deficiency for any amount of Tax has been asserted or assessed against the Company or any of its Subsidiaries which (i) has not been paid, settled or adequately provided for through reserves established in the financial statements and accounts and (ii) would have a Material Adverse Effect on the Company if required to be paid. (e) No election under Section 341(f) of the Internal Revenue Code of 1986, as amended (the "Code"), has been made to treat the Company or any of its ---- Subsidiaries as a consenting corporation (as defined in Section 341(f) of the Code). Neither the Company nor any of its Subsidiaries is a U.S. real property holding corporation within the meaning of Section 897(c)(2) of the Code. (f) Except as disclosed in Section 3.11(f) of the Company Disclosure Letter, neither the Company nor any of its Subsidiaries is a party to any agreement, contract, arrangement, or plan that has resulted or would result, separately or in the aggregate, in the payment of any "excess parachute payment" within the meaning of Section 280G of the Code (or any similar provision of state, local or foreign law) as a result of the Transactions. (g) Except as disclosed in Section 3.11(c) of the Company Disclosure Letter, there are no Tax Liens upon any property or assets of the Company or any of its Subsidiaries other than Liens for Taxes that (i) are being contested in good faith, (ii) are not yet due and payable, or (iii) would not, individually or in the aggregate, have a Material Adverse Effect on the Company if required to be paid. For purposes of this Agreement: (i) "Tax" (and, with correlative meaning, --- "Taxes") means any federal, state, local or foreign income, gross receipts, ----- property, sales, use, license, excise, franchise, employment, payroll, withholding, alternative or add on minimum, ad valorem, transfer or excise tax, or any other tax, custom, duty, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or penalty, imposed by any governmental authority or any obligation to pay Taxes imposed on any entity for which a party to this Agreement is liable as a result of any indemnification provision or other contractual obligation, and (ii) "Tax Return" means any ---------- return, report or similar statement required to be filed with respect to any Tax (including any 23 attached schedules), including, without limitation, any information return, claim for re fund, amended return or declaration of estimated Tax. 3.12 Certain Contracts. As of the date hereof, except as set forth in ----------------- the Company Reports filed prior to the date of this Agreement or Section 3.12 of the Company Disclosure Letter, neither the Company nor any of its Subsidiaries is a party to or bound by (i) any "material contracts" (as such term is defined in Item 601(b) (10) of Regulation S-K of the SEC) or (ii) any non-competition agreements or any other agreements or arrangements that limit or otherwise restrict the Company or any of its Subsidiaries or any of their respective affiliates or any successor thereto, or that would, after the Effective Time, to the knowledge of the Company, limit or restrict Purchaser or any of its affiliates (including the Surviving Corporation) or any successor thereto, from engaging or competing in any line of business or in any geographic area (collectively, "Material Contracts"), which agreements or arrangements, in the ------------------ aggregate, would reasonably be expected to have a Material Adverse Effect on Purchaser and its Subsidiaries (including the Surviving Corporation and its Subsidiaries), taken together, after giving effect to the Merger. 3.13 Company Shareholder Rights Plan. The Board of Directors of the ------------------------------- Company has amended the Rights Agreement in accordance with its terms to render it inapplicable to the Transactions. The Company has delivered to Parent a true and correct copy of the Rights Agreement, as amended, in effect as of execution and delivery of this Agreement. 3.14 ERISA Compliance. ---------------- (a) With respect to the Company's Benefit Plans, no event has occurred and, to the knowledge of the Company, there exists no condition or set of circumstances, in connection with which the Company or any of its Subsidiaries could be subject to any liability that individually or in the aggregate would have a Material Adverse Effect on the Company under ERISA, the Code or any other applicable law. (b) Each of the Company's Benefit Plans has been administered in accordance with its terms, all applicable laws, including ERISA and the Code, and the terms of all applicable collective bargaining agreements, except for any failures so to administer any of the Company's Benefit Plans that individually or in the aggregate would not rea sonably be expected to have a Material Adverse Effect on the Company. The Company, its Subsidiaries and all of the Company's Benefit Plans are in compliance with the applicable provisions of ERISA, the Code and all other applicable laws and the terms of all applicable collective bargaining agreements, except for any failures to be in such compli ance that individually or in the aggregate would not reasonably be expected to have a 24 Material Adverse Effect on the Company. Each of the Company's Benefit Plans that is intended to be qualified under Section 401(a) or 401(k) of the Code has received a favor able determination letter from the Internal Revenue Service (the "IRS") that it is so qualified and each trust established in connection --- with any of the Company's Benefit Plans that is intended to be exempt from federal income taxation under Section 501(a) of the Code has received a determination letter from the IRS that such trust is so exempt. To the knowledge of the Company, no fact or event has occurred since the date of any determination letter from the IRS which is reasonably likely to affect adversely the qualified status of any such Company Benefit Plan or the exempt status of any such trust, except for any occurrence that individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect on the Company, and to the knowledge of the Company, all contributions to, and payments from, such Benefit Plans which are required to be made in accordance with such Benefit Plans, ERISA or the Code have been timely made other than any failures that individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect on the Company. (c) Except as any of the following either individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect on the Company, (x) neither the Company nor any trade or business, whether or not incorporated (an "ERISA Affiliate"), which together with the Company would be --------------- deemed to be a "single employer" within the meaning of Section 4001(b) of ERISA, has incurred any liability under Title IV of ERISA and no condition exists that presents a risk to the Company or any ERISA Affiliate of the Company of incurring any such liability (other than liability for benefits or premiums to the Pension Benefit Guaranty Corporation arising in the ordinary course), (y) none of the Company's Benefit Plan has incurred an "accumulated funding deficiency" (within the meaning of Section 302 of ERISA or Section 412 of the Code) whether or not waived and (z) to the knowledge of the Company, there are not any facts or circumstances that would materially change the funded status of any of the Company's Benefit Plans that is a "defined benefit" plan (as defined in Section 3(35) of ERISA) since the date of the most recent actuarial report for such plan. (d) Neither the Company nor any of its Subsidiaries is a party to any collective bargaining or other labor union contract applicable to persons employed by the Company or any of its Subsidiaries and no collective bargaining agreement is being negotiated by the Company or any of its Subsidiaries, in each case that is material to the Company and its Subsidiaries taken as a whole. As of the date of this Agreement, there is no labor dispute, strike or work stoppage against the Company or any of its Subsidiaries pending or, to the knowledge of the Company, threatened which may interfere with the respective business activities of the Company or any of its Subsidiaries, except where such dispute, strike or work stoppage individually or in the aggregate would not reason ably be expected to have a Material Adverse Effect on the Company. To the knowledge 25 of the Company, none of the Company, any of its Subsidiaries or any of their respective representatives or employees has committed any unfair labor practice in connection with the operation of the respective businesses of the Company or any of its Subsidiaries except where such practice individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect on the Company. There is no charge or complaint against the Company or any of its Subsidiaries by the National Labor Relations Board or any comparable governmental agency pending or threatened in writing, except for any occurrence that individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect on the Company. (e) Except as disclosed in Section 3.14 of the Company Disclosure Letter, none of the Company's Benefit Plans provides medical benefits (whether or not insured) with respect to current or former employees after retirement or other termination of service the cost of which is material to the Company and its Subsidiaries taken as a whole. (f) With respect to each of the Company's Benefit Plans: (i) no actions, suits, claims or disputes are pending or, to the knowledge of the Company, threatened, other than claims for benefits made in accordance with the terms of such Company Benefit Plan, except for such actions, suits, claims or disputes that individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect on the Company; (ii) no audits are pending with any governmental or regulatory agency and to the knowledge of the Company there are no facts which could give rise to any liability in the event of such an audit that either individually or in the aggregate would have a Material Adverse Effect on the Company; and (iii) to the knowledge of the Company, all reports and returns required to be filed with any governmental agency or distributed to any participant in any of the Company's Benefit Plans have been so duly filed or distributed other than any failure to file or distribute such reports or returns that individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect on the Company. (g) The Company has not incurred any liability under Code Section 4975, and no fact exists which could result in a liability to the Company under Code Section 4975 that would reasonably be expected to have a Material Adverse Effect on the Company. (h) Neither the Company nor any ERISA Affiliate contributes to a multiemployer plan described in Section 3(37) of ERISA, no withdrawal liability has been incurred with respect to any such plan and no withdrawal liability would be incurred upon the withdrawal from any such plan by the Company or any ERISA Affiliate as of 26 the date hereof, except for any withdrawal that individually or in the aggregate would not have a Material Adverse Effect on the Company. (i) Except as disclosed in the Company Disclosure Letter, the consummation of the transactions contemplated by this Agreement will not, either alone or in combination with another event, (A) entitle any current or former employee, officer or director of the Company to severance pay, unemployment compensation or any other payment, (B) accelerate the time of payment or vesting, or increase the amount of compensation due any such employee, officer or director, or (C) constitute a "change of control" under any Company Benefit Plan. 3.15 Schedule 14D-9; Proxy Statement; Schedule TO. Neither the -------------------------------------------- Schedule 14D-9 nor any information supplied by the Company for inclusion in the Schedule TO will, at the respective times the Schedule 14D-9 and the Schedule TO are filed with the SEC and first published, sent or given to the Company's shareholders, contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. If a Proxy Statement is mailed to the Company's shareholders, on the date the Proxy Statement is mailed to the Company's shareholders and on the date of the Shareholders Meeting, if there is one, none of the information supplied by the Company for inclusion in the Proxy Statement will contain any untrue statement of a material fact or will omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading or necessary to correct any statement in any earlier communication with respect to the Shareholders Meeting or the solicitation of proxies to used at the Shareholders Meeting which shall have become false or misleading. However, the Company does not make any representations or warranties with respect to information supplied by the Parent, Purchaser or any of their affiliates or representatives for inclusion in the Schedule 14D-9, or with respect to the Schedule TO or the Proxy Statement (except to the extent of information supplied by the Company for inclusion in the Schedule TO or the Proxy Statement). The Schedule 14D-9 will comply as to form in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder. 27 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER Parent and Purchaser each represents and warrants to the Company as of the date of this Agreement as follows: 4.1 Organization, Standing and Power. Each of Parent and Purchaser -------------------------------- is a corporation duly organized, validly existing and, in the case of Purchaser, in good standing under the laws of its jurisdiction of incorporation or organization, has the requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted, except where the failures to be so organized, existing and in good standing or to have such power and authority, in the aggregate, would not reasonably be expected to have a material adverse effect on Parent's or Purchaser's ability to consummate the Offer or the Merger, and is duly qualified and in good standing to do business in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification necessary other than in such jurisdictions where the failures so to qualify or to be in good standing, in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Parent and its Subsidiaries, taken as a whole. The copies of the certificate of incorporation and bylaws of Parent and Purchaser, which were previously furnished or made available to the Company, are true, complete and correct copies of such documents as in effect on the date of this Agreement. 4.2 Authority; No Conflicts. ----------------------- (a) Each of Parent and Purchaser has all requisite corporate power and authority to enter into this Agreement and to consummate the Transactions. The execu tion and delivery of this Agreement and the consummation of the Transactions have been duly authorized by all necessary corporate action on the part of Parent and Purchaser. This Agreement has been duly executed and delivered by each of Parent and Purchaser and constitutes the valid and binding agreement of Parent and Purchaser, enforceable against each of them in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws relating to or affecting creditors generally or by general equity principles (regardless of whether such enforceability is considered in a proceeding in equity or at law). (b) The execution and delivery of this Agreement by each of Parent and Purchaser does not, and the consummation by Purchaser of the Merger and the other Transactions will not, conflict with, or result in any violation of, or constitute a default (with or without notice or lapse of time, or both) under, or give rise to a Violation pursu- 28 ant to: (A) any provision of the certificate of incorporation or bylaws (or equivalent organizational documents) of Parent or Purchaser or any material Subsidiary of Parent, or (B) except as, in the aggregate, would not reasonably be expected to have a material adverse effect on Parent's or Purchaser's ability to consummate the Offer or the Merger, subject to obtaining or making the consents, approvals, orders, authorizations, registrations, declarations and filings referred to in paragraph (c) below, any loan or credit agreement, note, mortgage, bond, indenture, lease, benefit plan or other agreement, obligation, instrument, permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Parent or Purchaser, any material Subsidiary, or their respective properties or assets. (c) No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required by or with respect to Parent or Purchaser or any Subsidiary of Parent in connection with the execution and delivery of this Agreement by Parent or Purchaser or the consummation of the Merger and the other Transactions, except for Necessary Consents. 4.3 Financial Capability. Parent and Purchaser have sufficient funds -------------------- to purchase all of the Common Stock outstanding on the Expiration Date, as such date may be extended, and the Effective Time, to pay all fees and expenses pursuant to Sections 1.1 and 2.9 and to pay all fees and expenses related to the Transactions. 4.4 Capitalization of Purchaser. The authorized capital stock of --------------------------- Purchaser consists of 1,000 shares common stock, par value $0.01 (the "Purchaser --------- Common Stock"). As of the date hereof, 1,000 shares of Purchaser Common Stock - ------------ are outstanding, all of which (i) were validly issued, and are fully paid and nonassessable and (ii) are owned, directly or indirectly, by Parent. 4.5 No Prior Activities. Purchaser was formed for the purpose of ------------------- effecting the Offer, the Merger and the Transactions, and does not have any Subsidiaries and has not undertaken any business or other activities other than in connection with pursuing the Offer and entering into this Agreement and engaging in the Transactions. 4.6 Offer Documents. Neither the Offer Documents nor any information --------------- supplied by Parent or Purchaser for inclusion in the Schedule 14D-9 will, at the respective times the Schedule TO and Schedule 14D-9 are filed with the SEC and first published, sent or given to the Company's shareholders, contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. If a Proxy Statement is mailed to the Company's shareholders, on the date the Proxy Statement is mailed to the Company's shareholders and on the date of 29 the Shareholders Meeting, if there is one, none of the information supplied by Parent and Purchaser for inclusion in the Proxy Statement will contain any untrue statement of a material fact or will omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading or necessary to correct any statement in any earlier communication with respect to the Shareholders Meeting or the solicitation of proxies to used at the Shareholders Meeting which shall have become false or misleading. However, Parent and Purchaser do not make any representations or warranties with respect to information supplied by the Company or any of its affiliates or representatives for inclusion in the Offer Documents, or with respect to the Schedule 14D-9 or the Proxy Statement (except to the extent of information supplied by Parent and Purchaser for inclusion in the Schedule 14D-9 or the Proxy Statement). The Offer Documents will comply as to form in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder. ARTICLE V COVENANTS 5.1 Conduct of Business by the Company Pending the Merger. The ----------------------------------------------------- Company covenants and agrees that, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Offer Completion Date, unless Parent shall otherwise agree in writing, and except as set forth in Section 5.1 of the Company Disclosure Letter or as contemplated hereby, the Company shall conduct its business and shall cause the businesses of its Subsidiaries to be conducted only in, and the Company and its 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 reasonable commercial efforts to preserve substantially intact the business organization of the Company and its Subsidiaries, to keep available the services of the present officers, employees and consultants of the Company and its Subsidiaries and to preserve the present relationships of the Company and its Subsidiaries with customers, suppliers and other persons with which the Company or any of its Subsidiaries has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement, or as required by applicable law or rule of any stock exchange or over-the-counter market, neither the Company nor any of its Subsidiaries shall, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Offer Completion Date, and except as set forth in Section 5.1 of the Company Disclosure Letter, directly or indirectly do, or propose to do, any of the following without the prior written consent of Parent: 30 (a) Amend or otherwise change its certificate of incorporation or by- laws, or amend the Rights Agreement or reduce the rights issued thereunder; (b) Issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including, without limitation, any phantom interest) in the Company, any of its Subsidiaries or affiliates (except for the issuance of shares of Company Common Stock issuable pursuant to Company Stock Options under the Company Stock Option Plans, which options are outstanding on the date hereof; provided that the occurrence of a separation of the rights under the -------- Rights Agreement, and the related issuance of shares of Company Common Stock to the Company's shareholders thereunder shall not be deemed a breach of this Agreement to the extent that (i) the occurrence of such separation occurred as a result of an unsolicited acquisition of Company Common Stock by a third party, and (ii) such acquisition did not occur as a result of the Company breaching Section 5.2 hereof); (c) Sell, pledge, dispose of or encumber any assets of the Company or any of its Subsidiaries (except for (i) sales of inventory in the ordinary course of business and in a manner consistent with past practice and (ii) dispositions of obsolete or worthless assets); (d) (i) Declare, set aside, make or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, except that a wholly-owned Subsidiary of the Company may declare and pay a dividend to its parent, (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, (iii) except as required by the terms of any security as in effect on the date hereof or expressly permitted hereunder, amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any Subsidiary to amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, any of its securities or any securities of its subsidiaries, including, without limitation, shares of Company Common Stock, or any option, warrant or right, directly or indirectly, to acquire any such securities, or propose to do any of the foregoing, or (iv) commence any claim, suit or other action or settle, pay or discharge any claim, suit or other action brought or threatened against the Company other than any claim, suit or action with respect to or arising out of the ordinary course of business which is not material to the Company considered as a whole; 31 (e) (i) Acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof; (ii) incur any indebtedness for borrowed money, except in the ordinary course of business or issue any debt securities or assume, guarantee (other than guarantees of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for, the obligations of any person, make any loans or advances, except in the ordinary course of business consistent with past practice; (iii) commit to make any capital expenditures or purchases of fixed assets; except in the ordinary course of business consistent with past practice; or (iv) enter into any lease agreement other than in the ordinary course of business consistent with past practices; (f) Increase the compensation or severance payable or to become payable to its directors, officers or employees, except for increases in salary or wages of employees of the Company or its Subsidiaries (who are not directors or executive officers of the Company) in accordance with past practices, or grant any severance or termination pay (except payments required to be made under obligations existing on the date hereof that are disclosed to Parent or Purchaser in accordance with the terms of such obligations) to, or enter into any employment or severance agreement with, any employee of the Company or any of its Subsidiaries, except for agreements with new employees entered into in the ordinary course of business and providing for annual base and bonus compensation not to exceed $150,000, or establish, adopt, enter into or amend any collective bargaining agreement, any of the Company's Benefit Plans (within the meaning of Section 3.2(a)), trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees or any of their beneficiaries, except, in each case, as may be required by law or as would not result in a material increase in the cost of maintaining such collective bargaining agreement, Benefit Plan, trust, fund, policy or arrangement; (g) Take any action to change material accounting policies or procedures (including, without limitation, procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable), except as required by a change in GAAP or SEC position occurring after the date hereof; (h) Except in the ordinary course of business, make any Tax election or settle or compromise any material United States federal, state, local or non- United States Tax liability; (i) Pay, discharge or satisfy any claims, liabilities or obligations (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 financial statements contained in the 32 Company Reports or incurred in the ordinary course of business and consistent with past practice; (j) Enter into any contract or agreement which is material to the Company other than in the ordinary course of business and consistent with past practices, or amend, modify or consent to the termination of any Material Contract, other than in the ordinary course of business and consistent with past practices; or (k) Take, or agree in writing or otherwise to take, any of the actions described in Sections 5.1(a) through (i) above, or any action which would make any of the representations or warranties of the Company contained in this Agreement untrue or in correct or prevent the Company from performing or cause the Company not to perform its covenants hereunder. 5.2 No Solicitation. Except as otherwise provided in this Agreement, --------------- the Company shall not, directly or indirectly, or through any officer, director, employee, representative or agent of the Company or any of its Subsidiaries, and shall not permit any such officer, director, employee, representative or agent to, solicit or encourage the initiation of (including by way of furnishing information) any inquiries or proposals regarding, or participate in negotiations or discussions concerning any merger, sale of assets, sale of shares of capital stock (including without limitation by way of a tender offer) or similar transactions involving the Company or any Subsidiaries of the Company that if consummated would constitute an Alternative Transaction (as defined in Section 7.1) (any of the foregoing inquiries or proposals being referred to herein as an "Acquisition Proposal"). Upon the execution of this Agreement, the -------------------- Company shall immediately cease any discussions or negotiations with any person, entity or group (other than Parent or any of its affiliates or representatives) concerning any such transaction or any Acquisition Proposal that are continuing on the date hereof and thereafter shall seek to have returned to the Company any confidential information that has been provided in any such discussions or negotiations. Nothing in this section shall prevent the Board from (i) furnishing information to a Third Party (as defined in Section 7.1) which has made a bona fide written Acquisition Proposal that the Board reasonably ---- ---- determines is likely to lead to a Superior Proposal (as defined below) not solicited in violation of this Agreement, provided that, with respect to any person that is not currently party to a confidentiality agreement with the Company, such person has executed an agreement with confidentiality and other provisions substantially similar to those then in effect between the Company and Parent, or (ii) subject to compliance with the other terms of this Section 5.2, considering and negotiating a bona fide written Acquisition Proposal that is a Superior Proposal not solicited in violation of this Agreement; provided, -------- however, that, as to each of clauses (i) and (ii), (x) such actions occur at a - ------- time prior to the consummation (or, if the Offer is consummated and extended, the initial consummation) of the Offer and (y) the Board deter- 33 mines in good faith (based on the advice of its financial advisor and counsel) that the failure to take such actions would be inconsistent with its fiduciary duties to the Com pany's shareholders under applicable law. For purposes of this Agreement, a "Superior Proposal" means any written proposal made by a third ----------------- person to acquire, directly or indirectly, for consideration consisting of cash and/or securities, all of the equity securities of the Company entitled to vote generally in the election of directors or all or substantially all the assets of the Company, if, and only if, the Board reasonably determines (after consultation with its financial advisor and counsel) (i) that the proposed transaction would be more favorable from a financial point of view to its shareholders than the Offer and the Merger and the Transactions taking into account at the time of determination any changes to the terms of this Agreement which as of that time had been proposed by Parent and (ii) that the person or entity making such Acquisition Proposal is capable of consummating such Acquisition Proposal (based upon, among other things, the availability of financing and the degree of certainty of obtaining financing, the expectation of obtaining required regulatory approvals and the identity and background of such person). (a) The Company shall notify Parent promptly upon receipt of any Acquisition Proposal, or any modification of or amendment to any Acquisition Proposal, or any request for nonpublic information relating to the Company or any of its Subsidiaries in connection with an Acquisition Proposal or for access to the properties, books or records of the Company or any Subsidiary by any person or entity that informs the Board or such Subsidiary that it is considering making, or has made, an Acquisition Proposal. Such notice to Parent shall be made orally and in writing, and shall indicate the identity of the person making the Acquisition Proposal or intending to make an Acquisition Proposal or requesting non-public information or access to the books and records of the Company, the terms of any such Acquisition Proposal or modification or amendment to an Acquisition Proposal, and whether the Company is providing or intends to provide the person making the Acquisition Proposal with access to information concerning the Company as provided in this Section 5.2. the Company shall also promptly notify Parent, orally and in writing, if it enters into negotiations concerning any Acquisition Proposal. (b) Except as provided in the following sentence, neither the Company nor the Board shall withdraw or modify in a manner adverse to Parent or Purchaser, or propose to withdraw or modify in a manner adverse to Parent or Purchaser, or fail at Parent's request to reaffirm, the approval by such Board of this Agreement, the Offer or the Merger or the favorable recommendation of the Board with respect thereto. The foregoing notwithstanding, in the event that, after the Company has received a bona fide written Acquisition Proposal --------- not solicited in violation of this Agreement, the Board determines (based on the advice of its counsel), prior to the consummation (or, if the Offer is consummated and extended, the initial consummation) of the Offer, that the failure to take such actions would be inconsistent with its fiduciary duties to the Company's share- 34 holders under applicable law, the Board may (x) withdraw or modify its approval or recommendation of this Agreement, the Offer or the Merger and disclose to the Company's shareholders a position contemplated by Rule 14d-9 or Rule 14e- 2(a) promulgated under the Exchange Act or otherwise make disclosure to them, or (y) approve or recommend such an Acquisition Proposal that is a Superior Proposal; provided, however, that in no event may the Board take either such -------- ------- action earlier than the second full business day following Parent's receipt of written notice of the intention of the Board to do so. (c) The Company and the Board shall not (i) redeem the Rights under the Rights Agreement, or waive or amend any provision of the Rights Agreement, in any such case to permit or facilitate the consummation of any Acquisition Proposal or Alternative Transaction, or (ii) enter into any agreement with respect to, or otherwise approve or recommend to shareholders, or publicly propose to approve or recommend, any Acquisition Proposal or Alternative Transaction, unless this Agreement has been terminated in accordance with its terms. (d) The Company shall not release any third party from the confidentiality provisions of any agreement to which the Company is a party. 5.3 Access to Information; Confidentiality. (a) The Company shall -------------------------------------- (and shall cause its Subsidiaries to): (i) afford to the officers, employees, accountants, counsel, financing sources and other representatives of Parent, reasonable access during normal business hours to its properties, books, contracts, commitments and records; (ii) furnish to Parent all information concerning its business, properties and personnel as Parent may reasonably request or has reasonably requested; and (iii) make available during normal business hours to the officers, employees, accountants, counsel, financing sources and other representatives of Parent the appropriate individuals (including management personnel, attorneys, accountants and other professionals) for discussion of the Company's business, properties, prospects and personnel as Parent may reasonably request. (b) Parent shall keep all information disclosed to it pursuant to this Agreement confidential in accordance with the terms of the confidentiality letter, dated May 10, 2000 (the "Confidentiality Letter"), between Parent and ---------------------- the Company. 35 5.4 Consents; Approvals. ------------------- (a) Subject to the terms and conditions herein provided, Parent and the Company shall (i) promptly make all filings necessary in connection with their respective Necessary Consents and (ii) use reasonable best efforts to cooperate with one another in (y) determining whether any filings are required to be made with, or consents, permits, authorizations or approvals are required to be obtained from, any third party or other Governmental Entity in connection with the execution and delivery of this Agreement and the consummation of the Transactions and (z) timely making all such filings and timely seeking all such consents, permits, authorizations or approvals, including such party's Necessary Consents. The parties shall cooperate with one another in connection with the making of all such filings, including providing copies of all such documents to the non-filing or non-submitting party and its advisors prior to filing or otherwise submitting. (b) (i) Without limiting the generality of the undertakings of Parent and the Company pursuant to Section 5.4(a), Parent and Purchaser agree to (1) promptly effect all necessary registrations and filings, including, but not limited to, filings and submissions of information under the HSR Act, and applicable foreign laws that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization, restraint of trade or limitation of competition (collectively, "Antitrust Laws"), and (2) use -------------- reasonable best efforts to promptly take, or cause their affiliates to take, if required by the Federal Trade Commission (the "FTC") or its staff, the Assistant --- Attorney General in charge of the Antitrust Division and his staff, or any state attorney general or its staff, or any comparable person under applicable foreign Antitrust Laws, in each case in order to consummate the Transactions, all commercially reasonable actions and things (including, without limitation, executing agreements and submitting to judicial or administrative orders) to secure federal, state and applicable foreign antitrust clearance (includ ing by avoiding or setting aside any preliminary or permanent injunction or other order of any United States federal, state, local, or foreign court or other Governmental Entity). The existence of the conditions set forth in Sections 6.2 and clauses (a) and (b) of Annex A shall not limit or diminish Parent's ------- obligations pursuant to the foregoing sentence or relieve Parent of any liability or damages that may result from its breach of its obligations under this Section 5.4(b)(i). In connection with the foregoing, the Company will cooper ate with and assist Parent, and, with respect to matters that are within its power or control will use its reasonable best efforts to promptly (x) take, or cause to be taken, all actions and to do, or cause to be done, all commercially reasonable things necessary, proper or advisable under applicable Antitrust Laws to consummate the Transactions as soon as practicable, including, without limitation, preparing and filing as promptly as practicable all documentation to effect all necessary filings, notices, petitions, statements, registra tions, submissions of information, applications and other documents and (y) obtain and 36 maintain all approvals, consents, registrations, permits, authorizations and other confirmations required to be obtained from any third party that are necessary, proper or advisable to consummate the Merger and the other Transactions. Subject to applicable laws relating to the exchange of information, Parent and the Company shall have the right to review in advance, and to the extent practicable each will consult with the other on, all the information relating to their respective Subsidiaries that appears in any filing made with, or written materials submitted to, any third party and/or any Governmental Entity in connection with the Merger and the other Transactions. (ii) In furtherance and not in limitation of the foregoing, and to the extent that any such action has not heretofore been taken or completed, each of Parent and the Company agrees to (x) make an appropriate filing of a Notification and Report Form pursuant to the HSR Act with respect to the transactions contemplated hereby as promptly as practicable and in any event within ten business days of the date hereof, (y) supply as promptly as practicable any additional information and documentary material that may be requested pursuant to the HSR Act and (z) complete the review process under the HSR Act to permit the consummation of the Merger including, but not limited to, causing the expiration of termination of the applicable waiting periods under the HSR Act as soon as practicable. 5.5 Indemnification and Insurance. ----------------------------- (a) The certificate of incorporation and by-laws of the Surviving Corporation shall contain provisions with respect to indemnification substantially to the same effect as those set forth in the certificate of incorporation and the by-laws of the Company on the date hereof, which provisions shall not be amended, modified or otherwise repealed for a period of six years after the Effective Time in any manner that would adversely affect the rights thereunder as of the Effective Time of individuals who at the Effective Time were directors, officers, employees or agents of the Company, unless such modification is required after the Effective Time by law. (b) Parent shall cause the Surviving Corporation, to the fullest extent permitted under applicable law or under the Surviving Corporation's certificate of incorporation or by-laws, to indemnify and hold harmless, each present and former director, officer or employee of the Company or any of its Subsidiaries (collectively, the "Indemnified Parties") against any costs or -------------------- expenses (including attorneys' fees), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, (x) arising out of or pertaining to the Transactions or (y) otherwise with respect to any acts or omissions occurring at or prior to the Effective Time, to the same extent as provided in the Company's certificate of incorporation or by-laws or 37 any applicable contract or agreement as in effect on the date hereof, in each case for a period of six years after the date hereof. In the event of any such claim, action, suit, proceeding or investigation (whether arising before or after the Effective Time) and subject to the specific terms of any indemnification contract, (i) any counsel retained by the Indemnified Parties for any period after the Effective Time shall be reasonably satisfactory to the Surviving Corporation, (ii) after the Effective Time, the Surviving Corporation shall pay the reasonable fees and expenses of such counsel, promptly after statements therefor are received and (iii) the Surviving Corporation will cooperate in the defense of any such matter; provided, however,that the -------- ------- Surviving Corporation shall not be liable for any settlement effected without its written consent (which consent shall not be unreasonably withheld or delayed); and provided, further, that, in the event that any claim or claims -------- ------- for indemnification are asserted or made within such six-year period, all rights to indemnification in respect of any such claim or claims shall continue until the disposition of any and all such claims. The Indemnified Parties as a group may retain only one law firm to represent them with respect to any single action unless there is, under applicable standards of professional conduct, a conflict on any significant issue between the positions of any two or more Indemnified Parties, in which case each Indemnified Person with respect to whom such a conflict exists (or group of such Indemnified Persons who among them have no such conflict) may retain one separate law firm. (c) In addition, Parent will provide, or cause the Surviving Corporation to provide, for a period of not less than six years after the Effective Time, the Company's current directors and officers an insurance and indemnification policy that provides coverage for events occurring at or prior to the Effective Time (the "D&O Insurance") that is no less favorable than the ------------- existing policy or, if substantially equivalent insurance coverage is unavailable, the best available coverage; provided, however, that Parent and the -------- ------- Surviving Corporation shall not be required to pay an annual premium for the D&O Insurance in excess of twice the annual premium currently paid by the Company for such insurance (which annual premium the Company represents to currently be $380,000), but in such case shall purchase as much such coverage as possible for such amount. (d) This Section shall survive the consummation of the Merger at the Effective Time, is intended to benefit the Company, the Surviving Corporation and the Indemnified Parties, shall be binding on all successors and assigns of the Surviving Cor poration and shall be enforceable by the Indemnified Parties. 5.6 Employee Benefits. ----------------- (a) Effective as of the Effective Time and for a one-year period following the Effective Time, Parent shall provide, or cause the Surviving Corporation and its Subsidiaries and successors to provide, those persons who, immediately prior to the Effective 38 Time, were employees of the Company and its Subsidiaries and who continue in such employment ("Continuing Employees"), with benefits and compensation that -------------------- are substantially comparable, in the aggregate, to the compensation and benefits provided to such employees as of the date of this Agreement; provided, -------- Surviving Corporation from terminating the employment of any such employees in accordance with applicable laws and contractual rights, if any, of such employees. (b) Except with respect to accruals under any defined benefit pension plan, Parent will, or will cause the Surviving Corporation and its Subsidiaries to, give Continuing Employees full credit for purposes of eligibility, vesting and determination of the level of benefits under any employee benefit plans or arrangements maintained by Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation for such Continuing Employees' service with the Company or any Subsidiary of the Company to the same extent recognized by the Company for similar purposes immediately prior to the Effective Time. Parent will, or will cause the Surviving Corporation and its Subsidiaries to, (i) waive all limitations as to preexisting conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to the Continuing Employees under any welfare plan that such employees may be eligible to participate in after the Effective Time, other than limitations or waiting periods that are already in effect with respect to such employees and that have not been satisfied as of the Effective Time under any welfare plan maintained for the Continuing Employees immediately prior to the Effective Time, and (ii) provide each Continuing Employee with credit for any co-payments and deductibles paid prior to the Effective Time in satisfying any applicable deductible or out-of-pocket requirements under any welfare plans that such employees are eligible to participate in after the Effective Time to the same extent as if those deductibles or co-payments had been paid under the welfare plans for which such employees are eligible after the Effective Time. (c) For purposes of the Company's Benefit Plans, the Offer Completion Date will constitute a "change in control" of the Company (as such term or similar term is defined in an applicable Benefit Plan). The Parent shall (i) cause the Surviving Corporation after the Offer Completion Date to pay all amounts provided under all of the Company's Benefit Plans in accordance with their terms, and (ii) honor and cause the Surviving Corporation to honor all rights, privileges and modifications to or with respect to any such Company Benefit Plans which become effective as a result of such change in control. 39 5.7 Notification of Certain Matters. The Company shall give prompt ------------------------------- notice to Parent and Parent shall give prompt notice to the Company, of (i) the occurrence or nonoccurrence of any event the occurrence or nonoccurrence of which is reasonably likely to cause any representation or warranty of such party contained in this Agreement to be materially untrue or inaccurate, (ii) any failure of the Company or Parent, as the case may be, materially to comply with or satisfy, or the occurrence or nonoccurrence of any event the occurrence or nonoccurrence of which is reasonably likely to cause the failure by such party materially to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; (iii) the Company obtaining knowledge of a material breach by Parent, or Parent obtaining knowledge of a material breach by the Company, of their respective representations, warranties, or covenants hereunder of which the breaching party has not already given notice pursuant to clauses (i) or (ii); or (iv) the occurrence of any other event which would be reasonably likely (A) to have a Material Adverse Effect on the Company or (B) to cause any condition set forth in Annex A hereto to be unsatisfied in ------- any material respect at any time prior to the consummation of the Offer; provided, however, that the delivery of any notice pursuant to this Section 5.7 - -------- ------- shall not limit or otherwise affect the remedies available hereunder to the party receiving such notice. 5.8 Other Cooperation and Further Assurances. If required by appli- ---------------------------------------- cable law, as soon as practicable following consummation of the Offer, Parent and the Company shall together, or pursuant to any reasonable allocation of responsibility between them, cooperate with one another in taking all commercially reasonable efforts in order to lift any injunctions or remove any other impediment to the consummation of the Transactions. In case at any time after the Effective Time any further action is necessary or desirable to carry out the purposes of this Agreement, the proper officers and directors of each of the parties to this Agreement shall take all such necessary action. 5.9 Public Announcements. Parent and the Company shall consult with -------------------- each other before issuing any press release or making any written public statement with respect to the Offer or Merger or this Agreement and shall not issue any such press release or make any such public statement without the prior consent of the other party, which shall not be unreasonably withheld; provided, however, that either party may, without the prior consent of the - -------- ------- other, issue such press release or make such public state ment as may upon the advice of counsel be required by law or the rules and regulations of the National Association of Securities Dealers, the New York Stock Exchange, or the Stock Exchange of Switzerland in advance of obtaining such prior consent, if it has used all reasonable efforts to consult with the other party. 40 5.1 Financial Information. The Company will deliver to Parent, as --------------------- soon as reasonably practicable, such financial information as Parent may request to the extent such financial information is regularly prepared by the Company for the Board or for management. ARTICLE VI CONDITIONS TO THE MERGER The respective obligations of each party to effect the Merger shall be subject to the fulfillment or waiver at or prior to the Effective Time of the following conditions: 6.1 Offer. The Offer Completion Date shall have occurred. ----- 6.2 Shareholder Approval. If required by applicable law, this -------------------- Agreement shall have been adopted at or prior to the Effective Time by the requisite vote of the shareholders of the Company in accordance with the DGCL. 6.3 No Injunction or Action. No order, statute, rule, regulation, ----------------------- executive order, stay, decree, judgment or injunction shall have been enacted, entered, promulgated or enforced by any court or other Governmental Entity which prohibits or prevents the consummation of the Merger which has not been vacated, dismissed or withdrawn prior to the Effective Time. The Company and Parent shall use reasonable best efforts to have any of the foregoing vacated, dismissed or withdrawn by the Effective Time. ARTICLE VII TERMINATION 7.1 Termination. This Agreement may be terminated at any time prior ----------- to the Effective Time, notwithstanding approval thereof by the shareholders of the Company: (a) by mutual written consent duly authorized by the Boards of Directors of Parent and the Company; or 41 (b) by either Parent or the Company if the initial consummation of the Offer shall not have occurred on or prior to September 30, 2000; provided, -------- however, that either party may by written notice to the other party delivered on - ------- or prior to September 30, 2000 extend such date until November 30, 2000 if the failure to consummate the Offer on or prior to September 30, 2000 shall have resulted from the failure of the conditions set forth in clause (a) of Annex A and/or clause (b) of Annex A to be satisfied; and provided, further, that the -------- ------- right to terminate this Agreement under this Section 7.1(b) shall not be available to any party whose failure to fulfill any obligation under this Agreement has been the cause of, or resulted in, the failure of the Offer to be consummated on or prior to such date; or (c) by either Parent or the Company if, as the result of the failure of the Minimum Condition or any of the other conditions set forth in Annex A ------- hereto, the Offer shall have terminated or expired in accordance with its terms without Purchaser having purchased any shares of Company Common Stock pursuant to the Offer; or (d) by either Parent or the Company if a court of competent jurisdiction or governmental, regulatory or administrative agency or commission shall have issued a nonappealable final order, decree or ruling or taken any other nonappealable final action having the effect of permanently restraining, enjoining or otherwise prohibiting the Offer or the Merger; provided that the -------- party seeking to terminate this Agreement shall have used its reasonable best efforts to remove or lift such order decree or ruling; or (e) by Parent, if, whether or not permitted to do so by this Agreement, the Board or the Company shall, prior to the Offer Completion Date (x) (i) withdraw, modify or change its approval or recommendation of the Offer, this Agreement or the Merger in a manner adverse to Parent, (ii) approve or recommend to the shareholders of the Company an Acquisition Proposal or Alternative Transaction; or (iii) approve or recommend that the shareholders of the Company tender their shares in any tender or exchange offer that is an Alternative Transaction or (y) take any public position or make any disclosures to the Company's shareholders, whether or not permitted pursuant to Section 5.2, which has the effect of any of the foregoing; or (f) by Parent or the Company, upon a material breach of any representation, warranty, covenant or agreement on the part of the Company or Parent, respectively, set forth in this Agreement (a "Terminating Breach"); ------------------ provided that, except for any breach of the Company's obligations under Section - -------- 5.2, if such Terminating Breach is curable prior to the Initial Expiration Date (or any extension thereof) by the Company or Parent, as the case may be, through the exercise of its reasonable best efforts and for so long as the Company or Parent, as the case may be, continues to exercise such reasonable 42 best efforts, neither Parent nor the Company, respectively, may terminate this Agreement under this Section 7.1(g) until such date; or (g) by the Company, in order to accept a Superior Proposal; provided -------- that (A) the Offer shall not theretofore have been consummated (or, if the Offer is consummated and extended, initially consummated); (B) the Board determines (based on the advice of counsel) that the failure to take such actions would be inconsistent with its fiduciary duties to the Company's shareholders under applicable law; (C) the Company has given Parent two full business days' advance notice of the Company's intention to accept such Superior Proposal; (D) the Company shall have paid the Fee and the Expense Reimbursement pursuant to Section 7.3(b); and (E) the Company shall have complied in all respects with the provisions of Section 5.2. Notwithstanding the foregoing, the right to terminate this Agreement pursuant to clauses (e) and (f) above shall not be available to Parent if Purchaser or any other affiliate of Parent shall have acquired shares of Company Common Stock pursuant to the Offer. As used herein, "Alternative Transaction" means any of (i) a ----------------------- transaction pursuant to which any person (or group of persons (including the shareholders of any party to such transaction)) other than Parent or its affiliates (a "Third Party") acquires or would acquire more than 30% of the ----------- outstanding shares of any class of equity securities of the Company, whether from the Company or pursuant to a tender offer or exchange offer or otherwise, (ii) a merger or other business combination involving the Company pursuant to which any Third Party acquires more than 30% of the outstanding equity securities of the Company or the entity surviving such merger or business combination, (iii) any transaction pursuant to which any Third Party acquires or would acquire control of assets (including for this purpose the outstanding equity securities of Subsidiaries of the Company and securities of the entity surviving any merger or business combination including any of the Company's Subsidiaries) of the Company, or any of its Subsidiaries having a fair market value (as determined by the Board in good faith) equal to more than 30% of the fair market value of all the assets of the Company and its Subsidiaries, taken as a whole, immediately prior to such transaction, or (iv) any other consolidation, business combination, recapitalization or similar transaction involving the Company or any of the Company Subsidiaries that are "significant" under Regulation S-X at a level of 30% or more, other than the Transactions; provided, however, that the term Alternative Transaction shall not include any - -------- ------- acquisition of securities by a broker dealer in connection with a bona fide public offering of such securities. 43 7.2 Effect of Termination. In the event of the termination of this --------------------- Agreement pursuant to Section 7.1, written notice thereof shall forthwith be given to the other party or parties specifying the provision hereof pursuant to which such termination is made, and this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto or any of its affiliates, directors, officers or shareholders except for any obligation of the Company or Parent set forth in Section 7.3 hereof. Notwithstanding the foregoing, nothing herein shall relieve the Company or Parent from liability for any willful breach hereof (it being understood that the provisions of Section 7.3 do not constitute a sole or exclusive remedy for such willful breach). 7.3 Fees and Expenses. ----------------- (a) Except as set forth in this Section 7.3, all fees and expenses incurred in connection with this Agreement and the Transactions shall be paid by the party incurring such expenses, whether or not the Merger is consummated. (b) The Company shall pay Parent a fee of $30,000,000 (the "Fee") --- (and shall also pay Parent up to $1,000,000 to reimburse Parent for its itemized out-of-pocket expenses in connection with the Transactions (the "Expense ------- Reimbursement") upon the first to occur of any of the following events: - ------------- (1) the termination of this Agreement by Parent pursuant to Section 7.1(e) or Section 7.1(f); or (2) the termination of this Agreement by the Company pursuant to Section 7.1(g). (c) Parent shall reimburse the Company for the Ocular Fee (the "Parent Expense Reimbursement") upon the termination of this Agreement by (i) by - ----------------------------- either Parent or the Company pursuant to Section 7.1(b), Section 7.1(c), or Section 7.1(d) if the failure to consummate the Offer is the result of the failure of the conditions set forth in any of clauses (a) or (b) of Annex A to ------- be satisfied or (ii) the Company pursuant to Section 7.1(f); provided, however, -------- ------- if within twelve months of termination of this Agreement pursuant to clause (i) of this paragraph, an Alternative Transaction is consummated, then the Company shall pay to Parent, not later than two days after the date such Alternative Transaction is consummated, an amount equal to the Ocular Fee previously reimbursed to the Company by Parent pursuant to the provisions hereof. (d) The Fee and the Expense Reimbursement and Parent Expense Reimbursement shall be paid by wire transfer of same day funds to an account designated by Parent or the Company, as applicable within two business days after a demand for payment 44 following (i) in the case of the Fee and the Expense Reimbursement, the first to occur of any of the events described in Section 7.3(b); provided that, in the -------- event of a termination of this Agreement under Section 7.1(g), the Fee and the Expense Reimbursement shall be paid as therein provided as a condition to the effectiveness of such termination; and (ii) in the case of the Parent Expense Reimbursement, the first to occur of any of the events described in Section 7.3(c). (e) The agreements contained in this Section 7.3 are an integral part of the Transactions and do not constitute a penalty. In the event of any dispute between the Company and Parent as to whether the Fee and the Expense Reimbursement or the Parent Expense Reimbursement under this Section 7.3 is due and payable, the prevailing party shall be entitled to receive from the other party the reasonable costs and expenses (including reasonable legal fees and expenses) in connection with any action, including the filing of any lawsuit or other legal action, relating to such dispute. Interest shall be paid on the amount any unpaid fee at the publicly announced prime rate of Bank One, N.A. from the date such fee was required to be paid. ARTICLE VIII GENERAL PROVISIONS 8.1 Nonsurvival of Representations, Warranties and Agreements. The --------------------------------------------------------- representations, warranties and agreements in this Agreement or in any instrument delivered pursuant to this Agreement shall not survive the Merger, provided that the representations and warranties of the Company shall not - -------- survive the Offer Completion Date, and provided further that the agreements -------- ------- contained in Section 2.4, Section 2.9, Section 2.10, Section 2.11, Section 5.5 and this ARTICLE VIII will survive the Merger. 8.2 Notices. Any notice required to be given hereunder will be ------- sufficient if in writing, and sent by facsimile transmission (provided that any notice received by facsimile transmission or otherwise at the addressee's location on any business day after 5:00 p.m. (addressee's local time) shall be deemed to have been received at 9:00 a.m. (addressee's local time) on the next business day), by courier service (with proof of service), hand delivery or certified or registered mail (return receipt requested and first-class postage prepaid), addressed as follows: If to Parent or Purchaser: Novartis AG Schwarzwaldallee 215 45 CH-4058 Basel Switzerland Attention: Urs Barlocher Telecopier No.: 011-4161-697-3921 WJ Acquistion Corp. C/O Novartis Corporation 608 5/th/ Avenue New York, New York 10020 Attention: Robert Thompson Telecopier No.: (212) 830-2416 CIBA Vision Corporation 11460 Johns Creek Parkway Duluth, Georgia 30097-1556 Attention: R. Scott Meece Telecopier No.: (678) 415-3018 With copies to: Shearman & Sterling 599 Lexington Avenue New York, New York 10022 Attention: David W. Heleniak, Esq. Telecopier No.: 212-848-7179 If to the Company: Wesley Jessen VisionCare, Inc. 333 East Howard Avenue Des Plaines, IL 60018-5903 Attention: Edward J. Kelley Telecopier No.: (847) 294-3515 With copies to: Sweeney Lev & Blinkoff LLP 460 Bloomfield Avenue Suite 2000 Montclair, NJ 07042 Attention: Gerald B. Sweeney, Esq. 46 Telecopier No.: (973) 509-1074 Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, NY 10036-6522 Attention: Roger S. Aaron, Esq. Telecopier No.: 212-735-2000 or to such other address as any party shall specify by written notice so given, and such notice shall be deemed to have been delivered as of the date so telecommunicated, personally delivered or mailed. Any party to this Agreement may notify any other party of any changes to the address or any of the other details specified in this paragraph, provided that such notification shall only be effective on the date specified in such notice or five (5) business days after the notice is given, whichever is later. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to be receipt of the notice as of the date of such rejection, refusal or inability to deliver. 8.3 Assignment; Binding Effect. Neither this Agreement nor any of -------------------------- the rights, interests or obligations hereunder may be assigned by any of the parties (whether by operation of law or otherwise) without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon and shall inure to the benefit of the parties and their respective successors and permitted assigns. Notwithstanding anything contained in this Agreement to the contrary, except for the provisions of Section 5.5, nothing in this Agreement, expressed or implied, is intended to confer on any person other than the parties hereto or their respective heirs, successors, executors, administrators and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement. 8.4 Entire Agreement. This Agreement, the Company Disclosure Letter, ---------------- and any documents delivered by the parties in connection herewith constitute the entire agreement among the parties with respect to the subject matter of this Agreement and supersede all prior representations, warranties, agreements and understandings among the parties, both written and oral, with respect thereto except the Confidentiality Letter which shall continue in full force and effect, provided that if there is any conflict between the Confidentiality Letter and - -------- this Agreement, this Agreement shall prevail. No prior drafts of this Agreement or portions thereof shall be admissible into evidence in any action, suit or other proceeding involving this Agreement. 47 8.5 Amendment. This Agreement may be amended by the parties hereto, --------- by action taken by their respective boards of directors, at any time before or after approval of matters presented in connection with the Merger by the shareholders of the Company, but after any such shareholder approval, no amendment shall be made which by law requires the further approval of shareholders without obtaining such further approval. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties. 8.6 Governing Law; Consent to Jurisdiction. -------------------------------------- (a) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its rules of conflict of laws. (b) Each of the parties hereto (1) (A) consents to submit itself to the personal jurisdiction of any Federal court located in the State of Delaware or any Delaware state court in the event any dispute arises out of this Agreement or any of the Transactions and (B) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, and (2) (A) agrees that any action under this Agreement may also be brought in any Federal or state court located in the City of New York, Borough of Manhattan and (B) agrees that it will not by motion or other action contest the bringing of any such action in the above mentioned courts rather than in any other venue or forum. 8.7 Counterparts. This Agreement may be executed by the parties in ------------ separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of a number of copies of this Agreement each signed by less than all, but together signed by all of the parties hereto. This Agreement shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. 8.8 Headings. Headings of the Articles and Sections of this -------- Agreement are for the convenience of the parties only, and shall be given no substantive or interpretive effect whatsoever. 8.9 Interpretation. When a reference is made in this Agreement to an -------------- Article, or Section, such reference shall be to an Article or Section of this Agreement unless otherwise indicated. The table of contents to this Agreement is for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." The words 48 "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant thereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. References to a person are also to its permitted successors and assigns. Each of the parties has participated in the drafting and negotiation of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement must be construed as if it is drafted by all the parties and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of authorship of any of the provisions of this Agreement. 8.10 Waivers. Except as provided in this Agreement, no action taken ------- pursuant to this Agreement, including, without limitation, any investigation by or on behalf of any party, will be deemed to constitute a waiver by the party taking such action of compliance with any representations, warranties, covenants or agreements contained in this Agreement. The waiver by any party hereto of a breach of any provision hereunder will not operate or be construed as a waiver of any prior or subsequent breach of the same or any other provision hereunder. 8.11 Incorporation of Company Disclosure Letter. The Company ------------------------------------------ Disclosure Letter referred to in this Agreement is hereby incorporated in this Agreement and made a part of this Agreement for all purposes as if fully set forth in this Agreement. 8.12 Severability. Any term or provision of this Agreement which is ------------ invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent (and only to the extent) of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in 49 order that the Transactions are consummated as originally contemplated to the greatest extent possible. 8.13 Enforcement of Agreement. The parties hereto agree that ------------------------ irreparable damage would occur if any of the provisions of this Agreement was not performed in accordance with its specific terms or as otherwise breached and that money damages would not be an adequate remedy for any breach of this Agreement. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court referred to in Section 8.6(b), this being in addition to any other remedy to which they are entitled at law or in equity. In any such action for specific performance, each of the parties will waive (a) the defense of adequacy of a remedy at law and (b) any requirement for the securing and posting of any bond. 8.14 Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT WAIVES, TO -------------------- THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. 8.15 Company Disclosure Letter. Except where reference is made to the ------------------------- Company Disclosure Letter in Article V, any matter disclosed in a section of the Company Disclosure Letter shall be treated as if it were disclosed in all applicable locations throughout such disclosure letter to the extent that, based upon a reasonable review of such disclosure letter by someone familiar with this Agreement, its applicability would be readily apparent. No disclosure in the Company Disclosure Letter shall be deemed to be an admission or representation as to the materiality of the item so disclosed. 8.16 Execution. This Agreement may be executed by facsimile signatures --------- by any party and such signature shall be deemed binding for all purposes hereof, without delivery of an original signature being thereafter required. 8.17 Personal Liability. Neither this Agreement nor any other ------------------ document delivered in connection with this Agreement shall create or be deemed to create or permit any personal liability or obligation on the part of any officer or director of the Company or any Subsidiary of the Company. 50 8.18 Date for any Action. In the event that any date on which any ------------------- action is required to be taken hereunder by any of the parties hereto is not a business day, such action shall be required to be taken on the next succeeding day which is a business day. 8.19 Obligation of Parent and the Company. Whenever this Agreement ------------------------------------ requires Purchaser or another Subsidiary of Parent to take any action, such requirement shall be deemed to include an undertaking on the part of Parent to cause Purchaser or such Subsidiary to take such action and a guarantee of the performance thereof. Whenever this Agreement requires the Surviving Corporation to take any action, from and after the Offer Completion Date, such requirement shall be deemed to include an undertaking on the part of Parent to cause the Surviving Corporation to take such action and a guarantee of the performance thereof. Whenever this Agreement requires a Subsidiary of the Company to take any action, such requirement shall be deemed to include an undertaking on the part of the Company to cause such Subsidiary to take such action and a guarantee of the performance thereof. 8.20 Certain Definitions. As used in this Agreement: ------------------- (a) The term "affiliate," as applied to any person, shall mean any --------- other person directly or indirectly controlling, controlled by, or under common control with, that person; for purposes of this definition, "control" ------- (including, with correlative meanings, the terms "controlling," "controlled by," "under common control with"), as applied to any person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that person, whether through the ownership of voting securities, by contract or otherwise. (b) A person will be deemed to "beneficially" own securities if such ------------ person would be the beneficial owner of such securities under Rule 13d-3 under the Exchange Act, including securities which such person has the right to acquire (whether such right is exercisable immediately or only after the passage of time). (c) The term "business day" means any day on which commercial banks ------------ are open for business in New York, New York other than a Saturday, a Sunday or a day observed as a holiday in New York, New York under the laws of the State of New York or the federal laws of the United States. (d) The term "knowledge" or any similar formulation of "knowledge" --------- --------- shall mean, with respect to the Company, the actual knowledge of the Company's executive officers. 51 (e) The term "person" shall include individuals, corporations, ------ partnerships, trusts, limited liability companies, associations, unincorporated organizations, joint ventures, other entities, groups (which term shall include a "group" as such term is defined in Section 13(d)(3) of the Exchange Act), labor unions or Governmental Entity. 52 IN WITNESS WHEREOF, the parties have executed this Agreement and caused the same to be duly delivered on their behalf on the day and year first written above. NOVARTIS AG By: ________________________________ Name: Title: By: ________________________________ Name: Title: WJ ACQUISITION CORP. By: ________________________________ Name: Title: WESLEY JESSEN VISIONCARE, INC. By: ________________________________ Name: Title: 53 ANNEX A CONDITIONS TO THE OFFER ----------------------- Capitalized terms used but not defined herein shall have the meanings set forth in the Agreement and Plan of Merger (the "Agreement") of which this --------- Annex A is a part. Notwithstanding any other provision of the Offer, Purchaser shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) promulgated under the Exchange Act (relating to the obligation of Purchaser to pay for or return tendered shares of Company Common Stock promptly after termination or withdrawal of the Offer), pay for, and (subject to any such rules or regulations) may delay the acceptance for payment of or the payment for any tendered shares of Company Common Stock and (except as provided in the Agreement) amend or terminate the Offer if (i) the Minimum Condition has not been satisfied or (ii) at any time on or after the date of this Agreement and before the Expiration Date, any of the following conditions exists: (a) there shall be in effect an injunction or other order, decree, judgment or ruling by a Governmental Entity of competent jurisdiction or a law, rule or regulation shall have been promulgated, or enacted by a Governmental Entity of competent jurisdiction which in any such case (i) restrains or prohibits the making or consummation of the Offer or the consummation of the Merger, or (ii) prohibits or restricts the ownership by Parent (or any of its affiliates or Subsidiaries) of any material portion of the Company's business or assets or which would substantially deprive Parent and/or its affiliates or Subsidiaries of the benefit of ownership of the Company's business or assets, or (iii) imposes material limitations on the ability of Purchaser or Parent effectively to acquire the shares of Company Common Stock; or (b) any applicable waiting period under the Antitrust Laws shall not have expired or been terminated; or (c) this Agreement shall have been terminated by the Company or Parent in accordance with its terms; or (d) Parent and the Company shall have agreed in writing that Purchaser shall amend the Offer to terminate the Offer or postpone the payment for shares of Company Common Stock pursuant thereto; or (e) the representations and warranties of the Company set forth in the Agreement shall not have been true and accurate as of the date made (except for those representations and warranties that address matters only as of a particular date or only with respect to a specific period of time which need only be true and accurate as of such Annex A-1 date or with respect to such period) (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 failures to be true and correct as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company, or the Company shall have breached or failed to perform or comply in any material respect with any material obligations, agreement or covenant required by the Agreement to be performed or complied with by it; provided, however, that such breach or failure to perform is incapable of -------- ------- being cured or has not been cured prior to the Initial Expiration Date (or such later date upon with the Offer shall expire); or (f) the Board shall have modified or amended its recommendation of the Offer in any manner adverse to Parent or shall have withdrawn its recommendation of the Offer, or shall have recommended acceptance of any Acquisition Proposal or shall have resolved to do any of the foregoing; which in the reasonable judgment of Parent or the Purchaser, in any such case, and regardless of the circumstances giving rise to such condition, makes it inadvisable to proceed with the Offer and/or with such acceptance for payment or payments. The foregoing conditions are for the sole benefit of Parent and Purchaser and may be asserted by Parent and Purchaser regardless of the circumstances giving rise to any such condition, and, except for the Minimum Condition and otherwise subject to the terms of this Agreement, may be waived by Parent and Purchaser, in whole or in part, at any time and from time to time, in the sole discretion of Parent and Purchaser. The determination as to whether any condition has been satisfied shall be deemed a continuing right which may be asserted at any time and from time to time. Notwithstanding the fact that the Parent and Purchaser reserve the right to assert the failure of a condition following acceptance for payment but prior to payment in order to delay payment or cancel their obligation to pay for properly tendered shares of Company Common Stock, the Parent and Purchaser will either promptly pay for such Company Common Stock or promptly return such Company Common Stock. Should the Offer be terminated pursuant to the foregoing provisions, all tendered shares of Company Common Stock not theretofore accepted for payment pursuant thereto shall forthwith be returned to the tendering shareholders. Annex A-2 EX-99.(D)(2) 10 0010.txt CONFIDENTIALITY AGREEMENT, DATED MAY 10, 2000 EXHIBIT (d)(2) Page 1 May 10, 2000 CIBA Vision Corporation 11460 Johns Creek Parkway Duluth, Georgia 30097-1556 Re: WJ: Confidentiality Agreement Gentlemen: In connection with discussions between Wesley Jessen VisionCare, Inc. ("WJ") and CIBA Vision Corporation ("CIBA") regarding the possibility of entering into a business transaction with each other, each of us may need to review certain of the other party's non-public information regarding such party. As a condition for the disclosure of such information to each other, WJ and CIBA each agree, as set forth below, to treat confidentially all such information, all materials containing such information which the disclosing party or its directors, officers, employees, affiliates, prospective capital or financing sources, advisors or other representatives (hereinafter referred to collectively as a party's "Representatives") furnish or cause to be furnished, and all materials prepared by the disclosing party or its Representatives using, incorporating or relating to such information (collectively, such information and materials are referred to hereinafter as that party's "Information and Evaluation Materials") and to comply with the other terms set forth below. The term "Information and Evaluation Materials" does not include information which (i) is or becomes generally available to the public other than as a result of disclosure by the receiving party or its Representatives; (ii) was available to the receiving party on a non-confidential basis prior to its disclosure by the disclosing party or its Representatives, or (iii) becomes available to the receiving party on a non-confidential basis from a source other than the disclosing party or its Representatives, provided that such source, to receiving party's knowledge, is not bound by confidentiality obligations to the disclosing party. WJ and CIBA each agree that the Information and Evaluation Materials provided by the other will be used only for the evaluation purposes described above and shall be kept confidential, except that the Information and Evaluation Materials or portions thereof may be disclosed to the receiving party's Representatives who need to know such information for the purpose of evaluating a proposed business transaction; provided that the receiving party has informed its Representatives of the confidential nature of the Information and Evaluation Materials and that such Representatives have agreed to be bound by that party's obligations under this Agreement. Each of us Page 2 agrees to be responsible for the breach of this Agreement by our respective Representatives. Without the prior written consent of the other party to this Agreement, neither WJ nor CIBA shall disclose to any third party other than a party's Representatives (including, without limitation, any corporation, company, partnership or individual) any information contained in the disclosing party's Information and Evaluation Materials, the fact that discussions or negotiations are taking place concerning a possible transaction, or any terms, conditions or the status thereof, unless in the unqualified opinion of that party's counsel, disclosure is required to be made under the Securities Act of 1933 or the Securities Exchange Act of 1934, or other applicable law. In the event that WJ or CIBA or a Representative thereof is requested or required, by subpoena, civil investigative demand, interrogatories, requests for information or other similar process, to disclose any portion of the Information and Evaluation Materials supplied by its counterparty (or its counterparty's Representatives) pursuant to this Agreement, the recipient of the request or demand shall immediately notify its counterparty of the existence and terms of such request or demand, and if disclosure of such Information and Evaluation materials is required, exercise best efforts to obtain an order or other reliable assurance that confidential treatment will be accorded to the Information and Evaluation Materials. Each of WJ and CIBA will promptly destroy or return to the other, upon request, the Information and Evaluation Materials provided hereunder, without retaining any copy thereof. All notes, analyses, compilations, studies or other documents prepared by the recipient of a party's Information and Evaluation Materials shall be kept confidential and subject to the terms of this Agreement or destroyed, at the option of the party which prepared such notes, analyses, compilations, studies or other documents. Each of us agrees to endeavor to disclose to the other information which we believe to be reliable and relevant for the purpose of informed evaluation. Nonetheless, neither WJ nor CIBA is making any representation or warranty as to the accuracy or completeness of its Information and Evaluation Materials and our respective officers, directors, employees, agents or controlling persons (within the meaning of the Securities Act of 1934) shall have no liability resulting from a party's use of its counterparty's Information and Evaluation Materials. Each of us hereby acknowledges awareness, and will so advise our Representatives, that the United States securities laws restrict persons with material non-public information about a company obtained directly or indirectly from that company from purchasing or selling securities of such company or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities. Each of us acknowledges and agrees that money damages would not be a sufficient remedy for breach of this Agreement and that the injured party shall be Page 3 entitled to specific performance and injunctive relief, in addition to all other remedies at law or equity available to that party. The benefits of this Agreement shall inure to the respective successors and assigns of the parties hereto, and the obligations and liabilities assumed in this Agreement by the parties hereto shall be binding upon their respective successors and assigns. This Agreement shall establish no rights, duties or obligations between the parties other than those expressly provided by the terms of this Agreement. This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subject matter hereof. The Agreement shall expire five (5) years from the date set forth below. This Agreement shall be construed under the laws of the State of New York, without giving effect to its conflict of laws, principles or rules. If for any reason any provision contained in this Agreement should be held invalid in whole or in party by a court of competent jurisdiction, then it is the intent of the parties hereto that the balance of this Agreement be enforced to the full extent permitted by applicable law. No failure or delay by either party in exercising any right, power or privilege pursuant to this Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. Any waiver must be in writing signed by both parties. If the terms of this Agreement are acceptable to CIBA, please sign and return a copy of it to my office. Very truly yours, Wesley Jessen VisionCare, Inc. By: /s/ Kevin J. Ryan ------------------------------- Title: CEO ---------------------------- Accepted and Agreed to: CIBA Vision Corporation By: /s/ Glenn Bradley ------------------------------------- Title: CEO --------------------------------- Date: May 11, 2000 ----------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----