-----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, MU5D8USiUYokjXZGht6wZEKJXoDfofIoetzgPTOw6TMoUSmO1Mb4vFPl2tLI0ArM Hq9CbqAnfopLUSIOkiAXCw== 0000950130-00-002867.txt : 20000515 0000950130-00-002867.hdr.sgml : 20000515 ACCESSION NUMBER: 0000950130-00-002867 CONFORMED SUBMISSION TYPE: SC TO-T PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 20000512 GROUP MEMBERS: DANAHER CORP /DE/ GROUP MEMBERS: KING DC ACQUISITION CORP SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: KOLLMORGEN CORP CENTRAL INDEX KEY: 0000056583 STANDARD INDUSTRIAL CLASSIFICATION: MOTORS & GENERATORS [3621] IRS NUMBER: 042151861 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-T SEC ACT: SEC FILE NUMBER: 005-33630 FILM NUMBER: 629888 BUSINESS ADDRESS: STREET 1: RESERVOIR PL STREET 2: 1601 TRAPELO RD CITY: WALTHAM STATE: MA ZIP: 02154 BUSINESS PHONE: 7818905655 MAIL ADDRESS: STREET 1: RESERVOIR PLACE STREET 2: 1601 TRAPELO ROAD CITY: WALTHAM STATE: MA ZIP: 02154 FORMER COMPANY: FORMER CONFORMED NAME: KOLLMORGEN OPTICAL CORP DATE OF NAME CHANGE: 19670928 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: DANAHER CORP /DE/ CENTRAL INDEX KEY: 0000313616 STANDARD INDUSTRIAL CLASSIFICATION: CUTLERY, HANDTOOLS & GENERAL HARDWARE [3420] IRS NUMBER: 591995548 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-T BUSINESS ADDRESS: STREET 1: 1250 24TH ST NW STREET 2: SUITE 800 CITY: WASHINGTON STATE: DC ZIP: 20037 BUSINESS PHONE: 2028280850 MAIL ADDRESS: STREET 1: 1250 24TH STREET NW STREET 2: SUITE 800 CITY: WASHINGTON STATE: DC ZIP: 20037 FORMER COMPANY: FORMER CONFORMED NAME: DMG INC DATE OF NAME CHANGE: 19850221 SC TO-T 1 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 KOLLMORGEN CORPORATION (NAME OF SUBJECT COMPANY) KING DC ACQUISITION CORP. DANAHER CORPORATION (NAME OF FILING PERSON--OFFEROR) COMMON STOCK, PAR VALUE $2.50 PER SHARE PREFERRED SHARE PURCHASE RIGHTS (TITLE OF CLASS OF SECURITIES) 500440102 (CUSIP NUMBER OF CLASS OF SECURITIES) PATRICK W. ALLENDER EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER DANAHER CORPORATION 1250 24TH STREET, N.W. WASHINGTON, D.C. 20037 TELEPHONE: (202) 828-0850 (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF FILING PERSONS) COPY TO: TREVOR S. NORWITZ, ESQ. WACHTELL, LIPTON, ROSEN & KATZ 51 WEST 52ND STREET NEW YORK, NEW YORK 10019 TELEPHONE: (212) 403-1000 CALCULATION OF FILING FEE TRANSACTION VALUATION* AMOUNT OF FILING FEE - ------------------------------------------------------------------------------- 258,851,956 $51,778 - ------------------------------------------------------------------------------- * Based on the offer to purchase all of the outstanding shares of common stock of Kollmorgen Corporation at a purchase price of $23.00 cash per share, 10,357,822 shares issued and outstanding, and outstanding options with respect to 898,350 shares, in each case as of May 2, 2000. [_]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 below 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 is filed by Danaher Corporation, a Delaware corporation ("Danaher"), and King DC Acquisition Corp., a New York corporation and a wholly-owned subsidiary of Danaher (the "Purchaser"). This Schedule TO relates to the offer by the Purchaser to purchase all outstanding shares of common stock, par value $2.50 per share, including associated preferred share purchase rights (the "Shares"), of Kollmorgen Corporation, a New York corporation ("Kollmorgen") at $23.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated May 12, 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), respectively (which, together with any amendments or supplements thereto, collectively constitute the "Offer"). The information set forth in the Offer to Purchase and in 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 4, 2000, among Kollmorgen, Danaher and the Purchaser, a copy of which is attached hereto as Exhibit (d)(1) hereto, the Confidentiality Agreement, dated as of September 13, 1999, between Danaher and Kollmorgen, a copy of which is attached as Exhibit (d)(2) hereto, and the Consulting Agreement, dated as of May 4, 2000, between Mr. Gideon Argov and Danaher, a copy of which is attached as Exhibit (d)(3) hereto, are incorporated herein by reference with respect to Items 5 and 11 of Schedule TO. ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON. None of Danaher, the 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. ITEM 10. FINANCIAL STATEMENTS OF CERTAIN BIDDERS. Not applicable. ITEM 12. EXHIBITS.
(a)(1) Offer to Purchase, dated May 12, 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) Text of press release issued by Danaher dated May 4, 2000. (a)(7) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(8) Form of summary advertisement dated May 12, 2000. (d)(1) Agreement and Plan of Merger, dated as of May 4, 2000, between Danaher, the Purchaser and Kollmorgen. (d)(2) Confidentiality Agreement, dated as of September 13, 1999, between Danaher and Kollmorgen. (d)(3) Consulting Agreement, dated as of May 4, 2000, between Gideon Argov and Danaher. (g) None. (h) Not applicable.
ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3. Not applicable. 2 SIGNATURE 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: May 12, 2000 King DC Acquisition Corp. By /s/ Daniel L. Comas ----------------------------------- Name: Daniel L. Comas Title: Vice President Danaher Corporation By /s/ Daniel L. Comas ----------------------------------- Name: Daniel L. Comas Title: Vice President 3 EXHIBIT INDEX (a)(1) Offer to Purchase, dated May 12, 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) Text of press release issued by Danaher and Kollmorgen dated May 4, 2000. (a)(7) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(8) Form of summary advertisement dated May 12, 2000. (d)(1) Agreement and Plan of Merger, dated as of May 4, 2000, between Danaher, the Purchaser and Kollmorgen. (d)(2) Confidentiality Agreement, dated as of September 13, 1999, between Danaher and Kollmorgen. (d)(3) Consulting Agreement, dated as of May 4, 2000, between Gideon Argov and Danaher. (g) None. (h) Not applicable.
4 EX-99.(A)(1) 2 OFFER TO PURCHASE, DATED MAY 12, 2000 EXHIBIT (a)(1) OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS) OF KOLLMORGEN CORPORATION BY KING DC ACQUISITION CORP. A WHOLLY-OWNED SUBSIDIARY OF DANAHER CORPORATION AT $23.00 NET PER SHARE THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 9, 2000, UNLESS THE OFFER IS EXTENDED. A SUMMARY OF THE PRINCIPAL TERMS OF THE OFFER APPEARS ON PAGES (II) THROUGH (III). YOU SHOULD READ THIS ENTIRE DOCUMENT CAREFULLY BEFORE DECIDING WHETHER TO TENDER YOUR SHARES. May 12, 2000 The Dealer Manager for the Offer is: LEHMAN BROTHERS TABLE OF CONTENTS
PAGE ---- Summary of the Offer....................................................... ii Introduction............................................................... 1
1. Terms of the Offer.................................................. 2 2. Acceptance for Payment and Payment.................................. 4 3. Procedures for Accepting the Offer and Tendering Shares............. 5 4. Withdrawal Rights................................................... 7 5. Material U.S. Federal Income Tax Consequences....................... 8 6. Price Range of the Shares; Dividends................................ 9 7. Possible Effects of the Offer on the Market for the Shares; NYSE Listing; Securities Exchange Act Registration; Margin Regulations.. 9 8. Information Concerning Kollmorgen................................... 11 9. Information Concerning Danaher and the Purchaser.................... 11 10. Background of the Offer; Contacts with Kollmorgen................... 12 11. Purpose of the Offer; the Merger Agreement; the Consulting Agreement; Statutory Requirements; Appraisal Rights; Plans for Kollmorgen; "Going Private" Transactions........................... 13 12. Source and Amount of Funds.......................................... 22 13. Dividends and Distributions......................................... 23 14. Conditions of the Offer............................................. 23 15. Legal Matters; Required Regulatory Approvals........................ 24 16. Fees and Expenses................................................... 27 17. Miscellaneous....................................................... 27
Schedule I--Directors and Executive Officers of Danaher and the Purchaser SUMMARY OF THE OFFER PRINCIPAL TERMS . Danaher Corporation, through its wholly-owned subsidiary, is offering to buy all outstanding shares of Kollmorgen Corporation common stock. The tender price is $23.00 per share in cash. Tendering shareholders will not have to pay brokerage fees or commissions. . The offer is the first step in our plan to acquire all of the outstanding Kollmorgen shares, as provided in our merger agreement with Kollmorgen. If the offer is successful, we will acquire any remaining Kollmorgen shares in a later merger for $23.00 per share in cash. The shareholders of Kollmorgen will have appraisal rights in the merger. . The initial offering period of the offer will expire at 12:00 midnight, New York City time, on Friday, June 9, 2000, unless we extend the offer. We do not intend to have a subsequent offering period. . If we decide to extend the offer, we will issue a press release giving the new expiration date no later than 9:00 a.m., New York City time, on the first business day after the previously scheduled expiration date of the offer. KOLLMORGEN BOARD RECOMMENDATION . The board of directors of Kollmorgen has unanimously determined that the offer and the merger are fair to and in the best interests of the shareholders of Kollmorgen, approved and adopted the merger agreement, and recommends that shareholders of Kollmorgen accept the offer and tender their Kollmorgen shares. CONDITIONS We are not required to complete the offer unless: . we receive U.S. federal antitrust clearance and approval from certain foreign antitrust authorities for the offer, and . at least two-thirds of the outstanding Kollmorgen common shares (taken together with any other Kollmorgen common shares, directly or indirectly, owned by us) are validly tendered and not withdrawn prior to the expiration of the offer. Other conditions to the offer are described at pages 23 through 24. The offer is not conditioned on Danaher obtaining financing. PROCEDURES FOR TENDERING If you wish to accept the offer, this is what you must do: . If you are a record holder (i.e., a stock certificate has been issued to you), you must complete and sign the enclosed letter of transmittal and send it with your stock certificate to the depositary for the offer or follow the procedures described in the offer for book-entry transfer. These materials must reach the depositary before the offer expires. Detailed instructions are contained in the letter of transmittal and on pages 5 through 7 of this document. . If you are a record holder but your stock certificate is not available or you cannot deliver it to the depositary before the offer expires, you may be able to tender your shares using the enclosed notice of guaranteed delivery. Please call our information agent, D.F. King & Co., Inc., at 888-242-8157 for assistance. See pages 6 through 7 for further details. . If you hold your Kollmorgen shares through a broker or bank, you should contact your broker or bank and give instructions that your Kollmorgen shares be tendered. ii WITHDRAWAL RIGHTS . If, after tendering your Kollmorgen shares in the offer, you decide that you do not want to accept the offer, you can withdraw your Kollmorgen shares by so instructing the depositary in writing before the offer expires. If you tendered by giving instructions to a broker or bank, you must instruct the broker or bank to arrange for the withdrawal of your Kollmorgen shares. See pages 7 through 8 for further details. RECENT KOLLMORGEN TRADING PRICES; SUBSEQUENT TRADING . The closing price for Kollmorgen common shares was: $16.13 per share on May 3, 2000, the last trading day before we announced the merger agreement with Kollmorgen, and $22.69 per share on May 11, 2000, the last trading day before the printing of these materials. BEFORE DECIDING WHETHER TO TENDER, YOU SHOULD OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES. . If the offer is successful, we expect the Kollmorgen shares to continue to be traded on the New York Stock Exchange until the time of the merger, although we expect trading volume to be below its pre- offer level. FURTHER INFORMATION . If you have questions about the offer, you can call: Our Information Agent: D.F. KING & CO., INC. Banks and Brokers Call Collect: (212) 269-5550 All Others Call Toll Free: (888) 242-8157 Our Dealer Manager: LEHMAN BROTHERS Three World Financial Center 200 Vesey Street, 18th Floor New York, New York 10285 Call Collect: (212) 526-6739 or (415) 274-5442 iii To: All Holders of Shares of Common Stock of Kollmorgen INTRODUCTION King DC Acquisition Corp. (the "Purchaser"), a wholly-owned subsidiary of Danaher Corporation ("Danaher") is offering to purchase all outstanding shares of common stock of Kollmorgen Corporation ("Kollmorgen"), together with the associated preferred share purchase rights issued pursuant to the Amended and Restated Rights Agreement, dated as of December 20, 1988 as amended through May 4, 2000, between Kollmorgen and Fleet National Bank (formerly known as Bank Boston, N.A.), as Rights Agent (the "Rights Agreement"), at a purchase price of $23.00 per share, net to the seller in cash, without interest (the "Per Share Amount"), on the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which together constitute the "Offer"). "Share" means a share of Kollmorgen common stock, together with the associated preferred share purchase rights. You will not be required to pay brokerage fees or commissions or, except as described in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase of Shares in the Offer. Shareholders who hold their shares through bankers or brokers should check with such institutions as to whether or not they charge any service fee. However, if you do not complete and sign the Substitute Form W-9 that is included in the Letter of Transmittal, you may be subject to a required backup U.S. federal income tax withholding of 31% of the gross proceeds payable to you. See Section 3. We will pay all charges and expenses of Lehman Brothers Inc., as Dealer Manager ("Lehman Brothers" or the "Dealer Manager"), SunTrust Bank, as Depositary (the "Depositary"), and D.F. King & Co., Inc., as Information Agent (the "Information Agent"), incurred in connection with the Offer. See Section 16. THE BOARD OF DIRECTORS OF KOLLMORGEN (THE "KOLLMORGEN BOARD") HAS UNANIMOUSLY DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE SHAREHOLDERS OF KOLLMORGEN, APPROVED AND ADOPTED THE MERGER AGREEMENT (AS DEFINED HEREIN) AND RECOMMENDS THAT KOLLMORGEN SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES. We are not required to purchase any Shares unless at least two-thirds of the outstanding Shares (taken together with any other Shares, directly or indirectly, owned by us and assuming exercise of all outstanding stock options) are validly tendered and not withdrawn prior to the expiration of the Offer (the "Minimum Condition"). We reserve the right (subject to the applicable rules and regulations of the Securities and Exchange Commission (the "SEC") and to the prior written consent of Kollmorgen), which we presently have no intention of exercising, to waive or reduce the Minimum Condition and to elect to purchase a smaller number of Shares. The Offer is also subject to certain other terms and conditions. See Sections 1, 14 and 15. We are making the Offer under the Agreement and Plan of Merger, dated as of May 4, 2000, among Kollmorgen, Danaher and the Purchaser (the "Merger Agreement"). Following the consummation of the Offer and the satisfaction or waiver of certain conditions, Kollmorgen will merge with the Purchaser (the "Merger"), with Kollmorgen continuing as the surviving corporation. In the Merger, each outstanding Share that is not owned by us (other than Shares held by Kollmorgen shareholders who perfect their appraisal rights under the Business Corporation Law of the State of New York (the "BCL")) will be converted into the right to receive $23.00 net in cash, or any higher price paid per Share in the Offer (the "Merger Consideration"). Section 11 contains a more detailed description of the Merger Agreement. Section 5 describes the principal U.S. federal income tax consequences of the sale of Shares in the Offer and the Merger. Salomon Smith Barney Inc., Kollmorgen's financial advisor, has delivered to the Kollmorgen Board a written opinion dated May 4, 2000, to the effect that, as of such date, and based upon and subject to certain matters stated in such opinion, the $23.00 per Share cash consideration to be received in the Offer and the Merger by holders of Shares (other than Danaher and its affiliates) was fair, from a financial point of view, to such holders. A copy of Salomon Smith Barney's opinion is included with Kollmorgen's Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9"), which is being mailed with this document and Kollmorgen shareholders are urged to read the opinion in its entirety for a description of the assumptions made, matters considered and limitations of the review undertaken by Salomon Smith Barney. Approval of the Merger requires the affirmative vote of holders of two- thirds of the outstanding Shares. As a result, if the Minimum Condition and the other conditions to the Offer are satisfied and the Offer is completed, we will own a sufficient number of Shares to ensure that the Merger will be approved by Kollmorgen shareholders. See Section 11. Kollmorgen has advised us that, to its knowledge, all of its executive officers and directors intend to tender all Shares that they own of record or beneficially in the Offer (other than Shares that they have the right to purchase by exercising stock options and Shares, if any, that, if tendered, would cause them to incur liability under the short-swing profits provisions of the Securities Exchange Act of 1934, as amended). Kollmorgen has informed us that, as of May 2, 2000, there were 10,357,822 Shares issued and outstanding and 1,538,545 Shares reserved for issuance upon the exercise of outstanding stock options. THE OFFER IS CONDITIONED UPON THE FULFILLMENT OF THE CONDITIONS DESCRIBED IN SECTION 14. THE INITIAL OFFERING PERIOD OF THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 9, 2000, UNLESS WE EXTEND IT. THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH YOU SHOULD READ CAREFULLY BEFORE YOU MAKE ANY DECISION WITH RESPECT TO THE OFFER. 1. TERMS OF THE OFFER 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 extension or amendment), we will purchase all Shares validly tendered and not withdrawn in accordance with the procedures set forth in Section 3 on or prior to the Expiration Date. "Expiration Date" means 12:00 midnight, New York City time, on Friday, June 9, 2000, unless we determine, or are required in certain events specified below, to extend the period of time for which the initial offering period of the Offer is open, in which case Expiration Date will mean the time and date at which the initial offering period of the Offer, as so extended, will expire. We do not intend to have any subsequent offering period. Upon the terms and subject to the conditions of the Offer, we will purchase, as soon as permitted under the terms of the Offer, all Shares validly tendered and not withdrawn prior to the expiration of the Offer. If, at the Expiration Date, the conditions to the Offer described in Section 14 have not been satisfied or earlier waived, then, subject to the provisions of the Merger Agreement, we may extend the Expiration Date for an additional period or periods of time by giving oral or written notice of the extension to the Depositary; provided, however, that in the event that (a) the required waiting periods under U.S. federal antitrust laws or under certain applicable foreign statutes or regulations have not expired, we are required to extend the Offer, or (b) the consummation of this Offer is prohibited or is materially limited pursuant to applicable laws or pending legal actions (as set forth in paragraphs (a) and (b) of Annex I to the Merger Agreement), we are required to extend the Expiration Date for additional periods until the earlier of five business days after the time such limitations no longer exist or such time at which such limitations have become final. During any such extension, all Shares previously tendered and not withdrawn will remain subject to the Offer and subject to your right to withdraw Shares. See Section 4. Subject to the applicable regulations of the Securities and Exchange Commission (the "SEC") and the terms of the Merger Agreement, we also reserve the right, in our sole discretion, at any time or from time to time, to (a) delay purchase of, or, regardless of whether we previously purchased any Shares, payment for, any Shares, pending receipt of any regulatory or governmental approvals specified in Section 15; (b) terminate the Offer (whether or not any Shares have previously been purchased) if any condition referred to in Section 14 has not 2 been satisfied or upon the occurrence of any Event specified (and defined) in Section 14; and (c) except as set forth in the Merger Agreement, waive any condition or otherwise amend the Offer in any respect; in each case, by giving oral or written notice of the delay, termination, waiver or amendment to the Depositary. We acknowledge (a) that Rule 14e-1(c) under the Securities Exchange Act requires us to pay the consideration offered or return the Shares tendered promptly after the termination or withdrawal of the Offer and (b) that we may not delay purchase of, or payment for (except as provided in clause (a) of the preceding sentence), any Shares upon the occurrence of any Event specified in Section 14 without extending the period of time during which the Offer is open. The rights we reserve in the preceding paragraph are in addition to our rights pursuant to Section 14. Any extension, delay, termination or amendment of the Offer will be followed as promptly as practicable by a public announcement. An announcement, in the case of an extension, will be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. Without limiting the manner in which we may choose to make any public announcement, subject to applicable law (including Rules 14d-4(d) and 14d-6(c) promulgated under the Securities Exchange Act, which require that material changes be promptly disseminated to holders of Shares), we will have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a release to the Dow Jones News Service. As of the date of this Offer to Purchase, the associated preferred share purchase rights do not trade separately. Accordingly, by tendering Shares, you are automatically tendering a similar number of preferred share purchase rights. If, however, the preferred share purchase rights detach and separate right certificates are issued, tendering shareholders will be required to deliver rights certificates with the shares. We do not intend to offer any subsequent offering period in connection with the Offer unless we come to a written agreement with Kollmorgen which would provide for such subsequent offering period. If we make a material change in the terms of the Offer, or if we waive a material condition to the Offer, we will extend the Offer and disseminate additional tender offer materials to the extent required by Rules 14d-4(d), 14d-6(c) and 14e-1 promulgated under the Securities Exchange Act. The minimum period during which a tender offer must remain open following material changes in the terms of the offer, other than a change in price or a change in percentage of securities sought, depends upon the facts and circumstances, including the materiality of the changes. In the SEC's view, an offer should remain open for a minimum of five business days from the date the material change is first published, sent or given to shareholders, and, if material changes are made with respect to information that approaches the significance of price and the percentage of securities sought, a minimum of ten business days may be required to allow for adequate dissemination and investor response. With respect to a change in price, a minimum ten business day period from the date of the change is generally required to allow for adequate dissemination to shareholders. Accordingly, if, prior to the Expiration Date, we decrease the number of Shares being sought, or increase or decrease the consideration offered pursuant to the Offer, and if the Offer is scheduled to expire at any time earlier than the period ending on the tenth business day from the date that notice of the increase or decrease is first published, sent or given to holders of Shares, we will extend the Offer at least until the expiration of that period of ten business days. For purposes of the Offer, a "business day" means any day other than a Saturday, Sunday or a U.S. federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, New York City time. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OF THE MINIMUM CONDITION. Consummation of the Offer is also conditioned upon expiration or termination of all waiting periods imposed by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the regulations thereunder (the "HSR Act"), and the other conditions set forth in Section 14. We reserve the right (but are not obligated), in accordance with applicable rules and regulations of the SEC and with the Merger Agreement, to waive any or all of those conditions. If, by the Expiration Date, any or all of those conditions have not been satisfied, we may, in the exercise of our good faith judgment, elect to (a) extend the Offer and, subject to 3 applicable withdrawal rights, retain all tendered Shares until the expiration of the Offer, as extended, subject to the terms of the Offer and the Merger Agreement; (b) waive all of the unsatisfied conditions (other than the Minimum Condition) and, subject to complying with applicable rules and regulations of the SEC, accept for payment all Shares so tendered; or (c) terminate the Offer and not accept for payment any Shares and return all tendered Shares to tendering Kollmorgen shareholders. In the event that we waive any condition set forth in Section 14, the SEC may, if the waiver is deemed to constitute a material change to the information previously provided to Kollmorgen shareholders, require that the Offer remain open for an additional period of time and/or that we disseminate information concerning such waiver. In the Merger Agreement, we have agreed that, upon the terms and subject to the conditions to the Offer, we will accept for payment and pay for, all Shares validly tendered and not withdrawn prior to the expiration of the Offer as promptly as practicable after expiration of the Offer. Kollmorgen has provided us with its shareholder lists and security position listings for the purpose of disseminating the Offer to holders of Shares. We will mail this Offer to Purchase, the related Letter of Transmittal and other relevant materials to record holders of Shares, and we will furnish the materials to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the security holder lists or, if applicable, who are listed as participants in a clearing agency's security position listing, for forwarding to beneficial owners of Shares. 2. ACCEPTANCE FOR PAYMENT AND PAYMENT Upon the terms and subject to the conditions of the Offer (including, if we extend or amend the Offer, the terms and conditions of the Offer as so extended or amended), we will purchase, by accepting for payment, and will pay for, all Shares validly tendered and not withdrawn (as permitted by Section 4) prior to the Expiration Date promptly after the Expiration Date following the satisfaction or waiver of the conditions to the Offer set forth in Section 14. In addition, subject to applicable rules of the SEC, we reserve the right to delay acceptance for payment of, or payment for, Shares pending receipt of any regulatory or governmental approvals specified in Section 15. For information with respect to approvals that we are required to obtain prior to the completion of the Offer, including under the HSR Act and other laws and regulations, see Section 15. In all cases, we will pay for Shares purchased in the Offer only after timely receipt by the Depositary of (a) certificates representing the Shares ("Share Certificates") or timely confirmation (a "Book-Entry Confirmation") of the book-entry transfer of the 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; (b) the appropriate Letter of Transmittal (or a facsimile), properly completed and duly executed, with any required signature guarantees or an Agent's Message (as defined below) in connection with a book-entry transfer; and (c) any other documents that the Letter of Transmittal requires. "Agent's Message" means a message transmitted by a Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of a Book- Entry Confirmation, which message states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares which are the subject of the Book-Entry Confirmation that the participant has received and agrees to be bound by the terms of the Letter of Transmittal and that we may enforce that agreement against the participant. For purposes of the Offer, we will be deemed to have accepted for payment, and purchased, Shares validly tendered and not withdrawn as, if and when we give oral or written notice to the Depositary of our acceptance of the Shares for payment pursuant to the Offer. In all cases, upon the terms and subject to the conditions of the Offer, payment for Shares purchased pursuant to the Offer will be made by deposit of the purchase price for the 4 Shares with the Depositary, which will act as agent for tendering Kollmorgen shareholders for the purpose of receiving payment from us and transmitting payment to validly tendering Kollmorgen shareholders. UNDER NO CIRCUMSTANCES WILL WE PAY INTEREST ON THE PURCHASE PRICE FOR SHARES. If we do not purchase any tendered Shares pursuant to the Offer for any reason, or if you submit Share Certificates representing more Shares than you wish to tender, we will return Share Certificates representing unpurchased or untendered Shares, without expense to you (or, in the case of Shares delivered by book-entry transfer into the Depositary's account at a Book-Entry Transfer Facility pursuant to the procedures set forth in Section 3, the Shares will be credited to an account maintained within the Book-Entry Transfer Facility), as promptly as practicable following the expiration, termination or withdrawal of the Offer. IF, PRIOR TO THE EXPIRATION DATE, WE INCREASE THE PRICE OFFERED TO HOLDERS OF SHARES IN THE OFFER, WE WILL PAY THE INCREASED PRICE TO ALL HOLDERS OF SHARES THAT WE PURCHASE IN THE OFFER, WHETHER OR NOT THE SHARES WERE TENDERED BEFORE THE INCREASE IN PRICE. We reserve the right, subject to the provisions of the Merger Agreement, to transfer or assign, in whole or from time to time in part, to one or more of our subsidiaries or affiliates, the right to purchase all or any portion of the Shares tendered in the Offer, but any such transfer or assignment will not relieve us of our obligations under the Offer or prejudice your rights to receive payment for Shares validly tendered and accepted for payment in the Offer. 3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES. Valid Tender of Shares. Except as set forth below, in order for you to tender Shares in the Offer, the Depositary must receive the Letter of Transmittal (or a facsimile), properly completed and signed, together with any required signature guarantees or an Agent's Message in connection with a book- entry delivery of Shares and any other documents that the Letter of Transmittal requires at one of its addresses set forth on the back cover of this Offer to Purchase on or prior to the Expiration Date and either (a) you must deliver Share Certificates representing tendered Shares to the Depositary or you must cause your Shares to be tendered pursuant to the procedure for book-entry transfer set forth below and the Depositary must receive Book-Entry Confirmation, in each case on or prior to the Expiration Date, or (b) you must comply with the guaranteed delivery procedures set forth below. THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT YOUR OPTION AND SOLE RISK, AND DELIVERY WILL BE CONSIDERED MADE ONLY WHEN THE DEPOSITARY ACTUALLY RECEIVES THE CERTIFICATES. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE TIMELY DELIVERY. Book-Entry Transfer. The Depositary will make a request to 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 book-entry delivery of Shares by causing the Book-Entry Transfer Facility to transfer the Shares into the Depositary's account at the Book-Entry Transfer Facility in accordance with the Book-Entry Transfer Facility's procedures. However, although Shares may be delivered through book-entry transfer into the Depositary's account at a Book-Entry Transfer Facility, the Depositary must receive the Letter of Transmittal (or facsimile), properly completed and signed, with any required signature guarantees, or an Agent's Message in connection with a book-entry transfer, and any other required documents, at one of its addresses set forth on the back cover of this Offer to Purchase on or before the Expiration Date, or you must comply with the guaranteed delivery procedure set forth below. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. 5 Signature Guarantees. A bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of the Securities Transfer Agents Medallion Program (an "Eligible Institution") must guarantee signatures on all Letters of Transmittal, unless the Shares tendered are tendered (a) by a registered holder of Shares who has not completed either the box labeled "Special Payment Instructions" or the box labeled "Special Delivery Instructions" on the Letter of Transmittal or (b) for the account of an Eligible Institution. See Instruction 1 of the Letter of Transmittal. If the Share Certificates are registered in the name of a person other than the signer of the Letter of Transmittal, or if payment is to be made to, or Share Certificates for unpurchased Shares are to be issued or returned to, a person other than the registered holder, then the tendered Share Certificates must be endorsed or accompanied by appropriate stock powers, signed exactly as the name or names of the registered holder or holders appear on the Share Certificates, with the signatures on the Share Certificates or stock powers guaranteed by an Eligible Institution as provided in the Letter of Transmittal. See Instructions 1 and 5 of the Letter of Transmittal. If the Share Certificates are forwarded separately to the Depositary, a properly completed and duly executed Letter of Transmittal (or facsimile) must accompany each delivery of Share Certificates. Guaranteed Delivery. If you want to tender Shares in the Offer and your Share Certificates are not immediately available or time will not permit all required documents to reach the Depositary on or before the Expiration Date or the procedures for book-entry transfer cannot be completed on time, your Shares may nevertheless be tendered if you comply with all of the following guaranteed delivery procedures: (a) your tender is made by or through an Eligible Institution; (b) the Depositary receives, as described below, a properly completed and signed Notice of Guaranteed Delivery, substantially in the form made available by us, on or before the Expiration Date; and (c) the Depositary receives the Share Certificates (or a Book-Entry Confirmation) representing all tendered Shares, in proper form for transfer together with a properly completed and duly executed Letter of Transmittal (or facsimile), 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 within three trading days after the date of execution of the Notice of Guaranteed Delivery. You may deliver the Notice of Guaranteed Delivery by hand or mail or transmitted by facsimile transmission to the Depositary. The Notice of Guaranteed Delivery must include a guarantee by an Eligible Institution in the form set forth in the Notice of Guaranteed Delivery. Notwithstanding any other provision of the Offer, we will pay for Shares only after timely receipt by the Depositary of Share Certificates for, or, of Book-Entry Confirmation with respect to, the Shares, a properly completed and duly executed Letter of Transmittal (or facsimile thereof), together with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message) and any other documents required by the appropriate Letter of Transmittal. Accordingly, payment might not be made to all tendering Kollmorgen shareholders at the same time, and will depend upon when the Depositary receives Share Certificates or Book-Entry Confirmation that the Shares have been transferred into the Depositary's account at a Book-Entry Transfer Facility. Backup U.S. Federal Income Tax Withholding. Under the backup U.S. federal income tax withholding laws applicable to certain Kollmorgen shareholders (other than certain exempt Kollmorgen shareholders, including, among others, all corporations and certain foreign individuals), the Depositary may be required to withhold 31% of the amount of any payments made to those Kollmorgen shareholders pursuant to the Offer or the Merger. To prevent backup U.S. federal income tax withholding, you must provide the Depositary with your correct taxpayer identification number and certify that you are not subject to backup U.S. federal income tax withholding by completing the Substitute Form W-9 included in the Letter of Transmittal. See Instruction 9 of the Letter of Transmittal. 6 Appointment as Proxy. By executing the Letter of Transmittal, you irrevocably appoint our designees, and each of them, as your agents, attorneys-in-fact and proxies, with full power of substitution, in the manner set forth in the Letter of Transmittal, to the full extent of your rights with respect to the Shares that you tender and that we accept for payment and with respect to any and all other Shares and other securities or rights issued or issuable in respect of those Shares on or after the date of this Offer to Purchase. All such powers of attorney and proxies will be considered irrevocable and coupled with an interest in the tendered Shares. This appointment will be effective when we accept your Shares for payment in accordance with the terms of the Offer. Upon such acceptance for payment, all other powers of attorney and proxies given by you with respect to your Shares and such other securities or rights prior to such payment will be revoked, without further action, and no subsequent powers of attorney and proxies may be given by you (and, if given, will not be deemed effective). Our designees will, with respect to the Shares and such other securities and rights for which the appointment is effective, be empowered to exercise all your voting and other rights as they, in their sole discretion, may deem proper at any annual or special meeting of Kollmorgen shareholders, or any adjournment or postponement thereof, or by consent in lieu of any such meeting or otherwise. In order for Shares to be deemed validly tendered, immediately upon the acceptance for payment of such Shares, we or our designee must be able to exercise full voting rights with respect to such Shares and other securities, including voting at any meeting of Kollmorgen's shareholders. Determination of Validity. All questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by us, in our sole discretion, which determination will be final and binding on all parties. We reserve the absolute right to reject any or all tenders determined by us not to be in proper form or the acceptance of or payment for which may, in the opinion of our counsel, be unlawful. We also reserve the absolute right to waive any of the conditions of the Offer or any defect or irregularity in any tender of Shares of any particular Kollmorgen shareholder, whether or not similar defects or irregularities are waived in the case of other Kollmorgen shareholders. Our interpretation of the terms and conditions of the Offer will be final and binding. No tender of Shares will be deemed to have been validly made until all defects and irregularities with respect to the tender have been cured or waived by us. None of Danaher, the Purchaser or any of their respective affiliates or assigns, the Dealer Manager, the Depositary, the Information Agent or any other person or entity will be under any duty to give any notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. Our acceptance for payment of Shares tendered pursuant to any of the procedures described above will constitute a binding agreement between us and you upon the terms and subject to the conditions of the Offer. 4. WITHDRAWAL RIGHTS. Except as described in this Section 4, tenders of Shares made in the Offer are irrevocable. You may withdraw Shares that you have previously tendered in the Offer at any time on or before the Expiration Date and, unless theretofore accepted for payment as provided herein, may also be withdrawn at any time after July 10, 2000. If, for any reason, acceptance for payment of any Shares tendered in the Offer is delayed, or we are unable to accept for payment or pay for Shares tendered in the Offer, then, without prejudice to our rights set forth in this Offer to Purchase, the Depositary may, nevertheless, on our behalf, retain Shares that you have tendered, and you may not withdraw your Shares, except to the extent that you are entitled to and duly exercise withdrawal rights as described in this Section 4. Any such delay will be by an extension of the Offer to the extent required by law. In order for your withdrawal to be effective, you must deliver a written or facsimile transmission notice of withdrawal to the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase. Any such notice of withdrawal must specify your name, the number of Shares that you want to withdraw, and (if Share Certificates have been tendered) the name of the registered holder of the Shares as shown on the Share Certificate, if different from your name. If Share Certificates have been delivered or otherwise identified to the 7 Depositary, then, prior to the physical release of such Share Certificates, you must submit the serial numbers shown on the particular Share Certificates evidencing the Shares to be withdrawn and an Eligible Institution must guarantee the signature on the notice of withdrawal, except in the case of Shares tendered for the account of an Eligible Institution. If Shares have been tendered pursuant to the procedures for book-entry transfer set forth in Section 3, the 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, in which case a notice of withdrawal will be effective if delivered to the Depositary by any method of delivery described in the first sentence of this paragraph. You may not rescind a withdrawal of Shares. Any Shares that you withdraw will be considered not validly tendered for purposes of the Offer, but you may tender your Shares again at any time before the Expiration Date by following any of the procedures described in Section 3. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by us, in our sole discretion, which determination will be final and binding. None of Danaher, the Purchaser or any of their respective affiliates or assigns, the Dealer Manager, the Depositary, the Information Agent or any other person or entity 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. 5. MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES. Your receipt of cash for Shares in the Offer or the Merger will be a taxable transaction for U.S. federal income tax purposes, and may also be a taxable transaction under applicable state, local, foreign and other tax laws. For U.S. federal income tax purposes, if you sell or exchange your Shares in the Offer or the Merger, you would generally recognize gain or loss equal to the difference between the amount of cash received and your tax basis for the Shares that you sold or exchanged. That gain or loss will be capital gain or loss (assuming you hold your Shares as a capital asset), and any such capital gain or loss will be long term if, as of the date of sale or exchange, you have held such Shares for more than one year or will be short term if, as of such date, you have held such Shares for one year or less. The discussion above may not be applicable to certain types of Kollmorgen shareholders, including Kollmorgen shareholders who acquired Shares through the exercise of employee stock options or otherwise as compensation, individuals who are not citizens or residents of the United States, foreign corporations, or entities that are otherwise subject to special tax treatment under the Internal Revenue Code of 1986, as amended (such as insurance companies, tax-exempt entities and regulated investment companies). THE U.S. FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY. YOU ARE URGED TO CONSULT YOUR TAX ADVISOR WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES TO YOU OF THE OFFER AND MERGER, INCLUDING U.S. FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES. 8 6. PRICE RANGE OF THE SHARES; DIVIDENDS. The Shares are traded on the New York Stock Exchange, Inc. (the "NYSE") under the symbol "KOL." The following table sets forth, for the periods indicated, the reported high and low sale prices for the Shares on the NYSE during each quarter presented. KOLLMORGEN CORPORATION
HIGH LOW ------ ------ FISCAL 1998 First Quarter............................................... $24.25 $16.00 Second Quarter.............................................. 21.94 17.63 Third Quarter............................................... 21.38 13.75 Fourth Quarter.............................................. 19.38 13.63 FISCAL 1999 First Quarter............................................... $17.25 $11.81 Second Quarter.............................................. 15.00 10.56 Third Quarter............................................... 15.31 10.63 Fourth Quarter.............................................. 12.31 8.88 FISCAL 2000 First Quarter............................................... $15.19 $10.94 Second Quarter (through May 11)............................. 22.75 11.63
Kollmorgen has declared and paid a dividend of $.02 per Share in each of the quarterly periods described above. The dividend for second quarter fiscal 2000 was declared by the Kollmorgen Board on May 11, 2000 and is payable on June 1, 2000 to Kollmorgen shareholders of record as of May 22, 2000. Under the terms of the Merger Agreement, Kollmorgen is not permitted to declare or pay dividends with respect to the Shares other than regular quarterly dividends paid at times and in amounts consistent with past practice. On May 3, 2000, the last full day of trading prior to the announcement of the execution of the Merger Agreement, the reported closing price on the NYSE for the Shares was $16.13 per Share. On May 11, 2000, the last full day of trading prior to the commencement of the Offer, the reported closing price on the NYSE for the Shares was $22.69 per Share. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. 7. POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR THE SHARES; NYSE LISTING; SECURITIES EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS. Possible Effects of the Offer on the Market for the Shares. The purchase of Shares pursuant to the Offer will reduce the number of Shares that might otherwise trade publicly and could adversely affect the liquidity and market value of the remaining Shares held by the public. The purchase of Shares pursuant to the Offer can also be expected to reduce the number of holders of Shares. We cannot predict whether the reduction in the number of Shares that might otherwise trade publicly would have an adverse or beneficial effect on the market price for or marketability of the Shares or whether it would cause future market prices to be greater or less than the Offer price. Stock Listing. Depending upon the number of Shares purchased pursuant to the Offer, the Shares may no longer meet the requirements of the NYSE for continued listing on the NYSE. According to the NYSE's published guidelines, the NYSE would consider delisting the Shares if, among other things, (a) the number of record holders should fall below 400, (b) the number of record holders should fall below 1,200 and the average 9 monthly trading volume is less than 100,000 Shares, (c) the number of publicly held Shares (exclusive of holdings of Danaher and the Purchaser and any other subsidiaries or affiliates of Danaher and of officers or directors of Kollmorgen or their immediate families or other concentrated holdings of 10% or more ("Excluded Holdings")) should fall below 600,000, or (d) the aggregate market value of such publicly held Shares (exclusive of Excluded Holdings) should fall below $8,000,000. If, as a result of the purchase of Shares pursuant to the Offer or otherwise, the Shares no longer meet the requirements of the NYSE for continued listing and the listing of the Shares is discontinued, the market for the Shares could be adversely affected. If the NYSE were to delist the Shares, it is possible that the Shares would continue to trade on another securities exchange or in the over-the-counter market, and that price or other quotations would be reported by such exchange or through the National Association of Securities Dealers Automated Quotation System or other sources. The extent of the public market for the Shares and the availability of such quotations would depend upon such factors as the number of shareholders and/or the aggregate market value of the publicly traded Shares remaining at such time, the interest in maintaining a market in the Shares on the part of securities firms, the possible termination of registration under the Securities Exchange Act, as described below, and other factors. We cannot predict whether the reduction in the number of Shares that might otherwise trade publicly would have an adverse or beneficial effect on the market price for or marketability of the Shares or whether it would cause future market prices to be greater or less than the Offer price. Securities Exchange Act Registration. The Shares are currently registered under the Securities Exchange Act. The purchase of the Shares pursuant to the Offer may result in the Shares becoming eligible for deregistration under the Securities Exchange Act. Registration of the Shares may be terminated upon application by Kollmorgen to the SEC if the Shares are not listed on a "national securities exchange" and there are fewer than 300 record holders of Shares. Termination of registration of the Shares under the Securities Exchange Act would substantially reduce the information that Kollmorgen is required to furnish to Kollmorgen shareholders and the SEC and would make certain provisions of the Securities Exchange Act, such as the short-swing profit recovery provisions of Section 16(b) of the Securities Exchange Act and the requirements of furnishing a proxy statement in connection with shareholders' meetings pursuant to Section 14(a) or 14(c) of the Securities Exchange Act and the related requirement of an annual report, no longer applicable to Kollmorgen. If the Shares are no longer registered under the Securities Exchange Act, the requirements of Rule 13e-3 promulgated under the Securities Exchange Act with respect to "going private" transactions would no longer be applicable to Kollmorgen. In addition, the ability of "affiliates" of Kollmorgen and persons holding "restricted securities" of Kollmorgen to dispose of such securities pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended, may be impaired or, with respect to certain persons, eliminated. If registration of the Shares under the Securities Exchange Act were terminated, the Shares would no longer be "margin securities" or eligible for stock exchange listing or NASDAQ reporting. We believe that the purchase of the Shares pursuant to the Offer may result in the Shares becoming eligible for deregistration under the Securities Exchange Act, and it would be our intention to cause Kollmorgen to make an application for termination of registration of the Shares as soon as possible after successful completion of the Offer if the Shares are then eligible for such termination. If registration of the Shares is not terminated prior to the Merger, then the registration of the Shares under the Securities Exchange Act and the listing of the Shares on the NYSE will be terminated following the completion of the Merger. Margin Regulations. The Shares are currently "margin securities" under the regulations of the Board of Governors of the Federal Reserve System, which regulations have the effect, among other things, of allowing brokers to extend credit on the collateral of the Shares for the purpose of buying, carrying or trading in securities ("Purpose Loans"). Depending upon factors such as the number of record holders of the Shares and the number and market value of publicly held Shares, following the purchase of Shares pursuant to the Offer, the Shares might no longer constitute "margin securities" for purposes of the Federal Reserve Board's margin regulations and, therefore, could no longer be used as collateral for Purpose Loans made by brokers. In addition, if registration of the Shares under the Securities Exchange Act were terminated, the Shares would no longer constitute "margin securities." 10 8. INFORMATION CONCERNING KOLLMORGEN Kollmorgen is a New York corporation with its principal executive offices located at Reservoir Place, 1601 Trapelo Road, Waltham, Massachusetts 02451. Kollmorgen's telephone number is (781) 890-5655. The following description of Kollmorgen and its business has been taken from Kollmorgen's Form 10-K for the fiscal year ended December 31, 1999, and is qualified in its entirety by reference to Kollmorgen's Form 10-K for the fiscal year ended December 31, 1999: Kollmorgen is one of the major worldwide manufacturers of high performance electronic motion control products and systems and has operations in the industrial and commercial segment as well as in the aerospace and defense segment. Kollmorgen files annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any reports, statements or other information filed at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549, or at the SEC's public reference rooms in New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Kollmorgen's SEC filings are also available to the public from commercial document retrieval services and at the Internet world wide web site maintained by the SEC at http://www.sec.gov. Although we have no knowledge that any such information is untrue, we take no responsibility for the accuracy or completeness of information contained in this Offer to Purchase with respect to Kollmorgen or any of its subsidiaries or affiliates or for any failure by Kollmorgen to disclose events which may have occurred or may affect the significance or accuracy of any such information. 9. INFORMATION CONCERNING DANAHER AND THE PURCHASER Danaher is a Delaware corporation with principal executive offices located at 1250 24th Street, N.W., Suite 800, Washington, D.C. 20037. Danaher's telephone number is (202) 828-0850. Danaher designs, manufactures and markets industrial and consumer products with strong brand names, proprietary technology and major market positions in two principal businesses: process/environmental controls and tools and components. The Purchaser's principal executive offices are located c/o Danaher at 1250 24th Street, N.W., Suite 800, Washington, D.C. 20037. The Purchaser is a newly formed New York corporation and a wholly-owned subsidiary of Danaher. The Purchaser has not conducted any business other than in connection with the Offer and the Merger. The name, business address, citizenship, present principal occupation and employment history for the past five years of each of the directors and executive officers of Danaher and the Purchaser are set forth in Schedule I hereto. Danaher is subject to the information and reporting requirements of the Securities Exchange Act and is required to file periodic reports, proxy statements and other information with the SEC relating to its business, financial condition and other matters. Certain information, as of particular dates, concerning Danaher's business, principal physical properties, capital structure, material pending legal proceedings, operating results, financial condition, directors and officers (including their remuneration and stock options granted to them), principal holders of Danaher's securities, any material interests of such persons in transactions with Danaher, and certain other matters is required to be disclosed in proxy statements and annual reports distributed to Danaher stockholders and filed with the SEC. You may inspect or copy these reports, proxy statements and other information at the SEC's public reference facilities and they should also be available for inspection in the same manner as set forth with respect to Kollmorgen in Section 8. Except as set forth elsewhere in this Offer to Purchase or in Schedule I hereto: (a) neither we nor, to our knowledge, any of the persons listed in Schedule I hereto or any associate or majority owned subsidiary of ours 11 or of any of the persons so listed, beneficially owns or has a right to acquire any Shares or any other equity securities of Kollmorgen; (b) neither we nor, to our knowledge, any of the persons or entities referred to in clause (a) above or any of their executive officers, directors or subsidiaries has effected any transaction in the Shares or any other equity securities of Kollmorgen during the past 60 days; (c) neither we nor, to our knowledge, any of the persons listed in Schedule I hereto, has any contract, arrangement, understanding or relationship with any other person with respect to any securities of Kollmorgen (including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against loss, or the giving or withholding of proxies, consents or authorizations); (d) since May 9, 1998, there have been no transactions which would require reporting under the rules and regulations of the SEC between us or any of our subsidiaries or, to our knowledge, any of the persons listed in Schedule I hereto, on the one hand, and Kollmorgen or any of its executive officers, directors or affiliates, on the other hand; and (e) since May 9, 1998, there have been no contacts, negotiations or transactions between us or any of our subsidiaries or, to our knowledge, any of the persons listed in Schedule I hereto, on the one hand, and Kollmorgen or any of its subsidiaries or affiliates, on the other hand, concerning a merger, consolidation or acquisition, a tender offer or other acquisition of securities, an election of directors or a sale or other transfer of a material amount of assets. 10. BACKGROUND OF THE OFFER; CONTACTS WITH KOLLMORGEN In August 1999, representatives of Lehman Brothers, as financial advisor to Danaher, contacted Salomon Smith Barney, financial advisor to Kollmorgen, to indicate an interest in Kollmorgen. Lehman Brothers indicated to Salomon Smith Barney that a representative of Danaher would be interested in meeting with a representative of Kollmorgen to discuss a possible business combination. On September 10, 1999, Mr. George M. Sherman, the President and Chief Executive Officer of Danaher, met with Mr. Gideon Argov, the Chairman of the Board, President and Chief Executive Officer of Kollmorgen. At that meeting, Mr. Sherman indicated that Danaher would be interested in considering a possible acquisition of Kollmorgen, subject to the satisfactory completion of due diligence investigations and the negotiation of a definitive merger agreement. Danaher subsequently signed a confidentiality and standstill agreement with Kollmorgen on September 13, 1999. Representatives of Danaher and Kollmorgen met again on September 23, 1999. The September 23, 1999 meeting was attended by Mr. Argov, other members of Kollmorgen's senior management and representatives of Salomon Smith Barney, and Mr. Sherman, other members of Danaher's senior management and representatives of Lehman Brothers. Kollmorgen made a presentation concerning its business at this meeting. Over the period between September 23, 1999 and March 1, 2000, representatives of Kollmorgen provided information to Danaher regarding its business. On March 1, 2000, Mr. Sherman and Mr. Argov met to discuss further the extent and nature of Danaher's interest in acquiring Kollmorgen. At that meeting, Mr. Sherman and Mr. Argov agreed to schedule another meeting between representatives of Danaher and Kollmorgen at which an additional presentation of the business of Kollmorgen would be made. On March 8, 2000, Mr. Argov, Mr. Robert J. Cobuzzi, Vice President and Chief Financial Officer of Kollmorgen, Mr. Keith Jones, Corporate Controller and Chief Accounting Officer of Kollmorgen and Mr. James A. Eder, Vice President, Secretary and General Counsel of Kollmorgen and representatives of Salomon Smith Barney met with Mr. Sherman and other members of Danaher's senior management and representatives of Lehman Brothers for an in-depth presentation on the business of Kollmorgen. On March 30, 2000, Mr. Argov and Mr. Sherman met to discuss a possible business combination of the two companies. On April 7, 2000, Mr. Sherman and Mr. Argov again discussed the possible business combination of the two companies. Mr. Sherman indicated that Danaher would be willing to consider making an offer for all 12 outstanding Shares for a price in the low $20s, subject to satisfactory completion of due diligence and agreement between Danaher and Kollmorgen on other aspects of the proposed transaction. Over the two weeks following the April 7, 2000 meeting, representatives of Danaher and Kollmorgen spoke periodically, continued discussions regarding the proposed purchase price and agreed on the overall structure of the transaction, subject to completion of due diligence and negotiation of other terms and conditions of the transaction. The companies also agreed on a due diligence schedule. It was during this period that the possibility of a Consulting Agreement between Mr. Argov and Danaher was raised. On April 18, 2000, the Board of Directors of Kollmorgen held a meeting at which the management of Kollmorgen and representatives of Salomon Smith Barney updated the Kollmorgen Board concerning the discussions with Danaher. At this meeting, the Kollmorgen Board indicated Kollmorgen's officers and other representatives should continue to pursue discussions with Danaher concerning a possible business combination, provided that the purchase price would be no less than $23 per Share and satisfactory agreement was reached on other terms and conditions relating to the transaction, which would be submitted to the Board for final approval. On April 21, 2000, the Kollmorgen Board held a meeting at which the management of Kollmorgen updated the Board concerning the discussions with Danaher. On April 24, 2000, representatives of Kollmorgen made another presentation to representatives of Danaher on the business of Kollmorgen. Between April 24, 2000 and May 4, 2000, Danaher conducted its due diligence investigations of Kollmorgen. During that period, Kollmorgen's representatives and Danaher's representatives negotiated the terms of the Merger Agreement. In addition, the terms of the Consulting Agreement were also negotiated during this period. On May 3, 2000, the Board of Directors of Danaher were presented with a discussion of the results of due diligence and the terms of the proposed transaction by Mr. Sherman and other members of Danaher's management. At this meeting, the Board of Directors of Danaher unanimously approved the Merger Agreement and Consulting Agreement, subject to satisfactory negotiation of the final terms of each. On May 3, 2000 and again on May 4, 2000, the Kollmorgen Board met to discuss the status of negotiations with Danaher and the terms of the proposed business combination. At the May 3, 2000 meeting, a form of the Merger Agreement was presented to and reviewed with the Kollmorgen Board by Kollmorgen's attorneys. Also at this meeting, Salomon Smith Barney reviewed with the Kollmorgen Board its financial analysis of the Per Share Amount. At the May 4, 2000 meeting, the Kollmorgen's Board received an update with respect to the proposed transactions from Kollmorgen's attorneys and Salomon Smith Barney delivered to the Board its opinion as to the fairness, from a financial point of view, of the Per Share Amount to the holders of Shares (other than Danaher and its affiliates). After full discussion, the Kollmorgen Board determined that the Offer and the Merger were in the best interests of Kollmorgen's shareholders and unanimously approved the Per Share Amount, the Merger Agreement and related transactions. The Merger Agreement as well as the Consulting Agreement were finalized and executed, and a press release announcing the proposed Offer and the Merger was issued, on May 4, 2000. 11. PURPOSE OF THE OFFER; THE MERGER AGREEMENT; THE CONSULTING AGREEMENT; STATUTORY REQUIREMENTS; APPRAISAL RIGHTS; PLANS FOR KOLLMORGEN; "GOING PRIVATE" TRANSACTIONS (a) Purpose. The purpose of the Offer and the Merger is to acquire control of, and the entire equity interest in, Kollmorgen. The Offer, as the first step in the acquisition of Kollmorgen, is intended to facilitate the acquisition of all of the Shares. The purpose of the Merger is to acquire all capital stock of Kollmorgen not purchased pursuant to the Offer or otherwise. 13 (b) The Merger Agreement. The following summary description of the Merger Agreement is qualified in its entirety by reference to the Merger Agreement itself, which we have filed as an exhibit to the Tender Offer Statement on Schedule TO that we have filed with the SEC, which you may examine and copy as set forth in Section 8 above (except that it will not be available at the regional offices of the SEC). THE OFFER. The Merger Agreement provides that the Purchaser will commence the Offer and that, upon the terms and subject to prior satisfaction or waiver of the conditions of the Offer, as set forth in Section 14, the Purchaser will purchase all Shares validly tendered and not withdrawn pursuant to the Offer. The Merger Agreement provides that, without the prior written consent of Kollmorgen, the Purchaser will not (a) decrease the Offer price or change the form of consideration payable in the Offer, (b) decrease the number of Shares sought to be purchased in the Offer, (c) impose additional conditions to the Offer, (d) waive the Minimum Condition or (e) amend any other term of the Offer in a manner adverse to the holders of Shares. The Purchaser may extend the Offer, from time to time, if, at the then-scheduled Expiration Date of the Offer, any of the conditions to the Purchaser's obligation to accept for payment and pay for all Shares shall not have been satisfied or waived; provided, however, that in the event that (a) the required waiting periods under U.S. federal antitrust laws or under certain applicable foreign statutes or regulations have not expired or terminated, we are required to extend the Offer, or (b) the consummation of this Offer is prohibited or is materially limited pursuant to applicable laws or pending legal actions (as set forth in paragraphs (a) and (b) of Annex I to the Merger Agreement), the Purchaser is required to extend the Expiration Date for additional periods until the earlier of five business days after the time such limitations no longer exist or such time at which such limitations have become final. In addition, if all conditions to the Offer are satisfied and the number of Shares tendered and not withdrawn is more than 70%, but less than 90%, of the outstanding number of Shares on a fully diluted basis, the Purchaser shall have the right, in its sole discretion, to extend the Offer from time to time for up to a maximum of seven additional business days in the aggregate beyond the latest Expiration Date. RECOMMENDATION. Kollmorgen has represented to Danaher in the Merger Agreement that the Kollmorgen Board, at a meeting duly called and held, has (a) determined by unanimous vote that the Offer and the Merger are fair to and in the best interest of Kollmorgen shareholders, (b) approved the Offer and the Merger Agreement in accordance with the BCL, (c) recommended acceptance of the Offer and adoption of the Merger Agreement by Kollmorgen shareholders (if such adoption is required by applicable law) and (d) taken all other action necessary to render the rights under the Rights Agreement inapplicable to the Offer and the Merger; provided, however, that such recommendation and approval may be withdrawn, modified or amended prior to the acceptance of payment of Shares only to the extent that the Kollmorgen Board determines in good faith, after consultation with its outside legal counsel, that failure to take such action would constitute a breach of the Kollmorgen Board's fiduciary obligations under applicable law. Kollmorgen further represented that Salomon Smith Barney delivered to the Kollmorgen Board a written opinion dated May 4, 2000, as to the fairness, from a financial point of view, to the holders of Shares (other than Danaher and its affiliates) of the Per Share Amount to be received by such holders pursuant to the Offer and the Merger. DIRECTORS. The Merger Agreement provides that, subject to compliance with applicable law, Danaher, promptly upon the payment by the Purchaser for Shares pursuant to the Offer, and from time to time thereafter, is entitled to designate that number of directors, rounded up to the next whole number, on the Kollmorgen Board as is equal to the product of the total number of directors on the Kollmorgen Board (determined after giving effect to the directors so elected pursuant to such provisions) multiplied by the percentage that the aggregate number of Shares beneficially owned by Danaher or its affiliates bears to the total number of Shares then outstanding. Kollmorgen shall, upon request of Danaher, promptly take all actions necessary to cause designees to be so elected, including, if necessary, seeking the resignations of one or more existing directors; provided, however, that, prior to the time the Merger becomes effective (the "Effective Time"), the Kollmorgen Board shall always have at least two members who are not officers, directors, employees or designees of the Purchaser or any of its affiliates, including Kollmorgen ("Purchaser Insiders"). If the number of directors who are not Purchaser Insiders is reduced below two prior to the Effective Time, the remaining director who is not a Purchaser Insider will be entitled to designate a person who is not a Purchaser Insider to fill such vacancy. 14 Following the election or appointment of Danaher's designees and prior to the Effective Time, any amendment or termination of the Merger Agreement by Kollmorgen, any extension by Kollmorgen of the time for performance of any of the obligations or other acts of Danaher or the Purchaser, any waiver of any of Kollmorgen's rights under the Merger Agreement or any other actions taken by Kollmorgen will require the concurrence of a majority of the directors of Kollmorgen then in office who are not Purchaser Insiders (or, in the case where there are two or fewer directors who are not Purchaser Insiders, the concurrence of one director who is not a Purchaser Insider) if that amendment, termination, extension, or waiver, could be reasonably likely to have an adverse effect on the minority Kollmorgen shareholders. THE MERGER. The Merger Agreement provides that, at the Effective Time, the Purchaser will be merged with and into Kollmorgen. Following the Merger, the separate corporate existence of the Purchaser will cease and Kollmorgen will continue as the surviving corporation (the "Surviving Corporation") and a wholly-owned subsidiary of Danaher. Kollmorgen has agreed pursuant to the Merger Agreement that, if required by applicable law in order to consummate the Merger, it will (a) duly call, give notice of, convene and hold a special meeting of Kollmorgen shareholders as soon as practicable following the acceptance for payment of and payment for Shares by the Purchaser pursuant to the Offer for the purpose of adopting the Merger Agreement; (b) prepare and file with the SEC a preliminary proxy statement relating to the Merger Agreement, and use its reasonable best efforts (1) to obtain and furnish the information required to be included by the SEC in the Proxy Statement (as defined herein) and, after consultation with Danaher, to respond promptly to any comments made by the SEC with respect to the preliminary proxy statement and to cause a definitive proxy statement (the "Proxy Statement") to be mailed to its shareholders and (2) to obtain the necessary approvals of the Merger and adoption of the Merger Agreement by Kollmorgen shareholders; and (c) (1) subject to the provisions described under "Recommendation" above, include in the Proxy Statement the recommendation of the Kollmorgen Board that Kollmorgen shareholders vote in favor of the approval of the Merger Agreement and (2) include in the Proxy Statement the opinion of Salomon Smith Barney. Danaher has agreed in the Merger Agreement that it will vote, or cause to be voted, all of the Shares then owned by it, the Purchaser or any of Danaher's other subsidiaries in favor of the approval of the Merger and the Merger Agreement. The Merger Agreement further provides that, notwithstanding the foregoing, if Danaher, the Purchaser or any other of Danaher's subsidiaries acquires at least 90% of the outstanding Shares pursuant to the Offer or otherwise, the parties to the Merger Agreement will take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after the acceptance for payment of and payment for the Shares by the Purchaser pursuant to the Offer without a meeting of the Kollmorgen shareholders in accordance with Section 905 of the BCL. CHARTER, BY-LAWS, DIRECTORS AND OFFICERS. The Certificate of Incorporation of the Purchaser, as in effect immediately prior to the Effective Time, will be the Certificate of Incorporation of the Surviving Corporation, until amended afterward in accordance with the provisions of the Certificate of Incorporation of the Surviving Corporation and applicable law; provided, however, that any such amendments shall be consistent with the rights of directors and officers to indemnification and insurance as described below under "Indemnification, Directors' and Officers' Insurance." The By-Laws of the Purchaser in effect at the Effective Time will be the By-Laws of the Surviving Corporation, until amended afterward in accordance with the provisions of the By-Laws of the Surviving Corporation and applicable law. Subject to applicable law, (a) the directors of the Purchaser immediately prior to the Effective Time will be the initial directors of the Surviving Corporation and will hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal, and (b) the officers of the Purchaser immediately prior to the Effective Time will be the initial officers of the Surviving Corporation. CONVERSION OF SECURITIES. By virtue of the Merger and without any action on the part of the holders of the Shares, at the Effective Time, each Share issued and outstanding immediately prior to the Effective Time (other than (a) any Shares held by Danaher, the Purchaser, any wholly-owned subsidiary of Danaher or the 15 Purchaser, in the treasury of Kollmorgen or by any wholly-owned subsidiary of Kollmorgen, which Shares, by virtue of the Merger and without any action on the part of the holder of those shares, will be canceled and retired and will cease to exist with no payment being made with respect thereto and (b) shares held by a holder who has not voted in favor of the Merger and who has demanded appraisal for those shares in accordance with the BCL ("Dissenting Shares")) will be canceled and retired and will be converted into the right to receive the Consideration, upon surrender of the Share Certificate formerly representing that Share. At the Effective Time, each share of common stock of the Purchaser, issued and outstanding immediately prior to the Effective Time will, by virtue of the Merger and without any action on the part of the holder thereof, be converted into and become one validly issued, fully paid and non- assessable share of common stock, par value $.01 per share, of the Surviving Corporation. The Merger Agreement provides that, prior to the Effective Time, the Kollmorgen Board (or, if appropriate, any committee of the Kollmorgen Board) will adopt appropriate resolutions and use its reasonable best efforts to provide for the cancellation or exercise, effective at the Effective Time, of all the outstanding options granted under any stock option or similar plan of Kollmorgen (the "Stock Plans"), or under any agreement, without any payment therefor except as otherwise discussed in this Section 11. Immediately prior to the Effective Time, all options (whether vested or unvested) will be canceled (and to the extent exercisable shall no longer be exercisable) and will entitle each holder of an option, in cancellation and settlement therefor, to a payment, if any, in cash by Kollmorgen (less any applicable withholding taxes), at the Effective Time, equal to the product of (a) the total number of Shares subject to that option and (b) the excess, if any, of the Merger Consideration (or such greater price as is provided in an applicable option agreement) over the exercise price per Share subject to that option. REPRESENTATIONS AND WARRANTIES. Pursuant to the Merger Agreement, Kollmorgen has made customary representations and warranties to Danaher and the Purchaser with respect to, among other matters, its organization and qualification, capitalization, subsidiaries, authority, required filings, consents and approvals, financial statements, public filings, litigation, compliance with law, employee benefit plans, environmental matters, material contracts (including government contracts and bids), opinion of financial advisor, information to be included in the Schedule 14D-9, the Proxy Statement or the other documents required to be filed with the SEC or any other governmental authority relating to the Offer and the Merger, intellectual property, tax status, condition of assets, relationships with customers and employees and the absence of any material adverse effects on Kollmorgen. Danaher and the Purchaser have made customary representations and warranties to Kollmorgen with respect to, among other matters, its organization, qualifications, authority, required filings, consents and approvals, information to be included in the Schedule 14D-9, the Proxy Statement or the other documents required to be filed with the SEC or any other governmental authority relating to the Offer and the Merger, availability of funds and ownership and lack of prior activities of Purchaser. COVENANTS. The Merger Agreement obligates Kollmorgen and its subsidiaries, from the date of the Merger Agreement until the Effective Time, to conduct their operations only in the ordinary and usual course of business consistent with past practice, and obligates Kollmorgen and its subsidiaries to use their reasonable best efforts to preserve intact their business organizations, to keep available the services of their present officers and key employees and to preserve the good will of those having business relationships with them. The Merger Agreement also contains specific restrictive covenants as to certain impermissible activities of Kollmorgen prior to the Effective Time, which provide that Kollmorgen will not (and will not permit any of its subsidiaries to) take certain actions without the prior written consent of Danaher, including, among other things, actions related to amendments to the Amended and Restated Certificate of Incorporation or the By-Laws of Kollmorgen, issuances or sales of its securities, changes in capital structure, dividends and other distributions, repurchases or redemptions of securities, material acquisitions or dispositions, increases in compensation or adoption of new benefit plans and certain other material events or transactions, subject to specified exceptions. ACCESS TO INFORMATION. The Merger Agreement provides that, subject to applicable law, until the Effective Time, Kollmorgen will give Danaher and the Purchaser and their representatives full access, during normal business hours, to the offices and other facilities and to the books and records of Kollmorgen and its subsidiaries, 16 and will provide Danaher and the Purchaser copies of documents filed pursuant to U.S. federal or state securities laws during this period, and, upon reasonable request, other information with respect to the business and operations of Kollmorgen and its subsidiaries. EFFORTS. Subject to the terms and conditions provided in the Merger Agreement, each of Kollmorgen, Danaher and the Purchaser will cooperate and use all reasonable efforts to make or cause to be made all filings necessary or proper under applicable laws and regulations to consummate and make effective the transactions contemplated by the Merger Agreement. Each of the parties to the Merger Agreement also has agreed to use its reasonable best efforts to obtain, as promptly as practicable, all consents of any governmental authorities or any other person required in connection with, and waivers of any violations that may be caused by, the consummation of the transactions contemplated by the Merger Agreement; provided, however, that neither Danaher nor Kollmorgen would be required to divest, hold separate or otherwise materially restrict the operations of any of their businesses or assets, in order to consummate the transactions contemplated by the Offer and the Merger Agreement. PUBLIC ANNOUNCEMENTS. The Merger Agreement provides that Kollmorgen, on the one hand, and Danaher and the Purchaser, on the other hand, agree to consult promptly with each other prior to issuing any press release or otherwise making any public statement with respect to the Offer, the Merger and the other transactions contemplated by the Merger Agreement, agree to provide to the other party for review a copy of any such press release or statement, and agree not to issue any such press release or make any such public statement prior to such consultation and review, unless required by applicable law or any listing agreement with a securities exchange. EMPLOYEE BENEFIT ARRANGEMENTS. With respect to employee benefit matters, the Merger Agreement provides that, from and after the Effective Time, Danaher will honor, or Danaher will cause to have honored, obligations under certain specified employee benefit plans of Kollmorgen. The Merger Agreement also provides that for the period ending December 31, 2000, the Surviving Corporation will continue the employee benefit plans of Kollmorgen (other than those providing equity-based compensation) and thereafter the Surviving Corporation will provide its employees (and those of its subsidiaries) with compensation programs and employee benefits which are substantially the same as or not less favorable in the aggregate than those in effect with respect to similarly situated employees of Danaher. The Merger Agreement also provides that through the period ending on the first anniversary of the Effective Time, severance benefits available to employees of Kollmorgen will be no less favorable than those severance benefits as in effect on the date of the Merger Agreement. The Merger Agreement also provides that, from and after the Effective Time, Danaher will provide, or Danaher will cause to provide, to persons who are retired salaried employees of Kollmorgen, as of the Effective Time, retiree medical benefits that are substantially comparable to those provided to those retired salaried employees of Kollmorgen as of the Effective Time. INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE. Pursuant to the Merger Agreement, Danaher has agreed that from and after the Effective Time all rights to indemnification, defense and advancement of funds existing at the date of the Merger Agreement in favor of individuals who were directors, officers, employees or agents of Kollmorgen or any of its subsidiaries at or prior to the Effective Time as set forth in the Certificate of Incorporation or By-Laws of Kollmorgen shall survive the Merger and shall continue in full force and effect, and will not be amended by the Surviving Corporation for a period of six years from the Effective Time in any manner that would adversely affect the rights of those individuals, unless such modification is required by law. Kollmorgen and, following the purchase of any Shares by Purchaser, Danaher will, regardless of whether the Merger becomes effective, indemnify, and, after the Effective Time, will cause the Surviving Corporation, to indemnify those individuals against all claims or liabilities arising out of actions or omissions occurring on or prior to the Effective Time, subject to limitations in the Merger Agreement. Danaher also has agreed that it will maintain the directors' and officers' liability insurance policy in effect as of the date of the Merger Agreement until the fourth anniversary of the Effective Time. In the event that Danaher or the Surviving Corporation consolidates or merges with another person or transfers its assets to another person, it shall make proper provisions to assure that these obligations are assumed. 17 NOTIFICATION OF CERTAIN MATTERS. Danaher and Kollmorgen have agreed to promptly notify each other of (a) the occurrence or non-occurrence of any fact or event which would be reasonably likely (1) to cause any representation or warranty contained in the Merger Agreement to be untrue or inaccurate in any material respect at any time prior to the Effective Time or (2) to cause any covenant, condition or agreement under the Merger Agreement not to be complied with or satisfied and (b) any failure of Kollmorgen, Danaher or the Purchaser, as the case may be, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it under the Merger Agreement. Each of Kollmorgen, Danaher and the Purchaser is also required to give prompt notice to the other parties of any notice or communication from any third party alleging that the consent of that third party is or may be required in connection with the transactions contemplated by the Merger Agreement. RIGHTS AGREEMENT. Kollmorgen has agreed in the Merger Agreement that it will not (a) redeem the preferred share purchase rights, (b) amend the Rights Agreement or (c) take any action which would allow any Person (as defined in the Rights Agreement) other than Danaher or the Purchaser to acquire beneficial ownership of 20% or more of the Shares without causing a Distribution Date or a Triggering Event (as each such term is defined in the Rights Agreement) to occur. STATE TAKEOVER LAWS. The Merger Agreement provides that each party will, upon the request of the other party, take all reasonable steps to assist in any challenge by that other party to the validity or applicability to the transactions contemplated by the Merger Agreement, including the Offer and the Merger, of any state takeover law. NO SOLICITATION. The Merger Agreement requires Kollmorgen to, and to direct its affiliates and their respective officers, directors (in their capacity as such), employees, representatives and agents to, immediately cease any existing discussions or negotiations with any parties with respect to any Acquisition Transaction (as defined below). The Merger Agreement further provides that, prior to the Effective Time, Kollmorgen will not authorize or permit any of its subsidiaries or any of its or its subsidiaries' directors (in their capacity as such), officers, employees, agents or representatives, directly or indirectly, to solicit, initiate, encourage or facilitate, or furnish or disclose non-public information in furtherance of, any inquiries or the making of any proposal with respect to any merger, liquidation, recapitalization, consolidation or other business combination involving Kollmorgen or its subsidiaries or acquisition of more than 5% of capital stock or any material portion of the assets of Kollmorgen or of its subsidiaries, or any combination of the foregoing (an "Acquisition Transaction"), or negotiate or engage in substantive discussions with any person with respect to any Acquisition Transaction, or enter into or resolve to enter into any agreement, arrangement or understanding with respect to any Acquisition Transaction or requiring it to abandon, terminate or fail to consummate the Merger or any other transaction contemplated by the Merger Agreement; provided, however, that Kollmorgen may, prior to the purchase of shares of common stock pursuant to the Offer, furnish information to, and negotiate or otherwise engage in substantive discussions with, any person who has delivered a bona fide written proposal for an Acquisition Transaction if the Kollmorgen Board determines in good faith following consultation with outside counsel and financial advisors, that such a transaction is reasonably likely to result in a transaction that is superior in comparison to the Offer and the Merger and the terms of the Merger Agreement to Kollmorgen's shareholders from a financial point of view and to Kollmorgen, taking into account the terms and conditions thereof, the likelihood of consummation and the time required to complete such transaction (a "Superior Proposal"), under applicable law, provided that prior to furnishing non-public information to any such party, (a) Kollmorgen shall have entered into a confidentiality agreement containing confidentiality terms at least as favorable to Kollmorgen as those of the letter agreement dated September 13, 1999 between Danaher and Kollmorgen and (b) shall provide Danaher or the Purchaser copies of all proposed written arrangements or understandings, including the forms of any agreements supplied by third parties, and all applicable financial statements and evidence of any planned financing with respect to such Superior Proposal (and a description of all material oral agreements with respect to such Superior Proposal). The Merger Agreement further provides that, from and after the execution of the Merger Agreement, Kollmorgen will promptly advise Danaher of any discussions, negotiations or proposals relating to an Acquisition 18 Transaction, identify the offeror and furnish to Danaher a copy of any such proposal if it is in writing or a written summary of any such proposal relating to an Acquisition Transaction if it is not in writing, and that Kollmorgen will promptly advise Danaher of any significant development relating to any such proposal, including results of any discussions or negotiations with respect to that proposal. CONVERTIBLE DEBENTURES. The Merger Agreement provides that Danaher will enter, as of the Effective Time, into such supplemental indentures as may be required under the terms of the indenture for the 8.75% Convertible Debentures due 2009. CONDITIONS TO CONSUMMATION OF THE MERGER. Pursuant to the Merger Agreement, the respective obligations of Danaher, the Purchaser and Kollmorgen to consummate the Merger are subject to the satisfaction or waiver, at or before the Effective Time, of each of the following conditions: (a) Kollmorgen shareholders will have duly adopted the Merger Agreement if required by applicable law; (b) the Purchaser will have accepted for payment and paid for Shares in an amount sufficient to meet the Minimum Condition and otherwise pursuant to the Offer in accordance with the terms of the Merger Agreement provided, however, that this condition shall be deemed to be satisfied with respect to the obligation of Danaher and the Purchaser to effect the Merger if Purchaser's failure to accept for payment or pay for Shares constitutes a violation of the terms of this Offer or of the Merger Agreement; (c) consummation of the Merger will not have been restrained, enjoined or prohibited by any order, judgment, decree, injunction or ruling of a court of competent jurisdiction or any governmental authority and there will not be any statute, rule or regulation enacted, promulgated or deemed applicable to the Merger by any governmental authority which prevents the consummation of the Merger or has the effect of making the acquisition of Shares in the Merger illegal; and (d) any applicable waiting period will have expired under the HSR Act or under any material applicable foreign laws. TERMINATION. The Merger Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time, notwithstanding approval thereof by the Kollmorgen shareholders (with any termination by Danaher also being an effective termination by the Purchaser): (a) by the mutual written consent of Danaher and Kollmorgen, by action of their respective Boards of Directors; (b) by Danaher or Kollmorgen if (1) Purchaser fails to commence the Offer on or prior to May 15, 2000, or (2) Purchaser will not have accepted for payment and paid for the Shares pursuant to the Offer in accordance with the terms of the Offer on or before September 30, 2000, provided, however, that neither Danaher nor Kollmorgen may terminate the Merger Agreement pursuant to this paragraph if such failure to accept for payment and pay for the Shares is due to a material breach of the Merger Agreement by that terminating party; (c) by Danaher or Kollmorgen if the Offer expires pursuant to its terms and the terms of the Merger Agreement without any Shares being purchased under the Offer other than due to a breach by the terminating party of the Merger Agreement; (d) by Danaher or Kollmorgen if any court of competent jurisdiction or other governmental authority will have issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the Merger or the acceptance for payment of, or payment for, Shares pursuant to the Offer and that order, decree or ruling or other action will have become final and nonappealable, provided that the party seeking to terminate the Merger Agreement will have used its reasonable best efforts to remove or lift such order, decree or ruling; (e) by Kollmorgen if, prior to the acceptance for payment of Shares pursuant to the Offer, the Kollmorgen Board will have determined to recommend a Superior Proposal to its shareholders and to enter into a binding written agreement concerning that Superior Proposal after making the determination described under "No Solicitation" above; provided, that the termination described in this paragraph shall not be permissible unless and until (1) Kollmorgen shall have provided the Purchaser and Danaher prior written notice at least five business days prior to such termination that the Kollmorgen Board has authorized 19 and intends to effect the termination of the Merger Agreement pursuant to this paragraph, including copies of all proposed written agreements, arrangements, or understandings, including the forms of any agreements supplied by third parties and all applicable financial statements and evidence of any planned financing, with respect to such Superior Proposal (and a description of all material oral agreements with respect thereto), (2) the Kollmorgen Board shall have determined, in good faith and after consultation with its legal and financial advisors, that the foregoing Acquisition Transaction constituted, at the time of such determination to terminate the Merger Agreement, and still constitutes a Superior Proposal and (3) prior to such termination Kollmorgen shall have paid to Danaher the Termination Fee (as defined below) and the Expense Fee (as defined below); (f) by Danaher, prior to the purchase of the Shares, if the Kollmorgen Board (1) will have withdrawn or modified (including by amendment of the Schedule 14D-9) in a manner adverse to the Purchaser its approval or recommendation of the Offer, the Merger Agreement or the Merger, (2) will have approved or recommended any Acquisition Transaction, (3) Kollmorgen will have breached Section 6.8(a) of the Merger Agreement, or (4) will have resolved to effect any of the foregoing; and (g) by Danaher, prior to the purchase of the Shares, if the Minimum Condition will not have been satisfied by the close of business on the business day immediately preceding September 30, 2000, and an Acquisition Transaction will have been publicly announced or disclosed. In the event of the termination of the Merger Agreement in accordance with its terms, the Merger Agreement will become void and have no effect, without any liability on the part of any party or its directors, officers or shareholders, other than certain specified provisions, which shall survive any such termination; provided, that no party would be relieved from liability for any willful breach of the Merger Agreement. FEES AND EXPENSES. Except as provided below, whether or not the Merger is consummated, all costs and expenses incurred in connection with the Offer, the Merger Agreement and the transactions contemplated by the Merger Agreement will be paid by the party incurring those expenses. In the event that the Merger Agreement is terminated pursuant to paragraph (e) or (f) under "Termination" above (other than termination pursuant to paragraph (f)(1) under "Termination" if no Acquisition Proposal shall have been publicly announced) then Kollmorgen will, within one business day after that termination, pay Danaher a termination fee of $10,000,000 (the "Termination Fee") plus Danaher's aggregate expenses not to exceed $1,000,000 (the "Expense Fee"). In the event that the Merger Agreement is terminated pursuant to such paragraph (f)(1) (if no Acquisition Proposal shall have been publicly announced) or paragraph (g) under "Termination" and within such 12 months of the date of that termination of the Merger Agreement an Acquisition Transaction is consummated, then Kollmorgen will, prior to or simultaneously with the consummation of that transaction, pay Danaher the Termination Fee and the Expense Fee. AMENDMENT. The Merger Agreement may be amended by Kollmorgen, Danaher and the Purchaser at any time before or after any approval of the Merger Agreement by Kollmorgen shareholders but, after any such approval, no amendment will be made which decreases the price to be paid in the Merger or which adversely affects the rights of Kollmorgen shareholders thereunder without the approval of Kollmorgen shareholders. EXTENSION; WAIVER. Subject to the Merger Agreement, at any time prior to the Effective Time, the parties to the Merger Agreement may (a) extend the time for the performance of any of the obligations or other acts of the other, (b) waive any inaccuracies in the representations and warranties contained therein of any other party thereto or in any document, certificate or writing delivered pursuant to the Merger Agreement by any other party to the Merger Agreement, or (c) waive compliance by any other party with any of the agreements or conditions in the Merger Agreement. EFFECTS OF INABILITY TO CONSUMMATE THE MERGER. Pursuant to the Merger Agreement, following the consummation of the Offer and subject to certain other conditions, the Purchaser will be merged with Kollmorgen. If, following the Offer, approval of Kollmorgen shareholders is required by applicable law in order 20 to consummate the Merger of the Purchaser with Kollmorgen, Kollmorgen will submit the Merger to Kollmorgen shareholders for approval. If the Merger is submitted to Kollmorgen shareholders for approval, the Merger will require the approval of the holders of not less than a two-thirds majority of the outstanding Shares, including the Shares owned by the Purchaser. Provided that the Minimum Condition is satisfied without being reduced or waived, Danaher will own sufficient Shares to ensure that the required vote of Kollmorgen shareholders will be obtained and that the Merger will be consummated. If the Merger is consummated, Kollmorgen shareholders who elected not to tender their the Shares in the Offer will receive the same amount of consideration in exchange for each Share as they would have received in the Offer. If, following the consummation of the Offer, the Merger is not consummated, Danaher, which owns 100% of the Purchaser's common stock, indirectly will control the number of Shares acquired by the Purchaser pursuant to the Offer. Under the Merger Agreement, promptly following payment by the Purchaser for Shares purchased pursuant to the Offer, and from time to time thereafter, subject to applicable law, Kollmorgen has agreed to take all actions necessary to cause a majority of the directors of Kollmorgen to consist of persons designated by Danaher (whether, at the election of Kollmorgen, by means of increasing the size of the Kollmorgen Board or seeking the resignation of directors and causing Danaher designees to be elected). As a result of its ownership of such Shares and right to designate nominees for election to the Kollmorgen Board, Danaher, indirectly, will be able to influence decisions of the Kollmorgen Board and the decisions of the Purchaser as a shareholder of Kollmorgen. This concentration of influence in one shareholder may adversely affect the market value of the Shares. If Danaher controls more than 50% of the outstanding Shares following the consummation of the Offer but the Merger is not consummated, Kollmorgen shareholders, other than those affiliated with Danaher, will lack sufficient voting power to elect directors or to cause other actions to be taken which require majority approval. If, for any reason following completion of the Offer, the Merger is not consummated, Danaher and the Purchaser reserve the right to acquire additional Shares through private purchases, market transactions, tender or exchange offers or otherwise on terms and at prices that may be more or less favorable than those of the Offer, or, subject to any applicable legal restrictions, to dispose of any or all Shares acquired by them. (c) Consulting Agreements. At the time we entered into the Merger Agreement, we also entered into a consulting agreement with Gideon Argov, which consulting agreement would become effective on the date we consummate the Merger. We also intend to enter into additional consulting agreements with certain executives of Kollmorgen following consummation of the Merger. We have informed Kollmorgen of such intention prior to the execution of the Merger Agreement. Mr. Argov's consulting agreement provides that he will serve as a consultant for a period of six years beginning with the consummation of the Merger. Mr. Argov's primary responsibilities are likely to be assisting in the transition of Kollmorgen to Danaher management and assisting with intellectual property claims and a pending acquisition. The consulting agreement also provides for a non-competition period during the consulting period and for two years thereafter. Mr. Argov's consulting agreement is not terminable by us for any reason other than the death or permanent disability of Mr. Argov, or a continued material breach by Mr. Argov of the provisions of the consulting agreement, which breach is (if curable) not cured by Mr. Argov within 10 days after we have delivered to him a written notice setting forth the nature of that breach in reasonable detail. Pursuant to the consulting agreement, Mr. Argov will be paid a consulting fee of $1,000,000 at the Effective Time and $78,991.34 per month thereafter for the duration of the consulting period. Mr. Argov will also be paid 2% of the value of each settlement or judgment reached by or awarded to the Surviving Corporation or any of its affiliates at any time prior to the sixth anniversary of the Effective Time in respect of certain legal actions initiated by Kollmorgen, as well as a finder's fee of 2% of the aggregate value of the consideration paid by Kollmorgen in connection with the consummation of a pending acquisition. (d) Statutory Requirements. In general, under the BCL a merger of two New York corporations requires the adoption of a resolution by the board of directors of each of the corporations desiring to merge approving an 21 agreement of merger containing provisions with respect to certain statutorily specified matters and the approval of such agreement of merger by the shareholders of each corporation by the affirmative vote of the holders of (1) for corporations incorporated after February 22, 1998, a majority of all the outstanding shares of stock entitled to vote on such merger or (2) for corporations in existence on or prior to February 22, 1998, two-thirds of all the outstanding shares of stock entitled to vote on such merger, unless otherwise provided for in that corporation's certificate of incorporation. Accordingly, a vote of two-thirds of Kollmorgen's shareholders is required in order to adopt the Merger. The Shares entitle the holders thereof to voting rights. The BCL also provides that, if a parent company owns at least 90% of each class of stock of a subsidiary, the parent company can effect a short-form merger with that subsidiary without the action of the other shareholders of the subsidiary as long as a copy of that plan of merger or an outline of that plan of merger is furnished to the remaining shareholders. Accordingly, if, as a result of the Offer or otherwise, the Purchaser acquires or controls the voting power of at least 90% of the Shares, the Purchaser could, and intends to, effect the Merger without any action by any other Kollmorgen shareholder. (e) Appraisal Rights. No appraisal rights are available in connection with the Offer. However, if the Merger is consummated, Kollmorgen shareholders will have certain rights under Section 910 of the BCL to dissent and demand appraisal of, and payment in cash of the fair value of, Dissenting Shares. Such rights, if the statutory procedures were complied with, could lead to a judicial determination of the fair value (excluding any element of value arising from the accomplishment or expectation of the Merger) required to be paid in cash to such dissenting holders for their Dissenting Shares. Any such judicial determination of the fair value of Dissenting Shares could be based upon considerations other than, or in addition to, the price paid in the Offer and the market value of the Dissenting Shares, including asset values and the investment value of the Dissenting Shares. The value so determined could be more or less than the purchase price per Share pursuant to the Offer or the consideration per Share to be paid in the Merger. THE FOREGOING SUMMARY OF THE RIGHTS OF OBJECTING SHAREHOLDERS DOES NOT PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY KOLLMORGEN SHAREHOLDERS DESIRING TO EXERCISE ANY AVAILABLE DISSENTERS' RIGHTS. THE PRESERVATION AND EXERCISE OF DISSENTERS' RIGHTS REQUIRE STRICT ADHERENCE TO THE APPLICABLE PROVISIONS OF THE BCL. (f) Plans for Kollmorgen. In connection with the Offer, Danaher and the Purchaser have reviewed and will continue to review various possible business strategies that they might consider in the event that the Purchaser acquires control of Kollmorgen, whether pursuant to this Offer, the Merger or otherwise. Such changes could include, among other things, changes in Kollmorgen's business corporate structure, capitalization and management. (g) "Going Private" Transactions. The SEC has adopted Rule 13e-3 under the Securities Exchange Act which is applicable to certain "going private" transactions and which may, under certain circumstances, be applicable to the Merger. However, Rule 13e-3 would be inapplicable if (a) the Shares are deregistered under the Securities Exchange Act prior to the Merger or other business combination or (b) the Merger or other business combination is consummated within one year after the purchase of the Shares pursuant to the Offer and the amount paid per Share in the Merger or other business combination is at least equal to the amount paid per Share in the Offer. If applicable, Rule 13e-3 requires, among other things, that certain financial information concerning the fairness of the proposed transaction and the consideration offered to minority shareholders in such transaction be filed with the SEC and disclosed to shareholders prior to the consummation of the transaction. 12. SOURCE AND AMOUNT OF FUNDS. The Purchaser estimates that the total amount of funds required to purchase all outstanding Shares, other securities and rights pursuant to the Offer and to pay related fees and expenses will be approximately $250 million, plus debt to be assumed. Danaher will ensure that the Purchaser has sufficient funds to acquire all of the outstanding Shares pursuant to the Offer and the Merger. 22 Danaher has possession of, or has available to it, sufficient funds to close the Offer and the Merger, and will cause the Purchaser to have sufficient funds available to close the Offer and the Merger. Danaher intends to obtain the necessary funds through borrowings under Danaher's existing bank facilities with various commercial banks. Such financings would be on customary terms for borrowers of such type. In the event that such financings were unavailable Danaher will arrange alternate financing. 13. DIVIDENDS AND DISTRIBUTIONS. The Merger Agreement provides that, without the prior written consent of Danaher, Kollmorgen will not, and will not permit any of its subsidiaries to, prior to the Effective Time, (a) issue, reissue or sell, or authorize the issuance, reissuance or sale of (1) additional shares of capital stock of any class, or securities convertible into capital stock of any class, or any rights, warrants or options to acquire any convertible securities or capital stock, other than the issuance of Shares (and the related preferred share purchase rights), in accordance with the terms of the instruments governing such issuance on May 4, 2000, pursuant to the exercise of options or the 8.75% Convertible Debentures due 2009 outstanding on that date or (2) any other securities in respect of, in lieu of, or in substitution for, Shares outstanding as of May 4, 2000, or (b) make any other changes in its capital structure, or declare, set aside or pay any dividend or other distribution (whether in cash, securities or property or any combination thereof) in respect of any class or series of its capital stock except for regular quarterly dividends on the Shares declared and paid at times and in an amount consistent with past practice, other than between Kollmorgen and any of its wholly owned subsidiaries. 14. CONDITIONS OF THE OFFER. Conditions to the Offer. Notwithstanding any other provisions of the Offer, the Purchaser will 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 Securities Exchange Act, pay for any tendered Shares, and may terminate or, subject to the terms of the Merger Agreement, amend the Offer, if (A) there will not be validly tendered and not properly withdrawn prior to the Expiration Date for the Offer that number of Shares which, when added to any Shares already owned by Danaher or any of its subsidiaries, represents at least two-thirds of the total number of outstanding Shares on a fully diluted basis on the date of purchase (not taking into account the related preferred share purchase rights) (the "Minimum Condition"), (B) any applicable waiting period or approval under the HSR Act or under any applicable foreign statutes or regulations will not have expired or been terminated or obtained prior to the Expiration Date, (C) all consents from third parties will have been obtained except for those the failure of which to be obtained would not reasonably be expected to have a material adverse effect on Kollmorgen, or (D) at any time on or after May 4, 2000 and prior to the time of acceptance for payment for any Shares, any of the following events (each, an "Event") will occur: (a) there will be any action taken, or any statute, rule, regulation, legislation, interpretation, judgment, order or injunction enacted, enforced, promulgated, amended, issued or deemed applicable to the Offer, by any legislative body, court, government or governmental, administrative or regulatory authority or agency, domestic or foreign, other than the application of the waiting period provisions of the HSR Act to the Offer or to the Merger, that would reasonably be expected to, directly or indirectly: (1) make illegal or otherwise prohibit consummation of the Offer or the Merger, (2) prohibit or materially limit the ownership or operation by Danaher or the Purchaser of all or any material portion of the business or assets of Kollmorgen or any of its subsidiaries taken as a whole or compel Danaher or the Purchaser to dispose of or hold separately all or any material portion of the business or assets of Danaher or the Purchaser or Kollmorgen or any of its subsidiaries taken as a whole, or seek to impose any material limitation on the ability of Danaher or the Purchaser to conduct its business or own such assets, in any such case under this clause (2), which would reasonably be expected to have a material adverse effect on Danaher or on Kollmorgen, as the case may be, (3) impose material limitations on the ability of Danaher or the Purchaser effectively to acquire, hold or exercise full rights of ownership of the Shares, including, without limitation, the right to vote any Shares acquired by the Purchaser or Danaher pursuant to the Offer on all matters properly presented to the Kollmorgen shareholders, (4) require divestiture by Danaher or the Purchaser of any Shares, or (5) result in a material adverse effect on Kollmorgen; or 23 (b) there will be instituted or pending any action or proceeding by any governmental entity that would reasonably be expected to result in, any of the consequences referred to in clauses (1) through (5) of paragraph (a) above or by any third party for which there is a substantial likelihood of resulting in any of the consequences referred to in clauses (1) through (5) of paragraph (a) above; or (c) since May 4, 2000, any change will have occurred and be continuing in the business, financial condition or results of operations of Kollmorgen or any of its subsidiaries that has, or could reasonably be expected to have, a material adverse effect on Kollmorgen; or (d) (1) the Kollmorgen Board or any committee of the Kollmorgen Board will have withdrawn, or will have modified or amended in a manner adverse to Danaher or the Purchaser, the approval, adoption or recommendation, as the case may be, of the Offer or the Merger Agreement, or will have approved or recommended any Acquisition Transaction, (2) a person will have entered into a definitive agreement or an agreement in principle with Kollmorgen with respect to an Acquisition Transaction, or (3) the Kollmorgen Board or any committee of the Kollmorgen Board will have resolved to do or enter into any of the foregoing; or (e) Kollmorgen, the Purchaser and Danaher will have reached an agreement that the Offer or the Merger Agreement be terminated, or the Merger Agreement will have been terminated in accordance with its terms; or (f) any of the representations and warranties of Kollmorgen set forth in the Merger Agreement, when read without any exception or qualification as to materiality or material adverse effect on Kollmorgen, will not be true and correct, as if those representations and warranties were made at the time of such determination (except as to any such representation or warranty which speaks as of a specific date, which must be untrue or incorrect as of that specific date), except where the failure to be so true and correct would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on Kollmorgen; or (g) Kollmorgen will have failed to perform in any material respect or to comply in any material respect with any of its material obligations, covenants or agreements under the Merger Agreement; or (h) there will have occurred, and continue to exist, (1) any general suspension of, or limitation on prices for, trading in securities on the NYSE or on the over-the-counter stock market, as reported by the National Association of Securities Dealers, Inc. Automated Quotations System, (2) any decline of at least 25% in either the Dow Jones Average of Industrial Stocks or the Standard & Poor's 500 Index from the close of business on the last trading day immediately preceding the date of the Merger Agreement through the applicable Expiration Date, or (3) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States. The foregoing conditions (including those set forth in clauses (A), (B) and (C) of the initial paragraph) are for the benefit of Danaher and the Purchaser and may be asserted by Danaher or the Purchaser regardless of the circumstances giving rise to any such conditions, and may be waived by Danaher or the Purchaser in whole or in part at any time and from time to time, in each case, in the exercise of the reasonable discretion of Danaher and the Purchaser and subject to the terms of the Merger Agreement. The failure by Danaher or the Purchaser at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. A public announcement may be made of a material change in, or waiver of, such conditions and the Offer may, in certain circumstances, be extended in connection with any such change or waiver. 15. LEGAL MATTERS; REQUIRED REGULATORY APPROVALS. Except as set forth in this Offer to Purchase, based on our review of publicly available filings by Kollmorgen with the SEC and other information regarding Kollmorgen, we are not aware of any licenses or regulatory permits that appear to be material to the business of Kollmorgen and its subsidiaries, taken as a whole, and that 24 might be adversely affected by our acquisition of Shares in the Offer. In addition, we are not aware of any filings, approvals or other actions by or with any governmental authority or administrative or regulatory agency that would be required for our acquisition or ownership of the Shares. Should any such approval or other action be required, we expect to seek such approval or action, except as described under "State Takeover Laws." Should any such approval or other action be required, we cannot be certain that we would be able to obtain any such approval or action without substantial conditions or that adverse consequences might not result to Kollmorgen's or its subsidiaries' businesses, or that certain parts of Kollmorgen's, Danaher's, the Purchaser's or any of their respective subsidiaries' businesses might not have to be disposed of or held separate in order to obtain such approval or action. In that event, we may not be required to purchase any Shares in the Offer. See Introduction and Section 14 for a description of the conditions to the Offer. State Takeover Laws. A number of states (including New York, where Kollmorgen is incorporated) have adopted takeover laws and regulations that purport to be applicable to attempts to acquire securities of corporations that are incorporated in those states or that have substantial assets, shareholders, principal executive offices or principal places of business in those states. To the extent that these state takeover statutes purport to apply to the Offer or the Merger, we believe that those laws conflict with U.S. federal law and are an unconstitutional burden on interstate commerce. In 1982, the Supreme Court of the United States, in Edgar v. Mite Corp., invalidated on constitutional grounds the Illinois Business Takeovers Statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. The reasoning in that decision is likely to apply to certain other state takeover statutes. In 1987, however, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court of the United States held that the State of Indiana could, as a matter of corporate law and, in particular, those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining shareholders, as long as those laws were applicable only under certain conditions. Subsequently, in TLX Acquisition Corp. v. Telex Corp., a federal district court in Oklahoma ruled that the Oklahoma statutes were unconstitutional insofar as they apply to corporations incorporated outside Oklahoma because they would subject those corporations to inconsistent regulations. Similarly, in Tyson Foods, Inc. v. McReynolds, a federal district court in Tennessee ruled that four Tennessee takeover statutes were unconstitutional as applied to corporations incorporated outside Tennessee. This decision was affirmed by the United States Court of Appeals for the Sixth Circuit. In December 1988, a federal district court in Florida held, in Grand Metropolitan PLC v. Butterworth, that the provisions of the Florida Affiliated Transactions Act and the Florida Control Share Acquisition Act were unconstitutional as applied to corporations incorporated outside of Florida. We have not attempted to comply with any state takeover statutes in connection with the Offer or the Merger. We reserve the right to challenge the validity or applicability of any state law allegedly applicable to the Offer or the Merger, and nothing in this Offer to Purchase nor any action that we take in connection with the Offer is intended as a waiver of that right. In the event that it is asserted that one or more takeover statutes apply to the Offer or the Merger, and it is not determined by an appropriate court that the statutes in question do not apply or are invalid as applied to the Offer or the Merger, as applicable, we may be required to file certain documents with, or receive approvals from, the relevant state authorities, and we might be unable to accept for payment or purchase Shares tendered in the Offer or be delayed in continuing or consummating the Offer. In that case, we may not be obligated to accept for purchase, or pay for, any Shares tendered. See Section 14. Antitrust. Under the HSR Act, and the related rules and regulations that have been issued by the U.S. Federal Trade Commission (the "FTC"), certain acquisition transactions may not be consummated until certain information and documentary material has been furnished for review by the FTC and the Antitrust Division of the U.S. Department of Justice (the "Antitrust Division") and certain waiting period requirements have been satisfied. These requirements apply to our acquisition of Shares in the Offer and the Merger. Under the HSR Act, the purchase of Shares in the Offer may not be completed until the expiration of a 15-calendar-day waiting period following the filing of certain required information and documentary material concerning the Offer with the FTC and the Antitrust Division, unless the waiting period is earlier terminated by 25 the FTC and the Antitrust Division. We filed a Premerger Notification and Report Form under the HSR Act with the FTC and the Antitrust Division in connection with the purchase of Shares in the Offer and the Merger on May 11, 2000, and the required waiting period with respect to the Offer and the Merger will expire at 11:59 p.m., New York City time, on May 26, 2000, unless earlier terminated by the FTC or the Antitrust Division or we receive a request for additional information or documentary material prior to that time. If, within the 15-calendar-day waiting period, either the FTC or the Antitrust Division requests additional information or documentary material from us, the waiting period with respect to the Offer and the Merger would be extended for an additional period of 10 calendar days following the date of our substantial compliance with that request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR rules. After that time, the waiting period could be extended only by court order or with our consent. The FTC or the Antitrust Division may terminate the additional 10-calendar-day waiting period before its expiration. In practice, complying with a request for additional information or documentary material can take a significant period of time. Although Kollmorgen is required to file certain information and documentary material with the FTC and the Antitrust Division in connection with the Offer, neither Kollmorgen's failure to make those filings nor a request made to Kollmorgen from the FTC or the Antitrust Division for additional information or documentary material will extend the waiting period with respect to the purchase of Shares in the Offer and the Merger. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions, such as our acquisition of Shares in the Offer and the Merger. At any time before or after our purchase of Shares, the FTC or the Antitrust Division could take any action under the antitrust laws that either considers necessary or desirable in the public interest, including seeking to enjoin the purchase of Shares in the Offer and the Merger, the divestiture of Shares purchased in the Offer or the divestiture of substantial assets of Danaher, the Purchaser, Kollmorgen or any of their respective subsidiaries or affiliates. Private parties as well as state attorneys general may also bring legal actions under the antitrust laws under certain circumstances. See Section 14. Based upon an examination of publicly available information relating to the businesses in which Kollmorgen is engaged, we believe that the acquisition of Shares in the Offer and the Merger should not violate the applicable antitrust laws. Nevertheless, we cannot be certain that a challenge to the Offer and the Merger on antitrust grounds will not be made, or, if such challenge is made, what the result will be. See Section 14. Foreign Approvals. According to publicly available information, Kollmorgen owns property and conducts business in a number of other foreign countries and jurisdictions. In connection with the acquisition of the Shares in the Offer or the Merger, a notification is required by German competition law which Danaher will make shortly to the Federal Cartel Office. The purchase of Shares in the Offer may not be completed until the expiration of at least a thirty day waiting period following the German notification, unless that waiting period is earlier terminated. The laws of other of those foreign countries and jurisdictions where Kollmorgen owns property and conducts business may also require the filing of information with, or the obtaining of the approval or consent of, governmental authorities in such other countries and jurisdictions. The governments in those countries and jurisdictions might attempt to impose additional conditions on the Surviving Corporation's operations conducted in those countries and jurisdictions as a result of the acquisition of the Shares in the Offer or the Merger. If such approvals or consents are found to be required the parties intend to make the appropriate filings and applications. In the event such a filing or application is made for the requisite foreign approvals or consents, we cannot be certain that such approvals or consents will be granted, and, if such approvals or consents are received, we cannot be certain as to the date of those approvals or consents. In addition, we cannot be certain that we will be able to cause Kollmorgen or its subsidiaries to satisfy or comply with those laws or that compliance or noncompliance will not have adverse consequences for Kollmorgen or any subsidiary after purchase of the Shares pursuant to the Offer or the Merger. Government Approvals. According to publicly available information, Kollmorgen is engaged in the manufacturing and developing of certain products that require the licensing and approvals of certain government entities. We cannot be certain that Kollmorgen or its subsidiaries will receive all required approvals or licenses or that the failure to do so will not have adverse consequences for Kollmorgen or any subsidiary after purchase of the Shares pursuant to the Offer or the Merger. 26 16. FEES AND EXPENSES. Lehman Brothers is acting as the Dealer Manager in connection with the Offer and has provided certain financial advisory services to Danaher in connection with the Offer and the Merger. We will pay the Dealer Manager reasonable and customary compensation for such services, plus reasonable reimbursement of out-of-pocket expenses. We have agreed to indemnify the Dealer Manager against certain liabilities in connection with its services as financial advisor to Danaher in connection with the acquisition of Kollmorgen, including its services as Dealer Manager, and including certain liabilities under the U.S. federal securities laws. At any time, the Dealer Manager may trade the Shares for its own account or for the accounts of customers and, accordingly, may hold a long or short position in the Shares. We have retained D.F. King & Co., Inc. as Information Agent in connection with the Offer. The Information Agent may contact holders of Shares by mail, telephone, telex, telegraph and personal interview and may request brokers, dealers and other nominee shareholders to forward material relating to the Offer to beneficial owners of Shares. We will pay the Information Agent reasonable and customary compensation for these services in addition to reimbursing the Information Agent for its reasonable out-of-pocket expenses. We have agreed to indemnify the Information Agent against certain liabilities and expenses in connection with the Offer, including certain liabilities under the U.S. federal securities laws. In addition, we have retained SunTrust Bank as the Depositary. We will pay the Depositary reasonable and customary compensation for its services in connection with the Offer, will reimburse the Depositary for its reasonable out-of-pocket expenses, and will indemnify the Depositary against certain liabilities and expenses, including certain liabilities under the U.S. federal securities laws. Except as set forth above, we will not pay any fees or commissions to any broker, dealer or other person for soliciting tenders of Shares pursuant to the Offer. We will reimburse brokers, dealers, commercial banks and trust companies and other nominees, upon request, for customary clerical and mailing expenses incurred by them in forwarding offering materials to their customers. 17. MISCELLANEOUS. We are 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 we become aware of any valid state statute prohibiting the making of the Offer or the acceptance of the Shares, we will make a good faith effort to comply with that state statute. If, after a good faith effort, we cannot comply with the state statute, we will not make the Offer to, nor will we accept tenders from or on behalf of, the holders of Shares in that state. We have filed with the SEC a Schedule TO, together with exhibits, furnishing certain additional information with respect to the Offer, and may file amendments to our Schedule TO. Our Schedule TO and any exhibits or amendments may be examined and copies may be obtained from the SEC in the same manner as described in Section 8 with respect to information concerning Kollmorgen, except that copies will not be available at the regional offices of the SEC. WE HAVE NOT AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION ON OUR BEHALF NOT CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL, AND, IF GIVEN OR MADE, YOU SHOULD NOT RELY ON ANY SUCH INFORMATION OR REPRESENTATION AS HAVING BEEN AUTHORIZED. Neither the delivery of the Offer to Purchase nor any purchase pursuant to the Offer will under any circumstances create any implication that there has been no change in the affairs of Danaher, the Purchaser, Kollmorgen or any of their respective subsidiaries since the date as of which information is furnished or the date of this Offer to Purchase. King DC Acquisition Corp. May 12, 2000 27 SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF DANAHER AND THE PURCHASER DIRECTORS AND EXECUTIVE OFFICERS OF DANAHER. The following table sets forth the name and present principal occupation or employment, and material occupations, positions, offices or employments for the past five years of each director and executive officer of Danaher. Unless otherwise indicated below, each occupation set forth opposite each person refers to employment with Danaher. Unless otherwise indicated, the business address of each such person is c/o Danaher, at 1250 24th Street, N.W., Suite 800, Washington, D.C. 20037, and each such person is a citizen of the United States of America. 1. DIRECTORS OF DANAHER
PRINCIPAL OCCUPATION AND FIVE-YEAR NAME EMPLOYMENT HISTORY ---- ---------------------------------- Mortimer M. Caplin............... Senior Member of Caplin & Drysdale, a law firm in Washington, D.C., for over five years; Director of Fairchild Corporation and Presidential Realty Corporation. Caplin & Drysdale, One Thomas Circle NW, Suite 1100, Washington, DC 20005 Donald J. Ehrlich................ President, Chairman and Chief Executive Officer of Wabash National Corp. for over five years; Director of Indiana Secondary Market for Educational Loans, Inc. and INB National Bank, N.W. Wabash National Corp., 1000 Sagamore Parkway South, Lafayette, IN 47905 Walter G. Lohr, Jr. ............. Partner of Hogan & Hartson, a law firm in Baltimore, Maryland, for over five years. Hogan & Hartson, 111 S. Calvert Street, Suite 1600, Baltimore, MD 21202-6191 Mitchell P. Rales................ Principal in a number of private business entities with interests in manufacturing companies, media operations and publicly traded securities. Director of Imo Industries Inc. Steven M. Rales.................. Chairman of the Board of Danaher for over five years; principal in a number of private business entities with interests in manufacturing companies, media operations and publicly traded securities. Director of Imo Industries Inc. George M. Sherman................ President and Chief Executive Officer of Danaher for over five years; director of Campbell Soup Company. Alan G. Spoon.................... General partner of Polaris Venture Partners. Polaris Venture Partners, 1000 Winter Street, Waltham, MA 02451. A. Emmet Stephenson, Jr. ........ President of Stephenson and Co., a private investment firm in Denver, Colorado for more than five years; Chairman of StarTek, Inc. for more than five years. Stephenson and Company, 100 Garfield Street, Denver, CO 80206.
28 2. EXECUTIVE OFFICERS OF DANAHER
DATE BECAME EXECUTIVE NAME PRESENT TITLE OFFICER ---- ------------- --------- Patrick W. Allender.............. Executive Vice President, Chief 1987 Financial Officer and Secretary William J. Butler................ Vice President and Group 1999 Executive Dennis D. Claramunt.............. Vice President and Group 1994 Executive Daniel L. Comas.................. Vice President--Corporate 1996 Development H. Lawrence Culp, Jr. ........... Executive Vice President 1995 Mark C. DeLuzio.................. Vice President--Danaher 1996 Business Systems James H. Ditkoff................. Vice President--Finance and Tax 1991 Thomas S. Gross.................. Vice President and Group 1999 Executive Elmar P. Illek................... Vice President and Group 1999 Executive Dennis A. Longo.................. Vice President--Human Resources 1997 Christopher C. McMahon........... Vice President and Controller 1999 Brian M. McNeill................. Executive Vice President 1999 George M. Sherman................ President and Chief Executive 1990 Officer Steven E. Simms.................. Executive Vice President 1996 Uldis K. Sipols.................. Vice President--Procurement 1999
DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The following table sets forth the name and present principal occupation or employment, and material occupations, positions, offices or employments for the past five years of each director and executive officer of the Purchaser. Unless otherwise indicated below, each occupation set forth opposite each person refers to employment with Danaher. The business address of each such person is c/o Danaher, at 1250 24th Street, N.W., Suite 800, Washington, D.C. 20037, and each such person is a citizen of the United States of America. 1. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER
PRINCIPAL OCCUPATION AND FIVE-YEAR NAME EMPLOYMENT HISTORY ---- ---------------------------------- Patrick W. Allender.............. Executive Vice President, Chief Financial Officer and Secretary of Vice President and Secretary Danaher since November 1999; previously Senior Vice President, Chief Financial Officer and Secretary of Danaher. Daniel L. Comas.................. Vice President--Corporate Development since 1996; previously Vice President Director--Corporate Development of Danaher for over five years. George M. Sherman................ President and Chief Executive Officer of Danaher for over five President years.
29 Facsimile copies of Letters of Transmittal, properly completed and duly executed, will be accepted. The appropriate Letter of Transmittal, Share Certificates and any other required documents should be sent or delivered by each Kollmorgen shareholder or such Kollmorgen shareholder's 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: SUNTRUST BANK Facsimile for Eligible By Mail: By Overnight Courier: Institutions: SunTrust Bank SunTrust Bank 404-865-5371 Post Office Box 4625 Stock Transfer Department Atlanta, Georgia 30302 58 Edgewood Avenue Confirm by Telephone: Room 225, Annex 1-800-568-3476 Atlanta, Georgia 30303
You may direct questions and requests for assistance to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers set forth below. You may obtain additional copies of this Offer to Purchase, the Letter of Transmittal and other tender offer materials from the Information Agent as set forth below, and they will be furnished promptly at our expense. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer. The Information Agent for the Offer is: D.F. KING & CO., INC. 77 Water Street New York, New York 10005 Banks and Brokers Call Collect (212) 269-5550 All Others Call Toll Free (888) 242-8157 The Dealer Manager for the Offer is: LEHMAN BROTHERS Three World Financial Center 200 Vesey Street New York, New York 10285 Call Collect: (212) 526-6739 or (415) 274-5442 EX-99.(A)(2) 3 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 KOLLMORGEN CORPORATION PURSUANT TO THE OFFER TO PURCHASE DATED MAY 12, 2000 BY KING DC ACQUISITION CORP. A WHOLLY-OWNED SUBSIDIARY OF DANAHER CORPORATION THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 9, 2000, UNLESS THE OFFER IS EXTENDED The Depositary for the Offer is: SUNTRUST BANK Facsimile for By Overnight Courier: Confirm by Telephone: Eligible SunTrust Bank 1-800-568-3476 Institutions: Stock Transfer Department 404-865-5371 58 Edgewood Avenue Room 225, Annex Atlanta, Georgia By Mail: 30303 SunTrust Bank Post Office Box 4625 Atlanta, Georgia 30302 DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSIONS 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. This Letter of Transmittal is to be completed by shareholders, either if Share Certificates (as defined below) are to be forwarded herewith or, unless an Agent's Message (as defined in the Offer to Purchase, as referred to below) is utilized, if tenders of Shares are to be made by book-entry transfer into the account of SunTrust Bank, as Depositary (the "Depositary"), at The Depository Trust Company (the "Book-Entry Transfer Facility" or "DTC") pursuant to the procedures set forth in Section 3 of the Offer to Purchase. This Letter of Transmittal also covers any tenders of Shares in the Kollmorgen dividend reinvestment plan ("Dividend Reinvestment Shares") to be made by book-entry transfer. Shareholders who tender Shares by book-entry transfer are referred to herein as "Book-Entry Shareholders." 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 CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY) - ---------------------------------------------------------------------------------------- TOTAL NUMBER OF SHARES SHARES REPRESENTED NUMBER CERTIFICATE BY OF SHARES NUMBER(S)* CERTIFICATE(S)* TENDERED** ----------------------------------------------------- ---------------------------------------------------- ---------------------------------------------------- ---------------------------------------------------- ---------------------------------------------------- DIVIDEND REIN- VESTMENT SHARES*** ------------------------------------------------- TOTAL SHARES - ----------------------------------------------------------------------------------------
* Need not be completed by Book-Entry Shareholders. ** Unless otherwise indicated, all Shares represented by Share Certificates delivered to the Depositary will be deemed to have been tendered. See Instruction 4. ***Enter the number of Dividend Reinvestment Shares from the last statement received (if applicable). Holders of outstanding shares of common stock, par value $2.50 per share, including associated preferred share purchase rights and any Dividend Reinvestment Shares ("Shares"), whose certificates for such Shares (the "Share Certificates") are not immediately available or who cannot deliver their Share Certificates and all other required documents to the Depositary on or prior to the Expiration Date (as defined in the Offer to Purchase), or who cannot complete the procedure for book-entry transfer on a timely basis, must tender their Shares according to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. See Instruction 2. Delivery of documents to the Book-Entry Transfer Facility does not constitute delivery to the Depositary. NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY [_]CHECK HERE IF SHARES ARE BEING TENDERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER): 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 Owner(s): _________________________________________ Window Ticket Number (if any): __________________________________________ Date of Execution of Notice of Guaranteed Delivery: _____________________ Name of Institution that Guaranteed Delivery: ___________________________ Account Number: _________________________________________________________ Transaction Code Number: ________________________________________________ 2 Ladies and Gentlemen: The undersigned hereby tenders to King DC Acquisition Corp., a New York corporation (the "Purchaser"), and a wholly-owned subsidiary of Danaher Corporation, a Delaware corporation ("Danaher"), the above-described shares of common stock, par value $2.50 per share and Dividend Reinvestment Shares (the "Shares"), of Kollmorgen Corporation, a New York corporation ("Kollmorgen"), at a purchase price of $23.00 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated May 12, 2000 (the "Offer to Purchase"), and in this Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"). The undersigned understands that the Purchaser reserves the right to transfer or assign, in whole or from time to time in part, to one or more of its affiliates the right to purchase all or any portion of the Shares tendered pursuant to the Offer. Subject to, and effective upon, acceptance for payment of the Shares tendered herewith in accordance with the terms of the Offer, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Purchaser all right, title and interest in and to all of the Shares that are being tendered hereby and any and all dividends, distributions, rights, other Shares or other securities issued, paid or distributed or issuable, payable or distributable in respect of such Shares on or after May 12, 2000 and prior to the transfer to the name of the Purchaser (or a nominee or transferee of the Purchaser) on Kollmorgen's stock transfer records of the Shares tendered herewith (collectively, a "Distribution"), and appoints the Depositary the true and lawful agent, attorney-in-fact and proxy of the undersigned with respect to such Shares (and any Distribution), with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to (a) deliver such Share Certificates (and any Distribution) or transfer ownership of such Shares (and any Distribution) on the account books maintained by the Book-Entry Transfer Facility, together, in either case, with appropriate evidences of transfer, to the Depositary for the account of the Purchaser, (b) present such Shares (and any Distribution) for transfer on the books of Kollmorgen and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and any Distribution), all in accordance with the terms and subject to the conditions of the Offer. The undersigned irrevocably appoints designees of the Purchaser as such undersigned's agents, attorneys-in-fact and proxies, with full power of substitution, to the full extent of such shareholder's rights with respect to the Shares (and any Distribution) tendered by such shareholder and accepted for payment by the Purchaser. All such powers of attorney and proxies shall be considered irrevocable and coupled with an interest. Such appointment will be effective when, and only to the extent that, the Purchaser accepts such Shares for payment. Upon such acceptance for payment, all prior attorneys, proxies and consents given by such shareholder with respect to such Shares (and any Distribution) will be revoked without further action, and no subsequent powers of attorney and proxies may be given nor any subsequent written consents executed (and, if given or executed, will not be deemed effective). The designees of the Purchaser will, with respect to the Shares (and Distributions) for which such appointment is effective, be empowered to exercise all voting and other rights of such shareholder as they in their sole discretion may deem proper at any annual or special meeting of Kollmorgen shareholders or any adjournment or postponement thereof, by written consent in lieu of any such meeting or otherwise. The Purchaser reserves the right to require that, in order for the Shares to be deemed validly tendered, immediately upon the Purchaser's payment for such Shares, the Purchaser must be able to exercise full voting rights with respect to such Shares and all Distributions, including, without limitation, voting at any meeting of shareholders. The undersigned hereby represents and warrants that (a) the undersigned has full power and authority to tender, sell, assign and transfer the undersigned's Shares (and any Distribution) tendered hereby, and (b) when the Shares are accepted for payment by the Purchaser, the Purchaser will acquire good, marketable and unencumbered title to the Shares (and any Distribution), free and clear of all liens, restrictions, charges and encumbrances, and the same will not be subject to any adverse claim and will not have been transferred to the Purchaser in violation of any contractual or other restriction on the transfer thereof. The undersigned, upon request, will execute and deliver any additional documents deemed by the Depositary or the Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby (and any Distribution). In addition, the undersigned shall promptly remit and transfer to the Depositary for the account of the Purchaser any and all Distributions in respect of the Shares tendered hereby, accompanied by appropriate documentation of transfer, and, pending such remittance or appropriate assurance thereof, the Purchaser will, subject to applicable law, be entitled to all rights and privileges as owner of any such Distribution and may withhold the entire purchase price or deduct from the purchase price the amount or value thereof, as determined by the Purchaser, in its sole discretion. 3 All authority herein conferred or agreed to be conferred shall not be affected by and shall survive the death or incapacity of the undersigned and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Tenders of Shares made pursuant to the Offer are irrevocable, except that Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date, and, unless theretofore accepted for payment by the Purchaser pursuant to the Offer, may also be withdrawn at any time after July 10, 2000. See Section 4 of the Offer to Purchase. The undersigned understands that tenders of Shares pursuant to any of the procedures described in Section 3 of the Offer to Purchase and in the instructions hereto will constitute a binding agreement between the undersigned and the Purchaser upon the terms and subject to the conditions set forth in the Offer, including the undersigned's representation that the undersigned owns the Shares being tendered. Unless otherwise indicated herein under "Special Payment Instructions," please issue the check for the purchase price and/or issue or return any certificate(s) for Shares not tendered or not accepted for payment in the name(s) of the registered holder(s) appearing under "Description of Shares Tendered." Similarly, unless otherwise indicated herein under "Special Delivery Instructions," please mail the check for the purchase price and/or any Share Certificate(s) not tendered or not accepted for payment (and accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing under "Description of Shares Tendered." In the event that both the "Special Delivery Instructions" and the "Special Payment Instructions" are completed, please issue the check for the purchase price and/or any Share Certificate(s) not tendered or accepted for payment in the name of, and deliver such check and/or such Share Certificates to, the person or persons so indicated. Unless otherwise indicated herein under "Special Payment Instructions," please credit any Shares tendered herewith 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 the Purchaser has no obligation, pursuant to the Special Payment Instructions, to transfer any Shares from the name(s) of the registered holder(s) thereof if the Purchaser does not accept for payment any of the Shares so tendered. [_]CHECK HERE IF ANY SHARE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE BEEN LOST, STOLEN OR DESTROYED AND SEE INSTRUCTION 11 Number of Shares represented by lost, stolen or destroyed Share Certificates: _________________________________________________________ _________________________________________________________ 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 Share To be completed ONLY if Share Certificate(s) not tendered or not Certificate(s) not tendered or not accepted for payment and/or the accepted for payment and/or the check for the purchase price of check for the purchase price of Shares accepted for payment are to Shares accepted for payment are to be sent to someone other than the be issued in the name of someone undersigned or to the undersigned other than the undersigned or if at an address other than that shown Shares tendered by book-entry above. transfer which are not accepted for payment are to be returned by credit to an account maintained at the Book-Entry Transfer Facility other than that designated above. Mail: [_] check [_] certificate(s) to: Name: ______________________________ (PLEASE PRINT) Issue [_] check [_] certificate(s) to: Address: ___________________________ Name: ______________________________ ------------------------------------ (PLEASE PRINT) (INCLUDE ZIP CODE) Address: ___________________________ ------------------------------------ (TAX I.D. OR SOCIAL SECURITY NO.) ------------------------------------ (SEE SUBSTITUTE FORM W-9) (INCLUDE ZIP CODE) ____________________________________ (TAX I.D. OR SOCIAL SECURITY NO.) (SEE SUBSTITUTE FORM W-9) [_]Credit Shares tendered by book- entry transfer that are not accepted for payment to DTC to the account set forth below ------------------------------------ (DTC ACCOUNT NO.) 5 SIGN HERE (AND COMPLETE SUBSTITUTE FORM W-9) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (SIGNATURE(S) OF SHAREHOLDER(S)) Date: ______________________, 2000 (Must be signed by the registered holder(s) exactly as name(s) appear(s) on Share Certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by Share Certificates and documents transmitted herewith. If signature is by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others 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) Area Code and Telephone Number _________________________________________________ Tax Identification or Social Security No. ______________________________________ (SEE SUBSTITUTE FORM W-9) GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5) Authorized Signature: __________________________________________________________ Name: __________________________________________________________________________ (PLEASE PRINT) Name of Firm: __________________________________________________________________ Address: _______________________________________________________________________ (INCLUDE ZIP CODE) Area Code and Telephone Number: ________________________________________________ Date: ______________________, 2000 SIGN HERE 6 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. Guarantee of Signatures. No signature guarantee is required on this Letter of Transmittal (a) if 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 herewith, unless such holder(s) has completed either the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions," or (b) if such Shares are tendered for the account of a firm which is a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of a recognized Medallion Program approved by the Securities Transfer Association Inc., including the Securities Transfer Agents Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the New York Stock Exchange Medallion Signature Program (MSP) or any other "eligible guarantor institution" (as defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended) (each of the foregoing, an "Eligible Institution"). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 5 of this Letter of Transmittal. 2. Requirements of Tender. This Letter of Transmittal is to be completed by shareholders either if Share Certificates are to be forwarded herewith or, unless an Agent's Message is utilized, if tenders are to be made pursuant to the procedure for tender by book-entry transfer set forth in Section 3 of the Offer to Purchase. Share Certificates evidencing tendered Shares, or timely confirmation (a "Book-Entry Confirmation") of a book-entry transfer of Shares into the Depositary's account at the Book-Entry Transfer Facility, as well as this Letter of Transmittal (or a facsimile hereof), properly completed and duly executed, with any required signature guarantees, or an Agent's Message in connection with a book-entry transfer, and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth herein on or prior to the Expiration Date. Shareholders whose Share Certificates are not immediately available or who cannot deliver their Share Certificates and all other required documents to the Depositary on or 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 by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant to such procedure: (a) such tender must be made by or through an Eligible Institution; (b) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by the Purchaser, must be received by the Depositary on or prior to the Expiration Date; and (c) the Share Certificates (or a Book-Entry Confirmation) representing all tendered Shares in proper form for transfer, in each case, together with this 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 delivery, an Agent's Message) and any other documents required by this Letter of Transmittal, must be received by the Depositary within three New York Stock Exchange trading days after the date of execution of such Notice of Guaranteed Delivery. If Share Certificates are forwarded separately in multiple deliveries to the Depositary, a properly completed and duly executed Letter of Transmittal (or a facsimile thereof) must accompany each such delivery. 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 shareholder, and the delivery will be deemed made only when actually received by the Depositary (including, in the case of book-entry transfer, by Book-Entry Confirmation). If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery. No alternative, conditional or contingent tenders will be accepted and no fractional Shares will be purchased. All tendering shareholders, by execution of this Letter of Transmittal (or a facsimile hereof), waive any right to receive any notice of the acceptance of their Shares for payment. 3. Inadequate Space. If the space provided herein is inadequate, the Share Certificate numbers and/or the number of Shares and any other required information should be listed on a separate signed schedule attached hereto. 4. Partial Tenders. (Not Applicable to Book-Entry Shareholders) If fewer than all the Shares evidenced by any Share Certificate submitted are to be tendered, fill in the number of Shares which are to be tendered in the box entitled "Number of Shares Tendered" in the "Description of Shares Tendered." In such cases, new Share Certificates for the Shares that were 7 evidenced by your old Share Certificates, but were not tendered by you, will be sent to you, unless otherwise provided in the appropriate box on this Letter of Transmittal, as soon as practicable after the Expiration Date. All Shares represented by Share Certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the Share Certificate(s) without alteration, enlargement or any change whatsoever. If any of the Shares tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any of the tendered Shares are registered in different names on several Share Certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of Share Certificates. If this Letter of Transmittal or any Share Certificates or stock powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and proper evidence satisfactory to the Purchaser of their authority so to act must be submitted. If this Letter of Transmittal is signed by the registered holder(s) of the Shares listed and transmitted hereby, no endorsements of Share Certificates or separate stock powers are required unless payment is to be made to or Share Certificates for Shares not tendered or not purchased are to be issued in the name of a person other than the registered holder(s). In such latter case, signatures on such Share Certificates or 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 the Share Certificate(s) listed, the Share Certificate(s) 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(s). Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution. 6. Stock Transfer Taxes. Except as otherwise provided in this Instruction 6, the Purchaser will pay any stock transfer taxes with respect to the transfer and sale of Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or if Share Certificate(s) for Shares not tendered or accepted for payment are to be registered in the name of, any person other than the registered holder(s), or if tendered Share Certificate(s) are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s) or such person) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or an exemption therefrom, is submitted. EXCEPT AS OTHERWISE PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE CERTIFICATE(S) LISTED IN THIS LETTER OF TRANSMITTAL. 7. Special Payment and Delivery Instructions. If a check is to be issued in the name of, and/or Share Certificates for Shares not tendered or not accepted for payment are to be issued or returned to, a person other than the signer of this Letter of Transmittal or if a check and/or such Share Certificates are to be returned to a person other than the person(s) signing this Letter of Transmittal or to an address other than that shown in this Letter of Transmittal, the appropriate boxes on this Letter of Transmittal must be completed. A Book-Entry Shareholder may request that Shares not accepted for payment be credited to such account maintained at the Book-Entry Transfer Facility as such Book-Entry Shareholder may designate under "Special Payment Instructions." If no such instructions are given, such Shares not accepted for payment will be returned by crediting the account at the Book-Entry Transfer Facility designated above. 8. Waiver of Conditions. Subject to the terms and conditions of the Merger Agreement (as defined in the Offer to Purchase), the conditions of the Offer (other than the Minimum Condition, as defined in the Offer to Purchase) may be waived by the Purchaser in whole or in part at any time and from time to time in its sole discretion. 8 9. 31% Backup Withholding; Substitute Form W-9. Under U.S. federal income tax law, a shareholder who tenders Shares pursuant to the Offer is required to provide the Depositary with such shareholder's correct taxpayer identification number ("TIN") on Substitute Form W-9 and to certify that the TIN provided on Substitute Form W-9 is correct (or that such shareholder is awaiting a TIN). If such shareholder is an individual, the TIN is his or her social security number. If the Depositary is not provided with the correct TIN, such shareholder may be subject to a $50 penalty imposed by the Internal Revenue Service and payments that are made to such shareholder with respect to Shares pursuant to the Offer may be subject to backup withholding (see below). A shareholder who does not have a TIN may check the box in Part 3 of the Substitute Form W-9 if such shareholder has applied for a number or intends to apply for a TIN in the near future. If the box in Part 3 is checked, the shareholder must also complete the "Certificate of Awaiting Taxpayer Identification Number" below in order to avoid backup withholding. If the box is checked, payments made will be subject to backup withholding unless the shareholder has furnished the Depositary with his or her TIN within 60 days. A shareholder who checks the box in Part 3 in lieu of furnishing such shareholder's TIN should furnish the Depositary with such shareholder's TIN as soon as it is received. Certain shareholders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding requirements. In order for a foreign individual to qualify as an exempt recipient, that shareholder must submit a statement, signed under penalty of perjury, attesting to that individual's exempt status (Form W-8). Forms for such statements can be obtained from the Depositary. Shareholders are urged to consult their own tax advisors to determine whether they are exempt from these backup withholding and reporting requirements. If backup withholding applies, the Depositary is required to withhold 31% of any payments to be made to the shareholder. Backup withholding is not an additional tax. Rather, the 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 by filing a tax return with the Internal Revenue Service. The Depositary cannot refund amounts withheld by reason of backup withholding. 10. Requests for Assistance or Additional Copies. Questions or requests for assistance may be directed to the Dealer Manager or the Information Agent at their respective addresses and telephone numbers set forth below. Additional copies of the Offer to Purchase, this Letter of Transmittal and the Notice of Guaranteed Delivery also may be obtained from the Information Agent or the Dealer Manager or from brokers, dealers, commercial banks or trust companies. 11. Lost, Destroyed or Stolen Certificates. If any Share Certificate has been lost, destroyed or stolen, the shareholder should promptly notify the Depositary. The shareholder then will be instructed as to the steps that must be taken in order to replace the Share Certificate. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost or destroyed Share Certificates have been followed. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER OR THE NOTICE OF GUARANTEED DELIVERY, AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE. 9 TO BE COMPLETED BY ALL TENDERING HOLDERS PAYER'S NAME: SunTrust Bank, as Depositary - ------------------------------------------------------------------------------- Part 1--PLEASE PROVIDE YOUR Social Security Number TIN IN THE BOX AT THE RIGHT or Employer AND CERTIFY BY SIGNING AND Identification Number DATING BELOW. Part 3--Awaiting TIN [_] Part 2--Certification--Under penalties of perjury, I SUBSTITUTE certify that: Form W-9 (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 ---------------------- Department of the -------------------------------------------------------- Treasury Internal ------------------------- Revenue Service (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 backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. Payer's Request for Taxpayer Identification Number ("TIN") Certification Instructions--You must cross out item (2) above if you have been notified by the IRS that you are subject to backup withholding because of under-reporting 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 stating that you are no longer subject to backup withholding, do not cross out such item (2). -------------------------------------------------------- SIGNATURE ________________________________________ DATE _____________________________________________ NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE 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 CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9. 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 (a) 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 (b) 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 payments made to me will be withheld. Signature: ______________________________________ ____________________________ Date: _____________ 10 The Information Agent for the Offer is: D.F. KING & CO., INC. 77 Water Street New York, New York 10005 Bankers and Brokers Call Collect (212) 269-5550 All Others Call Toll Free (888) 242-8157 The Dealer Manager for the Offer is: LEHMAN BROTHERS Three World Financial Center 200 Vesey Street, 18th Floor New York, New York 10285 Call Collect: (212) 526-6739 or (415) 274-5442 May 12, 2000 11 EX-99.(A)(3) 4 FORM OF NOTICE OF GUARANTEED DELIVERY EXHIBIT (a)(3) NOTICE OF GUARANTEED DELIVERY TO TENDER SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS) OF KOLLMORGEN CORPORATION TO KING DC ACQUISITION CORP. A WHOLLY-OWNED SUBSIDIARY OF DANAHER CORPORATION (NOT TO BE USED FOR SIGNATURE GUARANTEES) This Notice of Guaranteed Delivery or one substantially equivalent hereto must be used to accept the Offer (as defined below) if certificates for Shares (as defined below) are not immediately available or the certificates for Shares and all other required documents cannot be delivered to SunTrust Bank (the "Depositary") on or prior to the Expiration Date (as defined in the Offer to Purchase) or if the procedure for delivery by book-entry transfer cannot be completed on a timely basis. This instrument may be delivered by hand or transmitted by facsimile transmission or mailed to the Depositary. See Section 3 of the Offer to Purchase. The Depositary for the Offer is: SUNTRUST BANK Facsimile for Eligible Institutions: By Mail: By Overnight Courier: 404-865-5371 Confirm by Telephone: SunTrust Bank SunTrust Bank Post Office Box 4625 Stock Transfer Department 1-800-568-3476 Atlanta, Georgia 30302 58 Edgewood Avenue Room 225, Annex Atlanta, Georgia 30303 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 TO THE DEPOSITARY. 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 IN THE LETTER OF TRANSMITTAL. THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED. Ladies and Gentlemen: The undersigned hereby tender(s) to King DC Acquisition Corp., a New York corporation and a wholly-owned subsidiary of Danaher Corporation, a Delaware corporation, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated May 12, 2000 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"), receipt of which is hereby acknowledged, the number of shares of common stock, par value $2.50 per share (the "Shares"), of Kollmorgen Corporation, a New York corporation, indicated below pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. Number of Tendered Shares: ------------------------------------ Certificate No.(s) (if available): ------------------------------------ ------------------------------------ Check box if Shares will be tendered by book-entry transfer: [_] Name of Tendering Institution: ------------------------------------ Dated: _________________, 2000 Name(s) of Record Holder(s): ------------------------------------ ------------------------------------ (PLEASE PRINT) Address(es): _______________________ ------------------------------------ (ZIP CODE) Area Code and Telephone No.(s): ____ SIGN HERE Signature(s): ______________________ ---------------------------- GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a firm which is a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of a recognized Medallion Program approved by the Securities Transfer Association Inc., including the Securities Transfer Agents Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the New York Stock Exchange Medallion Signature Program (MSP) or any other "eligible guarantor institution" (as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended), guarantees to deliver to the Depositary either the certificates evidencing all tendered Shares, in proper form for transfer, or a Book-Entry Confirmation (as defined in the Offer to Purchase) with respect to such Shares, in either case, together with the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees or an Agent's Message (as defined in the Offer to Purchase) in the case of a book-entry delivery, and any other required documents, all within three New York Stock Exchange trading days after the date hereof. The eligible guarantor institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal and Share Certificates to the Depositary within the time period indicated herein. Failure to do so may result in financial loss to such eligible guarantor institution. Name of Firm: ______________________________________________________________ ------------------------------------------------------------------ (AUTHORIZED SIGNATURE) Address: ___________________________________________________________________ ---------------------------------------------------------------------- (ZIP CODE) Title: _____________________________________________________________________ Name: ______________________________________________________________________ (PLEASE PRINT OR TYPE) Area Code and Telephone No.: _______________________________________________ Dated: _________________, 2000 NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. 2 EX-99.(A)(4) 5 LETTER TO BROKERS, DEALERS, COMMERCIAL BANKS EXHIBIT (a)(4) OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS) OF KOLLMORGEN CORPORATION BY KING DC ACQUISITION CORP. A WHOLLY-OWNED SUBSIDIARY OF DANAHER CORPORATION AT $23.00 NET PER SHARE IN CASH THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 9, 2000, UNLESS THE OFFER IS EXTENDED. May 12, 2000 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We have been appointed by King DC Acquisition Corp., a New York corporation (the "Purchaser") and a wholly-owned subsidiary of Danaher Corporation, a Delaware corporation ("Danaher"), to act as Dealer Manager in connection with the Purchaser's offer to purchase for cash all the outstanding shares of common stock, par value $2.50 per share (the "Shares"), of Kollmorgen Corporation, a Delaware corporation ("Kollmorgen"), at a purchase price of $23.00 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated May 12, 2000 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer") enclosed herewith. Holders of Shares whose certificates for such Shares (the "Share Certificates") are not immediately available or who cannot deliver their Share Certificates and all other required documents to the Depositary (as defined below) on or prior to the Expiration Date (as defined in the Offer to Purchase), or who cannot complete the procedure for book-entry transfer on a timely basis, must tender their Shares according to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. 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. Enclosed herewith for your information and forwarding to your clients are copies of the following documents: 1. The Offer to Purchase, dated May 12, 2000. 2. The Letter of Transmittal to tender Shares for your use and for the information of your clients. Facsimile copies of the Letter of Transmittal may be used to tender Shares. 3. The Notice of Guaranteed Delivery for Shares to be used to accept the Offer if Share Certificates are not immediately available or if such certificates and all other required documents cannot be delivered to SunTrust Bank (the "Depositary") on or prior to the Expiration Date or if the procedure for book-entry transfer cannot be completed by the Expiration Date. 4. The letter to shareholders of Kollmorgen from Gideon Argov, President and Chief Executive Officer of Kollmorgen, accompanied by Kollmorgen's Solicitation/Recommendation Statement on Schedule 14D-9. 5. A printed form of 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. 7. A return envelope addressed to SunTrust Bank, as Depositary. YOUR PROMPT ACTION IS REQUESTED. 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 FRIDAY, JUNE 9, 2000, UNLESS THE OFFER IS EXTENDED. The Offer is conditioned upon, among other things, (1) there being validly tendered and not withdrawn prior to the expiration of the Offer a number of Shares which represents at least two-thirds of the outstanding Shares on a fully-diluted basis on the date of purchase, and (2) all applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or under any applicable foreign statutes or regulations having expired or been terminated. The Board of Directors of Kollmorgen has unanimously determined that the Offer and the Merger are fair to, and in the best interests of, the holders of the Shares, approved and adopted the Merger Agreement and recommends that the holders of the Shares accept the Offer and tender their Shares. The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of May 4, 2000, among Danaher, the Purchaser and Kollmorgen (as it may be amended or supplemented from time to time, the "Merger Agreement"). The Merger Agreement provides, among other things, for the making of the Offer by the Purchaser, and further provides that, following the completion of the Offer, upon the terms and subject to the conditions of the Merger Agreement, and in accordance with the New York Business General Corporation Law (the "BCL"), the Purchaser will be merged with and into Kollmorgen (the "Merger"). Following the effective time of the Merger (the "Effective Time"), Kollmorgen will continue as the surviving corporation and become a wholly-owned subsidiary of Danaher and the separate corporate existence of the Purchaser will cease. At the Effective Time, each Share issued and outstanding immediately prior to the Effective Time (other than (1) Shares held by Danaher, the Purchaser or any other wholly-owned subsidiary of Danaher or the Purchaser, in the treasury of Kollmorgen, or by any wholly-owned subsidiary of Kollmorgen, which will be canceled, and (2) Shares, if any, held by shareholders who have properly exercised appraisal rights under Section 910 of the BCL) will, by virtue of the Merger and without any action on the part of the holders of the Shares, be converted into the right to receive in cash the per Share price paid in the Offer, payable to the holder thereof, without interest, upon surrender of the Share Certificate formerly representing such Share, less any required withholding taxes. In order to take advantage of the Offer, (1) a duly executed and properly completed Letter of Transmittal (or a facsimile thereof) and any required signature guarantees, or an Agent's Message (as defined in the Offer to Purchase) in connection with a book-entry delivery of Shares, and other required documents should be sent to the Depositary, and (2) either Share Certificates representing the tendered Shares should be delivered to the Depositary or such Shares should be tendered by book-entry transfer and a Book-Entry Confirmation (as defined in the Offer to Purchase) with respect to such Shares should be delivered to the Depositary, all in accordance with the instructions set forth in the Letter of Transmittal and the Offer to Purchase. Holders of Shares whose Share Certificates are not immediately available or who cannot deliver their Share Certificates and all other required documents to the Depositary on or prior the expiration date of the Offer, or who cannot complete the procedure for delivery by book-entry transfer on a timely basis, must tender their Shares according to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. 2 The Purchaser will not pay any commissions or fees to any broker, dealer or other person (other than the Dealer Manager, the Depositary and D.F. King & Co., Inc. (the "Information Agent") (as described in the Offer to Purchase)) for soliciting tenders of Shares pursuant to the Offer. The Purchaser will, however, upon request, reimburse you for customary clerical and mailing expenses incurred by you in forwarding any of the enclosed materials to your clients. The Purchaser will pay or cause to be paid any stock transfer taxes payable on the transfer of Shares to it, except as otherwise provided in Instruction 6 of the Letter of Transmittal. 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 of the Offer to Purchase. Additional copies of the enclosed materials may be obtained from the Information Agent. Very truly yours, LEHMAN BROTHERS NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON, THE AGENT OF THE PURCHASER, DANAHER, THE DEALER MANAGER, THE DEPOSITARY OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN. 3 EX-99.(A)(5) 6 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 KOLLMORGEN CORPORATION BY KING DC ACQUISITION CORP. A WHOLLY-OWNED SUBSIDIARY OF DANAHER CORPORATION AT $23.00 NET PER SHARE IN CASH THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 9, 2000, UNLESS THE OFFER IS EXTENDED. May 12, 2000 To Our Clients: Enclosed for your consideration is an Offer to Purchase dated May 12, 2000 (the "Offer to Purchase"), and the related Letter of Transmittal, relating to an offer by King DC Acquisition Corp., a New York corporation (the "Purchaser") and a wholly-owned subsidiary of Danaher Corporation, a Delaware corporation ("Danaher"), to purchase all of the outstanding shares of common stock, par value $2.50 per share (the "Shares"), of Kollmorgen Corporation, a New York corporation ("Kollmorgen"), at a purchase price of $23.00 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer") enclosed herewith. Holders of Shares whose certificates for such Shares (the "Share Certificates") are not immediately available or who cannot deliver their Share Certificates and all other required documents to SunTrust Bank, the Depositary, on or prior to the Expiration Date (as defined in the Offer to Purchase), or who cannot complete the procedure for delivery by book-entry transfer on a timely basis, must tender their Shares according to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US 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 of such Shares held by us for your account, pursuant to the terms and subject to the conditions set forth in the Offer to Purchase. Your attention is directed to the following: 1. The Offer price is $23.00 per Share, net to the seller in cash, without interest thereon. 2. The Offer is made for all of the outstanding Shares. 3. The Board of Directors of Kollmorgen has unanimously determined that the Offer and the Merger (as defined below), are fair to and in the best interests of, the holders of the Shares, approved and adopted the Merger Agreement and recommends that the holders of the Shares accept the Offer and tender their Shares. 4. The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of May 4, 2000, among Danaher, the Purchaser and Kollmorgen (as it may be amended or supplemented from time to time, the "Merger Agreement"). The Merger Agreement provides, among other things, for the making of the Offer by the Purchaser, and further provides that, following the completion of the Offer, upon the terms and subject to the conditions of the Merger Agreement, and in accordance with the New York Business Corporation Law (the "BCL"), the Purchaser will be merged with and into Kollmorgen (the "Merger"). Following the effective time of the Merger (the "Effective Time"), Kollmorgen will continue as the surviving corporation and become a wholly-owned subsidiary of Danaher and the separate corporate existence of the Purchaser will cease. At the Effective Time, each Share issued and outstanding immediately prior to the Effective Time (other than (1) Shares held by Danaher, Purchaser or any other wholly-owned subsidiary of Danaher or the Purchaser, in the treasury of Kollmorgen, or by any wholly-owned subsidiary of Kollmorgen, which will be canceled, and (2) Shares, if any, held by shareholders who have properly exercised appraisal rights under Section 910 of the BCL) will, by virtue of the Merger and without any action on the part of the holders of the Shares, be converted into the right to receive in cash the per Share price paid in the Offer, payable to the holder thereof, without interest, upon surrender of the Share Certificate, less any required withholding taxes. 5. The Offer and withdrawal rights will expire at 12:00 midnight, New York City time, on June 9, 2000, unless the Offer is extended. 6. Tendering shareholders will not be obligated to pay brokerage fees or commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase of Shares pursuant to the Offer. 7. The Offer is conditioned upon, among other things, (1) there being validly tendered and not withdrawn prior to the Expiration Date a number of Shares which (including any other Kollmorgen common shares, directly or indirectly, owned by us) represents at least two-thirds of the total number of outstanding Shares on a fully diluted basis on the date of purchase, and (2) any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or under any applicable foreign statutes or regulations having expired or been terminated. 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. The Purchaser is not aware of any state where the making of the Offer is prohibited by administrative or judicial action pursuant to any valid state statute. If the Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of Shares pursuant thereto, the Purchaser will make a good faith effort to comply with any such state statute. If, after such good faith effort, the 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 the Purchaser by Lehman Brothers Inc., as Dealer Manager, or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction. IF YOU WISH TO HAVE US TENDER ANY OR ALL OF THE SHARES HELD BY US FOR YOUR ACCOUNT, PLEASE INSTRUCT US BY COMPLETING, EXECUTING AND RETURNING TO US THE INSTRUCTION FORM CONTAINED IN THIS LETTER. IF YOU AUTHORIZE A TENDER OF YOUR SHARES, ALL SUCH SHARES WILL BE TENDERED UNLESS OTHERWISE SPECIFIED IN SUCH INSTRUCTION FORM. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF ON OR 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 KOLLMORGEN CORPORATION BY KING DC ACQUISITION CORP. A WHOLLY-OWNED SUBSIDIARY OF DANAHER CORPORATION The undersigned acknowledge(s) receipt of your letter enclosing the Offer to Purchase dated May 12, 2000 (the "Offer to Purchase"), and the related Letter of Transmittal, pursuant to an offer by King DC Acquisition Corp., a New York corporation and a wholly-owned subsidiary of Danaher Corporation, a Delaware corporation, to purchase all outstanding shares of common stock, par value $2.50 per share (the "Shares"), of Kollmorgen Corporation, a New York corporation, at a purchase price of $23.00 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase and the related Letter of Transmittal. This will instruct you to tender the number of Shares indicated below (or, if no number is indicated below, all Shares) which are held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related Letter of Transmittal furnished to the undersigned. Number of Shares to be Tendered* ------------------------------ Dated: ________________ , 2000 SIGN HERE ---------------------------------------------------------------------------- SIGNATURE(S) ---------------------------------------------------------------------------- PLEASE PRINT ---------------------------------------------------------------------------- ADDRESS ---------------------------------------------------------------------------- AREA CODE AND TELEPHONE ---------------------------------------------------------------------------- TAX IDENTIFICATION, OR SOCIAL SECURITY NUMBER(S) - ------- * Unless otherwise indicated, it will be assumed that all of your Shares held by us for your account are to be tendered. 3 EX-99.(A)(6) 7 PRESS RELEASE BY DANAHER & KOLLMORGEN DATED 5/4/00 Exhibit 99(a)(6) [DANAHER CORPORATION LOGO] FOR IMMEDIATE RELEASE Contact: Danaher Corporation Patrick Allender Chief Financial Officer (202) 828-0850 DANAHER CORPORATION ANNOUNCES AGREEMENTS TO ACQUIRE KOLLMORGEN CORPORATION AND WARNER ELECTRIC MOTION BUSINESSES Washington, D.C., May 4, 2000 -- Danaher Corporation (NYSE:DHR) announced --- today that it has entered into a definitive merger agreement with Kollmorgen Corporation (NYSE:KOL) to acquire all of its outstanding shares at a cash price of $23 per share. The transaction has a total value of approximately $325 million including assumption of debt. The Directors of both companies have approved the merger agreement. Kollmorgen Corporation, headquartered in Waltham, Massachusetts, is a $260 million revenue global leader in providing high performance electronic motion control equipment, systems and service to industrial, commercial, aerospace and defense customers worldwide. Motion products include brush and brushless motors, servo systems, drives and electronic controls. Kollmorgen is also the premier designer and supplier of advanced submarine periscope systems. George M. Sherman, President and Chief Executive Officer of Danaher, stated, "Kollmorgen, with its premier reputation for technology and innovative solutions for the motion control industry, represents a key addition to our rapidly growing motion platform. We are excited by the prospects of adding Kollmorgen's capabilities to those of our existing businesses." Gideon Argov, Chairman, President and Chief Executive Officer of Kollmorgen, stated, "We cannot imagine a better strategic partner than Danaher Corporation, whose leadership in process and environmental controls perfectly complements Kollmorgen's leadership in high performance electronic motion control products and systems. We believe this important transaction will not only deliver significant value to our shareholders but significantly benefit the customers and employees of both our Industrial & Commercial and Aerospace & Defense businesses. I personally look forward to working closely with George Sherman and his colleagues on the Danaher team to complete the transaction and to achieve a smooth and seamless transition." Under the merger agreement, Danaher will commence a tender offer for Kollmorgen's outstanding shares, which will be subject to certain conditions, including at least a two-thirds majority of Kollmorgen's outstanding shares, on a fully diluted basis, being tendered without withdrawal prior to the expiration of the offer, and clearance of the transaction under applicable antitrust laws and other governmental agencies' regulations being obtained. All stockholders should read the tender offer statements concerning the tender offer that will be filed by Danaher, and the solicitation/recommendation statements that will be filed by Kollmorgen, with the Securities and Exchange Commission (SEC) and mailed to stockholders. These statements will contain important information that stockholders should consider before making any decision regarding tendering their shares. Stockholders will be able to obtain these statements in due course, as well as other filings containing information about Danaher and Kollmorgen, without charge, at the SEC's internet site (www.sec.gov). Copies of the tender offer and the solicitation/recommendation statements and other SEC filings can also be obtained, without charge, from Danaher's Corporate Secretary. Danaher Corporation also announced today that it has entered into an agreement to acquire, for cash, the motion control businesses of Warner Electric Company (Warner) for $144 million. Warner's $160 million revenue motion control operations include the company's linear products group with principal operations in Marengo, Illinois and Wolfschlugen, Germany and the company's motors and controls group based in Bristol, Connecticut and Charlotte, North Carolina. Warner's motion products include stepper motors, synchronous motors and linear actuation components and systems serving a wide range of commercial and industrial markets, including factory automation, material handling and medical applications. Warner's brake and clutch operations were not part of the transaction. The Warner transaction has been unanimously recommended by an independent committee of Danaher's Board of Directors and is subject to certain closing conditions and customary regulatory approvals. Warner Electric's principals include Steven and Mitchell Rales, Danaher's Chairman of the Board and Chairman of the Executive Committee, respectively. Mr. Sherman stated, "The Warner motion product offering closely complements both our motion component and motion solution offerings and provides broader access to several key targeted markets. With Kollmorgen and Warner Motion, we will double the size of our strategic motion platform." Kollmorgen Corporation is one of the major worldwide manufacturers of high performance electronic motion control products and systems. (www.kollmorgen.com) Danaher Corporation is a leading manufacturer of Process/Environmental Controls and Tools and Components. (www.danaher.com). ---------- ####### EX-99.(A)(7) 8 GUIDELINES FOR CERTIFICATION OF TAX ID NUMBER EXHIBIT (a)(7) 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. All "Section" references are to the Internal Revenue Code of 1986, as amended. "IRS" is the Internal Revenue Service. - -------------------------------------------------------------------------------
GIVE THE FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY NUMBER OF -- - -------------------------------------------------------------------------------- 1. Individual 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 The owner(3)
- ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
GIVE THE EMPLOYER FOR THIS TYPE OF ACCOUNT: IDENTIFICATION NUMBER OF -- - ------------------------------------------------------------------------------ 6. Sole proprietorship The owner(3) 7. A valid trust, estate, The legal or pension trust entity(4) 8. Corporate The corporation 9. Association, club, religious, charitable, educational, The organization or other tax-exempt organization account 10. Partnership The partnership 11. A broker or registered nominee The broker or nominee 12. 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. If only one person on a joint account has a social security number, that person's number must be furnished. (2) Circle the minor's name and furnish the minor's social security number. (3) You must show your individual name, but you may also enter your business or "doing business as" name. You may use either your social security number or your employer identification number (if you have one). (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 PAGE 2 OBTAINING A NUMBER If you do not have a taxpayer identification number, obtain Form SS-5, Appli- cation for a Social Security Card, at the local Social Security Administration office, or Form SS-4, Application for Employer Identification Number, by call- ing 1 (800) TAX-FORM, and apply for a number. PAYEES EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from withholding include: . An organization exempt from tax under section 501(a), an individual retire- ment account (IRA), or a custodial account under Section 403(b)(7), if the account satisfies the requirements of Section 401(f)(2). . The United States or a state thereof, the District of Columbia, a posses- sion of the United States, or a political subdivision or wholly-owned agency or instrumentality of any one or more of the foregoing. . An international organization or any agency or instrumentality thereof. . A foreign government and any political subdivision, agency or instrumental- ity thereof. Payees that may be exempt from backup withholding include: . A corporation. . A financial institution. . A dealer in securities or commodities required to register in the United States, the District of Columbia, 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 middleman known in the investment community as a nominee or a custodian. . A futures commission merchant registered with the Commodity Futures Trading Commission. . A foreign central bank of issue. . A trust exempt from tax under Section 664 or described in Section 4947. Payments of dividends and patronage dividends generally exempt from backup withholding include: . 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 that have at least one nonresident alien partner. . Payments of patronage dividends not paid in money. . Payments made by certain foreign organizations. . Section 404(k) payments made by an ESOP. Payments of interest generally exempt from backup withholding include: . Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more 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. . Mortgage or student loan interest paid to you. Certain payments, other than payments of interest, dividends, and patronage dividends, that are exempt from information reporting are also exempt from backup withholding. For details, see sections 6041, 6041A, 6042, 6044, 6045, 6049, 6050A and 6050N. EXEMPT PAYEES DESCRIBED ABOVE MUST FILE FORM W-9 OR A SUBSTITUTE FORM W-9 TO AVOID POSSIBLE ERRONEOUS BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYER. FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" IN PART I OF THE FORM, AND RETURN TO THE PAYER IF THE PAYMENTS ARE OF INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS. ALSO SIGN AND DATE THE FORM. 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) FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER--If you fail to furnish your 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 that results in no backup withholding, you are subject to a $500 penalty. (3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION--Willfully falsifying certifi- cations or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE EX-99.(A)(8) 9 FORM OF SUMMARY ADVERTISEMENT DATED 5/12/00 Exhibit 99(a)(8) [FORM OF SUMMARY ADVERTISEMENT] 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 made solely by the Offer to Purchase dated May 12, 2000, and the related Letter of Transmittal, and any amendments thereto, and is being made to all holders of Shares. The Purchaser (as defined below) is not aware of any state where the making of the Offer is prohibited by administrative or judicial action pursuant to any valid state statute. If the Purchaser becomes aware of any valid state statute prohibiting the making of the Offer, the Purchaser will make a good faith effort to comply with such statute. If, after such good faith effort, the 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. Notice of Offer to Purchase for Cash All Outstanding Shares of Common Stock (Including the Associated Preferred Share Purchase Rights) of Kollmorgen Corporation At $23.00 Net Per Share in Cash by King DC Acquisition Corp. a wholly-owned subsidiary of Danaher Corporation King DC Acquisition Corp., a New York corporation (the "Purchaser") and a wholly-owned subsidiary of Danaher Corporation, a Delaware corporation ("Danaher"), hereby offers to purchase all of the outstanding shares of common stock, par value $2.50 per share (the "Shares"), of Kollmorgen Corporation, a New York corporation ("Kollmorgen"), at a purchase price of $23.00 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase dated May 12, 2000 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"). THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON JUNE 9, 2000, UNLESS THE OFFER IS EXTENDED. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE OF THE OFFER A NUMBER OF SHARES WHICH REPRESENTS AT LEAST TWO-THIRDS OF THE TOTAL NUMBER OF OUTSTANDING SHARES (TAKEN TOGETHER WITH ANY OTHER SHARES, DIRECTLY OR INDIRECTLY, OWNED BY DANAHER) ON A FULLY-DILUTED BASIS ON THE DATE OF PURCHASE, AND (2) ANY APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, OR UNDER ANY APPLICABLE FOREIGN STATUTES OR REGULATIONS SHALL HAVE EXPIRED OR BEEN TERMINATED. The purpose of the Offer is to acquire control of, and the entire equity interest in, Kollmorgen. As promptly as practicable following consummation of the Offer and after satisfaction or waiver of all conditions to the Merger (as defined below) set forth in the Merger Agreement (as defined below), the Purchaser intends to acquire the remaining equity interest in Kollmorgen not acquired in the Offer by consummating the Merger. The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of May 4, 2000, among Danaher, the Purchaser and Kollmorgen (the "Merger Agreement"). The Merger Agreement provides, among other things, for the making of the Offer by the Purchaser, and further provides that, following the completion of the Offer, upon the terms and subject to the conditions of the Merger Agreement and in accordance with the New York Business Corporation Law (the "BCL"), the Purchaser will be merged with and into Kollmorgen (the "Merger"). Following the effective time of the Merger (the "Effective Time"), Kollmorgen will continue as the surviving corporation (the "Surviving Corporation") and become a wholly-owned subsidiary of Danaher, and the separate corporate existence of the Purchaser will cease. At the Effective Time, each Share issued and outstanding immediately prior to the Effective Time (other than (1) Shares held by Danaher, the Purchaser or any other wholly-owned subsidiary of Danaher or the Purchaser, in the treasury of Kollmorgen or by any wholly- owned subsidiary of Kollmorgen, and (2) Shares, if any, held by shareholders who have properly exercised appraisal rights under Section 910 of the BCL) will, by virtue of the Merger and without any action on the part of the holders of the Shares be converted into the right to receive in cash the per Share price paid in the Offer, payable to the holder thereof, without interest, upon surrender of the certificate or certificates formerly representing such Shares, less any required withholding taxes. The Merger Agreement is more fully described in Section 11 of the Offer to Purchase. THE BOARD OF DIRECTORS OF KOLLMORGEN HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, AND DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE ADVISABLE AND FAIR TO, AND IN THE BEST INTERESTS OF, THE HOLDERS OF THE SHARES, AND RECOMMENDS THAT THE HOLDERS OF THE SHARES TENDER THEIR SHARES TO THE PURCHASER PURSUANT TO THE OFFER. For purposes of the Offer, the Purchaser will be deemed to have accepted for payment (and thereby purchased) Shares validly tendered and not properly withdrawn as, if and when the Purchaser gives oral or written notice to SunTrust Bank (the "Depositary") of the 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 shareholders for the purpose of receiving payments from the Purchaser and transmitting such payments to shareholders whose Shares have been accepted for payment. Under no circumstances will interest on the purchase price for Shares be paid by the Purchaser, regardless of any extension of the Offer or 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 (1) certificates representing such Shares, 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 the Offer to Purchase) pursuant to the procedures set forth in Section 3 of the Offer to Purchase, (2) the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees, or an Agent's Message (as defined in the Offer to Purchase) in connection with a book-entry transfer, and (3) any other documents required by the Letter of Transmittal. Subject to the provisions of the Merger Agreement and the applicable rules and regulations of the Securities and Exchange Commission (the "SEC"), the Purchaser reserves the right, in its sole discretion, to waive any or all conditions to the Offer (other than the Minimum Condition (as defined in the Offer to Purchase)) and to make any other changes in the terms and conditions of the Offer. Subject to the provisions of the Merger Agreement and the applicable rules and regulations of the SEC, if, by the Expiration Date, any or all of the conditions to the Offer have not been satisfied, the Purchaser reserves the right (but will not be obligated) to (1) terminate the Offer and return all tendered Shares to tendering shareholders, (2) waive such unsatisfied conditions (other than the Minimum Condition) and purchase all Shares validly tendered or (3) extend the Offer, and, subject to the terms of the Offer (including the rights of shareholders to withdraw their Shares), retain the Shares which have been tendered, until the termination of the Offer, as extended. Subject to the provisions of the Merger Agreement and the applicable rules and regulations of the SEC, the Purchaser expressly reserves the right, in its sole discretion, at any time and from time to time, and regardless of whether or not any of the events set forth in Section 14 of the Offer to Purchase have occurred or have been determined by the Purchaser to have occurred, to (1) extend the period of time during which the Offer is open and thereby delay acceptance for payment of, and payment for, any Shares, by giving oral or written notice of such extension to the Depositary, and (2) amend the Offer in any respect permitted by the Merger Agreement by giving oral or written notice of such amendment to the Depositary; provided, however, that in the event that the required waiting periods under U.S. federal antitrust laws or under certain applicable foreign statutes or regulations have not expired, or in the event of certain other actions (as set forth in the Merger Agreement), the Purchaser is required to extend the Offer. Any extension, delay, termination, waiver or amendment will be followed as promptly as practicable by public announcement thereof 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. During any such extension, all Shares previously tendered and not properly withdrawn will remain subject to the Offer, subject to the rights of a tendering shareholder to withdraw such shareholder's Shares. "Expiration Date" means 12:00 Midnight, New York City time, on Friday, June 9, 2000, unless and until the Purchaser, in its sole discretion (but subject to the terms and conditions of the Merger Agreement), has extended the period during which the Offer is open, in which event the term "Expiration Date" means the latest time and date at which the Offer, as so extended by the Purchaser, will expire. Tenders of Shares made pursuant to the Offer are irrevocable, except that Shares tendered pursuant to the Offer may be withdrawn at any time on or prior to the Expiration Date, and, unless theretofore accepted for payment by the Purchaser pursuant to the Offer, may also be withdrawn at any time after July 11, 2000. For a withdrawal to be effective, a written, telegraphic, telex or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of the Offer to Purchase. Any 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, if different from that of the person who tendered such Shares. If certificates for the Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of the certificates, the serial numbers shown on such certificates must be submitted to the Depositary and the signatures on the notice of withdrawal must be guaranteed by an Eligible Institution (as defined in 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, in which case a notice of withdrawal will be effective if delivered to the Depositary by any method of delivery described in the second sentence of this paragraph. All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by the Purchaser, in its sole discretion, whose determination will be final and binding. None of the Purchaser, Danaher, any of their 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 any notice of withdrawal or incur any liability for failure to give 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 of the Offer to Purchase. 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. Kollmorgen has provided the Purchaser with Kollmorgen's shareholder list and security position listing for the purpose of disseminating the Offer to holders of Shares. The Offer to Purchase and the related Letter of Transmittal and, if required, other relevant materials will be mailed by the Purchaser to record holders of Shares and furnished to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the shareholder list or, if applicable, who are listed as participants in a clearing agency's security position listing, for subsequent transmittal to beneficial owners of Shares. THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. Questions and requests for assistance may be directed to the Dealer Manager or the Information Agent as set forth below. Requests for copies of the Offer to Purchase and the related Letter of Transmittal and all other tender offer materials may be directed to the Information Agent, and copies will be furnished promptly at the Purchaser's expense. The Purchaser will not pay any fees or commissions to any broker or dealer or any other person (other than the Dealer Manager and Information Agent) for soliciting tenders of Shares pursuant to the Offer. The Information Agent for the Offer is: D.F. King & Co., Inc. 77 Water Street New York, New York 10005 Banks and Brokers, Please Call: (212) 269-5550 All Others Call Toll-free: (888) 242-8157 The Dealer Manager for the Offer is: Lehman Brothers 3 World Financial Center 200 Vesey Street, 18th Floor New York, New York 10285 Call Collect: (212) 526-6739 or (415) 274-5442 May 12, 2000 EX-99.(D)(1) 10 AGREEMENT & PLAN OF MERGER BTW. DANAHER & KOLLMORGEN EXHIBIT 99(d)(1) AGREEMENT AND PLAN OF MERGER AMONG DANAHER CORPORATION ("Parent"), KING DC ACQUISITION CORP., ("Purchaser"), and KOLLMORGEN CORPORATION (the "Company") May 4, 2000 TABLE OF CONTENTS Page ---- ARTICLE ONE THE OFFER......................................................................2 Section 1.1 The Offer................................................2 Section 1.2 Company Actions..........................................3 Section 1.3 Directors................................................4 ARTICLE TWO THE MERGER.....................................................................5 Section 2.1 The Merger...............................................5 Section 2.2 Effective Time...........................................5 Section 2.3 Effects of the Merger....................................5 Section 2.4 Certificate of Incorporation and By-Laws of the Surviving Corporation...........................6 Section 2.5 Directors................................................6 Section 2.6 Officers.................................................6 Section 2.7 Conversion of Common Shares..............................6 Section 2.8 Conversion of Purchaser Common Stock.....................6 Section 2.9 Options; Stock Plans.....................................7 Section 2.10 Shareholders' Meeting....................................7 Section 2.11 Merger Without Meeting of Shareholders...................8 ARTICLE THREE DISSENTING SHARES; PAYMENT FOR SHARES..........................................8 Section 3.1 Dissenting Shares........................................8 Section 3.2 Payment for Common Shares................................8 ARTICLE FOUR REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................................9 Section 4.1 Organization and Qualification; Subsidiaries.............9 Section 4.2 Capitalization; Subsidiaries............................10 -i- Section 4.3 Authority Relative to this Agreement and Related Matters...................................11 Section 4.4 No Conflict; Required Filings and Consents..............11 Section 4.5 SEC Reports and Financial Statements....................12 Section 4.6 Environmental Matters...................................13 Section 4.7 Compliance with Applicable Laws.........................15 Section 4.8 Change of Control.......................................16 Section 4.9 Litigation..............................................16 Section 4.10 Information.............................................16 Section 4.11 Certain Approvals.......................................17 Section 4.12 Employee Benefit Plans..................................17 Section 4.13 Intellectual Property...................................20 Section 4.14 Taxes...................................................21 Section 4.15 Absence of Certain Changes..............................22 Section 4.16 Labor Matters...........................................22 Section 4.17 Relationships with Customers, Suppliers, Distributors and Sales Representatives................23 Section 4.18 Contracts...............................................23 Section 4.19 Rights Agreement........................................24 Section 4.20 Product Recalls.........................................24 Section 4.21 Brokers.................................................24 Section 4.22 Opinion of Financial Advisor............................24 Section 4.23 Year 2000 Compliance....................................24 Section 4.24 Government Contracts....................................24 Section 4.25 Government Contracting Audits...........................27 ARTICLE FIVE REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER....................27 Section 5.1 Organization and Qualification..........................27 Section 5.2 Authority Relative to this Agreement....................28 Section 5.3 No Conflict; Required Filings and Consents..............28 Section 5.4 Information.............................................29 Section 5.5 Financing...............................................29 Section 5.6 Ownership of Purchaser; No Prior Activities.............29 ARTICLE SIX COVENANTS.....................................................................30 Section 6.1 Conduct of Business of the Company......................30 Section 6.2 Access to Information...................................32 Section 6.3 Efforts.................................................33 Section 6.4 Public Announcements....................................34 Section 6.5 Employee Benefit Arrangements...........................34 -ii- Section 6.6 Indemnification.........................................35 Section 6.7 Notification of Certain Matters.........................36 Section 6.8 Rights Agreement........................................36 Section 6.9 State Takeover Laws.....................................36 Section 6.10 No Solicitation.........................................36 Section 6.11 Parent Agreement Concerning Purchaser...................37 Section 6.12 Convertible Debentures..................................38 ARTICLE SEVEN CONDITIONS TO CONSUMMATION OF THE MERGER......................................38 Section 7.1 Conditions..............................................38 ARTICLE EIGHT TERMINATION; AMENDMENTS; WAIVER...............................................38 Section 8.1 Termination.............................................38 Section 8.2 Effect of Termination...................................40 Section 8.3 Fees and Expenses.......................................40 Section 8.4 Amendment...............................................40 Section 8.5 Extension; Waiver.......................................41 ARTICLE NINE MISCELLANEOUS.................................................................41 Section 9.1 Non-Survival of Representations and Warranties..........41 Section 9.2 Entire Agreement; Assignment............................41 Section 9.3 Validity................................................41 Section 9.4 Notices.................................................41 Section 9.5 Governing Law; Jurisdiction.............................42 Section 9.6 Descriptive Headings....................................43 Section 9.7 Counterparts............................................43 Section 9.8 Parties in Interest.....................................43 Section 9.9 Certain Definitions.....................................43 Section 9.10 Specific Performance....................................43 -iii- AGREEMENT AND PLAN OF MERGER AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of May 4, 2000, by and among Danaher Corporation, a Delaware corporation ("Parent"), King DC Acquisition Corp., a New York corporation and a wholly owned subsidiary of Parent (the "Purchaser"), and Kollmorgen Corporation, a New York corporation (the "Company"). WHEREAS, the respective Boards of Directors of Parent, the Purchaser and the Company have approved the acquisition of the Company by Parent on the terms and subject to the conditions set forth in this Agreement; WHEREAS, pursuant to this Agreement the Purchaser has agreed to commence a tender offer (the "Offer") to purchase all of the Company's common stock, par value $2.50 per share (the "Common Shares"), including the associated preferred share purchase rights (the "Rights") issued pursuant to the Amended and Restated Rights Agreement, dated as of December 20, 1988, amended and restated as of March 27, 1990, amended and restated as of October 22, 1998, and further amended and restated as of December 13, 1999 between the Company and BankBoston, N.A., as Rights Agent (the "Rights Agreement") (which Rights together with the Common Shares are hereinafter referred to as the "Shares"), at a price per Share of $23.00 net to the seller in cash (such amount or any greater amount per Share paid pursuant to the Offer being hereinafter referred to as the "Offer Price"); WHEREAS, the Board of Directors of the Company (the "Company Board") has, on the terms and subject to the conditions set forth herein, unanimously (i) approved the Offer and the Merger (as hereinafter defined), (ii) adopted this Agreement and is recommending that the Company's shareholders accept the Offer, the Merger, tender their Shares to the Purchaser and approve this Agreement; WHEREAS, the respective Boards of Directors of the Purchaser and the Company and Parent as the sole Shareholder of the Purchaser have approved the merger of the Purchaser with and into the Company with the Company as the surviving corporation, as set forth below (the "Merger"), in accordance with the Business Corporation Law of the State of New York (the "BCL"), and upon the terms and subject to the conditions set forth in this Agreement, whereby each of the issued and outstanding Common Shares not owned directly or indirectly by Parent, the Purchaser or the Company will be converted into the right to receive the Offer Price in cash; and WHEREAS, Parent, the Purchaser and the Company desire to make certain representations, warranties, covenants and agreements in connection with the Offer and the Merger and also to prescribe various conditions to the Offer and the Merger; NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, Parent, the Purchaser and the Company agree as follows: ARTICLE ONE THE OFFER SECTION 1.1 The Offer. --------- (a) Provided that this Agreement shall not have been terminated in accordance with Article Eight hereof and none of the events set forth in Annex I hereto (the "Tender Offer Conditions") shall have occurred, as promptly as reasonably practicable, but in no event later than May 15, 2000, Parent shall cause the Purchaser to commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended (including the rules and regulations promulgated thereunder), the "Exchange Act") an offer to purchase all outstanding Shares at the Offer Price, shall, upon commencement of the Offer but after affording the Company a reasonable opportunity to review and comment thereon, file Schedule TO and all other necessary documents with the Securities and Exchange Commission (the "SEC") and make all deliveries, mailings and telephonic notices required by Rule 14d-3 under the Exchange Act, in each case in connection with the Offer (the "Offer Documents") and shall use its reasonable best efforts to consummate the Offer, subject to the terms and conditions thereof. The obligation of the Purchaser to accept for payment or pay for any Shares tendered pursuant to the Offer will be subject only to the satisfaction or waiver of the conditions set forth in Annex I hereto. (b) Without the prior written consent of the Company, the Purchaser shall not decrease the Offer Price or change the form of consideration payable in the Offer, decrease the number of Shares sought to be purchased in the Offer, impose additional conditions to the Offer or amend any other term of the Offer in any manner adverse to the holders of Common Shares. The Offer shall remain open until the date that is 20 business days (as such term is defined in Rule 14d-1(c)(6) under the Exchange Act) after the commencement of the Offer (the "Expiration Date"), unless the Purchaser shall have extended the period of time for which the Offer is open pursuant to, and in accordance with, the two succeeding sentences or as may be required by applicable law, in which event the term "Expiration Date" shall mean the latest time and date as the Offer, as so extended, may expire. If at any Expiration Date, any of the Tender Offer Conditions is not satisfied or waived by the Purchaser, the Purchaser may extend the Offer from time to time; provided, however, that, on the scheduled -------- ------- expiration date of the Offer, (i) if the waiting period under the HSR Act or under any material applicable foreign statutes or regulations applicable to the Merger shall have not expired or been terminated, the Purchaser shall extend the Offer from time to time until the expiration or termination under the HSR Act or any other applicable foreign statutes or regulations, (ii) if any of the conditions set forth in paragraphs (a) or (b) of Annex I hereto shall have occurred and be continuing, the Purchaser shall extend the Offer from time to time until the earlier of (A) five business days after the time such condition shall no longer exist or (B) such time at which the matters described in such paragraphs (a) or (b) shall have become final and nonappealable; or (iii) if all of the Tender Offer Conditions are satisfied and more than 70% but less than 90% of the outstanding Common Shares on a fully diluted basis (excluding Options (as defined herein) which are not exercisable for 30 days) have been validly tendered and not withdrawn in the Offer, the Purchaser shall have the right, in its sole discretion, to extend the Offer from time to time up to a maximum of seven additional business days in the aggregate. Subject to the terms of the Offer and this Agreement and the satisfaction of all the Tender Offer Conditions as of any Expiration Date, the Purchaser will accept for payment and -2- pay for all Shares validly tendered and not validly withdrawn pursuant to the Offer as soon as practicable after such expiration date of the Offer. Without the prior written consent of the Company, the Purchaser shall not accept for payment or pay for any Shares in the Offer if, as a result, Purchaser would acquire less than the number of Shares necessary to satisfy the Minimum Condition (as defined in Annex I hereto). (c) Parent and the Purchaser represent that the Offer Documents will comply in all material respects with the provisions of applicable federal securities laws and, on the date filed with the SEC and on the date first published, sent or given to the Company's shareholders, shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading, except that no representation is made by Parent or the Purchaser with respect to information supplied by the Company in writing for inclusion in the Offer Documents. Each of Parent and the Purchaser, on the one hand, and the Company, on the other hand, agrees promptly to correct any information provided by it for use in the Offer Documents if and to the extent that it shall have become false or misleading in any material respect and the Purchaser further agrees to take all steps necessary to cause the Offer Documents as so corrected to be filed with the SEC and to be disseminated to shareholders of the Company, in each case, as and to the extent required by applicable federal securities laws. SECTION 1.2 Company Actions. --------------- (a) The Company shall, after affording Parent a reasonable opportunity to review and comment thereon, file with the SEC and mail to the holders of Common Shares, as promptly as practicable on the date of the filing by Parent and the Purchaser of the Offer Documents, a Solicitation/Recommendation Statement on Schedule 14D-9 (together with any amendments or supplements thereto, the "Schedule 14D-9") reflecting the recommendation of the Company Board that holders of Shares tender their Shares pursuant to the Offer and shall disseminate the Schedule 14D-9 as required by Rule 14d-9 promulgated under the Exchange Act. The Schedule 14D-9 will set forth, and the Company hereby represents, that the Company Board, at a meeting duly called and held at which a quorum was present throughout, has unanimously (i) determined that each of the transactions contemplated hereby, including each of the Offer and the Merger, is fair to and in the best interests of the Company and its shareholders, (ii) approved the Offer and adopted this Agreement in accordance with the BCL, (iii) recommended acceptance of the Offer and approval of this Agreement by the Company's shareholders (if such approval is required by applicable law), and (iv) taken all other action necessary to render the Rights inapplicable to the Offer and the Merger; provided, however, that such recommendation and approval -------- ------- may be withdrawn, modified or amended only prior to the acceptance of payment of Common Shares pursuant to the Offer, and only to the extent that the Company Board determines in good faith, after consultation with its outside legal counsel, that failure to take such action would result in a breach of the Company Board's fiduciary obligations under applicable law. The Company further represents that, as of the date of this Agreement, Salomon Smith Barney Inc. ("SSB"), the Company's financial advisor, has delivered to the Company Board its written opinion that, as of the date of this Agreement, the consideration to be received by the holders of Common Shares (other than Parent or any of its affiliates) pursuant to the Offer and the Merger is fair to such holders from a financial point of view, a copy of the written opinion of which such advisor has consented to include in the Schedule 14D-9. The Company hereby consents to the inclusion in -3- the Offer Documents of the recommendations of the Company Board described in this Section 1.2(a). (b) The Company represents that the Schedule 14D-9 will comply in all material respects with the provisions of applicable federal securities laws and, on the date filed with the SEC and on the date first published, sent or given to the Company's shareholders, shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading, except that no representation is made by the Company with respect to information supplied by Parent or the Purchaser in writing for inclusion in the Schedule 14D-9. Each of the Company, on the one hand, and Parent and the Purchaser, on the other hand, agree promptly to correct any information provided by either of them for use in the Schedule 14D-9 if and to the extent that it shall have become false or misleading, and the Company further agrees to take all steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the SEC and to be disseminated to the holders of Shares, in each case, as and to the extent required by applicable federal securities law. (c) In connection with the Offer, the Company will promptly furnish the Purchaser with mailing labels, security position listings, any available non- objecting beneficial owner lists and any available listing or computer list containing the names and addresses of the record holders of the Common Shares as of the most recent practicable date and shall furnish the Purchaser with such additional available information (including, but not limited to, updated lists of holders of Common Shares and their addresses, mailing labels and lists of security positions and non-objecting beneficial owner lists) and such other assistance as the Purchaser or its agents may reasonably request in communicating the Offer to the Company's record and beneficial shareholders. Subject to the requirements of applicable law, and except for such steps as are necessary to disseminate the Offer Documents and any other documents necessary to consummate the Merger, Parent, the Purchaser and their affiliates, associates, agents and advisors, shall keep such information confidential and use the information contained in any such labels, listings and files only in connection with the Offer and the Merger and, should the Offer terminate or if this Agreement shall be terminated, will deliver to the Company all copies of such information then in their possession. SECTION 1.3 Directors. --------- (a) Subject to compliance with applicable law, promptly upon the payment by the Purchaser for Shares pursuant to the Offer representing at least such number of Shares as shall satisfy the Minimum Condition, and from time to time thereafter, Parent shall be entitled to designate such number of directors, rounded up to the next whole number, on the Company Board as is equal to the product of the total number of directors on the Company Board (determined after giving effect to the directors elected pursuant to this sentence) multiplied by the percentage that the aggregate number of Common Shares beneficially owned by Parent or its affiliates bears to the total number of Common Shares then outstanding, and the Company shall, upon request of Parent, promptly take all actions necessary to cause Parent's designees to be so elected, including, if necessary, seeking the resignations of one or more existing directors; provided, -------- however, that prior to the Effective Time (as defined in Section 2.2), the - ------- Company Board shall always have at least two members who are not officers, directors, employees or designees of the Pur- -4- chaser or any of its affiliates, including the Company ("Purchaser Insiders"). If the number of directors who are not Purchaser Insiders is reduced below two prior to the Effective Time, the remaining director who is not a Purchaser Insider shall be entitled to designate a person to fill such vacancy who is not a Purchaser Insider and who shall be a director not deemed to be a Purchaser Insider for all purposes of this Agreement. (b) The Company's obligations to appoint Parent's designees to the Board shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1 thereunder. The Company shall promptly take all actions required pursuant to such Section and Rule in order to fulfill its obligations under this Section 1.3 and shall include in the Schedule 14D-9 such information with respect to the Company and its officers and directors as is required under such Section and Rule in order to fulfill its obligations under this Section 1.3. Parent will supply to the Company any information with respect to itself and its officers, directors and affiliates required by such Section and Rule. (c) Following the election or appointment of Parent's designees pursuant to this Section 1.3 and prior to the Effective Time, any amendment or termination of this Agreement by the Company, any extension by the Company of the time for the performance of any of the obligations or other acts of Parent or the Purchaser or waiver of any of the Company's rights hereunder, will require the concurrence of a majority of the directors of the Company then in office who are not Purchaser Insiders (or in the case where there are two or fewer directors who are not Purchaser Insiders, the concurrence of one director who is not a Purchaser Insider) if such amendment, termination, extension or waiver could be reasonably likely to have an adverse effect on the minority shareholders of the Company. ARTICLE TWO THE MERGER SECTION 2.1 The Merger. Upon the terms and subject to the ---------- satisfaction or waiver of the conditions hereof, and in accordance with the applicable provisions of this Agreement and the BCL, at the Effective Time the Purchaser shall be merged with and into the Company. Following the Merger, the separate corporate existence of the Purchaser shall cease and the Company shall continue as the surviving corporation (the "Surviving Corporation"), and shall continue its corporate existence under the laws of the State of New York. SECTION 2.2 Effective Time. As soon as practicable after the -------------- satisfaction or waiver of the conditions set forth in Sections 7.1(a) and 7.1(b), but subject to Sections 7.1(c) and 7.1(d), the Merger shall become effective as set forth in the certificate of merger which shall be filed with the Secretary of State of the State of New York. The parties shall take such other and further actions as may be required by law to make the Merger effective. The time the Merger becomes effective in accordance with applicable law is referred to herein as the "Effective Time." SECTION 2.3 Effects of the Merger. At and after the Effective Time --------------------- the Merger shall have the effects set forth in Section 906 of the BCL. Without limiting the generality of the -5- foregoing, and subject thereto, at the Effective Time, all the properties, rights, privileges, powers and franchises of the Company and the Purchaser shall vest in the Surviving Corporation, and all debts, liabilities and duties of the Company and the Purchaser shall become the debts, liabilities and duties of the Surviving Corporation. SECTION 2.4 Certificate of Incorporation and By-Laws of the Surviving --------------------------------------------------------- Corporation. - ----------- (a) The Certificate of Incorporation of the Purchaser, as in effect immediately prior to the Effective Time, shall be the Certificate of Incorporation of the Surviving Corporation until thereafter amended, subject to the provisions of Section 6.6 of this Agreement, in accordance with the provisions thereof and hereof and applicable law. (b) The By-Laws of the Purchaser in effect at the Effective Time shall be the By-Laws of the Surviving Corporation until amended, subject to the provisions of Section 6.6 of this Agreement, in accordance with the provisions thereof and applicable law. SECTION 2.5 Directors. Subject to applicable law, the directors of the --------- Purchaser immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal. SECTION 2.6 Officers. The individuals specified by Parent prior to the -------- Effective Time shall, subject to applicable law, be the initial officers of the Surviving Corporation and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal. SECTION 2.7 Conversion of Common Shares. At the Effective Time, by --------------------------- virtue of the Merger and without any action on the part of the holders thereof, each Common Share issued and outstanding immediately prior to the Effective Time (other than (i) any Common Shares held by Parent, the Purchaser, any wholly owned subsidiary of Parent or the Purchaser, in the treasury of the Company or by any wholly owned subsidiary of the Company, which Common Shares, by virtue of the Merger and without any action on the part of the holder thereof, shall be cancelled and retired and shall cease to exist with no payment being made with respect thereto and (ii) Dissenting Shares (as defined in Section 3.1)), shall be cancelled and retired and shall be converted into the right to receive the Offer Price in cash (the "Merger Price"), payable to the holder thereof, without interest thereon, upon surrender of the certificate formerly representing such Common Share. SECTION 2.8 Conversion of Purchaser Common Stock. The Purchaser has ------------------------------------ outstanding 10 shares of common stock, par value $.01 per share, all of which are entitled to vote with respect to approval of this Agreement. At the Effective Time, each share of common stock of the Purchaser issued and outstanding immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into and become one validly issued, fully paid and non-assessable share of common stock, par value $.01 per share, of the Surviving Corporation. -6- SECTION 2.9 Options; Stock Plans. Prior to the Effective Time, the -------------------- Company Board (or, if appropriate, any committee thereof) shall adopt appropriate resolutions and take all other actions necessary to provide for the cancellation or exercise, effective at the Effective Time, of all the outstanding stock options or similar rights (the "Options") heretofore granted under any stock option or similar plan of the Company (the "Stock Plans"), without any payment therefor except as otherwise provided in this Section 2.9. Immediately prior to the Effective Time, the Company shall accelerate the vesting of all unvested Options and each then vested Option shall thereafter no longer be exercisable but shall entitle each holder thereof, in cancellation and settlement therefor, to a payment in cash by the Company (subject to any applicable withholding taxes), at the Effective Time, equal to the product of (i) the total number of Common Shares subject to such vested Option and (ii) the excess, if any, of the Merger Price (or such greater price as provided in an applicable option agreement) over the exercise price per Common Share subject to such vested Option (such amounts payable hereunder being referred to as the "Cash Payment"). All other Stock Plans and any other plan, program or arrangement providing for the issuance or grant of any other interest in respect of the capital stock of the Company or any subsidiary shall terminate as of the Effective Time. The Company will use its reasonable best efforts to obtain all necessary consents to ensure that after the Effective Time, holders of Options will have no rights other than the rights of the holders of vested Options to receive the Cash Payment in cancellation and settlement thereof. SECTION 2.10 Shareholders' Meeting. --------------------- (a) If required by applicable law in order to consummate the Merger, the Company, acting through the Company Board, shall, in accordance with applicable law: (i) duly call, give notice of, convene and hold a special meeting of its shareholders (the "Special Meeting") as soon as practicable following the acceptance for payment of and payment for Common Shares by the Purchaser pursuant to the Offer for the purpose of considering and taking action upon this Agreement; (ii) prepare and file with the SEC a preliminary proxy statement relating to this Agreement, and use its reasonable efforts (x) to obtain and furnish the information required to be included by the SEC in the Proxy Statement (as hereinafter defined) and, after consultation with Parent, to respond promptly to any comments made by the SEC with respect to the preliminary proxy statement and cause a definitive proxy statement (the "Proxy Statement") to be mailed to its shareholders and (y) to obtain the necessary approvals of the Merger and this Agreement by its shareholders; and (iii) subject to Section 1.2(a), include in the Proxy Statement the recommendation of the Company Board that shareholders of the Company vote in favor of the approval of this Agreement; and (iv) include in the Proxy Statement the opinion of SSB referred to in Section 1.2(a). -7- (b) Parent agrees that it will vote, or cause to be voted, all of the Common Shares then owned by it, the Purchaser or any of its other subsidiaries in favor of the approval of the Merger and of this Agreement. SECTION 2.11 Merger Without Meeting of Shareholders. Notwithstanding -------------------------------------- Section 2.10, in the event that Parent, the Purchaser or any other subsidiary of Parent shall acquire at least 90% of the outstanding Common Shares pursuant to the Offer or otherwise, the parties hereto agree to take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after the acceptance for payment of and payment for Common Shares by the Purchaser pursuant to the Offer without a meeting of shareholders of the Company, in accordance with Section 905 of the BCL. ARTICLE THREE DISSENTING SHARES; PAYMENT FOR SHARES SECTION 3.1 Dissenting Shares. Notwithstanding Section 2.7, Common ----------------- Shares outstanding immediately prior to the Effective Time and held by a holder who has the right to receive payment of the fair value of his shares pursuant to Section 910 of the BCL and has complied with the provisions of Section 623 of the BCL ("Dissenting Shares") shall not be converted into a right to receive the Merger Price, unless such holder fails to perfect or withdraws or otherwise loses his right to appraisal. If after the Effective Time such holder fails to perfect or withdraws or loses his right to appraisal, such Common Shares shall be treated as if they had been converted as of the Effective Time into a right to receive the Merger Price. The Company shall give Parent prompt notice of any demands received by the Company for appraisal of Common Shares, and Parent shall have the right to participate in and to control all negotiations and proceedings with respect to such demands. The Company shall not, except with the prior written consent of Parent, make any payment with respect to, or settle or offer to settle, any such demands. SECTION 3.2 Payment for Common Shares. ------------------------- (a) From and after the Effective Time, such bank or trust company as shall be designated by Parent and reasonably acceptable to the Company shall act as paying agent (the "Paying Agent") in effecting the payment of the Merger Price in respect of certificates (the "Certificates") that, prior to the Effective Time, represented Common Shares entitled to payment of the Merger Price pursuant to Section 2.7. Promptly following the Effective Time, Parent or the Purchaser shall deposit, or cause to be deposited, with the Paying Agent the aggregate Merger Price to which holders of Common Shares shall be entitled at the Effective Time pursuant to Section 2.7. (b) Promptly after the Effective Time, Parent shall cause the Paying Agent to mail to each record holder of Certificates that immediately prior to the Effective Time represented Common Shares a form of letter of transmittal which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates to the Paying Agent, and instructions for use in surrendering such Certificates and -8- receiving the Merger Price in respect thereof. Upon the surrender of each such Certificate, the Paying Agent shall pay the holder of such Certificate the Merger Price multiplied by the number of Common Shares formerly represented by such Certificate, in consideration therefor, and such Certificate shall forthwith be cancelled. Until so surrendered, each such Certificate (other than Certificates representing Common Shares held by Parent or the Purchaser, any wholly owned subsidiary of Parent or the Purchaser, in the treasury of the Company or by any wholly owned subsidiary of the Company or Dissenting Shares) shall represent solely the right to receive the aggregate Merger Price relating thereto. No interest or dividends shall be paid or accrued on the Merger Price. If the Merger Price (or any portion thereof) is to be delivered to any person other than the person in whose name the Certificate formerly representing Common Shares surrendered therefor is registered, it shall be a condition to such right to receive such Merger Price that the Certificate so surrendered shall be properly endorsed or otherwise be in proper form for transfer and that the person surrendering such Common Shares shall pay to the Paying Agent any transfer or other similar taxes required by reason of the payment of the Merger Price to a person other than the registered holder of the Certificate surrendered, or shall establish to the satisfaction of the Paying Agent that such tax has been paid or is not applicable. (c) Promptly following the date which is 180 days after the Effective Time, the Paying Agent shall deliver to the Surviving Corporation all cash, Certificates and other documents in its possession relating to the transactions described in this Agreement, and the Paying Agent's duties shall terminate. Thereafter, each holder of a Certificate formerly representing a Common Share may surrender such Certificate to the Surviving Corporation and (subject to applicable abandoned property, escheat and similar laws) receive in consideration therefor the aggregate Merger Price relating thereto, without any interest thereon. (d) After the Effective Time, there shall be no transfers on the stock transfer books of the Surviving Corporation of any Common Shares which were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates formerly representing Common Shares are presented to the Surviving Corporation or the Paying Agent, they shall be surrendered and cancelled in return for the payment of the aggregate Merger Price relating thereto, as provided in this Article Three. ARTICLE FOUR REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company represents and warrants to Parent and the Purchaser as follows: SECTION 4.1 Organization and Qualification; Subsidiaries. The -------------------------------------------- Company is a corporation duly organized, validly existing and in good standing under the laws of the State of New York. Each of the Company's subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation. The Company and each of its subsidiaries has the requisite corporate power and authority to own, operate or lease its properties and to carry on its business as it is now being conducted, and, except as set forth on Section 4.1 of the Company Disclosure Schedule, is duly qualified or licensed to do business, and is in good standing, in each jurisdiction in which the nature of its business or the properties -9- owned, operated or leased by it makes such qualification, licensing or good standing necessary, except where the failure to have such power or authority, or the failure to be so qualified, licensed or in good standing, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company. The term "Material Adverse Effect on the Company," as used in this Agreement, means any change in or effect on the business, financial condition or results of operations of the Company or any of its subsidiaries that would reasonably be expected to be materially adverse to the Company and its subsidiaries taken as a whole; provided, however, that -------- ------- "Material Adverse Effect on the Company" shall not include any change, effect, condition, event or circumstance to the extent attributable to (i) changes, effects, conditions, events or circumstances that generally affect the industries in which the Company operates, (ii) general economic conditions or change, effects, conditions or circumstances affecting the U.S. securities markets generally or (iii) changes, effects, conditions, events or circumstances arising from the announcement of the execution of this Agreement. The Company has heretofore provided or made available to Parent and the Purchaser a complete and correct copy of the Restated Certificate of Incorporation and the By-Laws or comparable organizational documents, each as amended to the date hereof, of the Company and each of its United States subsidiaries and has provided a complete and correct copy of the Rights Agreement as amended to the date hereof. SECTION 4.2 Capitalization; Subsidiaries. The authorized capital ---------------------------- stock of the Company consists of 25,000,000 Common Shares and 500,000 shares of preferred stock of a par value of $1.00 per share ("Preferred Stock"). As of the close of business on May 2, 2000, 10,357,822 Common Shares were issued and outstanding, all of which are entitled to vote on this Agreement, and 425,711 Common Shares were held in treasury. The Company has no shares of Preferred Stock issued and outstanding. As of May 4, 2000, there were 1,538,545 Shares reserved for issuance pursuant to outstanding Options and rights granted under the Stock Plans. Section 4.2 of the Disclosure Schedule delivered to Parent by the Company prior to the date hereof (the "Company Disclosure Schedule") sets forth the holders of all outstanding Options and the number, exercise prices and expiration dates of each grant to such holders. Since January 1, 2000, the Company has not issued any shares of capital stock except pursuant to the exercise of Options outstanding as of such date, except for issuance of director fee shares in the ordinary course consistent with past practice. All the outstanding Common Shares are, and all Common Shares which may be issued pursuant to the exercise of outstanding Options will be, when issued in accordance with the respective terms thereof, duly authorized, validly issued, fully paid and nonassessable and are not subject to, nor were they issued in violation of, any preemptive rights. Except for the 8 3/4% Convertible Debentures Due 2009 (the "Convertible Debentures"), there are no bonds, debentures, notes or other indebtedness having general voting rights (or convertible into securities having such rights) ("Voting Debt") of the Company or any of its subsidiaries issued and outstanding. Except as set forth in this Section 4.2, and except for the Rights and the Convertible Debentures, there are no existing options, warrants, calls, subscriptions or other rights, agreements, arrangements or commitments of any character 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, transfer or sell or cause to be issued, transferred or sold any shares of capital stock or Voting Debt of, or other equity interest in, the Company or any of its subsidiaries or securities convertible into or exchangeable for such shares or equity interests or obligating the Company or any of its subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment. Ex- -10- cept as contemplated by this Agreement or the Rights Agreement and except for the Company's obligations in respect of the Options under the Stock Plans, there are no outstanding contractual obligations of the Company or any of its subsidiaries to repurchase, redeem or otherwise acquire any Common Shares or the capital stock of the Company or any of its subsidiaries. Each of the outstanding shares of capital stock of each of the Company's subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and, except as set forth in Section 4.2 of the Company Disclosure Schedule, such shares of the Company's subsidiaries are owned by the Company or by another subsidiary of the Company or by a Director as qualifying shares (all of which are owned beneficially by the Company) in each case free and clear of any lien, claim, option, charge, security interest, limitation, encumbrance and restriction of any kind (any of the foregoing being a "Lien"). Set forth in Section 4.2 of the Company Disclosure Schedule is a complete and correct list of each subsidiary (direct or indirect) of the Company and each entity in which the Company owns, directly or indirectly, any equity interest. SECTION 4.3 Authority Relative to this Agreement and Related Matters. -------------------------------------------------------- The Company has all necessary corporate power and authority to execute and deliver this Agreement and, except for any required approval by the Company's shareholders in connection with consummation of the Merger, to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been duly and validly authorized and approved by the Company Board and no other corporate proceedings on the part of the Company are necessary to authorize or approve this Agreement or to consummate the transactions contemplated hereby (other than, with respect to the Merger, the approval of this Agreement by the affirmative vote of the holders of two-thirds of the then outstanding Common Shares entitled to vote thereon, to the extent required by applicable law and the filing of the certificate of merger pursuant to the BCL). This Agreement has been duly and validly executed and delivered by the Company and, assuming the due and valid authorization, execution and delivery of this Agreement by Parent and the Purchaser, constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms. SECTION 4.4 No Conflict; Required Filings and Consents. ------------------------------------------ (a) Assuming (i) the filings required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") and any foreign or supranational antitrust laws are made and the waiting periods thereunder have been terminated or have expired, (ii) the requirements of the Exchange Act and any applicable state securities, "blue sky" or takeover law are met, (iii) the filing of the certificate of merger and other appropriate merger documents, if any, as required by the BCL, is made, (iv) the requirements under applicable security and export control regulations are met and (v) with respect to the Merger, approval of this Agreement by the holders of two-thirds of the outstanding Common Shares, if required by the BCL, is received, none of the execution and delivery of this Agreement by the Company, the consummation by the Company of the transactions contemplated hereby or compliance by the Company with any of the provisions hereof will (i) conflict with or violate the Restated Certificate of Incorporation or By-Laws of the Company or the comparable organizational documents of any of its subsidiaries, (ii) except as disclosed on Section 4.4(a) of the Company Disclosure Schedule, conflict with or violate in any material respect any statute, ordinance, rule, regulation, order, judgment, decree, permit or license applicable to the Company or any of its subsidiaries, or by which any of them -11- or any of their respective properties or assets may be bound or affected, or (iii) except as disclosed on Section 4.4(a) of the Company Disclosure Schedule, result in a violation or breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in any loss of any benefit, or the creation of any Lien on any of the properties or assets of the Company or any of its subsidiaries (any of the foregoing referred to in clause (ii) or this clause (iii) being a "Violation") pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries or any of their respective properties may be bound or affected, other than, in the case of clause (ii) or (iii) above, any such Violations that, individually or in the aggregate, would not (A) reasonably be expected to have a Material Adverse Effect on the Company, (B) materially impair the ability of the Company to perform its obligations under this Agreement or (C) prevent or materially delay consummation of the Offer or the Merger. (b) Except as set forth in Section 4.4(b) of the Company Disclosure Schedule, none of the execution and delivery of this Agreement by the Company, the consummation by the Company of the transactions contemplated hereby or compliance by the Company with any of the provisions hereof will require any consent, waiver, approval, authorization or permit of, or registration or filing with or notification to (any of the foregoing being a "Consent"), any government or subdivision thereof, domestic, foreign or supranational or any administrative, governmental or regulatory authority, agency, commission, tribunal or body, domestic, foreign or supranational (each a "Governmental Entity"), including, without limitation, the U.S. Departments of Defense, State and Commerce except for (i) compliance with any applicable requirements of the Exchange Act, (ii) the filing of the certificate of merger pursuant to the BCL, (iii) compliance with the HSR Act and any requirements of any foreign or supranational antitrust laws, and (iv) such filings, authorizations, orders and approvals as to which failure to obtain or make would not (x) reasonably be expected to have a Material Adverse Effect on the Company or (y) prevent or materially delay the consummation of the Offer or the Merger. SECTION 4.5 SEC Reports and Financial Statements. ------------------------------------ (a) The Company has filed with the SEC all forms, reports, schedules, registration statements and definitive proxy statements required to be filed by the Company with the SEC since January 1, 1998 (as they have been amended since the time of their filing, and including any documents filed as exhibits thereto, collectively, the "SEC Reports") and complete and correct copies of all such forms, reports, schedules, registration statements, and proxy statements are available to Parent through public sources. As of their respective dates, the SEC Reports (including but not limited to any financial statements or schedules included or incorporated by reference therein) complied as to form in all material respects with the requirements of the Exchange Act or the Securities Act of 1933, as amended (the "Securities Act"), and the rules and regulations of the SEC promulgated thereunder applicable, as the case may be, to such SEC Reports, and none of the SEC Reports contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. -12- (b) The consolidated balance sheets as of December 31, 1999 and 1998 and the consolidated statements of income, common shareholders' equity and cash flows for each of the three fiscal years in the period ended December 31, 1999 (including the related notes and schedules thereto) of the Company contained in the Company's Form 10-K for the fiscal year ended December 31, 1999 (the "1999 Financial Statements") present fairly in all material respects the consolidated financial position and the consolidated results of operations and cash flows of the Company and its consolidated subsidiaries as of the dates or for the periods presented therein and were prepared in accordance with United States generally accepted accounting principles ("GAAP") consistently applied during the periods involved except as otherwise noted therein, including the related notes. (c) Except as reflected, reserved against or otherwise disclosed in the 1999 Financial Statements or as set forth in Section 4.5(c) of the Company Disclosure Schedule, neither the Company nor any of its subsidiaries has any material liabilities or obligations (absolute, accrued, fixed, contingent or otherwise) other than liabilities incurred in the ordinary course of business consistent with past practice since December 31, 1999 which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company. (d) The Company has heretofore furnished to Parent a complete and correct copy of any amendments or modifications which have not yet been filed with the SEC to agreements, documents or other instruments which previously had been filed by the Company with the SEC pursuant to the Securities Act and the rules and regulations promulgated thereunder or the Exchange Act and the rules and regulations promulgated thereunder. (e) Proper accounting controls are, and since January 1, 1996, have been, in place to ensure that no portion of any international sales representative commission or contingent fee or other payment is included, directly or indirectly, in the contract price of any sale to the United States Government pursuant to the Foreign Military Sales ("FMS") program, or any sale to a foreign government financed in whole or in part with funding from the U.S. Foreign Military Finance ("FMF") program, except as permitted thereunder. (f) All payments to international sales representatives since January 1, 1996 including commission and contingent fee payments to international sales representatives or others on FMS and FMF contracts, (i) have been accurately reported in all material respects on the Company books and records, and (ii) have been made consistent in all material respects with all applicable United States and foreign laws and regulations. SECTION 4.6 Environmental Matters. --------------------- Except as may be set forth in Section 4.6 of the Company Disclosure Schedule: (a) The business and operations of the Company and its subsidiaries comply with all applicable Environmental Laws; the Company and its subsidiaries have obtained all Governmental Permits relating to Environmental Laws necessary for the operation of their businesses; and all such Governmental Permits are in full force and effect and the Company and its subsidiaries are in compliance with such permits except, in the case of each of the foregoing, for such events as would not reasonably be expected to, individually or in the aggregate, have a Material -13- Adverse Effect on the Company. Neither the Company nor any of its subsidiaries has received written notice of, or, to the knowledge of the Company, is subject to, any ongoing or currently applicable investigation by, order from or written claim by any person (including without limitation any Governmental Entity or prior owner or operator of any of the Company Property) respecting (i) any Environmental Law, (ii) any Remedial Action or (iii) any claim arising from the Release or threatened Release of a Contaminant into the environment except as would not reasonably be expected to individually or in the aggregate, have a Material Adverse Effect on the Company. Neither the Company nor any of its subsidiaries has been served with any pending judicial or administrative proceeding, order, judgment or decree, or entered into a settlement alleging or addressing a violation of or liability under any Environmental Law, except as would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect on the Company. (b) Neither the Company nor any of its subsidiaries has (i) reported a Release of a hazardous substance pursuant to Section 103(a) of CERCLA, or any state equivalent; (ii) filed a notice pursuant to Section 103(c) of CERCLA; or (iii) filed any notice under any applicable Environmental Law reporting a violation of any applicable Environmental Law. There is not now with respect to the operations of the Company or any of its subsidiaries, nor to the knowledge of the Company has there ever been, on or in any Company Property: (A) any Release, (B) any treatment, recycling, disposal or storage, other than short term storage prior to removal by a licensed transporter for off-site disposal, of any hazardous waste, as that term is defined under RCRA or any state equivalent, or (C) any underground storage tank or surface impoundment or landfill or waste pile, except, in the case of each of the foregoing, for such events which would not, individually or in the aggregate, have a Material Adverse Effect on the Company. (c) Except as set forth on Section 4.6(c) of the Company Disclosure Schedule, to the knowledge of the Company, there is not now on or in any Company Property any polychlorinated biphenyls (PCB) used in the Company's operations in pigments, hydraulic oils, electrical transformers or other equipment except as would not have, individually or in the aggregate, a Material Adverse Effect on the Company. (d) To the knowledge of the Company, any asbestos-containing material or presumed asbestos-containing material which is on or part of any Company Property presently owned, leased or operated by the Company or any of its subsidiaries, as currently configured and operated, is in good repair according to the current standards and practices governing such material, and its presence or condition does not materially violate any currently applicable Environmental Law. None of the products manufactured, distributed or sold by the Company or any of its subsidiaries contained asbestos or asbestos-containing material. (e) For purposes of this Section: (i) "Company Property" means any real property, plant, building or facility now or, to the Company's knowledge, previously owned, leased or operated primarily by the Company or any of its present or, to the Company's knowledge, past subsidiaries. -14- (ii) "CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act, in effect as of the Closing Date, and any regulations promulgated thereunder in effect as of the Closing Date. (iii) "Contaminant" means any waste, pollutant, hazardous or toxic substance or waste, petroleum, petroleum-based substance or waste, special waste, hazardous material or any constituent of any such substance, waste or material, in each case to the extent regulated by Environmental Law. (iv) "Environmental Law" means all foreign, federal, state and local laws or regulations relating to or addressing the environment or health and safety as related to Contaminants, including but not limited to CERCLA, OSHA and RCRA and any foreign or state equivalent thereof. (v) "Governmental Permits" means any permits, licenses, certificates, orders, consents, authorizations, and other approvals from, or required by, any Governmental Entity that are used by, or are necessary to own and to operate, the business of the Company and its subsidiaries as currently configured and operated, together with any applications for the issuance, renewal, modification or extension thereof and all supporting information and analyses. (vi) "OSHA" means the Occupational Safety and Health Act, as amended, and any regulations promulgated thereunder, in each case in effect as of the Closing Date. (vii) "RCRA" means the Resource Conservation and Recovery Act, as amended, and any regulations promulgated thereunder, in each case in effect as of the Closing Date. (viii) "Release" means release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration of a Contaminant into the environment, including the movement of Contaminants through or in the air, soil, surface water or groundwater of Company Property. SECTION 4.7 Compliance with Applicable Laws. (a) Except with respect ------------------------------- to Environmental Laws (which are covered in Section 4.6), and except as set forth on Section 4.7 of the Company Disclosure Schedule the Company and its subsidiaries hold all permits, registrations, clearances, licenses, variances, exemptions, orders and approvals of all Governmental Entities material to the Company and required for them to own their assets, conduct their business, and perform their contracts (the "Company Permits"). The Company and its subsidiaries are in compliance in all material respects with the terms of the Company Permits. Except with respect to Environmental Laws which are covered in Section 4.6, the business operations of the Company and its subsidiaries have been conducted in compliance in all respects material to the Company with all laws, ordinances and regulations of any Governmental Entity. (b) The Company and its subsidiaries have not made, directly or indirectly, any payment or promise to pay, or gift or promise to give or authorized such a promise or gift, of any money or anything of value, directly or indirectly, to (i) any foreign official (as such term is defined in the Foreign Corrupt Practices Act of 1977, as amended (the "FCPA") for the purpose of -15- influencing any official act or decision of such official or inducing him or her to do or omit to do any act in violation of his or her lawful duty, to affect any act or decision of such official, or to secure any improper advantage, or inducing him or her to use his or her influence to affect any act or decision of a foreign government, or any agency or subdivision thereof or (ii) any foreign political party or official thereof or candidate for foreign political office for the purpose of influencing any official act or decision of such party, official or candidate or inducing him or her to do any act in violation of his or her lawful duty, or to secure any improper advantage, or inducing such party, official or candidate to use his, her or its influence to affect any act or decision of a foreign government or agency or subdivision thereof, in the case of both clauses (i) and (ii) above in order to assist the Company or any of its subsidiaries in obtaining or retaining business for or directing business to the Company or any of its subsidiaries or under circumstances which would subject the Company or any of its subsidiaries to liability under the FCPA (or any comparable foreign statute or regulation). To its knowledge, the Company has not made any bribe, kickback or other illegal payment in violation of any foreign or domestic law. SECTION 4.8 Change of Control. Except as set forth on Section 4.4(a) ----------------- or Section 4.8 of the Company Disclosure Schedules, the transactions contemplated by this Agreement will not constitute a "change of control" under, require the consent from or the giving of notice to a third party pursuant to, permit a third party to terminate or accelerate vesting or repurchase rights or create any other detriment under the terms, conditions or provisions of any material note, bond, mortgage, indenture, license, lease, contract, agreement or other instrument or obligation to which the Company or any of its subsidiaries is a party or by which any of them or any of their properties or assets may be bound. SECTION 4.9 Litigation. Except as set forth on Section 4.9 of the ---------- Company Disclosure Schedule, there is no suit, claim, action, proceeding or investigation pending or, to the knowledge of the Company, threatened, against the Company or any of its subsidiaries, individually or in the aggregate, which would reasonably be expected to (i) have a Material Adverse Effect on the Company and its subsidiaries or (ii) prevent or materially delay the consummation of the Offer and the Merger. Except as disclosed in the SEC Reports filed prior to the date of this Agreement, neither the Company nor any of its subsidiaries is subject to any outstanding order, writ, injunction or decree which, individually or in the aggregate, would reasonably be expected to (i) have a Material Adverse Effect on the Company or (ii) prevent or materially delay the consummation of the Offer and the Merger. SECTION 4.10 Information. None of the information supplied by the ----------- Company specifically for inclusion or incorporation by reference in (i) the Offer Documents, (ii) the Proxy Statement or (iii) any other document to be filed with the SEC or any other Governmental Entity in connection with the transactions contemplated by this Agreement (the "Other Filings") will, at the respective times filed with the SEC or other Governmental Entity and, in addition, in the case of the Proxy Statement, at the date it or any amendment or supplement is mailed to shareholders, at the time of the Special Meeting and at the Effective Time, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The Proxy Statement will comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations thereunder, except that no representation is made by the Company with respect to any forward-looking information which may -16- have been supplied by the Company, whether or not included by Parent or the Purchaser in any Offer Document or in the Proxy Statement or statements made therein based on information supplied by Parent or the Purchaser in writing specifically for inclusion in the Proxy Statement. SECTION 4.11 Certain Approvals. The Company has taken all necessary ----------------- action to ensure that Section 912 of the BCL shall not apply to or be triggered by this Agreement or the consummation of the transactions contemplated hereby. To the knowledge of the Company, no state takeover statute or similar statute or regulation applies or purports to apply to the Offer, the Merger or the transactions contemplated by this Agreement. SECTION 4.12 Employee Benefit Plans. ---------------------- (a) Section 4.12(a) of the Company Disclosure Schedule includes a complete list of all material employee benefit plans, programs, and other arrangements providing incentive compensation or benefits to any employee or former employee or beneficiary or dependent thereof, whether or not written, and whether covering one person or more than one person, sponsored or maintained by the Company or any of its subsidiaries or to which the Company or any of its subsidiaries contributes or is obligated to contribute ("Plans") except for Foreign Plans (as hereinafter defined), a complete list of which the Company shall deliver to Parent within ten business days after the date of this Agreement. Without limiting the generality of the foregoing, the term "Plans" includes all employee welfare benefit plans within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended, and the regulations thereunder ("ERISA") and all employee pension benefit plans within the meaning of Section 3(2) of ERISA. (b) With respect to each material Plan (other than a Foreign Plan), the Company has, except as set forth on Section 4.12(b) of the Company Disclosure Schedule, delivered or made available to Parent a true, correct and complete copy of: (i) each material Plan document and each material document, if any, prepared in connection with such Plan, including without limitation, benefit schedules, trust agreements, and insurance contracts and other funding vehicles; (ii) the most recent Annual Report (Form 5500 Series) and accompanying schedule, if any; (iii) the current summary plan description, if any; (iv) the most recent annual financial report, if any; (v) the most recent actuarial report, if any; and (vi) the most recent determination letter from the Internal Revenue Service (the "IRS"), if any. Except as set forth on Section 4.12(b) of the Company Disclosure Schedule, there are no material amendments to any Plan that have been adopted or approved nor has the Company or any of its subsidiaries undertaken to make any such amendments. (c) Section 4.12(c) of the Company Disclosure Schedule identifies each Plan that is intended to be a "qualified plan" within the meaning of Section 401(a) of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder (the "Code") ("Qualified Plans"). Except as set forth on Section 4.12(b) of the Company Disclosure Schedule, the IRS has issued a favorable determination letter with respect to each Qualified Plan that has not been revoked, and to the Company's knowledge there are no existing circumstances nor any events that have occurred that could reasonably be expected to adversely affect the qualified status of any Qualified Plan or the related trust. Each Plan which is intended to meet the requirements of -17- Code Section 501(c)(9), meets such requirements and provides no disqualified benefits (as such term is defined in Code Section 4976(b)). (d) All material contributions required to be made to any Plan by applicable law or regulation or by any plan document or other contractual undertaking, and all material premiums due or payable with respect to insurance policies funding any Plan, for any period through the date hereof have been timely made or paid in full or, to the extent not required to be made or paid on or before the date hereof, have been fully reflected in the financial statements of the Company included in the SEC Reports to the extent required under generally accepted accounting principles. (e) The Company and each of its subsidiaries has complied, and is now in compliance, in all material respects with all provisions of ERISA, the Code and all laws and regulations applicable to the Plans. There is not now, nor, to the Company's knowledge, do any circumstances exist that could give rise to, any requirement for the posting of material security with respect to a Plan or the imposition of any material lien on the assets of the Company or any of its subsidiaries under ERISA or the Code. To the Company's knowledge, no non-exempt prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) has occurred with respect to any Plan that could reasonably be expected to result in the imposition of any material penalty or tax on the Company. (f) With respect to each Plan that is subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code: (i) there does not exist any accumulated funding deficiency within the meaning of Section 412 of the Code or Section 302 of ERISA, whether or not waived; (ii) no reportable event within the meaning of Section 4043(c) of ERISA for which the 30-day notice requirement has not been waived has occurred during the last six years, and the consummation of the transactions contemplated by this agreement will not result in the occurrence of any such reportable event; (iv) all premiums to the Pension Benefit Guaranty Corporation (the "PBGC") have been timely paid in full; (v) no liability (other than for premiums to the PBGC) under Title IV of ERISA that could have a Material Adverse Effect on the Company has been or is to the Company's knowledge expected to be incurred by the Company or any of its subsidiaries; and (vi) the PBGC has not instituted proceedings to terminate any such Plan and, to the Company's knowledge, no condition exists that could reasonably be expected to result in the institution of proceedings or which could reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any such Plan. (g) Except as set forth on Section 4.12(g) of the Company Disclosure Schedule, no Plan is a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA (a "Multiemployer Plan") or a plan that has two or more contributing sponsors at least two of which are not under common control, within the meaning of Section 4063 of ERISA and which is subject to Title IV of ERISA (a "Multiple Employer Plan"), nor has the Company or any of its subsidiaries, or any of their respective ERISA Affiliates (as defined in the next sentence), at any time during the last six years, contributed to or been obligated to contribute to any Multiemployer Plan or Multiple Employer Plan. An "ERISA Affiliate" means any entity, trade or business that is a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes the Company or any of its subsidiaries, or that is a member of -18- the same "controlled group" as the Company or any of its subsidiaries, pursuant to Section 4001(a)(14) of ERISA. With respect to each Plan that is a Multiemployer Plan: (i) if the Company or any of its subsidiaries or any of their respective ERISA Affiliates were to experience a withdrawal or partial withdrawal from such plan, no material withdrawal liability under Title IV of ERISA would be incurred; and (ii) none of the Company and its subsidiaries, nor any of their respective ERISA Affiliates, has received any notification, nor has any reason to believe, that any such Plan is in reorganization, has been terminated, is insolvent, or may reasonably be expected to be in reorganization, to be insolvent, or to be terminated. (h) There does not now exist, nor to the Company's knowledge do any circumstances exist that could reasonably be expected to result in, any material liability under (i) Title IV of ERISA, (ii) Section 302 of ERISA, (iii) Sections 412 and 4971 of the Code, (iv) the continuation coverage requirements of Section 601 et seq. of ERISA and Section 4980B of the Code, or (v) corresponding or similar provisions of foreign laws or regulations known to the Company, other than a liability that arises solely out of, or relate solely to, the Plans, that would be a liability of the Company or any of its subsidiaries following the Closing. Without limiting the generality of the foregoing, to the Company's knowledge none of the Company, its subsidiaries nor any ERISA Affiliate of the Company or any of its subsidiaries has engaged in any transaction described in Section 4069 or Section 4204 or 4212 of ERISA. (i) Except as set forth in the SEC Reports or on Section 4.12(i) of the Company Disclosure Schedule, neither the Company nor any of its subsidiaries has any liability for life, health, medical or other welfare benefits to former employees or beneficiaries or dependents thereof, except for health continuation coverage as required by Section 4980B of the Code or Part 6 of Title I of ERISA and at no expense to the Company and its subsidiaries. (j) There are no pending or to the Company's knowledge threatened claims (other than claims for benefits in the ordinary course), lawsuits or arbitrations which have been asserted or instituted against the Plans, any fiduciaries thereof with respect to their duties to the Plans or the assets of any of the trusts under any of the Plans which could reasonably be expected to result in any material liability of the Company or any of its subsidiaries to the Pension Benefit Guaranty Corporation, the Department of Treasury, the Department of Labor or any Multiemployer Plan that could have a Material Adverse Effect on the Company. (k) Except as set forth on Section 4.8 or 4.12(k) of the Company Disclosure Schedule, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or in conjunction with any other event) result in, cause the accelerated vesting, funding or delivery of, or increase the amount or value of, any payment or benefit to any employee, officer or director of the Company or any of its subsidiaries or result in any limitation on the right of the Company or any of its subsidiaries to amend, merge, terminate or receive a reversion of assets from any Plan or related trust. Without limiting the generality of the foregoing, the aggregate amounts paid or payable (whether in cash, in property, or in the form of benefits) by the Company or any of its subsidiaries in connection with the transactions contemplated hereby (either solely as a result thereof or as a result of such transactions in conjunction with any other event) that will be "excess parachute payments" within the meaning of Section 280G of the Code, will not exceed the amounts set forth on Section 4.12(k) of the Company Disclosure Schedule. -19- (l) With respect to employee benefit plans, programs, and other arrangements providing incentive compensation or other benefits to any employee or former employee or dependent thereof, which plan, program or arrangement is subject to the laws of any jurisdiction outside of the United States ("Foreign Plans"): (i) the Foreign Plans have been maintained in all material respects in accordance with all applicable requirements, (ii) if they are intended to qualify for special tax treatment, meet all requirements for such treatment, and (iii) if they are intended to be funded and/or book-reserved are fully funded and/or book reserved, as appropriate, based upon reasonable actuarial assumptions. SECTION 4.13 Intellectual Property. --------------------- (a) Set forth on Section 4.13(a) of the Company Disclosure Schedule is a list of all material patents, patent applications, trademark registrations and trademark applications, service mark registrations and service mark applications, certification mark registrations and certification mark applications, copyright registrations and copyright registration applications, mask works registrations and mask works registration applications, both domestic and foreign, which are owned by the Company or any of its subsidiaries. The assets described on Section 4.13(a) of the Company Disclosure Schedule and all other material computer software, trade secrets, trademarks, trade names, service marks, certification marks, copyrights, know-how, methods, processes, procedures, apparatus, equipment, industrial property, discoveries, inventions, patent disclosures, designs, drawings, plans, specifications, engineering data, manuals, development projects, research and development work in progress, technology or other proprietary rights or confidential information which are owned by or material to the Company or any of its subsidiaries are referred to as the "Intellectual Property." The Company and its subsidiaries own all right, title and interest in and to the Intellectual Property validly and beneficially, free and clear of all material Liens, with the sole and exclusive right to use the same, subject to those licenses listed on Section 4.13(b) of the Company Disclosure Schedule. (b) Set forth on Section 4.13(b) of the Company Disclosure Schedule is a list of (i) all material licenses, assignments and other transfers of Intellectual Property granted to others by the Company or any of its subsidiaries, and (ii) all material licenses, assignments and other transfers of patents, trade names, trademarks, service marks, copyrights, mask works registrations, software, trade secrets, know-how, technology or other proprietary rights or information granted to the Company or any of its subsidiaries by others. Except as set forth on Section 4.13(b) of the Company Disclosure Schedule, none of the material licenses, assignments or other transfers described above is subject to termination or cancellation or change in its terms or provisions as a result of this Agreement or the transactions provided for in this Agreement. (c) Except as set forth on Section 4.13(c) of the Company Disclosure Schedule to the best knowledge of the Company, there is no material unauthorized use, infringement or misappropriation of any Intellectual Property. The Intellectual Property constitutes all the intellectual property necessary or appropriate to conduct the business of the Company as presently conducted. (d) Except as set forth on Section 4.13(d) of the Company Disclosure Schedule, no material claim with respect to the Intellectual Property has been asserted or, to the best knowledge of the Company, is threatened by any person nor does the Company know of any -20- valid ground for any bona fide claims (i) to the effect that the manufacture, sale or use of any product or process as used (currently or in the past) or offered or proposed for use or sale by the Company infringes on any copyright, trade secret, patent, tradename or other intellectual property right of any person, (ii) against the Company relating to the use of any Intellectual Property, or (iii) challenging the ownership, validity or effectiveness of any Intellectual Property. All granted and issued patents and all registered trademarks and service marks listed in Section 4.13(a) of the Company Disclosure Schedule and all copyrights held by the Company are valid, enforceable and subsisting. (e) No Intellectual Property is subject to any outstanding order, judgment, decree, stipulation or agreement restricting in any manner the licensing, assignment or other transfer, use or enforceability thereof by the Company. The Company has not entered into any agreement to indemnify any other person against any charge of infringement of any Intellectual Property, except indemnities agreed to in the ordinary course of business in connection with the sale, delivery or transfer of Company products and services or included as part of the Company's license agreements. The Company or its subsidiaries have the exclusive right to file, prosecute and maintain all applications and registrations with respect to Intellectual Property owned by the Company or its subsidiaries. SECTION 4.14 Taxes. ----- (a) The Company and each of its subsidiaries has filed all federal, state, local and foreign income Tax Returns (as hereinafter defined) required to be filed by it, and all other Tax Returns required to be filed by it. All such Tax Returns were correct in all material respects. The Company and each of its subsidiaries has paid or caused to be paid all Taxes (as hereinafter defined) shown as due and payable on such Tax Returns in respect of the periods covered by such returns and has made adequate provision in the Company's financial statements for payment of all Taxes anticipated to be payable in respect of all taxable periods or portions thereof ending on or before the date hereof. Except as set forth on Section 4.14(a) of the Company Disclosure Schedule, neither the Company nor any of its subsidiaries is currently the beneficiary of any extension of time within which to file any Tax Return. There are no security interests on any of the assets of Company or any of its subsidiaries that arose in connection with any failure to pay any Tax. There is no claim or dispute concerning any material Tax liability of the Company or its subsidiaries either (i) claimed or raised by any authority in writing or (ii) as to which any of the directors and officers (and employees responsible for Tax matters) of the Company and its subsidiaries has knowledge based on personal contact with any agent of such authority. No issue has been raised in writing in any examination by any authority with respect to the Company or any subsidiary which, by application of similar principles, reasonably could be expected to result in a proposed material deficiency or increase in Tax for any other period not so examined. Section 4.14 of the Company Disclosure Schedule lists the periods through which the Tax Returns required to be filed by the Company or any of its subsidiaries have been examined by the IRS or other appropriate taxing authority, or the period during which any assessments may be made by the IRS or other appropriate taxing authority has expired. All material deficiencies and assessments asserted as a result of such examinations or other audits by federal, state, local or foreign taxing authorities have been paid, fully settled or adequately provided for in the Company's -21- financial statements, and no issue or claim has been asserted in writing for Taxes by any taxing authority for any prior period, other than those heretofore paid or provided for in the Company's financial statements. There are no outstanding agreements or waivers extending the statutory period of limitation applicable to any Tax Return of the Company or any of its subsidiaries. Neither the Company nor any of its subsidiaries has filed a consent pursuant to Section 341(f) of the Code or agreed to have Section 341(f)(2) of the Code apply to any disposition of a subsection (f) asset (as such term is defined in Section 341(f)(4) of the Code) owned by the Company or any of its subsidiaries. Neither the Company nor any of its subsidiaries (i) has been a member of a group filing consolidated returns for federal income Tax purposes (except for the group of which the Company is the common parent), (ii) has any liability for the Taxes of any person (other than the Company and its subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign law), as a transferor or successor, by contract or otherwise, or (iii) except as set forth on Section 4.14(a) of the Company Disclosure Schedule, is a party to a Tax sharing or Tax indemnity agreement or any other agreement of a similar nature involving a material amount of Taxes that remains in effect. (b) For purposes of this Agreement, the term "Tax" or "Taxes" means all taxes, charges, fees, levies or other assessments, including, without limitation, income, gross receipts, excise, property, sales, transfer, license, payroll, withholding, capital stock and franchise taxes, imposed by the United States or any state, local or foreign government or subdivision or agency thereof, including any interest, penalties or additions thereto. For purposes of this Agreement, the term "Tax Return" means any report, return or other information or document required to be supplied to a taxing authority in connection with Taxes. SECTION 4.15 Absence of Certain Changes. Except as disclosed in the -------------------------- SEC Reports filed prior to the date of this Agreement and except as set forth on Section 4.15 of the Company Disclosure Schedule, since December 31, 1999 to the date of this Agreement, (i) there has not been any Material Adverse Effect on the Company; and (ii) the businesses of the Company and each of its subsidiaries have been conducted only in the ordinary course and in a manner consistent with past practice. SECTION 4.16 Labor Matters. (a) Except as set forth on Section 4.16 ------------- of the Company Disclosure Schedule, as of the date of this Agreement no employees of the Company or of any of its subsidiaries are represented by any labor union or any collective bargaining organization. As of the date of this Agreement, no labor organization or group of employees of the Company or any of its subsidiaries has made a pending demand for recognition or certification, and there are no representation or certification proceedings or petitions seeking a representation proceeding presently pending or threatened to be brought or filed, with the National Labor Relations Board or any other labor relations tribunal or authority. To the Company's knowledge as of the date hereof no facts or event exists that is likely to give rise to a violation of Section 4.16(a) on or before the Effective Time. (b) With respect to employees of and services providers the Company: (i) The Company complies and has complied materially with all applicable domestic and foreign laws respecting employment and employment practices, terms and conditions of employment and wages and hours, including without limitation any such laws respecting employment discrimination, workers' compensation, family and medical leave, the Immigration Reform and Control Act, and occupational safety and health re- -22- quirements, and no claims or investigations are pending or, to the Company's knowledge, threatened with respect to such laws, either by private individuals or by governmental agencies; and all U.S. employees are at will except as set forth in Section 4.16 of the Company Disclosure Schedule; (ii) To the Company's knowledge it is not nor has it been engaged in any unfair labor practice. There is not now, nor within the past three years has there been, any unfair labor practice complaint against the Company pending or, to the Company's knowledge, threatened, before the National Labor Relations Board or any other comparable foreign or domestic authority or any workers' council; (iii) As of the date of this Agreement, no material grievance or arbitration proceeding arising out of or under collective bargaining agreements or employment relationships (involving more than one employee) is pending, and no claims therefor exist or have, to the Company's Knowledge, been threatened; no labor strike, lock-out, slowdown, or work stoppage is pending or threatened against or directly affecting the Company; and, to the Company's knowledge as of the date hereof, no fact or event exists that is likely to give rise to a violation of Section 4.16(b)(iii) on or before the Effective Time; and (iv) All persons who are or were performing services for the Company and are or were classified as independent contractors do or did satisfy and have satisfied the requirements of law to be so classified, and the Company has fully and accurately reported their compensation on IRS Forms 1099 when required to do so. SECTION 4.17 Relationships with Customers, Suppliers, Distributors and --------------------------------------------------------- Sales Representatives. Except as set forth on Section 4.17 of the Company - --------------------- Disclosure Schedule, the Company has not received written notice that any customer, supplier, distributor or sales representative intends to cancel, terminate or otherwise modify its relationship with the Company or any subsidiary, which action would reasonably be expected to have a Material Adverse Effect on the Company. SECTION 4.18 Contracts. Each material note, bond, mortgage, indenture, --------- lease, license, contract, agreement or other instrument or obligation to which the Company or any of its subsidiaries is a party or by which any of them or any of the properties or assets may be bound including, without limitation, all contracts in which the Company assumed or retained environmental liabilities in connection with the sales of companies or properties (the "Material Contracts") is valid and binding and in full force and effect, except where failure to be valid and binding and in full force and effect would not have a Material Adverse Effect on the Company, and there are no defaults by the Company or any of its subsidiaries or, to the Company's knowledge, any other party thereto, except those defaults that would not have a Material Adverse Effect on the Company. None of the Material Contracts with any affiliate of the Company are on terms less favorable to the Company than those that would be obtained from unaffiliated third parties. Except as set forth in Section 4.18 of the Disclosure Schedule, the Company is not party to any Contracts which after the Effective Time would have the effect of limiting the freedom of parent or its subsidiaries (other than the Company and its subsidiaries) to compete in any line of business in any geographic area or to hire any individual or group of individuals. -23- SECTION 4.19 Rights Agreement. The Company and the Company Board have ---------------- authorized all necessary action to amend the Rights Agreement (without redeeming the Rights) so that upon execution of such amendment (which will occur promptly after the date of this Agreement) none of the execution or delivery of this Agreement, the making of the Offer, the acquisition of Common Shares pursuant to the Offer or the consummation of the Merger in each case in accordance with the terms and conditions of this Agreement will (i) cause any Rights issued pursuant to the Rights Agreement to become exercisable or to separate from the stock certificates to which they are attached, (ii) cause Parent, the Purchaser or any of their Affiliates or Associates to be an Acquiring Person (as each such term is defined in the Rights Agreement) or (iii) trigger other provisions of the Rights Agreement, including giving rise to a Distribution Date or a Triggering Event (as each such term is defined in the Rights Agreement), and such amendment shall be in full force and effect from and after the date hereof. SECTION 4.20 Product Recalls. The Company is not aware of any pattern --------------- or series of claims against the Company or any of its subsidiaries which reasonably could be expected to result in a generalized product recall relating to products sold by the Company or any of its subsidiaries, regardless of whether such product recall is formal, informal, voluntary or involuntary. SECTION 4.21 Brokers. Except for the engagement of SSB, none of the ------- Company, any of its subsidiaries, or any of their respective officers, directors or employees has employed any broker or finder or incurred any liability for any brokerage fees, commissions or finder's fees in connection with the transactions contemplated by this Agreement. The Company has previously delivered to Parent a copy of the Company's engagement letters with SSB. SECTION 4.22 Opinion of Financial Advisor. The Company Board has ---------------------------- received the written opinion of SSB to the effect that, as of May 4, 2000, the consideration to be received by the holders of Common Shares (other than Parent or any of its affiliates) pursuant to the Offer and the Merger, is fair to such holders from a financial point of view. SECTION 4.23 Year 2000 Compliance. Except as could not reasonably be -------------------- expected to have a Material Adverse Effect on the Company, to the knowledge of the Company none of the assets or properties owned or utilized by the Company has failed or will fail to perform because of the Year 2000 Problem. The term "Year 2000 Problem" means the material inability of any hardware, software or process to recognize and correctly calculate dates on and after January 1, 2000, or the failure of computer systems, products or services to perform any of their intended functions in a proper manner in connection with data containing any date on or after January 1, 2000. SECTION 4.24 Government Contracts. -------------------- (a) The Company Disclosure Schedule sets forth (i) a list of all material current and open Government Bids to which the Company or any of the Company's subsidiaries is a party as of the date of this Agreement and (ii) a list of all Government Contracts for which there are or could reasonably be expected to be outstanding performance obli- -24- gations, except for non-material Government Contracts with foreign government entities. With respect to any Government Contract or Government Bid (regardless whether there is an outstanding performance obligation) and except as set forth on Section 4.24 of the Company Disclosure Schedule, (A) the Company and its subsidiaries have complied in all material respects with all material terms and conditions of each such contract or bid, including clauses, provisions, and requirements incorporated expressly by reference or by operation of law therein; (B) the Company and its subsidiaries have complied in all material respects with all requirements of all applicable laws, regulations, directions, or agreements pertaining to each Government Contract or Government Bid, and to the Company's performance on its Government Contracts; and (C) all representations and certifications executed, acknowledged or set forth in, or pertaining to each Government Contract or Government Bid were, when given, and are complete and correct in all material respects as of their effective date, and the Company and its subsidiaries have complied in all material respects with all such representations and certifications. (b) As of the date of this Agreement, and except as set forth on Section 4.24 of the Company Disclosure Schedule, neither the Company nor any of its subsidiaries has received from a party to a Government Contract or Government Bid (or any prime contractor, sub-contractor or other Person thereunder) any written show-cause notice, stop work order, cure notice, notice of convenience or default termination, or notice of default or violation concerning a Government Contract. (c) Neither the Company nor any of its subsidiaries has received from a party to whom a Government Bid has been submitted any written negative determination of responsibility concerning a Government Bid. (d) Except as set forth on Section 4.24 of the Company Disclosure Schedule, the Company has no knowledge of a request within three years prior to the date hereof by any Governmental Entity for a contract price adjustment for any reason, including, without limitation, based upon a claim of defective pricing or any cost incurred by the Company and its Subsidiaries which has been questioned, challenged or disallowed or has been the subject of any investigation, and no money due to the Company or its subsidiaries has been (or has been attempted to be) withheld or set off with respect to any Government Contract, which contract price adjustment, withheld or set off amount (i) is reasonably expected to have a Material Adverse Effect on the Company or (ii) is not otherwise fully reflected or reserved for in the 1999 Financial Statements. (e) Except as set forth on Section 4.24 of the Company Disclosure Schedule, neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any of their respective directors, officers, employees, consultants or agents is (or during the last three years has been) under administrative, civil or criminal investigation, indictment or information or equivalent official governmental charge or allegation by any Governmental Entity with respect to any alleged irregularity, misstatement or omission or other matter arising under or relating to any Government Contract. Except as set forth on Section 4.24 of the Company Disclosure Schedule, since January 1, 1996, the Company and its subsidiaries have not conducted or initiated any internal investigation, or made a voluntary disclosure to the U.S. Government, with respect to any alleged irregularity, misstatement, omission or other matter arising under or relating to any Government Contract or Government Bid. To the knowledge of the Company, there is no irregularity, misstatement or omission or other matter arising under or relating to any Government Contract or Government Bid that has led or could reasonably be expected to lead, either before or after the Effective Time, to a Material Adverse Effect. -25- (f) Except as set forth on Section 4.24(f) of the Company Disclosure Schedule, there exist (i) no outstanding claims, requests for equitable adjustment or other contractual action for relief against the Company or its subsidiaries, either by any Governmental Entity or by any prime contractor, subcontractor, vendor or other Person, arising under or relating to any Government Contract or Government Bid, and (ii) no disputes between the Company or its subsidiaries and the U.S. Government under the Contract Disputes Act of 1978, as amended (the "Contract Disputes Act") or any other federal statute or between the Company or its subsidiaries and any prime contractor, subcontractor, vendor or other Person arising under or relating to any Government Contract or Government Bid. The Company has no knowledge of any fact which could reasonably be expected to result in a claim or a dispute under clause (i) or (ii) of the immediately preceding sentence. To the knowledge of the Company, the Company and its subsidiaries have no interest in any pending or potential material claim under the Contract Disputes Act against the U.S. Government or any prime contractor, subcontractor or vendor arising under or relating to any Government Contract or Government Bid. (g) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any of their respective directors, officers, employees, consultants or agents is (or during the last three years has been) suspended or debarred or proposed to be suspended or debarred or declared ineligible from doing business with any Governmental Entity or is (or during such period was) the subject of a finding of nonresponsibility or ineligibility for contracting with any Governmental Entity. To the knowledge of the Company, no facts or circumstances exist that would warrant the institution of suspension or debarment proceedings or the finding of nonresponsibility or ineligibility on the part of the Company and its subsidiaries or any such director, officer, employee, consultant or agent. (h) The cost accounting systems with respect to Government Contracts of the Company and its subsidiaries are in compliance in all material respects with all applicable laws. (i) Section 4.24(i) of the Company Disclosure Schedule identifies by description or inventory number all material Customer Furnished Items. Customer Furnished Items are defined as all personal property, equipment and fixtures loaned, bailed or otherwise furnished to the Company or its subsidiaries by or on behalf of the U.S. Government or any other customer ("Customer Furnished Items"). Section 4.24(i) of the Company Disclosure Schedule also identifies each Government Contract or other executory contract pursuant to which each such Customer Furnished Item is furnished. The Company and its subsidiaries have complied in all material respects with all of their obligations relating to the Customer Furnished Items, and, upon the return thereof to the U.S. Government or other customer who provided such Customer Furnished Item in the condition thereof on the date hereof, would have no material liability with respect thereto. (j) The Company is not in violation of (i) any laws, directives, or regulations relating to security clearances of the protection of classified information or (ii) its security agreements relating thereto. (k) For purposes of this Agreement, (i) the term "Government Bids" shall mean any written quotations, bids or proposals that, if accepted, would bind any Person to perform the resultant Government Contract to furnish products or services to (A) any Governmental Entity, -26- (B) any prime contractor of any Governmental Entity, or (C) any subcontractor, at any tier level, to any contract described in clauses (A) or (B) above; and (ii) the term "Government Contract" shall mean a written, mutually binding legal relationship with (A) any Governmental Entity, (B) any prime contractor of any Governmental Entity, or (C) any subcontractor, at any tier level, to any contract described in clauses (A) or (B) above which obligates any Person to furnish products or services. SECTION 4.25 Government Contracting Audits. ----------------------------- (a) Section 4.25(a) of the Company Disclosure Schedule sets forth a list and description of each final audit or investigation, or in the absence thereof, a draft thereof, received by the Company and its subsidiaries since January 1, 1996 any performed by or for any prime or higher-tiered contractor or subcontractor, or Governmental Entity, including the Defense Contract Audit Agency, the Defense Contract Management Command, Defense Contract Administrative Service Management Area, the Defense Criminal Investigative Service, any governmental procurement agencies under the supervision of the Secretary of Defense, any investigative agency, any Inspector General, the Department of Justice, or the General Accounting Office (other than routine audits by resident auditors, none of which is material to the business of the Company and its subsidiaries, taken as a whole). Section 4.25(a) of the Company Disclosure Schedule also briefly describes the current status of such matters. (b) Section 4.25(b) of the Company Disclosure Schedule sets forth a list and description of each settlement agreement concerning Government Contracts or Government Bids between the Company or any of its subsidiaries and the U.S. Government which currently has or is expected to have a binding effect on the Company or its subsidiaries after the Effective Time, and under which the Company or its subsidiaries have material unperformed obligations with respect thereto. ARTICLE FIVE REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER Parent and the Purchaser represent and warrant to the Company as follows: SECTION 5.1 Organization and Qualification. Parent is a corporation ------------------------------ duly organized, validly existing and in good standing under the laws of Delaware and each material subsidiary of Parent is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of New York. Parent and each of its material subsidiaries (including the Purchaser) has the requisite corporate power and authority to own, operate or lease its properties and to carry on its business as it is now being conducted, and is duly qualified or licensed to do business, and is in good standing, in each jurisdiction in which the nature of its business or the properties owned, operated or leased by it makes such qualification, licensing or good standing necessary, except where the failure to have such power or authority, or the failure to be so qualified, licensed or in good standing, would not have a Ma- -27- terial Adverse Effect on Parent. The term "Material Adverse Effect on Parent", as used in this Agreement, means any change in or effect on the business, financial condition or results of operations of Parent or any of its subsidiaries that would be materially adverse to Parent and its subsidiaries taken as a whole; provided, however, that "Material Adverse Effect on Parent" -------- ------- shall not include any change, effect, condition, event or circumstance to the extent attributable to (i) changes, effects, conditions, events or circumstances that generally affect the industries in which Parent operates, (ii) general economic conditions or change, effects, conditions or circumstances affecting the U.S. securities markets generally or (iii) changes, effects, conditions, events or circumstances arising from the announcement of the execution of this Agreement. SECTION 5.2 Authority Relative to this Agreement. Each of Parent and ------------------------------------ the Purchaser has all necessary corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Parent and the Purchaser and the consummation by Parent and the Purchaser of the transactions contemplated hereby have been duly and validly authorized and approved by the respective Boards of Directors of Parent and the Purchaser and by Parent as sole Shareholder of the Purchaser and no other corporate proceedings on the part of Parent or the Purchaser are necessary to authorize or approve this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by each of Parent and the Purchaser and, assuming the due and valid authorization, execution and delivery by the Company, constitutes a valid and binding obligation of each of Parent and the Purchaser enforceable against each of them in accordance with its terms. SECTION 5.3 No Conflict; Required Filings and Consents. ------------------------------------------ (a) Assuming (i) the filings required under the HSR Act and any foreign or supranational antitrust laws are made and the waiting periods thereunder have been terminated or have expired, (ii) the requirements of the Exchange Act and any applicable state securities, "blue sky" or takeover law are met, (iii) the requirements under applicable security and export control regulations are met and (iv) the filing of the certificate of merger and other appropriate merger documents, if any, as required by the BCL, is made, none of the execution and delivery of this Agreement by Parent or the Purchaser, the consummation by Parent or the Purchaser of the transactions contemplated hereby or compliance by Parent or the Purchaser with any of the provisions hereof will (i) conflict with or violate the organizational documents of Parent or the Purchaser, (ii) conflict with or violate in any material respect any statute, ordinance, rule, regulation, order, judgment, decree, permit or license applicable to Parent or the Purchaser or any of their subsidiaries, or by which any of them or any of their respective properties or assets may be bound or affected, or (iii) result in a Violation pursuant to any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which Parent or the Purchaser or any of their subsidiaries is a party or by which Parent or the Purchaser or any of their subsidiaries or any of their respective properties or assets may be bound or affected, which would impair the ability of Parent or the Purchaser to perform its obligations under this Agreement, or prevent or materially delay the consummation of the transactions contemplated hereby. (b) None of the execution and delivery of this Agreement by Parent and the Purchaser, the consummation by Parent and the Purchaser of the transactions contemplated hereby -28- or compliance by Parent and the Purchaser with any of the provisions hereof will require any Consent of any Governmental Entity, except for (i) compliance with any applicable requirements of the Exchange Act and any state securities "blue sky" or takeover law, (ii) the filing of a certificate of merger pursuant to the BCL, and (iii) compliance with the HSR Act and any requirements of any foreign or supranational antitrust laws. (c) Neither Parent nor the Purchaser is known to be subject to foreign ownership, control or influence ("FOCI") as that term is used under Section 3 of the National Industrial Security Program Operating Manual published by the U.S. Department of Defense pursuant to Executive Order No. 12829. SECTION 5.4 Information. None of the information supplied or to be ----------- supplied by Parent and the Purchaser in writing specifically for inclusion in (i) the Schedule 14D-9, (ii) the Proxy Statement or (iii) the Other Filings will, at the respective times filed with the SEC or such other Governmental Entity and, in addition, in the case of the Proxy Statement, at the date it or any amendment or supplement is mailed to shareholders, at the time of the Special Meeting and at the Effective Time, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. SECTION 5.5 Financing. Parent has possession of, or has available to --------- it under existing lines of credit, sufficient funds to consummate the transactions contemplated by this Agreement, and will cause the Purchaser to have sufficient funds available to consummate the Offer and the Merger and the transactions contemplated hereby. SECTION 5.6 Ownership of Purchaser; No Prior Activities. ------------------------------------------- (a) Purchaser was formed solely for the purpose of engaging in the transactions contemplated by this Agreement. (b) As of the Effective Time, all of the outstanding capital stock of Purchaser will be owned directly by Parent. As of the Effective Time, there will be no options, warrants or other rights (including registration rights), agreements, arrangements or commitments to which Purchaser is a party of any character relating to the issued or unissued capital stock of, or other equity interests in, Purchaser or obligating Purchaser to grant, issue or sell any shares of the capital stock of, or other equity interests in, Purchaser, by sale, lease, license or otherwise. There are no obligations, contingent or otherwise, of Purchaser to repurchase, redeem or otherwise acquire any shares of the capital stock of Purchaser. (c) As of the date hereof and the Effective Time, except for obligations or liabilities incurred in connection with its incorporation or organization and the transactions contemplated by this Agreement, Purchaser has not and will not have incurred, directly or indirectly, through any subsidiary or affiliates, any obligations or liabilities or engaged in any business activities of any type whatsoever or entered into any agreements or arrangements with any person. -29- ARTICLE SIX COVENANTS SECTION 6.1 Conduct of Business of the Company. Except as required by ---------------------------------- this Agreement or otherwise with the prior written consent of Parent, during the period from the date of this Agreement to the Effective Time, the Company will, and will cause each of its subsidiaries to, conduct its operations only in the ordinary and usual course of business consistent with past practice and will use its reasonable best efforts, and will cause each of its subsidiaries to use its reasonable best efforts, to preserve intact the business organization of the Company and each of its subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the good will of those having business relationships with it, including, without limitation, maintaining satisfactory relationships with suppliers, distributors, customers, licensors and others having business relationships with the Company. Without limiting the generality of the foregoing, and except as otherwise required by this Agreement or as set forth on Section 6.1 of the Company Disclosure Schedule, the Company will not, and will not permit any of its subsidiaries to, prior to the Effective Time, without the prior written consent of Parent: (a) adopt any amendment to its Certificate of Incorporation or By-Laws or comparable organizational documents or the Rights Agreement (other than the amendment contemplated by Section 4.19); (b) sell, pledge or encumber any stock owned by it in any of its subsidiaries; (c) (i) issue, reissue or sell, or authorize the issuance, reissuance or sale of (A) additional shares of capital stock of any class, or securities convertible into capital stock of any class, or any rights, warrants or options to acquire any convertible securities or capital stock, other than the issuance of Common Shares (and the related Rights), in accordance with the terms of the instruments governing such issuance on the date hereof, pursuant to the exercise of Options outstanding on the date hereof or the Convertible Debentures outstanding on the date hereof pursuant to the terms of the governing instrument related to such Convertible Debentures (or, if a Triggering Event (as defined in the Rights Agreement) by a party other than Parent or the Purchaser shall occur, Rights) or (B) any other securities in respect of, in lieu of, or in substitution for, Common Shares outstanding on the date hereof, or (ii) make any other changes in its capital structure; (d) declare, set aside or pay any dividend or other distribution (whether in cash, securities or property or any combination thereof) in respect of any class or series of its capital stock except for regular quarterly dividends or the Common Shares declared and paid at times and in an amount consistent with past practices other than between any of the Company and any of its wholly owned subsidiaries; (e) split, combine, subdivide, reclassify or redeem, purchase or otherwise acquire, or propose to redeem or purchase or otherwise acquire, any shares of its capital stock, or any of its other securities; -30- (f) increase the compensation or fringe benefits payable or to become payable to its directors, officers or employees (whether from the Company or any of its subsidiaries), or pay or award any benefit not required by any existing plan or arrangement to any officer, director or employee (including, without limitation, the granting of stock options, stock appreciation rights, shares of restricted stock or performance units pursuant to the Stock Plans or otherwise), or grant any severance or termination pay to any officer, director or other employee of the Company or any of its subsidiaries (other than as required by existing agreements or policies described in the Company Disclosure Schedule), or enter into any employment or severance agreement with, any director, officer or other employee of the Company or any of its subsidiaries or establish, adopt, enter into, amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, savings, welfare, deferred compensation, employment, termination, severance or other employee benefit plan, agreement, trust, fund, policy or arrangement for the benefit or welfare of any directors, officers or current or former employees of the Company or its subsidiaries (any of the foregoing being an "Employee Benefit Arrangement"), except, in each case, to the extent required by applicable law or regulation or existing term of any such Employee Benefit Arrangement described in the Company Disclosure Schedule, except for increases in compensation in the ordinary course consistent with past practice (in timing and magnitude) for employees other than officers, up to 2% of the payroll for such employees in the aggregate; (g) acquire, mortgage, encumber, sell, lease, license or dispose of any significant assets (including Intellectual Property) or securities, except pursuant to existing contracts or commitments or the sale or purchase of goods in the ordinary course of business consistent with past practice, or enter into any commitment or transaction outside the ordinary course of business consistent with past practice other than transactions between a wholly owned subsidiary of the Company and the Company or another wholly owned subsidiary of the Company; (h) (i) incur, assume or pre-pay any long-term debt or incur or assume any short-term debt, except that the Company and its subsidiaries may incur, assume or pre-pay debt in the ordinary course of business in an amount not to exceed $1,000,000 per day and $5,000,000 in the aggregate and for purposes consistent with past practice under existing lines of credit, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, (iii) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except in the ordinary course of business consistent with past practice and in accordance with their terms, (iv) make any loans, advances or capital contributions to, or investments in, any other person, except for loans, advances, capital contributions or investments between any wholly owned subsidiary of the Company and the Company or another wholly owned subsidiary of the Company, (v) authorize or make capital expenditures which are in excess of $50,000 or $500,000 in the aggregate, (vi) accelerate or delay collection of notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practice, (vii) delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business consistent with past practice, or (viii) vary the Company's inventory practices in any material respect from the Company's past practices; -31- (i) settle or compromise any suit or claim or threatened suit or claim where the amount involved is greater than $100,000; (j) other than in the ordinary course of business consistent with past practice, (i) modify, amend or terminate any contract (and, in any case, only if the amount involved is less than $200,000), (ii) waive, release, relinquish or assign any contract (or any of the Company's rights thereunder), right or claim, or (iii) cancel or forgive any indebtedness owed to the Company or any of its subsidiaries; (k) make any tax election inconsistent with past practice that is not required by law or settle or compromise any tax liability; (l) permit any insurance policy naming it as a beneficiary or a loss payable payee to be canceled or terminated without notice to the Purchaser, except in the ordinary course of business consistent with past practice; (m) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or, except in the ordinary course of business consistent with past practice, any assets; (n) enter into any contract or agreement other than in the ordinary course of business consistent with past practice; (o) except as may be required as a result of a change in law or in generally accepted accounting principles, make any change in its methods of accounting, including tax accounting policies and procedures; (p) agree in writing or otherwise to take any of the foregoing actions prohibited under this Section 6.1 or any action which would cause any representation or warranty in this Agreement to be or become untrue or incorrect; or (q) make any Government Bid where the amount involved is greater than $500,000; provided that if the profit margin to be received by the Company on the bid is less than 5% then such amount shall not be greater than $100,000. SECTION 6.2 Access to Information. Subject to applicable law, from the --------------------- date of this Agreement until the Effective Time, the Company will, and will cause its subsidiaries, and each of their respective officers, directors, employees, counsel, advisors and representatives (collectively, the "Company Representatives") to, give Parent and the Purchaser and their respective officers, employees, counsel, advisors and representatives (collectively, the "Parent Representatives") full access, during normal business hours, to the offices and other facilities and to the books and records of the Company and its subsidiaries and will cause the Company Representatives and the Company's subsidiaries to furnish Parent, the Purchaser and the Parent Representatives with such financial and operating data and such other information with respect to the business and operations of the Company and its subsidiaries as Parent and the Purchaser may from time to time reasonably request. The Company shall furnish promptly to Parent and the Purchaser a copy of each report, schedule, registration statement and other document filed by it or its subsidiaries during such period pursuant to the requirements of federal or state securities -32- laws. Parent and the Purchaser agree that any information furnished pursuant to this Section 6.2 will be subject to the provisions of the letter agreement dated September 13, 1999 between the Parent and the Company (the "Confidentiality Agreement"). SECTION 6.3 Efforts. ------- (a) Subject to the terms and conditions provided herein, each of the Company, Parent and the Purchaser shall, and the Company shall cause each of its subsidiaries to, cooperate and use all reasonable efforts to make, or cause to be made, all filings necessary or proper under applicable laws and regulations, and to take all other actions necessary or advisable to consummate and make effective the transactions contemplated by this Agreement, including but not limited to cooperation in the preparation and filing of the Offer Documents, the Schedule 14D-9 and any actions or filings related thereto, the Proxy Statement, any required filings under the HSR Act, or other foreign filings and any amendments to any thereof, and cooperation in obtaining approvals necessary from Government Entities to continue fully existing operations. In addition, if at any time prior to the Effective Time any event or circumstance relating to either the Company or Parent or the Purchaser or any of their respective subsidiaries should be discovered by the Company or Parent, as the case may be, which should be set forth in an amendment to the Offer Documents or Schedule 14D-9, the discovering party will promptly inform the other party of such event or circumstance. If at any time after the Effective Time any further action is necessary or desirable to carry out the purposes of this Agreement, including the execution of additional instruments, the proper officers and directors of each party to this Agreement shall take all such necessary action. (b) Parent and the Company shall file as soon as practicable (but not later than five business days in the case of the HSR Act filings) after the date of this Agreement notifications under the HSR Act or under any material applicable foreign statutes or regulations applicable to the Merger and shall respond as promptly as practicable to all inquiries or requests received from the Federal Trade Commission or the Antitrust Division of the Department of Justice or such other domestic or foreign antitrust regulatory authority, as applicable for additional information or documentation and shall respond as promptly as practicable to all inquiries and requests received from any State Attorney General or other Governmental Entity in connection with antitrust matters. The parties shall cooperate with each other in connection with the making of all such filings or responses, including providing copies of all such documents to the other party and its advisors prior to filing or responding. (c) Each of the parties will use its reasonable best efforts to obtain as promptly as practicable all Consents of any Governmental Entity or any other person required in connection with, and waivers of any Violations that may be caused by, the consummation of the transactions contemplated by the Offer and this Agreement, provided, however, that, notwithstanding any other provision of -------- ------- this Agreement, the Company shall not, without Parent's prior written consent, and Parent shall not be obligated to, agree to divest, hold separate or otherwise materially restrict the use or operation of any business or assets of Parent or the Company, which divestiture, agreement to hold separate, or other restriction would reasonably be expected to have a Material Adverse Effect on Parent or the Company, as the case may be. Danaher represents that it cur- -33- rently has no pending acquisitions in the motion controls area (except for those being announced on the date hereof) and there are no such acquisitions currently intended in the near term. SECTION 6.4 Public Announcements. The Company, on the one hand, and -------------------- Parent and the Purchaser, on the other hand, agree to consult promptly with each other prior to issuing any press release or otherwise making any public statement with respect to the Offer, the Merger and the other transactions contemplated hereby, agree to provide to the other party for review a copy of any such press release or statement, and shall not issue any such press release or make any such public statement prior to such consultation and review, unless required by applicable law or any listing agreement with a securities exchange. SECTION 6.5 Employee Benefit Arrangements. ----------------------------- (a) Parent agrees that the Company will honor, and, from and after the Effective Time, Parent will cause the Surviving Corporation to honor, in accordance with their respective terms as in effect on the date hereof, the employment, severance, bonus, supplemental retirement, and split dollar life insurance agreements and arrangements to which the Company is a party which are set forth on Section 6.5 of the Company Disclosure Schedule covering current and former directors, officers and employees, subject to any amendment or termination that may be permitted by the terms thereof. (b) Parent agrees that (i) for the period ending December 31, 2000, the Surviving Corporation shall continue the compensation and employee benefit and welfare plans and programs of the Company other than those providing equity- based compensation to the extent practicable as in effect on the date hereof, and (ii) thereafter the Surviving Corporation shall provide employees of the Company and its subsidiaries as a whole (A) compensation (including bonus and incentive awards) programs and plans and (B) employee benefit and welfare plans, programs, contracts, agreements and policies (including insurance and pension plans), fringe benefits and vacation policies which are substantially the same as or not less favorable in the aggregate to such employees than those generally in effect with respect to similarly situated employees of Parent. Notwithstanding the forgoing, in no event shall severance benefits available to employees of the Company or its subsidiaries through the first anniversary of the Effective Date be less favorable than the severance benefits in effect as of the date of this Agreement, as set forth on Section 6.5 of the Company Disclosure Schedule. Without limiting the generality of the foregoing, following the Effective Time Parent shall provide, or cause to be provided, to persons who are as of the Effective Time retired salaried employees of the Company and its subsidiaries retiree medical benefits that are substantially comparable to those provided to them as of the Effective Time. (c) For all purposes under the employee benefit plans of Parent and its affiliates providing benefits to each employee of the Company (a "Company Employee") after the Effective Time, each Company Employee shall be credited with his or her years of service with the Company and its affiliates before the Effective Time, to the same extent as such Company Employee was entitled, before the Effective Time, to credit for such service for purposes of vesting, service and benefit accruals under any similar Plans, except to the extent such credit would result in a duplication of benefits and except for purposes of accrual of benefits under defined benefit pension plans. In addition, and without limiting the generality of the foregoing: (i) each Com- -34- pany Employee shall be immediately eligible to participate, without any waiting time, in any and all employee benefit plans sponsored by Parent and its affiliates for the benefit of Company Employees (such plans, collectively, the "New Plans") to the extent coverage under such New Plan replaces coverage under a comparable Plan in which such Company Employee participated immediately before the Effective Time (such plans, collectively, the "Old Plan"); and (ii) for purposes of each New Plan providing medical, dental, pharmaceutical and/or vision benefits to any Company Employee, Parent shall cause all pre-existing condition exclusions and actively-at-work requirements of such New Plan to be waived for such employee and his or her covered dependents to the extent currently applicable to such persons. SECTION 6.6 Indemnification. --------------- (a) The certificate of incorporation and the by-laws of the Surviving Corporation shall contain the provisions with respect to indemnification and exculpation from liability set forth in the Company's Restated Certificate of Incorporation and By-Laws on the date of this Agreement, which provisions shall not be amended, repealed or otherwise modified for a period of six years from the Effective Time in any manner that would adversely affect the rights thereunder of individuals who on or prior to the Effective Time were directors, officers, employees or agents of the Company, unless such modification is required by law. Parent shall guarantee the obligations of the Surviving Corporation with respect to the indemnification provisions contained in the Surviving Corporation's certificate of incorporation and by-laws. (b) Parent and the Surviving Corporation shall, until the fourth anniversary of the Effective Time or such earlier date as may be mutually agreed upon by Parent, the Surviving Corporation, and the applicable Indemnified Party, cause to be maintained in effect, to the extent available, the policies of directors' and officers' liability insurance maintained by the Company and its subsidiaries as of the date hereof (or policies of at least the same coverage and amounts containing terms that are not less advantageous to the insured parties) with respect to claims arising from facts or events that occurred on or prior to the Effective Time. In lieu of the purchase of such insurance by Parent or the Surviving corporation, the Surviving Corporation may purchase a six-year extended reporting period endorsement ("reporting tail coverage") under the Company's directors' and liability insurance coverage. In no event shall Parent or the Surviving Corporation be obligated to expend in order to maintain or procure insurance coverage pursuant to this paragraph (b) any amount per year (in the case of ongoing annual coverage) in excess of 150% of the aggregate premiums paid by the Company and the Subsidiaries in the fiscal year ending December 31, 1999 for directors' and officers' liability insurance, which amount has been disclosed to Parent. (c) The Company and, following the purchase of any Shares by Purchaser pursuant to the Offer, Parent shall, to the fullest extent permitted under applicable law and regardless of whether the Merger becomes effective, indemnify, defend and hold harmless, and, from and after the Effective Time, Parent shall cause the Surviving Corporation to the fullest extent permitted under applicable law, to indemnify, defend and hold harmless, the present and former officers, directors, employees and agents of the Company or any of its subsidiaries in their capacities as such (each an "Indemnified Party") against all losses, expenses, claims, damages or liabilities arising out of actions or omissions occurring on or prior to the Effective Time (including, without limitation, actions or omissions relating to the transactions contemplated hereby). -35- (d) In the event Parent, the Surviving Corporation or any of their successors or assigns (i) consolidates with or merges into any other person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any person, then and in each such case, proper provisions shall be made so that the successors and assigns of Parent or the Surviving Corporation, as the case may be, shall assume the obligations set forth in this Section 6.6. (e) This Section 6.6 shall survive the consummation of the Merger at the Effective Time, is intended to benefit the Indemnified Parties and their respective heirs, executors and personal representatives, and shall be binding on all successors and assigns of the Company, Parent and the Surviving Corporation. This Section 6.6 shall not limit or otherwise adversely affect any rights any Indemnified Party may have under any agreement with the Company or any of its subsidiary or the Company's or any such subsidiary's Certificate of Incorporation or By-Laws. SECTION 6.7 Notification of Certain Matters. Parent and the Company ------------------------------- shall promptly notify each other of (a) the occurrence or non-occurrence of any fact or event which would be reasonably likely (i) to cause any representation or warranty contained in this Agreement to be untrue or inaccurate in any material respect at any time from the date hereof to the Effective Time or (ii) to cause any covenant, condition or agreement under this Agreement not to be complied with or satisfied, and (b) any failure of the Company, Parent or Purchaser, as the case may be, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; provided, -------- however, that no such notification shall affect the representations or - ------- warranties of any party or the conditions to the obligations of any party hereunder. Each of the Company, Parent and the Purchaser shall give prompt notice to the other parties hereof of any notice or other communication from any third party alleging that the consent of such third party is or may be required in connection with the transactions contemplated by this Agreement. SECTION 6.8 Rights Agreement. The Company covenants and agrees that ---------------- it will not (i) redeem the Rights, (ii) amend the Rights Agreement or (iii) take any action which would allow any Person (as defined in the Rights Agreement) other than Parent or the Purchaser to acquire beneficial ownership of 20% or more of the Common Shares without causing a Distribution Date or a Triggering Event (as each such term is defined in the Rights Agreement) to occur. The Board of Directors of the Company shall not make a determination that Parent, the Purchaser or any of their respective Affiliates or Associates is an "Acquiring Person" for purposes of the Rights Agreement. SECTION 6.9 State Takeover Laws. The Company shall, upon the request ------------------- of the Purchaser, take all reasonable steps to assist in any challenge by the Purchaser to the validity or applicability to the transactions contemplated by this Agreement, including the Offer and the Merger, of any state takeover law. SECTION 6.10 No Solicitation. --------------- (a) The Company shall, and shall direct its affiliates and their respective officers, directors, employees, representatives and agents to immediately cease any existing discussions or negotiations, if any, with any parties conducted heretofore with respect to any Acquisition -36- Transaction (as hereinafter defined). The Company agrees that, prior to the Effective Time, it shall not, and shall not authorize or permit any of its subsidiaries or any of its or its subsidiaries' directors, officers, employees, agents or representatives, directly or indirectly, to solicit, initiate or encourage, or furnish or disclose non-public information in furtherance of, any inquiries or the making of any proposal with respect to any merger, liquidation, recapitalization, consolidation or other business combination involving the Company or its subsidiaries or acquisition of more than 5% of capital stock or any material portion of the assets of the Company or its subsidiaries, or any combination of the foregoing (other than the Offer and the Merger) (an "Acquisition Transaction"), or negotiate, explore or otherwise engage in substantive discussions with any person (other than the Purchaser, Parent or their respective directors, officers, employees, agents and representatives) with respect to any Acquisition Transaction or enter into any agreement, arrangement or understanding requiring it to abandon, terminate or fail to consummate the Merger or any other transactions contemplated by this Agreement; provided that the Company may, prior to the purchase of Common Shares pursuant to the Offer, furnish information to, and negotiate or otherwise engage in substantive discussions with, any person who delivers a written proposal for an Acquisition Transaction if the Company Board determines in good faith by a majority vote, after consultation with its outside legal counsel and financial advisors, that such a transaction is reasonably likely to result in a transaction that is superior in comparison to the Offer and the Merger and the terms of this Agreement to the Company's shareholders from a financial point of view and to the Company, taking into account the terms and conditions thereof, the likelihood of consummation and the time required to complete such transaction (a "Superior Proposal"), and prior to furnishing non-public information to any such party, the Company shall have (i) entered into a confidentiality agreement with such party containing confidentiality terms at least as favorable to the Company as those of the Confidentiality Agreement and (ii) shall provide Parent or Purchaser copies of all proposed written agreements, arrangements, or understandings, including the forms of any agreements supplied by third parties, and all applicable financial statements and evidence of any planned financing with respect to such Superior Proposal (and a description of all material oral agreements with respect thereto). (b) From and after the execution of this Agreement, the Company shall immediately advise the Purchaser in writing of the receipt, directly or indirectly, of any proposal with respect to an Acquisition Transaction, and of any discussions, negotiations or proposals relating to an Acquisition Transaction, identify the offeror and furnish to the Purchaser a copy of any such proposal, if it is in writing, or a written summary of any such proposal relating to an Acquisition Transaction if it is not in writing. The Company shall promptly advise Parent of any significant developments relating to such proposal, including the results of any discussions or negotiations with respect thereto. (c) Nothing contained in this Section 6.10 shall prohibit the Company from taking and disclosing to its shareholders a position contemplated by Rule 14e-2(a) promulgated under the Exchange Act or as otherwise required by law. SECTION 6.11 Parent Agreement Concerning Purchaser. Parent agrees to ------------------------------------- cause the Purchaser to comply with its obligations under this Agreement. -37- SECTION 6.12 Convertible Debentures. As of the Effective Time, Parent ---------------------- shall enter into such supplemental indentures as may be required under the terms of the indenture for the Convertible Debentures. ARTICLE SEVEN CONDITIONS TO CONSUMMATION OF THE MERGER SECTION 7.1 Conditions. The respective obligations of Parent, the ---------- Purchaser and the Company to consummate the Merger are subject to the satisfaction, at or before the Effective Time, of each of the following conditions: (a) Shareholder Approval. The shareholders of the Company shall have -------------------- duly approved the transactions contemplated by this Agreement, if required by applicable law. (b) Purchase of Common Shares. The Purchaser shall have accepted for ------------------------- payment and paid for Common Shares in an amount sufficient to meet the Minimum Condition and otherwise pursuant to the Offer in accordance with the terms hereof, provided, however, that this condition shall be deemed to be satisfied -------- ------- with respect to the obligation of Parent and the Purchaser to effect the Merger if the Purchaser fails to accept for payment or pay for Common Shares pursuant to the Offer in violation of the terms of the Offer or of this Agreement. (c) Injunctions; Illegality. The consummation of the Merger shall not be ----------------------- restrained, enjoined or prohibited by any order, judgment, decree, injunction or ruling of a court of competent jurisdiction or any Governmental Entity and there shall not have been any statute, rule or regulation enacted, promulgated or deemed applicable to the Merger by any Governmental Entity which prevents the consummation of the Merger, or has the effect of making the acquisition of Common Shares in the Merger illegal. (d) Regulatory Approval. Any waiting period (and any extension thereof) ------------------- under the HSR Act or under any material applicable foreign statutes or regulations applicable to the Merger shall have expired or terminated. ARTICLE EIGHT TERMINATION; AMENDMENTS; WAIVER SECTION 8.1 Termination. This Agreement may be terminated and the ----------- Merger contemplated hereby may be abandoned at any time prior to the Effective Time, notwithstanding approval thereof by the shareholders of the Company (with any termination by Parent also being an effective termination by the Purchaser): (a) by the mutual written consent of Parent and the Company, by action of their respective Boards of Directors; -38- (b) by Parent or the Company if (i) Purchaser fails to commence the Offer on or prior to May 15, 2000 or (ii) Purchaser shall not have accepted for payment and paid for the Common Shares pursuant to the Offer in accordance with the terms hereof and thereof on or before September 30, 2000; provided, however, -------- ------- that a party may not terminate this Agreement pursuant to this Section 8.1(b) if such failure to accept for payment and pay for the Common Shares is due to such party's material breach of this Agreement; (c) by Parent or the Company if the Offer is terminated or withdrawn pursuant to its terms and the terms of this Agreement without any Common Shares being purchased thereunder, other than due to a breach hereof by the terminating party; (d) by Parent or the Company if any court of competent jurisdiction or other Governmental Entity shall have issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the acceptance for payment of, or payment for, Common Shares pursuant to the Offer or the Merger and such order, decree or ruling or other action shall have become final and nonappealable, 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; (e) by the Company if, prior to the acceptance for payment of Common Shares pursuant to the Offer, the Company Board shall have determined to recommend a Superior Proposal to its shareholders and to enter into a binding written agreement concerning such Superior Proposal after making the determination required by Section 6.10(a); provided that the Company may not -------- exercise its right to terminate under this Section 8.1(e) (and may not enter into a binding written agreement with respect to any Superior Proposal) unless and until (i) the Company shall have provided the Purchaser and Parent prior written notice at least five business days prior to such termination that the Company Board has authorized and intends to effect the termination of this Agreement pursuant to this Section 8.1(e), including copies of all proposed written agreements, arrangements, or understandings, including the forms of any agreements supplied by third parties, and all applicable financial statements and evidence of any planned financing with respect to such Superior Proposal (and a description of all material oral agreements with respect thereto), (ii) the Company Board shall have determined, in good faith and after consultation with its legal and financial advisors, that the foregoing Acquisition Transaction constituted at the time of its determination to terminate this Agreement and, at the end of the 5-business day period referred to in clause (i) above still constitutes a Superior Proposal and (iii) prior to such termination, the Company shall have paid to Parent the Termination Fee and the Expense Fee described in Section 8.3(b); (f) by Parent prior to the purchase of Common Shares pursuant to the Offer, if the Company Board (i) shall have withdrawn or modified (including by amendment of the Schedule 14D-9) in any manner adverse to the Purchaser or Parent its approval or recommendation of the Offer, this Agreement or the Merger, (ii) shall have approved or recommended an Acquisition Transaction, (iii) or the Company shall have breached Section 6.8, or (iv) shall have resolved to effect any of the foregoing; (g) by Parent prior to the purchase of Common Shares pursuant to the Offer if the Minimum Condition (as defined in Annex I) shall not have been satisfied by the close of busi- -39- ness on the business day immediately preceding September 30, 2000 and an Acquisition Transaction shall have been publicly announced or disclosed. SECTION 8.2 Effect of Termination. In the event of the termination of --------------------- this Agreement pursuant to Section 8.1, this Agreement shall forthwith become void and have no effect, without any liability on the part of any party or its directors, officers or shareholders, other than the provisions of the last sentence of Section 6.2 and the provisions of this Section 8.2 and Section 8.3, which shall survive any such termination. Nothing contained in this Section 8.2 shall relieve any party from liability for any willful breach of this Agreement. SECTION 8.3 Fees and Expenses. ----------------- (a) Whether or not the Merger is consummated, except as otherwise specifically provided herein, all costs and expenses incurred in connection with the Offer, this Agreement and the transactions contemplated by this Agreement shall be paid by the party incurring such costs and expenses. (b) In the event that this Agreement is terminated pursuant to Section 8.1(e) or Section 8.1(f) (other than Section 8.1(f)(i) if no Acquisition Proposal shall have been publicly announced or disclosed), then the Company shall promptly (and in any event within one business day after such termination or, in the case of any such termination by the Company, prior to such termination) pay Parent an amount equal to (i) a termination fee of $10,000,000 (the "Termination Fee"), provided that in no event shall more than one Termination Fee be payable by the Company plus (ii) Parent's aggregate Expenses not exceeding $1,000,000 (the "Expense Fee"). Parent's "Expenses" shall mean all documented out-of-pocket fees and expenses incurred or paid by or on behalf of Parent in connection with or in contemplation of the Merger or the consummation of any of the transactions contemplated by this Agreement, including all fees and expenses of counsel, investment banking firms, accountants, experts and consultants to Parent. (c) In the event that this Agreement is terminated pursuant to Section 8.1(f)(i) (if no Acquisition Proposal shall have been publicly announced or disclosed) or Section 8.1(g) hereof and within 12 months of the date of termination of this Agreement a transaction constituting an Acquisition Transaction is consummated, the Company shall, prior to or simultaneously with the consummation of such transaction, pay Parent the Termination Fee and the Expense Fee; provided, however, that in no event shall the Company be obligated -------- ------- to pay more than one Termination Fee and Expense Fee pursuant to this Section 8.3. (d) The prevailing party in any legal action undertaken to enforce this Agreement or any provision hereof shall be entitled to recover from the other party the costs and expenses (including attorneys' and expert witness fees) incurred in connection with such action. SECTION 8.4 Amendment. Subject to Section 1.3(c), this Agreement may --------- be amended by the Company, Parent and the Purchaser at any time before or after any approval of this Agreement by the shareholders of the Company but, after any such approval, no amendment shall be made which decreases the Merger Price or which adversely affects the rights of the Company's shareholders hereunder without the approval of such shareholders. This Agreement may not be amended except by an instrument in writing signed on behalf of all the parties. -40- SECTION 8.5 Extension; Waiver. Subject to Section 1.3(c), at any time ----------------- prior to the Effective Time, Parent and the Purchaser, on the one hand, and the Company, on the other hand, may (i) extend the time for the performance of any of the obligations or other acts of the other, (ii) waive any inaccuracies in the representations and warranties contained herein of the other or in any document, certificate or writing delivered pursuant hereto by the other or (iii) waive compliance by the other with any of the agreements or conditions. Any agreement on the part of any party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. ARTICLE NINE MISCELLANEOUS SECTION 9.1 Non-Survival of Representations and Warranties. The ---------------------------------------------- representations and warranties made in this Agreement shall not survive beyond the Effective Time. Notwithstanding the foregoing, the agreements set forth in Section 3.2 and Section 6.6 shall survive the Effective Time indefinitely (except to the extent a shorter period of time is explicitly specified therein). SECTION 9.2 Entire Agreement; Assignment. ---------------------------- (a) This Agreement (including the documents and the instruments referred to herein, including, without limitation, the Confidentiality Agreement) constitute the entire agreement and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and thereof. (b) Neither this Agreement nor any of the rights, interests or obligations hereunder will be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other party (except that Parent may assign its rights and the Purchaser may assign its rights, interest and obligations to any direct or indirect subsidiary of Parent without the consent of the Company, provided that no such assignment shall relieve Parent of any liability for any breach by such assignee). Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. SECTION 9.3 Validity. The invalidity or unenforceability of any -------- provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, each of which shall remain in full force and effect. SECTION 9.4 Notices. All notices, requests, claims, demands and other ------- communications hereunder shall be in writing and shall be deemed to have been duly given when delivered in person, by overnight courier or facsimile to the respective parties as follows: -41- If to Parent or the Purchaser: Danaher Corporation 1250 24th Street, N.W., Suite 800 Washington, D.C. 20037 Attention: Patrick W. Allender Facsimile: (202) 828-0860 with a copy to: Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, New York 10019 Attention: Trevor S. Norwitz, Esq. Facsimile: (212) 403-2000 If to the Company: Kollmorgen Corporation Reservoir Place, 1601 Trapelo Road Waltham, Massachusetts 02451 Attention: James A. Eder, Esq. Facsimile: (860) 232-4033 with a copy to: Shearman & Sterling 599 Lexington Avenue New York, New York 10022 Attention: Creighton O'M Condon Facsimile: (212) 848-7179 or to such other address as the person to whom notice is given may have previously furnished to the other in writing in the manner set forth above; provided that notice of any change of address shall be effective only upon receipt thereof. SECTION 9.5 Governing Law; Jurisdiction. This Agreement shall be --------------------------- governed by and construed in accordance with the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. In addition, each of the parties hereto (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 contemplated by this Agreement, (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 (c) agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than a Federal or state court sitting in the State of Delaware. -42- SECTION 9.6 Descriptive Headings. The descriptive headings herein are -------------------- inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. SECTION 9.7 Counterparts. This Agreement may be executed in two or ------------ more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. SECTION 9.8 Parties in Interest. Except with respect to Section 6.6 ------------------- (which is intended to be for the benefit of the persons identified therein, and may be enforced by such persons), this Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to confer upon any other person any rights or remedies of any nature whatsoever under or by reason of this Agreement. SECTION 9.9 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 the purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "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) the term "Person" or "person" shall include individuals, corporations, partnerships, trusts, other entities and groups (which term shall include a "group" as such term is defined in Section 13(d)(3) of the Exchange Act); and (c) the term "Subsidiary" or "subsidiaries" means, with respect to Parent, the Company or any other person, any corporation, partnership, joint venture or other legal entity of which Parent, the Company or such other person, as the case may be (either alone or through or together with any other subsidiary), owns, directly or indirectly, stock or other equity interests the holders of which are generally entitled to more than 50% of the vote for the election of the board of directors or other governing body of such corporation or other legal entity. SECTION 9.10 Specific Performance. The parties hereto agree that -------------------- irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity. -43- IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed on its behalf by its respective officer thereunto duly authorized, all as of the day and year first above written. DANAHER CORPORATION By: /s/ Daniel L. Comas -------------------------------- Name: Daniel L. Comas Title: Vice President KING DC ACQUISITION CORP. By: /s/ Daniel L. Comas -------------------------------- Name: Daniel L. Comas Title: Vice President KOLLMORGEN CORPORATION By: /s/ Gideon Argov -------------------------------- Name: Gideon Argov Title: President -44- ANNEX I Conditions to the Offer. Notwithstanding any other provisions of the Offer, the Purchaser shall not be required to accept for payment or, subject to any applicable rules and regulations of the Commission, including Rule 14e-1(c) promulgated under the Exchange Act, pay for any tendered Common Shares and may terminate or, subject to the terms of the Merger Agreement, amend the Offer, if (i) there shall not be validly tendered and not properly withdrawn prior to the Expiration Date for the Offer that number of Common Shares which, when added to any Common Shares already owned by Parent or any of its subsidiaries, represents at least two-thirds of the total number of outstanding Common Shares on a fully diluted basis on the date of purchase (not taking into account the Rights) (the "Minimum Condition"), (ii) any applicable waiting period or approval under the HSR Act or under any applicable foreign statutes or regulations shall not have expired or been terminated or obtained prior to the Expiration Date, (iii) all consents from third parties shall have been obtained except for those the failure of which to be obtained would not reasonably be expected to have a Material Adverse Effect on the Company, or (iv) at any time on or after May 4, 2000 and prior to the time of acceptance for payment for any Common Shares, any of the following events (each, an "Event") shall occur: (a) there shall be any action taken, or any statute, rule, regulation, legislation, interpretation, judgment, order or injunction enacted, enforced, promulgated, amended, issued or deemed applicable to the Offer, by any legislative body, court, government or governmental, administrative or regulatory authority or agency, domestic or foreign, other than the application of the waiting period provisions of the HSR Act to the Offer or to the Merger, that would reasonably be expected to, directly or indirectly: (i) make illegal or otherwise prohibit consummation of the Offer or the Merger, (ii) prohibit or materially limit the ownership or operation by Parent or the Purchaser of all or any material portion of the business or assets of the Company or any of its subsidiaries taken as a whole or compel Parent or the Purchaser to dispose of or hold separately all or any material portion of the business or assets of Parent or the Purchaser or the Company or any of its subsidiaries taken as a whole, or seek to impose any material limitation on the ability of Parent or the Purchaser to conduct its business or own such assets, in any such case under this clause (ii), which would reasonably be expected to have a Material Adverse Effect on Parent or the Company, as the case may be, (iii) impose material limitations on the ability of Parent or the Purchaser effectively to acquire, hold or exercise full rights of ownership of the Common Shares, including, without limitation, the right to vote any Common Shares acquired by the Purchaser or Parent pursuant to the Offer on all matters properly presented to the Company's shareholders, (iv) require divestiture by Parent or the Purchaser of any Common Shares, or (v) result in a Material Adverse Effect on the Company; or (b) there shall be instituted or pending any action or proceeding by any Governmental Entity that would reasonably be expected to result in, any of the consequences referred to in clauses (i) through (v) of paragraph (a) above or by any third party for which there is a substantial likelihood of resulting in any of the consequences referred to in clauses (i) through (v) of paragraph (a) above; or (c) since the date of the Merger Agreement, any change shall have occurred and be continuing in the business, financial condition or results of operations of the Company or any of its subsidiaries that has, or could reasonably be expected to have, a Material Adverse Effect on the Company; or (d) (i) the Company Board or any committee thereof shall have withdrawn or shall have modified or amended in a manner adverse to Parent or the Purchaser, the approval, adoption or recommendation, as the case may be, of the Offer or the Merger Agreement, or shall have approved or recommended any Acquisition Transaction, (ii) a Person shall have entered into a definitive agreement or an agreement in principle with the Company with respect to an Acquisition Transaction, or (iii) the Company Board or any committee thereof shall have resolved to do or enter into any of the foregoing; or (e) the Company and the Purchaser and Parent shall have reached an agreement that the Offer or the Merger Agreement be terminated, or the Merger Agreement shall have been terminated in accordance with its terms; or (f) any of the representations and warranties of the Company set forth in the Merger Agreement, when read without any exception or qualification as to materiality or Material Adverse Effect on the Company, shall not be true and correct, as if such representations and warranties were made at the time of such determination (except as to any such representation or warranty which speaks as of a specific date, which must be untrue or incorrect as of such specific date) except where the failure to be so true and correct would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company; or (g) the Company shall have failed to perform in any material respect or to comply in any material respect with any of its material obligations, covenants or agreements under the Merger Agreement; or (h) there shall have occurred, and continue to exist, (i) any general suspension of, or limitation on prices for, trading in securities on the New York Stock Exchange or on the over-the-counter stock market, as reported by the National Association of Securities Dealers, Inc. Automated Quotations System ("NASDAQ"), (ii) any decline of at least 25% in either the Dow Jones Average of Industrial Stocks or the Standard & Poor's 500 Index from the close of business on the last trading day immediately preceding the date of the Merger Agreement through the applicable Expiration Date, or (iii) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States. The foregoing conditions (including those set forth in clauses (i), (ii) and (iii) of the initial paragraph) are for the benefit of Parent and the Purchaser and may be asserted by Parent or the Purchaser regardless of the circumstances giving rise to any such conditions and may be waived by Parent or the Purchaser in whole or in part at any time and from time to time in their reasonable discretion, in each case, subject to the terms of the Merger Agreement. The failure by Parent or the Purchaser at any time to exercise any of the foregoing rights shall not be -2- deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. The capitalized terms used in this Annex I shall have the meanings set forth in the Agreement to which it is annexed, except that the term "Merger Agreement" shall be deemed to refer to the Agreement to which this Annex I is appended. -3- EX-99.(D)(2) 11 CONFIDENTIALITY AGRMNT DATED 9/13/99 EXHIBIT 99.(d)(2) [LOGO OF KOLLMORGEN] Reservoir Place 1601 Trapelo Road Waltham, MA 02451 781-890-5655 TEL 781-890-7150 FAX http://www.kollmorgen.com September 13, 1999 VIA TELECOPY --1-202-828-0860 Mr. Dan Comas Vice President, Corporate Development Danaher Corporation 1256 24th Street, N.W. Suite 800 Washington, D.C. 20037 Dear Mr. Comas: In connection with your consideration of a possible negotiated transaction with Kollmorgen Corporation and/or its subsidiaries, affiliates or divisions (collectively, with such subsidiaries, affiliates and divisions, the "Company"), the Company is prepared to make available to you certain information concerning the business, financial condition, operations, assets and liabilities of the Company. As a condition of such information being furnished to you and your directors, officers, employees, agents or advisors (including, without limitation, attorneys, accountants, consultants, bankers and financial advisors) (collectively, "Representatives"), you agree to treat any information concerning the Company (whether prepared by the Company, its advisors or otherwise and irrespective of the form of communication) which is furnished to you or to your Representatives now or in the future by or on behalf of the Company therein collectively referred to as the "Evaluation Material") in accordance with the provisions of this agreement, and to take or abstain from taking certain other actions hereinafter set forth. The term "Evaluation Material" also shall be deemed to include all notes, analyses, compilations, studies, interpretations or other documents prepared by you or your Representatives which contain, reflect or are based upon, in whole or in part, the information furnished to you or your Representatives pursuant hereto. The Term "Evaluation Material" does not include information which (i) is or becomes generally available to the public other than as a result of a disclosure by you or your Representatives in violation of this agreement, (ii) was within you possession prior to its being furnished to you by or on behalf of the Company pursuant hereto, provided that the source of such information was not known by you to be bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to the Company or any other party with respect to such information; (ii) becomes 1 Mr. Comas September 13, 1999 Page 2 available to you as a non-confidential basis from a source other than the Company or any of its Representatives, provided that such source is not, to your knowledge, bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to the Company or any other party with respect to such information or (iv) information that was or is developed by you independently from the information disclosed by the Company or any of its Representatives. You hereby agree that you and your Representatives shall use the Evaluation Material solely for the purpose of evaluating a possible negotiated transaction between the Company and you, that the Evaluation Material will be kept confidential and that you and your Representatives will not disclose any of the Evaluation Material in any manner whatsoever, provided, however, that (i) you may make any disclosure of such information to which the Company gives its prior written consent; and (ii) any such information may be disclosed to your Representatives who need to know such information for the sole purpose of evaluating a possible negotiated transaction with the Company, who agree to keep such information confidential and who are provided with a copy of this agreement and agree to be bound by the terms hereof to the same extent as if they were parties hereto. In any event, you shall be responsible for any breach of this agreement by any of your Representatives and you agree, at your sole expense, to take all reasonable measures (including but not limited to court proceedings) to restrain your Representatives from prohibited or unauthorized disclosure or use of the Evaluation Material. In addition, you agree that, without the prior written consent of the Company, you and your Representatives will not disclose to any other person the fact that the Evaluation Material has been made available to you, that discussions or negotiations are taking place concerning a possible transaction involving the Company or any of the terms, conditions or other facts with respect thereto (including the status thereof), provided that you may make such disclosure if your General Counsel determines, and advises the Company of such in writing prior thereto, that such disclosure must be made by you in order that you not commit a violation of law or stock exchange rules and regulations. Without limiting the generality of the foregoing, you further agree that, without the prior written consent of the Company, you will not, directly or indirectly, enter into any agreement, arrangement or understanding, or any discussion which might lead to such agreement, arrangement or understanding, with any person regarding a possible transaction involving the Company. The term "person" as used in this agreement shall be broadly interpreted to include the media and any corporation, partnership, group, individual or other entity. In the event that you or any of your Representatives are requested or required (by oral questions, interrogatories, requests for information or documents in legal proceedings, subpoena, civil investigative demand or other similar process) to disclose any of the Evaluation Material, you shall provide the Company with prompt written notice of any such request or requirement so that the Company may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this 2 Mr. Comas September 13, 1999 Page 3 agreement. If, in the absence of a protective order or other remedy or the receipt of a waiver by the Company, you or any of your Representatives are nonetheless, in the opinion of your General Counsel, legally compelled to disclose Evaluation Material to any tribunal or else stand liable for contempt or suffer other censure or penalty, you or your representatives may, without liability hereunder, disclose to such tribunal only that portion of the Evaluation Material which such counsel advises you is legally required to be disclosed, provided that you exercise your reasonable best efforts to preserve the confidentiality of the Evaluation Material, including, without limitation, by cooperation with the Company at the Company's expense to obtain an appropriate protective order or other reliable assurance that confidential treatment will be awarded the Evaluation Material by such tribunal. If you decide that you do not wish to proceed with a transaction with the Company, you will promptly inform the Company of that decision. In that case, or at any time upon the request of the Company for any reason, you will promptly deliver to the Company all Evaluation Material (and all copies thereof) furnished to you or your Representatives by or on behalf of the Company pursuant hereto. In the event of such a decision or request, all other Evaluation Material prepared by you or your Representatives shall be destroyed and no copy thereof shall be retained. Notwithstanding the return or destruction of the Evaluation Material, you and your Representatives will continue to be bound by your obligations of confidentiality and other obligations hereunder for a period of three (3) years after the date this agreement is signed by you. You understand and acknowledge that neither the Company nor any of its Representatives (including the Company's directors, officers, employees or agents) make any representation or warranty, express or implied, as to the accuracy or completeness of the Evaluation Material. You agree that neither the Company nor any of its Representatives (including any of the Company's directors, officers, employees or agents) shall have any liability to you or to any of your Representatives relating to or resulting from the use of the Evaluation Material or any errors therein or omissions therefrom. Only those representations or warranties which are made in the final definitive agreement regarding any transactions contemplated hereby, when, as and if executed, and subject to such limitations and restrictions as may be specified therein, will have any legal effect. In consideration of the Evaluation Material being furnished to you, you hereby agree that, for a period of two (2) years from the date hereof, neither you nor any of your affiliates will solicit to employ any of the current officers or employees of the Company with whom you have had contact or who were specifically identified to you during the period of your investigation of the Company, so long as they are employed by the Company, without obtaining the prior written consent of the Company; provided that the foregoing provision shall not prevent you from employing any such person who contacts you on his or her own initiative and without any solicitation by you, other than general solicitations not specifically directed towards employees of the Company. 3 Mr. Comas. September 13, 1999 Page 4 You agree that, for a period of two (2) years from the date of this agreement, unless such shall have been specifically agreed to in writing by the Company, neither you nor any of your affiliates (as such term is defined under the Securities Exchange Act of 1934, as amended (the "1934 Act"), will in any manner, directly or indirectly, (a) effect or seek, offer or propose (whether publicly or otherwise) to effect, or cause or participate in or in any way assist any other person to effect or seek, offer or propose (whether publicly or otherwise) to effect or participate in, (i) any acquisition of any securities (or beneficial ownership thereof) of assets of the Company or any of its subsidiaries; (ii) any tender or exchange offer, merger or other business combination involving the Company or any of its subsidiaries; (iii) any recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to the Company or any of its subsidiaries; or (iv) any "solicitation" of "proxies" (as such terms are used in the proxy rules of the Securities and Exchange Commission) or consents to vote any voting securities of the Company; (b) form, join or in any way participate in a "group" (as defined by the 1934 Act); (c) otherwise act, alone or in concert with others, to seek to control or influence the management, Board of Directors or policies of the Company; (d) take any action which might force the Company to make a public announcement regarding any of the types of matters set forth in (a) above, or (b) enter into any discussions or arrangements with any third party with respect to any of the foregoing. You understand and agree that no contract or agreement providing for any transaction involving the Company shall be deemed to exist between you and the Company unless and until a final definitive agreement has been executed and delivered. You also agree that unless and until a final definitive agreement regarding a transaction between the Company and you has been executed and delivered, neither the Company nor you will be under any legal obligation of any kind whatsoever with respect to such a transaction by virtue of this agreement except for the matters specifically agreed to herein. You further acknowledge and agree that the Company reserves the right, in its sole discretion, to reject any and all proposals made by you or any of your Representatives with regard to a transaction between the Company and you, and to terminate discussions and negotiations with you at any time. You further understand that (i) the Company and its Representatives shall be free to conduct any process for any transaction contemplated by this agreement involving the Company, if and as they in their sole discretion shall determine (including, without limitation, negotiating with any other interested parties and entering into a definitive agreement without prior notice to you or any other person); and (ii) any procedures relating to such process or transaction may be changed at any time without notice to you or any other person. Neither this paragraph nor any other provision in this agreement can be waived or amended except by written consent of the Company, which consent shall specifically refer to this paragraph (or such provision) and explicitly make such waiver or amendment. It is understood and agreed that no failure of delay by the Company in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude 4 Mr. Comas September 13, 1999 Page 5 any other or future exercise thereof or the exercise of any other right, power or privilege hereunder. It is further understood and agreed that money damages may not be a sufficient remedy for any breach of this agreement by you or any of your Representatives and that the Company shall be entitled to seek equitable relief, including injunction and specific performance, as a remedy for any such breach. Such remedies shall not be deemed to be the exclusive remedies for a breach by you of this agreement but shall be in addition to all other remedies available at law or equity to the Company. In the event of litigation relating to this agreement, if a court of competent jurisdiction determines that there has been a breach of this agreement, then the breaching party shall pay to the other party the reasonable legal fees incurred by the non-breaching party in connection with such litigation, including any appeal therefrom. This agreement shall supersede any prior letter agreement entered into by or on behalf of the Company and you and your Representatives concerning the subject matter hereof. This agreement is for the benefit of the Company and its directors, officers, shareholders, owners, affiliates, and agents, and shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts without regard to such jurisdiction's conflict of laws principles. Please confirm your agreement with the foregoing by signing and returning one copy of this letter to the undersigned, whereupon this agreement shall become a binding agreement between you and the Company. Very truly yours, KOLLMORGEN CORPORATION /s/ James A. Eder By: _________________________________ James A. Eder Vice President Accepted and agreed as of the date first written above: DANAHER CORPORATION /s/ Daniel L. Comas By __________________________________ Daniel L. Comas Vice President 5 EX-99.(D)(3) 12 CONSULTING AGRMNT DATED 5/4/00 EXHIBIT 99(d)(3) CONSULTING AGREEMENT AGREEMENT by and between Danaher Corporation, a Delaware corporation (the "Company"), and Gideon Argov (the "Consultant"), dated as of the 4th day of May, 2000. WHEREAS, pursuant to that certain Agreement and Plan of Merger (the "Merger Agreement"), dated as of the date hereof, by and among the Company, King DC Acquisition Corp., a New York corporation and a subsidiary of the Company (the "Purchaser"), and Kollmorgen Corporation, a New York corporation ("Kollmorgen"), Purchaser shall be merged with and into Kollmorgen with Kollmorgen continuing as the surviving corporation (the "Merger"); and WHEREAS, prior to consummation of the Merger, the Consultant will continue to serve as Chairman of the Board, President and Chief Executive Officer of Kollmorgen; and WHEREAS, the Board of Directors of the Company (the "Board") has determined that the Consultant will be removed as Chairman of the Board, President and Chief Executive Officer of Kollmorgen immediately upon consummation of the Merger and it is in the best interests of the Company to retain the services of the Consultant on the terms and conditions set forth below, and the Consultant is willing to render such services. NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS: 1. Benefits under Existing Agreements. Effective as of the consummation ---------------------------------- of the Merger (the "Effective Time"), the Consultant shall cease to serve as the Chairman of the Board, President and Chief Executive Officer of Kollmorgen and his employment with Kollmorgen shall terminate. Such termination of employment shall be deemed an "Involuntary Termination" under the Retention Agreement, dated March 17, 1998, between the Consultant and Kollmorgen (the "Retention Agreement"), and the Company shall cause Kollmorgen to promptly perform all its obligations under the Retention Agreement to the Consultant arising from such Involuntary Termination, except that the Consultant shall not be entitled to any severance payments under Section 3(a) of the Retention Agreement. On the Effective Time, the Consultant shall deliver to the Company the Release in the form attached as Exhibit A to the Retention Agreement (as revised to appropriately reflect this Agreement). 2. Consulting Period. The Consultant shall make himself available to ----------------- render consulting services, on the terms and conditions set forth in this Agreement, for the period beginning on the Effective Time, and ending on the earlier of (i) the sixth anniversary thereof and (ii) the date this Agreement is terminated by the Company or the Consultant upon 10 business days' advance written notice (the "Consulting Period"); provided, however, that this Agreement shall not be terminable by the Company for any reason other than the death or permanent disability of the Consultant or a material breach by the Consultant of the provisions hereof, which breach is (if curable) not cured by the Consultant within 10 business days after delivery to him by the Company of a written notice setting forth the nature of such breach in reasonable detail. 3. Consulting Services. During the Consulting Period, the Consultant ------------------- shall render such services on a part-time basis as may be reasonably requested from time to time by the Board and/or the Chief Executive Officer of the Company (taking into account the Consultant's other obligations) including, but not limited to, assisting with the integration of Kollmorgen into the Company and assisting with the Intellectual Property Claims and the Pending Acquisition (each such term as defined below). The Consultant's services shall be performed at such times and locations as shall be mutually convenient to the Consultant and the Company; provided, however, that during any month in the Consulting Period the Consultant shall not be required to perform services hereunder for more than 20 hours without his consent. 4. Consulting Fee. In consideration of the foregoing, the Company shall -------------- pay the Consultant a consulting fee in accordance with the following schedule: $1,000,000 at the Effective Time, and $78,991.34 per month for each month of the Consulting Period, in arrears. 5. Consequences of Early Termination of the Consulting Period. In the ---------------------------------------------------------- event that the Consulting Period is terminated pursuant to clause (ii) of Section 2 above, the following shall apply: (a) if such termination is as a consequence of the Consultant's death or permanent disability, the Consultant or his estate, as the case may be, shall (i) be paid a lump sum in cash equal to the sum of any earned but unpaid Consulting Fees and 12.086% of the Consulting Fee payments that would have been payable for the remainder of the Consulting Period if no such termination had occurred and (ii) continue to be entitled to payments provided in Sections 6 and 7 hereof in accordance with their respective terms; (b) if such termination is as a consequence of the Consultant's material breach of Section 10, as finally determined by a Court of competent jurisdiction, the Consultant shall (i) be paid only earned but unpaid Consulting Fees and (ii) forfeit the right to receive any future payments under Section 6 or 7 hereof; and (c) if such termination is as a consequence of any other material breach (including a resignation by the Consultant other than as a consequence of the Company's breach of this Agreement), the Consultant shall (i) be paid the lump sum cash amount described in Section 6(a)(i) above and (ii) be subject to Section 6(b)(ii) above. 6. Intellectual Property Claim Payout. The Company shall pay the ---------------------------------- Consultant an amount equal to 2% of the value of each settlement or judgment reached by or awarded to (as applicable) Kollmorgen or any of its affiliates at any time prior the sixth anniversary of the Effective Time in respect of the legal actions initiated by Kollmorgen relating to the infringement of its intellectual property rights in existence as of the Effective Time (the "Intellectual Property Claims"), less actual legal expenses and other actual expenses incurred by Kollmorgen in litigating the relevant Intellectual Property Claim ("Expenses") but before taxes (the "Success Payment"). If the payment by the defendants of settlements or judgments relating to such Intellectual Property Claims (the "Resolution Payment") is in the form of non-cash 2 consideration, such non-cash consideration shall be valued by an independent appraiser, who shall be appointed by the Company subject to the approval of the Consultant, which shall not unreasonably be withheld. If the Resolution Payment involves the payment of royalty fees, the Consultant shall be entitled to receive an amount equal to 2% of the royalty fees received throughout the period during which the royalty fee is paid (after appropriate allocation of the Expenses). The Consultant understands and agrees that the decision to prosecute or pursue any Intellectual Property Claims or to settle any such Intellectual Property Claims, and the terms of any settlement or such claims, shall be at the Company's sole discretion. 7. Transaction Finders Fee. The Company shall pay the Consultant a ----------------------- finders fee at the time of the consummation of the "D Acquisition" (the "Pending Acquisition") in an amount equal to 2% of the aggregate value of the consideration (including assumption of debt and excluding cash in hand at the acquired company) paid by Kollmorgen or any of its affiliates in connection with the consummation of the Pending Acquisition (the "Finders Fee"). The Consultant understands and agrees that both the decision to effect the Pending Acquisition and the terms of any such transaction shall be at the Company's sole discretion. Should a dispute arise between the parties hereto concerning the value of the consideration relating to the Pending Acquisition and described in this Section 7, the value of such consideration shall be determined by an independent appraiser, who shall be appointed by the Company subject to the approval of the Consultant, which shall not unreasonably be withheld. 8. Restrictive Covenants. (a) During the Consulting Period and at --------------------- all times thereafter, the Consultant shall not disclose to anyone who is not employed by the Company or an affiliate thereof (which will include, after the Effective Time, Kollmorgen), or to any employee of the Company or an affiliate who, to the knowledge of the Consultant, is not authorized to receive such information, any confidential or proprietary information of the Company or any of its affiliates or any confidential information relating to the former or present customers or potential customers of the Company or any of its affiliates of which the Consultant became aware during his employment by the Company of any of its affiliates or of which he becomes aware during the Consulting Period. The Consultant shall hold in a fiduciary capacity for the benefit of the Company or any of its affiliates, as applicable, all secret, confidential or proprietary information, knowledge or data relating to the Company or any of its affiliates and their respective businesses that the Consultant obtained during his employment by the Company or any of its affiliates or that he obtains during the Consulting Period and that is not public knowledge (other than as a result of the Consultant's violation of this Section 8(a)) ("Confidential Information"). The Consultant shall not communicate, divulge or disseminate Confidential Information at any time during or after the Consulting Period, except with the prior written consent of the Company or as otherwise required by law or legal process. If the Consultant is required by law or legal process to divulge any Confidential Information, he shall promptly inform the Company and cooperate with the Company in seeking confidential treatment for such information. (b) During the Consulting Period and for two years thereafter (the "Noncompetition Period"), the Consultant shall not, directly or indirectly, without the prior written consent of the Board, engage in or become associated with a Competitive Activity anywhere in Europe (including the Middle East) or North America except as may be required in the course of the Consultant's performance of services hereunder. For purposes of this Section 8: 3 (i) a "Competitive Activity" means any business or other endeavor that engages in the electronic motion control business in competition with Kollmorgen, the Company or any of their respective affiliates or consulting with respect thereto; and (ii) the Consultant shall be considered to have become "associated with a Competitive Activity" if he becomes directly or indirectly involved as an owner, principal, employee, officer, director, independent contractor, agent, partner, advisor, representative, stockholder, financial backer, lender or in any other capacity calling for the rendition of the Consultant's personal services, with any individual, partnership, corporation or other organization that is engaged in a Competitive Activity (a "Competitor"); provided, however, that the Consultant shall not be considered "associated with a Competitive Activity" unless he is directly or indirectly assisting, supporting, advising or otherwise providing personal services to that portion of a Competitor's business that is primarily engaged in a Competitive Activity. Notwithstanding the foregoing, the Consultant may make and retain investments during the Noncompetition Period in less than five percent of the equity of any entity that is listed on a national securities exchange or regularly traded in an over-the- counter market. (c) During the Noncompetition Period, the Consultant shall not, directly or indirectly, on behalf of the Consultant or any other person, solicit for employment by other than the Company or any of its affiliates any person who is at that time, or has within 12 months of that time been, employed by the Company or any of its affiliates. (d) The Consultant acknowledges and agrees that: (i) the purpose of the foregoing covenants, including without limitation the noncompetition covenant of Section 8(b), is to protect the goodwill, trade secrets and other confidential information of the Company (including those of Kollmorgen being acquired in the Merger); (ii) because of the nature of the business in which the Company and its affiliates are engaged and because of the nature of the confidential information to which the Consultant has access, it would be impractical and excessively difficult to determine the actual damages of the Company and its affiliates in the event the Consultant breached any of the covenants of this Section 8; and (iii) remedies at law (such as monetary damages) for any breach of the Consultant's obligations under this Section 8 would be inadequate. The Consultant therefore agrees and consents that if he commits any breach of a covenant under this Section 8 or threatens to commit any such breach, the Company shall have the right (in addition to, and not in lieu of, any other right to remedy that may be available to it) to temporary and permanent injunctive relief from a court of competent jurisdiction, without posting any bond or other security and without the necessity of proof of actual damage. If any provision of this Section 8 is finally determined by a court of competent jurisdiction to be unenforceable, the Consultant and the Company hereby agree that such court shall have jurisdiction to reform this Agreement or any provision hereof so that it is enforceable to the maximum extent permitted by law, and the parties agree to abide by such court's determination. If any of the covenants of this Section 8 are determined to be wholly or partially unenforceable in any jurisdiction, such determination shall not be a bar to or in any way diminish the Company's right to enforce any such covenant in any other jurisdiction. (e) Any termination of the Consultant's provision of consulting services or of this Agreement shall have no effect on the continuing operation and enforceability of this Section. 4 9. Successors. (a) This Agreement is personal to the Consultant ---------- and, without the prior written consent of the Company, shall not be assignable by the Consultant otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Consultant's legal representatives. (b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. 10. Miscellaneous. (a) This Agreement shall be governed by, and ------------- construed in accordance with, the laws of the State of Delaware, without reference to principles of conflict of laws. In addition, each of the parties hereto (i) 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 contemplated by this Agreement, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (iii) agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than a Federal or state court sitting in the State of Delaware, and (iv) irrevocably waives any and all rights to trial by jury in any legal proceeding arising out of or related to this Agreement or the transactions contemplated hereby. (b) The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. (c) This Agreement may not be amended or modified except by a written agreement executed by the parties hereto or their respective successors and legal representatives. (d) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. (e) The Consultant acknowledges that his services hereunder are to be rendered as an independent contractor, and that he is solely responsible for the payment of all Federal, state, local and foreign taxes that are required by applicable laws or regulations to be paid with respect to the Consulting Fee, Success Payment (if any) and Finders Fee (if any). Notwithstanding the preceding sentence, during the Consulting Period the Company may withhold from amounts payable under this Agreement all federal, state, local and foreign taxes that are required to be withheld by applicable laws or regulations. (f) The Consultant and the Company acknowledge that this Agreement supersedes any other agreement between them concerning the subject matter hereof; provided, however, that this Agreement shall in no way supersede, replace, or otherwise affect in any manner any rights which the Consultant has under any agreements between Consultant and Kollmorgen in respect of his employment by Kollmorgen, termination of such employment or otherwise. (g) This Agreement may be executed by either of the parties hereto in counterparts, each of which shall be deemed to be an original, but all such counterparts together shall together constitute one and the same instrument. 5 (h) Notwithstanding any other provision of this Agreement, this Agreement shall be null and void and of no effect if the Merger is not consummated. IN WITNESS WHEREOF, the Consultant has hereunto set his hand and, pursuant to the authorization of its Board, the Company has caused this Agreement to be executed in its name on its behalf, all as of the day and year first above written. /s/ Gideon Argov ---------------------------------- GIDEON ARGOV /s/ Daniel L. Comas ---------------------------------- DANAHER CORPORATION By: /s/ Daniel L. Comas ------------------------------- Name: Daniel L. Comas Title: Vice President 6 -----END PRIVACY-ENHANCED MESSAGE-----