-----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, SXA4SRL0E+4mXm8GTvtoJv55x1CcMC2hEoGT7TOz0Z6RfjgWkN5459RSr8IBSmzF dNEuxJTqO5YLwsuDNdqbkA== 0000950131-95-002723.txt : 19951003 0000950131-95-002723.hdr.sgml : 19951003 ACCESSION NUMBER: 0000950131-95-002723 CONFORMED SUBMISSION TYPE: SC 14D1 PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 19950929 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SYNTRO CORP /DE/ CENTRAL INDEX KEY: 0000794627 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 363114681 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 14D1 SEC ACT: 1934 Act SEC FILE NUMBER: 005-39276 FILM NUMBER: 95577330 BUSINESS ADDRESS: STREET 1: 9669 LACKMAN RD CITY: LENEXA STATE: KS ZIP: 66219 BUSINESS PHONE: 9138888876 MAIL ADDRESS: STREET 1: 9669 LACKMAN ROAD CITY: LENEXA STATE: KS ZIP: 66219 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MALLINCKRODT GROUP INC CENTRAL INDEX KEY: 0000051396 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 361263901 STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 14D1 BUSINESS ADDRESS: STREET 1: 7733 FORSYTH BLVD CITY: ST LOUIS STATE: MO ZIP: 63105 BUSINESS PHONE: 3148545299 MAIL ADDRESS: STREET 1: 7733 FORSYTH BLVD CITY: ST LOUIS STATE: MO ZIP: 63105 FORMER COMPANY: FORMER CONFORMED NAME: IMCERA GROUP INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL MINERALS & CHEMICAL CORP DATE OF NAME CHANGE: 19900614 SC 14D1 1 SCHEDULE 14D-1 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- SCHEDULE 14D-1 TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 ---------------- SYNTRO CORPORATION (NAME OF SUBJECT COMPANY) MALLINCKRODT VETERINARY ACQUISITIONS, INC. A WHOLLY OWNED SUBSIDIARY OF MALLINCKRODT VETERINARY, INC. AND AN INDIRECT WHOLLY OWNED SUBSIDIARY OF MALLINCKRODT GROUP INC. (BIDDERS) COMMON STOCK, $0.01 PAR VALUE (TITLE OF CLASS OF SECURITIES) 871629101 (CUSIP NUMBER OF CLASS OF SECURITIES) ROGER A. KELLER VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL MALLINCKRODT GROUP INC. 7733 FORSYTH BLVD. ST. LOUIS, MISSOURI 63105 (314) 854-5200 (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSONS AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS) COPIES TO THOMAS L. FARQUER DENNIS V. OSIMITZ VICE PRESIDENT, LAW SIDLEY & AUSTIN MALLINCKRODT VETERINARY, INC. ONE FIRST NATIONAL PLAZA 421 HAWLEY STREET CHICAGO, ILLINOIS 60603 MUNDELEIN, ILLINOIS 60060 (312) 853-7748 (708) 949-3733 CALCULATION OF FILING FEE - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- TRANSACTION VALUATION* AMOUNT OF FILING FEE - ------------------------------------------------------------------------------- $45,018,001 $9,004 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- * For the purpose of calculating the fee only, this amount assumes the purchase of 12,681,127 shares of Common Stock of Syntro Corporation at $3.55 per share. Such number of shares includes all outstanding shares as of September 22, 1995, and assumes the exercise of all outstanding stock options issued pursuant to the 1984 Incentive Stock Option Plan, the 1988 Executive Stock Option Plan, the 1988 Stock Option Plan and the 1994 Stock Option Plan, and agreements with certain consultants, of the Company. [_]Check 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: FILING PARTY: FORM OR REGISTRATION NO.: DATE FILED: - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- This Statement relates to a tender offer by Mallinckrodt Veterinary Acquisitions, Inc., a Delaware corporation (the "Offeror") and a wholly owned subsidiary of Mallinckrodt Veterinary, Inc., a Delaware corporation ("Mallinckrodt Veterinary"), and an indirect wholly owned subidiary of Mallinckrodt Group Inc., a New York corporation ("Mallinckrodt Group"), to purchase all outstanding shares of common stock, par value $0.01 per share (the "Shares"), of Syntro Corporation, a Delaware corporation (the "Company"), at a purchase price of $3.55 per Share, net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated September 29, 1995 (the "Offer to Purchase"), and in the related Letter of Transmittal (which together constitute the "Offer"), copies of which are filed as Exhibits (a)(1) and (a)(2) hereof, respectively, and which are incorporated herein by reference. ITEM 1. SECURITY AND SUBJECT COMPANY. (a) The name of the subject company is Syntro Corporation. The address of the principal executive offices of the Company is set forth in Section 8 ("Certain Information Concerning the Company") of the Offer to Purchase and is incorporated herein by reference. (b) The exact title of the class of equity securities being sought in the Offer is the Common Stock, par value $0.01 per share, of the Company. The information set forth in the Introduction to the Offer to Purchase is incorporated herein by reference. (c) The information set forth in Section 6 ("Price Range of Shares; Dividends") of the Offer to Purchase is incorporated herein by reference. ITEM 2. IDENTITY AND BACKGROUND. (a) through (d), (g): The information set forth in the Introduction and Section 9 ("Certain Information Concerning Mallinckrodt Group, Mallinckrodt Veterinary and the Offeror") of the Offer to Purchase, and in Annex I thereto, is incorporated herein by reference. (e) and (f): None of the Offeror, Mallinckrodt Veterinary or Mallinckrodt Group, nor, to their knowledge, any of the persons listed in Annex I of the Offer to 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 a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation of such laws. ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY. (a) None. (b) The information set forth in the Introduction and Section 11 ("Background of the Offer; Past Contacts, Transactions or Negotiations with the Company") of the Offer to Purchase is incorporated herein by reference. ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a) and (b): The information set forth in Section 10 ("Source and Amount of Funds") of the Offer to Purchase is incorporated herein by reference. (c) Not applicable. 2 ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER. (a) through (e): The information set forth in the Introduction, Section 11 ("Background of the Offer; Past Contacts, Transactions or Negotiations with the Company"), Section 12 ("Purpose of the Offer and the Merger; Plans for the Company") and Section 13 ("The Merger Agreement") of the Offer to Purchase is incorporated herein by reference. (f) and (g): The information set forth in Section 7 ("Effect of the Offer on Market for Shares, Stock Quotation and Registration under the Exchange Act") of the Offer to Purchase is incorporated herein by reference. ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY. (a) and (b): The information set forth in the Introduction and Section 9 ("Certain Information Concerning Mallinckrodt Group, Mallinckrodt Veterinary and the Offeror") of the Offer to Purchase is incorporated herein by reference. ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE SUBJECT COMPANY'S SECURITIES. The information set forth in the Introduction, Section 11 ("Background of the Offer; Past Contacts, Transactions or Negotiations with the Company") and Section 13 ("The Merger Agreement") of the Offer to Purchase is incorporated herein by reference. ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED. The information set forth in the Introduction and in Section 17 ("Fees and Expenses") of the Offer to Purchase is incorporated herein by reference. ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS. The information set forth in Section 9 ("Certain Information Concerning Mallinckrodt Group, Mallinckrodt Veterinary and the Offeror") of the Offer to Purchase is incorporated herein by reference. The incorporation by reference herein of the above-mentioned financial information does not constitute an admission that such information is material to a decision by a security holder of the Company as whether to sell, tender or hold Shares being sought in the Offer. ITEM 10. ADDITIONAL INFORMATION. (a) Not applicable. (b) and (c) The information set forth in Section 16 ("Certain Legal Matters") of the Offer to Purchase is incorporated herein by reference. (d) The information set forth in Section 7 ("Effect of the Offer on Market for Shares, Stock Quotation and Registration under the Exchange Act") of the Offer to Purchase is incorporated herein by reference. (e) None. (f) The information set forth in the Offer to Purchase and the Letter of Transmittal is incorporated herein by reference in its entirety. 3 ITEM 11. MATERIAL TO BE FILED AS EXHIBITS. (a)(1) Offer to Purchase, dated September 29, 1995. (a)(2) Letter of Transmittal. (a)(3) Letter from Goldman, Sachs & Co., as Dealer Managers to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(4) Letter from Brokers, Dealers, Commercial Banks, Trust Com- panies and Other Nominees to Clients. (a)(5) Notice of Guaranteed Delivery. (a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(7) Summary Announcement, dated September 29, 1995. (a)(8) Press Release issued by Mallinckrodt Group and the Company on September 25, 1995. (a)(9) Press Release issued by Mallinckrodt Group on September 29, 1995. (c) Agreement and Plan of Merger, dated as of September 25, 1995, among Mallinckrodt Veterinary, the Offeror and the Company. (d) None. (e) Not applicable. (f) None.
4 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: September 29, 1995 Mallinckrodt Group Inc. /s/ Roger A. Keller By: _________________________________ Name: Roger A. Keller Title:Vice President, Secretary and General Counsel Mallinckrodt Veterinary, Inc. /s/ Paul D. Cottone By: _________________________________ Name: Paul D. Cottone Title:President Mallinckrodt Veterinary Acquisitions, Inc. /s/ Paul D. Cottone By: _________________________________ Name: Paul D. Cottone Title:President 5 EX-99.A1 2 OFFER TO PURCHASE EXHIBIT (a)(1) OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF SYNTRO CORPORATION AT $3.55 NET PER SHARE BY MALLINCKRODT VETERINARY ACQUISITIONS, INC. A WHOLLY OWNED SUBSIDIARY OF MALLINCKRODT VETERINARY, INC. AND AN INDIRECT WHOLLY OWNED SUBSIDIARY OF MALLINCKRODT GROUP INC. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, OCTOBER 27, 1995, UNLESS THE OFFER IS EXTENDED. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (i) THERE BEING VALIDLY TENDERED BY THE EXPIRATION DATE AND NOT WITHDRAWN THAT NUMBER OF SHARES OF COMMON STOCK OF SYNTRO CORPORATION (THE "COMPANY") REPRESENTING AT LEAST A MAJORITY OF THE OUTSTANDING SHARES ON A FULLY DILUTED BASIS, (ii) RECEIPT BY THE OFFEROR (AS DEFINED HEREIN) OF ALL NECESSARY GOVERNMENTAL APPROVALS AND (iii) SATISFACTION OF CERTAIN OTHER TERMS AND CONDITIONS. SEE SECTION 15. THE OFFER IS BEING MADE IN CONNECTION WITH THE AGREEMENT AND PLAN OF MERGER DATED AS OF SEPTEMBER 25, 1995, AMONG MALLINCKRODT VETERINARY, INC., MALLINCKRODT VETERINARY ACQUISITIONS, INC. AND THE COMPANY. THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER, THE MERGER AND THE MERGER AGREEMENT, HAS DETERMINED THAT THE TERMS OF EACH OF THE OFFER AND THE MERGER AND THE TERMS OF THE MERGER AGREEMENT ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY'S STOCKHOLDERS AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES IN THE OFFER. IMPORTANT Any stockholder desiring to tender Shares (as defined herein) should either (i) complete and sign the Letter of Transmittal or a facsimile thereof in accordance with the instructions in the Letter of Transmittal and deliver the Letter of Transmittal with the Shares and all other required documents to the Depositary, or follow the procedure for book-entry transfer set forth in Section 3 or (ii) request such stockholder's broker, dealer, commercial bank, trust company or other nominee to effect the transaction for the stockholder. A stockholder having Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such person if such stockholder desires to tender his Shares. Any stockholder who desires to tender Shares and cannot deliver such Shares and all other required documents to the Depositary prior to the expiration of the Offer must tender such Shares pursuant to the guaranteed delivery procedure set forth in Section 3. Questions and requests for assistance or additional copies of this Offer to Purchase and the Letter of Transmittal may be directed to the Information Agent or the Dealer Managers at their respective addresses and telephone numbers set forth on the back cover of this Offer to Purchase. The Dealer Managers for the Offer are: GOLDMAN, SACHS & CO. September 29, 1995 TABLE OF CONTENTS
PAGE ---- Introduction............................................................. 1 1. Terms of the Offer................................................. 2 2. Acceptance for Payment and Payment for Shares...................... 4 3. Procedure for Tendering Shares..................................... 5 4. Withdrawal Rights.................................................. 7 5. Certain Federal Income Tax Consequences............................ 8 6. Price Range of Shares; Dividends................................... 8 7. Effect of the Offer on Market for Shares, Stock Quotation and Registration under the Exchange Act............................... 9 8. Certain Information Concerning the Company......................... 10 9. Certain Information Concerning Mallinckrodt Group, Mallinckrodt Veterinary and the Offeror........................................ 13 10. Source and Amount of Funds......................................... 14 11. Background of the Offer; Past Contacts, Transactions or 15 Negotiations with the Company..................................... 12. Purpose of the Offer and the Merger; Plans for the Company......... 16 13. The Merger Agreement............................................... 18 14. Dividends and Distributions........................................ 26 15. Certain Conditions to the Offeror's Obligations.................... 27 16. Certain Legal Matters.............................................. 29 17. Fees and Expenses.................................................. 30 18. Miscellaneous...................................................... 31 Annex I. Certain Information Concerning the Directors and Executive Officers of Mallinckrodt Group, Mallinckrodt Veterinary and the Offeror.......................................................... A-1
i TO THE HOLDERS OF COMMON STOCK OF SYNTRO CORPORATION INTRODUCTION Mallinckrodt Veterinary Acquisitions, Inc., a Delaware corporation (the "Offeror") and a wholly owned subsidiary of Mallinckrodt Veterinary, Inc., a Delaware corporation ("Mallinckrodt Veterinary"), and an indirect wholly owned subsidiary of Mallinckrodt Group Inc., a New York corporation ("Mallinckrodt Group"), hereby offers to purchase all outstanding shares of Common Stock, par value $0.01 per share (the "Shares"), of Syntro Corporation, a Delaware corporation (the "Company"), at a purchase price of $3.55 per Share, net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which together constitute the "Offer"). Tendering holders of Shares will not be obligated to pay brokerage fees or commissions or, except as set forth in the Letter of Transmittal, transfer taxes on the purchase of Shares by the Offeror pursuant to the Offer. The Offeror will pay all charges and expenses of Goldman, Sachs & Co. (the "Dealer Managers"), First Chicago Trust Company of New York (the "Depositary") and Georgeson & Company Inc. (the "Information Agent") in connection with the Offer. THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER, THE MERGER (AS HEREINAFTER DEFINED) AND THE MERGER AGREEMENT (AS HEREINAFTER DEFINED), HAS DETERMINED THAT THE TERMS OF EACH OF THE OFFER, THE MERGER AND THE MERGER AGREEMENT ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY'S STOCKHOLDERS, AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES IN THE OFFER. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF SHARES WHICH WILL REPRESENT NOT LESS THAN A MAJORITY OF THE SHARES OUTSTANDING ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE (THE "MINIMUM CONDITION"). THE OFFER IS ALSO CONDITIONED UPON THE OFFEROR OBTAINING THE NECESSARY GOVERNMENTAL APPROVALS. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS. SEE SECTION 15. Piper Jaffray Inc. ("Piper Jaffray"), the Company's financial advisor, has delivered to the Company's Board of Directors its written opinion that the consideration to be received by the stockholders of the Company pursuant to the Offer and the Merger is fair to such stockholders from a financial point of view. A copy of such opinion is contained in the Company's Statement on Schedule 14D-9 which is being distributed to the Company's stockholders. The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of September 25, 1995 (the "Merger Agreement"), among Mallinckrodt Veterinary, the Offeror and the Company. The Merger Agreement provides that, among other things, as soon as practicable after the purchase of Shares pursuant to the Offer and the satisfaction of the other conditions set forth in the Merger Agreement and in accordance with the relevant provisions of the General Corporation Law of the State of Delaware, as amended (the "DGCL"), the Offeror will be merged with and into the Company (the "Merger"). See Section 12. Following consummation of the Merger, the Company will continue as the surviving corporation (the "Surviving Corporation") and will be a wholly owned subsidiary of Mallinckrodt Veterinary. At the effective time of the Merger (the "Effective Time"), each issued and outstanding Share (other than Shares owned by the Company as treasury stock, Shares owned by any subsidiary of the Company, Shares owned by Mallinckrodt Veterinary or the Offeror or any subsidiary thereof, or Shares with respect to which appraisal rights are properly exercised under Delaware law ("Dissenting Shares")), will be converted into and represent the right to receive $3.55 (or any higher price that may be paid for each Share pursuant to the Offer) in cash, without interest thereon (the "Offer Price"). See Section 5 for a description of certain tax consequences of the Offer and the Merger. The Merger Agreement provides that, promptly upon the purchase of Shares pursuant to the Offer, Mallinckrodt Veterinary will be entitled to designate for election to the Board of Directors of the Company a number of directors (rounded up to the next whole number) equal to that number of directors which equals the product of (i) the total number of directors on such Board and (ii) the percentage that the aggregate number of Shares purchased by the Offeror bears to the total number of outstanding Shares. The Company has agreed, upon the request by Mallinckrodt Veterinary, to promptly increase the size of the Board of Directors of the Company and/or use its reasonable best efforts to secure the resignations of such number of directors as is necessary to enable Mallinckrodt Veterinary's designees to be elected to the Board and to cause Mallinckrodt Veterinary's designees to be so elected. The Company has advised the Offeror that as of September 22, 1995, there were (a) 11,454,185 Shares issued and outstanding, and (b) outstanding stock options to purchase an aggregate of 1,226,942 Shares. As of the date hereof, neither the Offeror, Mallinckrodt Veterinary nor Mallinckrodt Group beneficially owns any Shares. If the Offeror acquires at least 6,340,564 Shares in the Offer, it will control a majority of the outstanding Shares on a fully diluted basis. Accordingly, the Offeror would have sufficient voting power to approve the Merger without the affirmative vote of any other stockholder. If the Offeror acquires 90% or more of the outstanding Shares through the Offer, the Offeror would be able to effect the Merger pursuant to the short form merger provisions of the DGCL, without prior notice to, or any action by, any other stockholder of the Company. THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. 1. TERMS OF THE OFFER. 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), the Offeror will accept for payment and pay for all Shares validly tendered prior to the Expiration Date and not theretofore withdrawn in accordance with Section 4. The term "Expiration Date" means 12:00 Midnight, New York City time, on Friday, October 27, 1995, unless the Offeror shall have extended the period of time for which the Offer is open, in which event the term "Expiration Date" shall mean the latest time and date at which the Offer, as so extended by the Offeror, shall expire. If the Offeror shall decide, in its sole discretion, to increase the consideration offered in the Offer to holders of Shares and if, at the time that notice of such increase is first published, sent or given to holders of Shares in the manner specified below, the Offer is scheduled to expire at any time earlier than the expiration of a period ending on the tenth business day from, and including, the date that such notice is first so published, sent or given, then the Offer will be extended until the expiration of such period of ten business days. For purposes of the Offer, a "business day" means any day other than a Saturday, Sunday or a 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 SATISFACTION OF THE MINIMUM CONDITION AND THE OFFEROR OBTAINING CERTAIN GOVERNMENTAL APPROVALS. THE MERGER AGREEMENT AND THE OFFER MAY BE TERMINATED BY THE OFFEROR AND MALLINCKRODT VETERINARY IF CERTAIN EVENTS OCCUR. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS. SEE SECTION 15. The Offeror reserves the right (but shall not be obligated), in accordance with applicable rules and regulations of the United States Securities and Exchange Commission (the "Commission"), subject to the limitations set forth in the Merger Agreement and described below, to waive or reduce the Minimum Condition or to waive any other condition to the Offer. If the Minimum Condition or any of the other conditions set forth in Section 15, have not been satisfied, by 12:00 Midnight, New York City time, on Friday, October 27, 1995 (or any other time then 2 set as the Expiration Date), the Offeror may, subject to the terms of the Merger Agreement as described below, elect to (1) extend the Offer and, subject to applicable withdrawal rights, retain all tendered Shares until the expiration of the Offer, as extended, (2) subject to complying with applicable rules and regulations of the Commission, accept for payment all Shares so tendered and not extend the Offer, or (3) terminate the Offer and not accept for payment any Shares and return all tendered Shares to tendering stockholders. Under the terms of the Merger Agreement, the Offeror may not (except as described in the next sentence), without prior written consent of the Company, waive the Minimum Condition, reduce the number of Shares subject to the Offer, reduce the price per Share to be paid pursuant to the Offer, extend the Offer if all of the Offer conditions are satisfied or waived, change the form of consideration payable in the Offer, or amend, add or waive any term or condition of the Offer in any manner that would adversely affect the Company or its stockholders. Notwithstanding the foregoing, the Offeror may, without the consent of the Company, extend the Offer (i) if, at the then scheduled Expiration Date of the Offer, any of the conditions shall not have been satisfied or waived, (ii) for any period required by any rule, regulation, interpretation or position of the Commission or the Commission staff applicable to the Offer or (iii) if all Offer conditions are satisfied or waived but the number of Shares tendered is less than 90% of the then outstanding number of Shares for an aggregate period of not more than 15 business days (for all such extensions) beyond the latest expiration date that would be permitted under clause (i) or (ii) of this sentence. Subject to the limitations set forth in the Merger Agreement and described below, the Offeror reserves the right (but will not be obligated), at any time or from time to time in its sole discretion, to extend the period during which the Offer is open by giving oral or written notice of such extension to the Depositary and by making a public announcement of such extension. There can be no assurance that the Offeror will exercise its right to extend the Offer. Subject to the applicable rules and regulations of the Commission and subject to the limitations set forth in the Merger Agreement, the Offeror also expressly reserves the right, at any time and from time to time, in its sole discretion, (i) to delay payment for any Shares regardless of whether such Shares were theretofore accepted for payment, or to terminate the Offer and not to accept for payment or pay for any Shares not theretofore accepted for payment or paid for, upon the occurrence of any of the conditions set forth in Section 15, by giving oral or written notice of such delay or termination to the Depositary, and (ii) at any time or from time to time, to amend the Offer in any respect. The Offeror's right to delay payment for any Shares or not to pay for any Shares theretofore accepted for payment is subject to the applicable rules and regulations of the Commission, including Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), relating to the Offeror's obligation to pay for or return tendered Shares promptly after the termination or withdrawal of the Offer. Any extension of the period during which the Offer is open, delay in acceptance for payment or payment, termination or amendment of the Offer will be followed, as promptly as practicable, by public announcement thereof, such announcement in the case of an extension to be issued not later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date in accordance with the public announcement requirements of Rules 14d-4(c) and 14e-1(d) under the Exchange Act. Without limiting the obligation of the Offeror under such rule or the manner in which the Offeror may choose to make any public announcement, the Offeror currently intends to make announcements by issuing a press release to the Dow Jones News Service and making any appropriate filing with the Commission. If the Offeror makes a material change in the terms of the Offer or the information concerning the Offer, or if it waives a material condition of the Offer (including a waiver of the Minimum Condition), the Offeror will disseminate additional tender offer materials and extend the Offer if and to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act or otherwise. The minimum period during which a tender offer must remain open following material changes in the terms of the 3 offer or the information concerning the offer, other than a change in price or a change in percentage of securities sought, depends upon the facts and circumstances, including the relative materiality of the terms or information changes. With respect to a change in price or a change in percentage of securities sought, a minimum ten business day period is generally required to allow for adequate dissemination to stockholders and investor response. The Company has provided the Offeror with the Company's list of stockholders and security position listings for the purpose of disseminating the Offer to holders of Shares. This Offer to Purchase and the Letter of Transmittal will be mailed to record holders of the Shares and will be furnished to brokers, dealers, commercial banks, trust companies and persons whose names, or the names of whose nominees, appear on the list of stockholders or, if applicable, who are listed as participants in a clearing agency's security position listing for subsequent transmittal to beneficial owners of Shares. 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the Offeror will accept for payment and will pay for all Shares validly tendered prior to the Expiration Date and not theretofore withdrawn in accordance with Section 4 promptly after the later to occur of (a) the Expiration Date and (b) subject to compliance with Rule 14e-1(c) under the Exchange Act, the satisfaction or waiver of the conditions set forth in Section 15. Subject to compliance with Rule 14e-1(c) under the Exchange Act, the Offeror expressly reserves the right to delay payment for Shares in order to comply in whole or in part with any applicable law. See Sections 1 and 16. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) certificates for such Shares or timely confirmation (a "Book-Entry Confirmation") of a book- entry transfer of such Shares into the Depositary's account at The Depository Trust Company, the Midwest Securities Trust Company or the Philadelphia Depository Trust Company (collectively, the "Book-Entry Transfer Facilities"), pursuant to the procedures set forth in Section 3, (ii) a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) with all required signature guarantees or, in the case of a book-entry transfer, an Agent's Message (as defined below) and (iii) any other documents required by the Letter of Transmittal. The term "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 states that such Book-Entry Transfer Facility has received an express acknowledgment from the participant in such Book-Entry Transfer Facility tendering the Shares that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Offeror may enforce such agreement against the participant. For purposes of the Offer, the Offeror will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered and not withdrawn as, if and when the Offeror gives oral or written notice to the Depositary of the Offeror's acceptance of such Shares for payment. In all cases, payment for Shares purchased pursuant to the Offer will be made by deposit of the purchase price with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payment from the Offeror and transmitting such payment to tendering stockholders. If, for any reason whatsoever, acceptance for payment of any Shares tendered pursuant to the Offer is delayed, or the Offeror is unable to accept for payment Shares tendered pursuant to the Offer, then, without prejudice to the Offeror's rights under Section 1, the Depositary may, nevertheless, on behalf of the Offeror, retain tendered Shares, and such Shares may not be withdrawn, except to the extent that the tendering stockholders are entitled to withdrawal rights as described in Section 4 below and as otherwise required by Rule 14e-1(c) under the Exchange Act. Under no circumstances will interest be paid by the Offeror because of any delay in making such payment. 4 If any tendered Shares are not accepted for payment pursuant to the terms and conditions of the Offer for any reason, or if certificates are submitted for more Shares than are tendered, certificates for such unpurchased or untendered Shares will be returned, without expense to the tendering stockholder (or, in the case of Shares delivered by book-entry transfer to a Book-Entry Transfer Facility, such Shares will be credited to an account maintained within such Book-Entry Transfer Facility), as promptly as practicable after the expiration, termination or withdrawal of the Offer. If, prior to the Expiration Date, the Offeror increases the price being paid for Shares accepted for payment pursuant to the Offer, such increased consideration will be paid to all stockholders whose Shares are purchased pursuant to the Offer, whether or not such Shares were tendered prior to such increase in consideration. 3. PROCEDURE FOR TENDERING SHARES. Valid Tenders. For Shares to be validly tendered pursuant to the Offer, (i) a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof), with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message, and any other required documents, must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase and certificates representing such Shares must be received by the Depositary at such address or such Shares must be tendered pursuant to the procedure for book-entry transfer set forth below, and a Book-Entry Confirmation must be received by the Depositary, in each case prior to the Expiration Date, or (ii) the tendering stockholder must comply with the guaranteed delivery procedures set forth below. No alternative, conditional or contingent tenders will be accepted. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. Book-Entry Transfer. The Depositary will make a request to establish an account with respect to the Shares at each 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 a Book-Entry Transfer Facility's system may make book-entry delivery of Shares by causing a Book-Entry Transfer Facility to transfer such Shares into the Depositary's account at a Book-Entry Transfer Facility in accordance with such Book-Entry Transfer Facility's procedures for transfer. Although delivery of Shares may be effected through book-entry at a Book-Entry Transfer Facility prior to the Expiration Date, (i) the Letter of Transmittal (or a manually signed facsimile thereof), properly completed and duly executed, with any required signature guarantees, or an Agent's Message in connection with a book-entry transfer, and any other required documents, must, in any case, be transmitted to and received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase or (ii) the guaranteed delivery procedures described below must be complied with. Signature Guarantee. Signatures on the Letter of Transmittal must be guaranteed by a member in good standing of the Securities Transfer Agents Medallion Program, or by any other bank, broker, dealer, credit union, savings association or other entity which is an "eligible guarantor institution," as such term is defined in Rule 17Ad-15 under the Exchange Act (each of the foregoing being referred to as an "Eligible Institution" and, collectively, as "Eligible Institutions"), unless the Shares tendered thereby are tendered (i) by a registered holder of Shares who has not completed either the box labeled "Special Delivery Instructions" or the box labeled "Special Payment Instructions" on the Letter of Transmittal or (ii) for the account of any Eligible Institution. If the certificates evidencing Shares are registered in the name of a person or persons other than the signer of the Letter of Transmittal, or if payment is to be made, or delivered to, or certificates for unpurchased Shares are to be issued or returned to, a person other than the registered owner or owners, then the tendered certificates must be endorsed or accompanied by duly executed stock powers, in either case signed exactly as the name or names of the registered owner or owners appear on the certificates, with the signatures on the certificates or stock powers guaranteed by an Eligible Institution as provided in the Letter of Transmittal. See Instructions 1 and 5 to the Letter of Transmittal. 5 Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to the Offer and such stockholder's certificates for Shares are not immediately available or time will not permit all required documents to reach the Depositary prior to the Expiration Date or the procedure for book-entry transfer cannot be completed on a timely basis, such Shares may nevertheless be tendered if all of the following guaranteed delivery procedures are duly complied with: (i) the tender is made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by the Offeror, is received by the Depositary, as provided below, prior to the Expiration Date; and (iii) the certificates for all tendered Shares, in proper form for transfer (or a Book-Entry Confirmation), together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof), and any required signature guarantees, or, in the case of a book- entry transfer, an Agent's Message, and any other documents required by the Letter of Transmittal are received by the Depositary within three trading days after the date of such Notice of Guaranteed Delivery. A "trading day" is any day on which the National Association of Securities Dealers Automated Quotation ("Nasdaq") National Market is open for business. The Notice of Guaranteed Delivery may be delivered by hand or transmitted by telegram, facsimile transmission or mail to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in the Notice of Guaranteed Delivery. THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. Notwithstanding any other provision hereof, payment for Shares accepted for payment pursuant to the Offer will in all cases be made only after timely receipt by the Depositary of (i) certificates for such Shares or a Book-Entry Confirmation, (ii) a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof), with all required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message, and (iii) any other documents required by the Letter of Transmittal. BACKUP FEDERAL INCOME TAX WITHHOLDING. TO PREVENT "BACKUP" FEDERAL INCOME TAX WITHHOLDING WITH RESPECT TO PAYMENT OF THE PURCHASE PRICE OF SHARES PURCHASED PURSUANT TO THE OFFER, EACH STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH SUCH STOCKHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER ("TIN") AND CERTIFY THAT SUCH STOCKHOLDER IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL. FOREIGN HOLDERS MUST SUBMIT A COMPLETED IRS FORM W-8 TO AVOID 31% BACKUP WITHHOLDING. THIS FORM MAY BE OBTAINED FROM THE DEPOSITARY. SEE INSTRUCTIONS 8 AND 9 SET FORTH IN THE LETTER OF TRANSMITTAL. 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 the Offeror, in its sole discretion, and its determination will be final and binding on all parties. The Offeror reserves the absolute right to reject any or all tenders of any Shares that are determined by it not to be in proper form or the acceptance of or payment for which may, in the opinion of the Offeror, be unlawful. The Offeror also reserves the absolute right to waive any of the conditions of the Offer, subject to the limitations set forth in the Merger Agreement, or any defect or irregularity in the tender of any Shares. The Offeror's interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the Instructions to the Letter of Transmittal) will be final and binding on all parties. No tender of Shares will be deemed to have been validly made until all defects and irregularities have been cured or waived. None of the Offeror, Mallinckrodt Veterinary, Mallinckrodt Group, the Dealer Managers, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. 6 Other Requirements. By executing the Letter of Transmittal as set forth above, a tendering stockholder irrevocably appoints designees of the Offeror as such stockholder's proxies, each with full power of substitution, in the manner set forth in the Letter of Transmittal, to the full extent of such stockholder's right with respect to the Shares tendered by such stockholder and accepted for payment by the Offeror (and any and all other Shares or other securities or rights issued or issuable in respect of such Shares on or after September 22, 1995). All such proxies shall be considered coupled with an interest in the tendered Shares. This appointment is effective when, and only to the extent that, the Offeror accepts for payment the Shares deposited with the Depositary. Upon acceptance for payment, all prior proxies given by the stockholder with respect to such Shares or other securities or rights will, without further action, be revoked and no subsequent proxies may be given or written consent executed (and, if given or executed, will not be deemed effective). The designees of the Offeror will, with respect to the Shares and other securities or rights, be empowered to exercise all voting and other rights of such stockholder as they in their sole judgment deem proper in respect of any opinion or special meeting of the Company's stockholders, or any adjournment or postponement thereof. The Offeror reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon the Offeror's payment for such Shares, the Offeror must be able to exercise full voting and other rights with respect to such Shares and the other securities or rights issued or issuable in respect of such Shares, including voting at any meeting of stockholders (whether annual or special or whether or not adjourned) in respect of such Shares. 4. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section 4, tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date and, unless theretofore accepted for payment pursuant to the Offer, may also be withdrawn at any time after Monday, November 27, 1995. If purchase of or payment for Shares is delayed for any reason or if the Offeror is unable to purchase or pay for Shares for any reason, then, without prejudice to the Offeror's rights under the Offer, tendered Shares may be retained by the Depositary on behalf of the Offeror and may not be withdrawn except to the extent that tendering stockholders are entitled to withdrawal rights as set forth in this Section 4, subject to Rule 14e-1(c) under the Exchange Act, which provides that no person who makes a tender offer shall fail to pay the consideration offered or return the securities deposited by or on behalf of security holders promptly after the termination or withdrawal of the Offer. For a withdrawal of Shares tendered pursuant to the Offer to be effective, a written, telegraphic 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 this 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 in which the certificates representing such Shares are registered, if different from that of the person who tendered the Shares. If certificates for Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such certificates, the serial numbers shown on such certificates must be submitted to the Depositary and, unless such Shares have been tendered by an Eligible Institution, the signatures on the notice of withdrawal must be guaranteed by an Eligible Institution. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Offeror, in its sole discretion, and its determination will be final and binding on all parties. None of the Offeror, Mallinckrodt Veterinary, Mallinckrodt Group, the Dealer Managers, 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 any such notification. Any Shares properly withdrawn will be deemed not validly tendered for purposes of the Offer, but may be retendered at any subsequent time prior to the Expiration Date by following any of the procedures described in Section 3. 7 5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The following is a summary of the principal United States federal income tax consequences of the Offer and the Merger to holders whose Shares are purchased pursuant to the Offer or whose Shares are converted to cash in the Merger (including pursuant to the exercise of appraisal rights). The discussion applies only to holders of Shares in whose hands Shares are capital assets, and may not apply to Shares received pursuant to the exercise of employee stock options or otherwise as compensation, or to holders of Shares who are in special tax situations (such as insurance companies, tax-exempt organizations or dealers in securities). This discussion does not discuss the federal income tax consequences to a holder of Shares who, for United States federal income tax purposes, is a non-resident alien individual, a foreign corporation, a foreign partnership or a foreign estate or trust. THE FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW ARE INCLUDED FOR GENERAL INFORMATIONAL PURPOSES ONLY AND ARE BASED UPON CURRENT LAW. BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH HOLDER OF SHARES SHOULD CONSULT SUCH HOLDER'S OWN TAX ADVISOR TO DETERMINE THE APPLICABILITY OF THE RULES DISCUSSED BELOW TO SUCH STOCKHOLDER AND THE PARTICULAR TAX EFFECTS TO SUCH STOCKHOLDER OF THE OFFER AND THE MERGER, INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL AND OTHER INCOME TAX LAWS. The receipt of cash for Shares pursuant to the Offer or the Merger will be a taxable transaction for federal income tax purposes (and also may be a taxable transaction under applicable state, local and other income tax laws). In general, for federal income tax purposes, a holder of Shares will recognize gain or loss equal to the difference between his or her adjusted tax basis in the Shares sold pursuant to the Offer or converted to cash in the Merger and the amount of cash received therefor. Gain or loss must be determined separately for each block of Shares (i.e., Shares acquired at the same cost in a single transaction) sold pursuant to the Offer or converted to cash in the Merger. Such gain or loss will be capital gain or loss and will be long-term gain or loss if the Shares were held for more than one year on the date of sale (in the case of the Offer) or the Effective Time of the Merger (in the case of the Merger). The receipt of cash for Shares pursuant to the exercise of appraisal rights will generally be taxed in the same manner as described above. Long-term capital gain of individuals currently is taxed at a maximum rate of 28%. Legislative proposals are pending that would decrease the tax rate applicable to an individual's long-term capital gains. It is not known whether any such proposal will be enacted, and, if enacted, what the new rate will be (if it is changed) and when any new rate will become effective. Payments in connection with the Offer or the Merger may be subject to "backup withholding" at a rate of 31%, unless a stockholder (a) is a corporation or comes within certain exempt categories and, when required, demonstrates this fact or (b) provides a correct TIN, certifies as to no loss of exemption from backup withholding and otherwise complies with applicable requirements of the backup withholding rules. A stockholder who does not provide a correct TIN may be subject to penalties imposed by the Internal Revenue Service. Any amount paid as backup withholding will be creditable against the stockholder's tax liability. Each stockholder should consult with his or her own tax advisor as to his or her qualification for exemption from backup withholding and the procedure for obtaining such exemption. Stockholders tendering their Shares in the Offer may prevent backup withholding by completing the Substitute Form W-9 included in the Letter of Transmittal. See Section 3. Similarly, stockholders who convert their Shares into cash in the Merger may prevent backup withholding by completing a Substitute Form W-9 and submitting it to the paying agent for the Merger. 6. PRICE RANGE OF SHARES; DIVIDENDS. According to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1994 (the "1994 10-K"), the Shares are principally traded on the Nasdaq National Market. The following table sets forth for the periods indicated the high and low sales prices per Share on the Nasdaq National 8 Market as reported by the Company in the 1994 10-K with respect to the years ended September 30, 1993 and September 30, 1994, and as reported by published financial sources with respect to periods after September 30, 1994.
HIGH LOW ----- ---- FISCAL 1993: First Quarter................................................ $6.00 3.75 Second Quarter............................................... 5.38 4.13 Third Quarter................................................ 4.88 3.38 Fourth Quarter............................................... 3.88 3.00 FISCAL 1994: First Quarter................................................ 4.25 2.75 Second Quarter............................................... 3.25 2.25 Third Quarter................................................ 3.13 1.88 Fourth Quarter............................................... 2.88 2.00 FISCAL 1995: First Quarter................................................ 2.63 1.75 Second Quarter............................................... 2.25 1.00 Third Quarter................................................ 2.63 1.25 Fourth Quarter (through September 28, 1995).................. 3.44 1.75
On September 22, 1995, the last full day of trading prior to the public announcement of the execution of the Merger Agreement, the closing price per Share as reported on the Nasdaq National Market was $2.50. On September 28, 1995, the last full day of trading prior to the commencement of the Offer, the closing price per Share as reported on the Nasdaq National Market was $3.38. Stockholders are urged to obtain current market quotations for the Shares. The Company has not paid any dividends since its inception. Under the terms of the Merger Agreement, the Company is prohibited from paying any dividends. 7. EFFECT OF THE OFFER ON MARKET FOR SHARES, STOCK QUOTATIONS AND REGISTRATION UNDER THE EXCHANGE ACT. The purchase of the Shares by the Offeror pursuant to the Offer will reduce the number of Shares that might otherwise trade publicly and will reduce the number of holders of Shares, which will adversely affect the liquidity and market value of the remaining Shares held by stockholders other than the Offeror. The Company has advised the Offeror that, as of September 22, 1995, there were approximately 600 stockholders of record and approximately 4,900 beneficial owners of the Shares. Depending upon the number of Shares purchased pursuant to the Offer, the Shares may no longer meet the requirements of the National Association of Securities Dealers, Inc. ("NASD") for continued inclusion in the Nasdaq National Market (the top tier market of The Nasdaq Stock Market), which require, among other things, that an issuer have at least 200,000 publicly held shares, held by at least 400 shareholders or 300 shareholders of round lots, with a market value of $1,000,000, and have net tangible assets of at least either $1,000,000, $2,000,000 or $4,000,000, depending on profitability levels during the issuer's four most recent fiscal years. If these standards are not met, the Shares might nevertheless continue to be included in The Nasdaq Stock Market with quotations published in the Nasdaq "additional list" or in one of the "local lists", but if the number of holders of Shares were to fall below 300, or if the number of publicly held Shares were to fall below 100,000 or there were not at 9 least two registered and active market makers for the Shares, the NASD's rules provide that the Shares would no longer be "qualified" for reporting by The Nasdaq Stock Market and The Nasdaq Stock Market would cease to provide any quotations. Shares held directly or indirectly by directors, officers or beneficial owners of more than 10% of the Shares are not considered as being publicly held for this purpose. If, as a result of the purchase of Shares pursuant to the Offer or otherwise, the Shares no longer meet the requirements of the NASD for continued inclusion in the Nasdaq National Market or in any other tier of The Nasdaq Stock Market, and the Shares are no longer included in the Nasdaq National Market or in any other tier of The Nasdaq Stock Market, the market for Shares could be adversely affected. In the event that the Shares no longer meet the requirements of the NASD for continued inclusion in any tier of The Nasdaq Stock Market, it is possible that Shares would continue to trade in the over-the-counter market and that price quotations would be reported by other sources. The extent of the public market for the Shares and the availability of such quotations would, however, depend upon the number of holders of Shares remaining at such time, the interest in maintaining a market in Shares on the part of securities firms, the possible termination of registration of the Shares under the Exchange Act, as described below, and other factors. The Shares are currently registered under the Exchange Act. Such registration may be terminated upon application by the Company to the Commission if there are fewer than 300 record holders of Shares. It is the intention of the Offeror to seek to cause an application for such termination to be made as soon after consummation of the Offer as the requirements for termination of registration of the Shares are met. If such registration were terminated, the Company would no longer legally be required to disclose publicly in proxy materials distributed to stockholders the information which it now must provide under the Exchange Act or to make public disclosure of financial and other information in annual, quarterly and other reports required to be filed with the Commission under the Exchange Act; and the officers, directors and 10% stockholders of the Company would no longer be subject to the "short-swing" insider trading reporting and profit recovery provisions of the Exchange Act. Furthermore, if such registration were terminated, persons holding "restricted securities" of the Company may be deprived of their ability to dispose of such securities under Rule 144 promulgated under the Securities Act of 1933, as amended (the "Securities Act"). The Shares are currently "margin securities" under the regulations of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), which has the effect, among other things, of allowing brokers to extend credit on the collateral of the Shares. Depending upon factors similar to those described above regarding listing and market quotations, it is possible that, following the Offer, the Shares would no longer constitute "margin securities" for the purposes of the margin regulations of the Federal Reserve Board and therefore could no longer be used as collateral for loans made by brokers. If registration of Shares under the Exchange Act were terminated, the Shares would no longer be "margin securities". 8. CERTAIN INFORMATION CONCERNING THE COMPANY. Except as otherwise set forth herein, the information concerning the Company contained in this Offer to Purchase, including financial information, has been furnished by the Company or has been taken from or based upon publicly available documents and records on file with the Commission and other public sources. Although neither the Offeror, Mallinckrodt Veterinary nor Mallinckrodt Group has any knowledge that would indicate that statements contained herein based upon such documents are untrue, neither the Offeror, Mallinckrodt Veterinary, Mallinckrodt Group nor the Dealer Managers assume any responsibility for the accuracy or completeness of the information concerning the Company, furnished by the Company or contained in such documents and records, or for any failure by the Company to disclose events which 10 may have occurred or may affect the significance or accuracy any such information but which are unknown to the Offeror, Mallinckrodt Veterinary or Mallinckrodt Group. The Company is a Delaware corporation with its principal executive offices located at 9669 Lackman Road, Lenexa, Kansas 66219. The Company is engaged in biotechnology research and in the development, manufacture and commercialization of innovative vaccines for the animal health market. Set forth below is certain summary consolidated financial data with respect to the Company excerpted or derived from financial information contained in the Company's Annual Report on Form 10-K for the year ended September 30, 1994, and the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1995. More comprehensive financial information is included in such reports and other documents filed by the Company with the Commission, and the following summary is qualified in its entirety by reference to such reports and such other documents and all the financial information (including any related notes) contained therein. Such reports and other documents should be available for inspection and copies thereof should be obtainable in the manner set forth below. SYNTRO CORPORATION AND SUBSIDIARIES SELECTED CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED FISCAL YEAR ENDED JUNE 30, SEPTEMBER 30, ---------------------- ---------------------------------- 1995 1994 1994 1993 1992 ---------- ---------- ---------- ---------- ---------- (UNAUDITED) Revenues: Net product sales..... $2,427,555 $2,427,266 $3,333,640 $2,719,454 $2,555,722 Collaborative research & contract services.. 2,184,146 2,502,818 3,334,119 3,234,786 2,463,268 License and distribution fees.... 200,000 -- -- 50,000 157,929 Interest and other income............... 360,612 313,710 426,973 464,707 312,527 Realization of a fully reserved note........ -- -- -- -- 300,315 Revenues from sale of technology........... -- -- -- -- 383,335 ---------- ---------- ---------- ---------- ---------- Total revenues...... 5,172,313 5,243,794 7,094,732 6,468,947 6,173,096 Costs and expenses: Costs of goods sold... 1,313,154 1,329,407 1,831,352 1,454,613 1,378,863 Research and development costs.... 2,543,875 2,367,530 3,259,173 3,050,419 2,129,063 Selling, general and administrative expenses............. 1,952,889 1,703,192 2,294,530 1,929,282 1,907,339 Interest expense...... -- -- -- 5,016 48,123 ---------- ---------- ---------- ---------- ---------- Total costs and expenses........... 5,809,918 5,400,129 7,385,055 6,439,330 5,463,388 ---------- ---------- ---------- ---------- ---------- Income (loss) before equity in income (loss) of Syntro Zeon......... (637,605) (156,335) (290,323) 29,617 709,708 Equity in income (loss) of Syntro Zeon......... 13,675 (6,168) 15,164 (5,927) -- ---------- ---------- ---------- ---------- ---------- Net income (loss)....... $ (623,930) $ (162,503) $ (275,159) $ 23,690 $ 709,708 Net income (loss) per share.................. $ (.05) $ (.01) $ (.02) $ .00 $ .06 Shares used in computing income (loss) per share, including common stock equivalents in fiscal 1993 and 1992... 11,394,010 11,382,471 11,383,374 11,983,410 11,140,459 ========== ========== ========== ========== ==========
11 SYNTRO CORPORATION AND SUBSIDIARIES SELECTED CONSOLIDATED BALANCE SHEETS
AT JUNE 30, AT SEPTEMBER 30, 1995 1994 1993 ------------ ------------ ------------ (UNAUDITED) Assets Current assets: Cash and cash equivalents........ $ 1,407,524 $ 780,069 $ 529,479 Short-term investments........... 3,832,383 5,259,539 5,573,889 Trade receivables................ 492,331 422,552 171,666 Contract and license receivables. 328,206 -- -- Inventories...................... 684,761 839,519 886,879 Prepaid expenses and other....... 331,824 274,579 190,798 ------------ ------------ ------------ Total current assets........... 7,077,029 7,576,258 7,352,711 Long-term investments, at cost... 374,689 1,048,286 1,508,384 Property and equipment, net...... 3,442,955 3,502,366 3,606,610 Patents and licenses, net........ 1,658,957 1,323,440 1,013,490 Investments and other assets..... 77,981 64,931 362,463 ------------ ------------ ------------ $12,631,611 $ 13,515,281 $ 13,843,658 ============ ============ ============ Liabilities and Stockholders' Equity Current liabilities: Accounts payable................. $ 236,189 $ 175,870 $ 230,097 Accrued compensation............. 216,999 200,352 181,009 Accrued royalties................ 149,012 137,784 114,125 Accrued rent..................... 141,158 132,749 114,335 Other accrued expenses........... 305,236 399,881 204,260 Research contract and other advances........................ -- 270,023 531,401 ------------ ------------ ------------ Total current liabilities...... 1,048,594 1,316,659 1,375,227 Stockholders' equity: Common stock, $0.01 par value; 25,000,000 shares authorized; 11,397,184, 11,386,084 and 11,378,814 shares issued, respectively...................... 113,972 113,861 113,788 Preferred stock, $1.00 par value, 225,000 shares authorized; no shares issued..................... -- -- -- Additional paid-in capital......... 33,020,686 33,012,472 33,007,195 Accumulated deficit................ (21,551,641) (20,927,711) (20,652,552) ------------ ------------ ------------ Total stockholders' equity..... 11,583,017 12,198,622 12,468,431 ------------ ------------ ------------ $ 12,631,611 $ 13,515,281 $ 13,843,658 ============ ============ ============
The Company is subject to the informational requirements of the Exchange Act and in accordance therewith files periodic reports, proxy statements and other information with the Commission relating to its business, financial condition and other matters. The Company is required to disclose in such proxy statements certain information, as of particular dates, concerning the Company's directors and officers, their remuneration, stock options granted to them, the principal holders of the Company's securities and any material interests of such persons in transactions with the Company. Such reports, proxy statements and other information may be inspected at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of the Commission located at Seven World Trade Center, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West Madison Street (Suite 400), Chicago, Illinois 60661. 12 9. CERTAIN INFORMATION CONCERNING MALLINCKRODT GROUP, MALLINCKRODT VETERINARY AND THE OFFEROR. The Offeror is a newly incorporated Delaware corporation. To date, the Offeror has not conducted any business other than that incident to its formation, the execution and delivery of the Merger Agreement and the commencement of the Offer. Accordingly, no meaningful financial information with respect to the Offeror is available. The Offeror is a wholly owned subsidiary of Mallinckrodt Veterinary and an indirect wholly owned subsidiary of Mallinckrodt Group. The principal executive office of the Offeror is located at 421 East Hawley Street, Mundelein, Illinois 60060. Mallinckrodt Veterinary, a Delaware corporation, has its principal executive office at 421 East Hawley Street, Mundelein, Illinois 60060. Mallinckrodt Veterinary is a wholly owned subsidiary of Mallinckrodt Group and the direct owner of the Offeror. Mallinckrodt Veterinary is one of the world's largest branded animal health and nutrition companies, with approximately 1,000 products sold in more than 100 countries. Products include pharmaceuticals, livestock and pet vaccines, pesticides, surgical supplies, anesthetics and mineral feed ingredients. Mallinckrodt Group, a New York corporation, has its principal executive office at 7733 Forsyth Boulevard, St. Louis, Missouri 63105. Mallinckrodt Group is a provider of specialty chemicals and human and animal health products worldwide through three technology-based businesses: Mallinckrodt Chemical, Inc., Mallinckrodt Medical, Inc., and Mallinckrodt Veterinary. Mallinckrodt Chemical, Inc. is a producer of pharmaceutical and specialty industrial chemicals. It is also a joint venture partner in a worldwide flavors business. Mallinckrodt Chemical, Inc. is the world's largest producer of acetaminophen and a major producer of medicinal narcotics and laboratory chemicals. Mallinckrodt Medical, Inc. is a provider of technologically advanced, cost- effective products and services to five medical specialties: anesthesiology, cardiology, critical care, nuclear medicine and radiology. Set forth below is certain summary consolidated financial data with respect to Mallinckrodt Group and Mallinckrodt Veterinary excerpted or derived from financial information contained in Mallinckrodt Group's Annual Report on Form 10-K for the year ended June 30, 1995. More comprehensive financial information is included in such reports and other documents filed by Mallinckrodt Group with the Commission, and the following summary is qualified in its entirety by reference to such reports and such other documents and all the financial information (including any related notes) contained therein. MALLINCKRODT GROUP INC. SUMMARY CONSOLIDATED FINANCIAL DATA (IN MILLIONS)
AS OF AND FOR THE YEAR ENDED JUNE 30, ---------------------------- 1995 1994 1993 -------- -------- -------- INCOME STATEMENT DATA: Net sales....................................... $2,212.1 $1,940.1 $1,796.3 Earnings (loss) from continuing operations...... 184.1 107.4 (113.8) Loss from discontinued operations............... (3.8) (3.6) (6.0) Cumulative effect of accounting changes......... (80.6) Net earnings (loss)............................. 180.3 103.8 (200.4) BALANCE SHEET DATA: Total assets.................................... $2,720.6 $2,433.5 $2,177.6 Working capital................................. 271.8 261.3 203.7 Total debt...................................... 699.0 669.8 617.0 Shareholders' equity............................ 1,171.5 1,015.9 910.5
13 MALLINCKRODT VETERINARY, INC. SUMMARY FINANCIAL DATA (IN MILLIONS)
AS OF AND FOR THE YEAR ENDED JUNE 30, --------------------- 1995 1994 1993 ------ ------ ------- Net Sales............................................... $623.8 $591.7 $ 618.1 Earnings (Loss) from Continuing Operations Before Income Taxes.................................................. 61.0 32.6 (242.5) Identifiable Assets..................................... 745.5 709.5 698.0
Mallinckrodt Group is subject to the informational requirements of the Exchange Act and in accordance therewith files periodic reports and other information with the Commission relating to its business, financial condition and other matters. Such reports and other information are available for inspection and copying at the offices of the Commission in the same manner as set forth with respect to the Company in Section 8. The name, citizenship, business address, present principal occupation, and material positions held during the past five years of each of the directors and executive officers of Mallinckrodt Group, Mallinckrodt Veterinary and the Offeror are set forth in Annex I hereto. None of the Offeror, Mallinckrodt Veterinary, Mallinckrodt Group, or, to their knowledge, any of the persons listed in Annex I hereto, owns or has any right to acquire any Shares and none of them has effected any transaction in the Shares during the past 60 days. Except as set forth in this Offer to Purchase, none of Mallinckrodt Group, Mallinckrodt Veterinary or the Offeror, or, to their knowledge, any of the persons listed in Annex I hereto, has any contract, arrangement, understanding or relationship with any other person with respect to any securities of the Company, 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. Except as set forth in this Offer to Purchase, there have been no contacts, negotiations or transactions between Mallinckrodt Group, Mallinckrodt Veterinary or the Offeror, or, to their knowledge, any of the persons listed in Annex I hereto, on the one hand, and the Company or its 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. Except as described in this Offer to Purchase, none of Mallinckrodt Group, Mallinckrodt Veterinary or the Offeror, or, to their knowledge, any of the persons listed in Annex I hereto, has had any transaction with the Company or any of its executive officers, directors or affiliates that would require disclosure under the rules and regulations of the Commission applicable to the Offer. 10. SOURCE AND AMOUNT OF FUNDS. This Offer is not conditioned upon any financing arrangements. The total amount of funds required by the Offeror to consummate the Offer and the Merger and to pay related fees and expenses is expected to be approximately $45,750,000. The Offeror expects to receive these funds from capital contributions or loans to the Offeror by Mallinckrodt Veterinary. Mallinckrodt Veterinary, in turn, expects to receive the funds to loan or contribute to the Offeror from capital contributions or loans to Mallinckrodt Veterinary from Mallinckrodt Group. Mallinckrodt Group anticipates obtaining the funds through internally generated cash or its issuance of privately placed commercial paper. 14 11. BACKGROUND OF THE OFFER; PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE COMPANY. Beginning in mid-1994, the Company initiated an evaluation of its competitive position and outlook in the biotechnology and animal health industries. At the Company's annual meeting of stockholders on February 9, 1995, the Company announced that it was exploring strategic alternatives for the Company. After assessing various strategic alternatives, the Company focused on the possibility of forming an alliance with a corporate partner that would provide the resources and complementary expertise necessary to commercialize new products based on the Company's technology. In early 1995, the Company approached, or was contacted by, a number of companies on a confidential basis to discuss their interest in a strategic transaction with the Company. Shortly after the Company's stockholders meeting, James L. Bittle, a director of the Company, contacted an officer of Mallinckrodt Veterinary to advise him of the Company's interest in such an alliance. Thereafter, Paul D. Cottone, the President and Chief Executive Officer of Mallinckrodt Veterinary, discussed with J. Donald Todd, the President and Chief Executive Officer of the Company, Mallinckrodt Veterinary's possible interest in a strategic transaction with the Company. On March 27, 1995, Mallinckrodt Veterinary entered into a confidentiality agreement with the Company, and thereafter the Company provided certain confidential information to Mallinckrodt Veterinary. The Company engaged Piper Jaffray as the Company's financial advisor with respect to a possible sale of the Company. Between late March 1995 and late June 1995, the Company, with the assistance of Piper Jaffray, continued discussions with a limited number of companies, in addition to Mallinckrodt Veterinary. On April 19, 1995, Piper Jaffray sent a letter to senior management of Mallinckrodt Veterinary inviting Mallinckrodt Veterinary to make an offer for the purchase of the Company and setting forth the process to be followed in connection with such an offer. In late April, May and early June 1995, Mallinckrodt Veterinary continued its review of the Company, both through meetings with representatives of the Company and pursuant to the review of documents provided by the Company. On June 8, 1995, Mr. Cottone sent a letter to Dr. Todd expressing possible interest in a merger transaction, in which a newly created subsidiary of Mallinckrodt Veterinary would be merged into the Company, at a purchase price in the range of $2.35 to $2.45 per Share in cash, subject to execution of a definitive agreement, completion of due diligence and other conditions. On June 9, 1995, Dr. Todd indicated to Mr. Cottone that such range was not acceptable. On June 12, 1995, a representative of Piper Jaffray contacted senior management of Mallinckrodt Veterinary and indicated that although the price contained in Mallinckrodt Veterinary's proposal was, in the Company's view, inadequate, the Company wished to keep the lines of communication between the Company and Mallinckrodt Veterinary open. On June 23, 1995, Mr. Cottone sent a letter to Dr. Todd indicating that Mallinckrodt Veterinary might be willing to increase the purchase price range over that contained in the June 8, 1995 letter. On July 11, 1995, the Company's Board of Directors received an update from Dr. Todd on the progress of discussions with Mallinckrodt Veterinary. Following this update, Mallinckrodt Veterinary was informed by the Company that a substantial increase in Mallinckrodt Veterinary's proposed purchase price would be necessary before further discussions could proceed. Mallinckrodt Veterinary indicated that it would not be able to do so unless it was permitted to perform additional due diligence on the Company. The Company agreed to permit this and in late July and August 1995, representatives of Mallinckrodt Veterinary conducted due diligence with respect to the Company, with the cooperation of the Company and its advisors. 15 On August 28, 1995, Mr. Cottone sent a letter to Dr. Todd expressing interest in a possible merger transaction at a purchase price of $3.25 per Share in cash, subject to certain conditions, including completion of final due diligence. During a telephone conversation on August 29, 1995, Mr. Cottone indicated to Dr. Todd that Mallinckrodt Veterinary was willing to increase the proposed purchase price to $3.55 per Share. On August 29, 1995, the Board of Directors of the Company convened by telephone to consider the latest proposal from Mallinckrodt Veterinary. After discussions with Piper Jaffray and the Company's legal advisors, the Board of Directors of the Company authorized management to proceed to negotiate a merger agreement with Mallinckrodt Veterinary at $3.55 per Share, subject to final board approval. On September 6, 1995, Mallinckrodt Veterinary sent an initial draft merger agreement to the Company and its advisors. On September 13, 1995, legal advisors for the Company and Mallinckrodt Veterinary discussed the draft agreement. On September 20, 1995, Mallinckrodt Group's Board of Directors approved the merger agreement, subject to certain conditions. Also on that date, the Company's Board of Directors met to consider the draft agreement. Following presentations relating to, among other things, the Company's operations, developments in the biotechnology and animal health industries, the Company's various strategic options and the terms of the proposed transaction, and a presentation by representatives of Piper Jaffray relating to the financial aspects of the draft agreement, the Company's Board of Directors unanimously authorized the Company's officers to pursue a transaction substantially as set forth in the draft agreement, subject to negotiation of certain provisions. On September 23, 1995, representatives of the Company and Mallinckrodt Veterinary and their respective legal counsel met to negotiate the final terms of the merger agreement, including termination rights, termination fee, payment of expenses and offer conditions. A revised merger agreement was delivered to the directors of the Company and of Mallinckrodt Veterinary early on September 24, 1995. On September 24, 1995, the Company's Board of Directors convened by telephone call. The Company's Board reviewed the revised agreement. Piper Jaffray delivered its opinion as to the fairness, from a financial point of view, of the cash consideration to be received by the Company's stockholders under the terms of the Merger Agreement. After significant discussion, the Company's Board of Directors unanimously approved the Merger Agreement and the Offer and Merger contemplated by the Merger Agreement. The Merger Agreement was executed and delivered on September 25, 1995. Public disclosure of the Merger Agreement was made on the morning of September 25, 1995, prior to the opening of trading of the Shares on the Nasdaq National Market. 12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY. The purpose of the Offer, the Merger and the Merger Agreement is to enable Mallinckrodt Veterinary to acquire control of, and the entire equity interest in, the Company. The Company is a leader in technology based vaccine and vaccine vector development. The acquisition of the Company will bring state of the art capabilities in gene vectoring to Mallinckrodt Veterinary, a technology which will replace less desirable chemical therapeutics currently used in the industry. The acquisition will also bring talented scientists and a bank of proprietary genetic materials to Mallinckrodt Veterinary which, in combination with the gene vectoring technology, will enable Mallinckrodt Veterinary to accelerate its focus on genetic immunization. Under the DGCL, the approval of the Board of Directors of the Company and the affirmative vote of the holders of a majority of the outstanding Shares are required to approve and adopt the Merger Agreement and the transactions contemplated thereby, including the Merger. The Board of Directors of the Company has approved the Offer, the Merger and the Merger Agreement and the transactions contemplated thereby, and, unless the Merger is consummated pursuant to the short form merger 16 provisions under the DGCL described below, the only remaining required corporate action of the Company is the approval and adoption of the Merger Agreement and the transactions contemplated thereby by the affirmative vote of the holders of a majority of the Shares. If the Minimum Condition is satisfied, the Offeror will have sufficient voting power to cause the approval and adoption of the Merger Agreement and the transactions contemplated thereby without the affirmative vote of any other stockholder. In the Merger Agreement, the Company has agreed to take all action necessary to convene a meeting of its stockholders as promptly as practicable after the consummation of the Offer for the purpose of considering and taking action on the Merger Agreement and the transactions contemplated thereby, if such action is required by the DGCL. Mallinckrodt Veterinary has agreed that, subject to applicable law, all Shares owned by the Offeror or any other subsidiary of Mallinckrodt Veterinary will be voted in favor of the Merger Agreement and the transactions contemplated thereby. Short Form Merger. Under the DGCL, if the Offeror acquires at least 90% of the outstanding Shares, the Offeror will be able to approve the Merger without a vote of the Company's stockholders. In such event, the Offeror anticipates that it will take all necessary and appropriate action to cause the Merger to become effective as soon as reasonably practicable after such acquisition without a meeting of the Company's stockholders. If the conditions to the Offeror's obligation to purchase Shares in the Offer are satisfied prior to the tender of 90% of the outstanding Shares into the Offer, the Offeror may, subject to certain limitations set forth in the Merger Agreement, delay its purchase of the Shares tendered to it in the Offer. See Section 1. If the Offeror does not acquire at least 90% of the outstanding Shares pursuant to the Offer or otherwise, a significantly longer period of time may be required to effect the Merger, because a vote of the Company's stockholders would be required under the DGCL. Pursuant to the Merger Agreement, the Company has agreed to take all action necessary under the DGCL and its Certificate of Incorporation and Bylaws to convene a meeting of its stockholders promptly following consummation of the Offer to consider and vote on the Merger, if a stockholders' vote is required. If the Offeror owns a majority of the outstanding Shares, approval of the Merger can be obtained without the affirmative vote of any other stockholder of the Company. Appraisal Rights. No appraisal rights are available in connection with the Offer. However, if the Merger is consummated, stockholders of the Company will have certain rights under the DGCL to dissent and demand appraisal of, and to receive payment in cash for the fair value of, their Shares. Such rights to dissent, if the statutory procedures are complied with, could lead to a judicial determination of the fair value of the Shares (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 Shares. In addition, such dissenting stockholders would be entitled to receive payment of a fair rate of interest from the date of consummation of the Merger on the amount determined to be the fair value of their Shares. In determining the fair value of the Shares, a Delaware court would be required to take into account all relevant factors. Accordingly, such determination could be based upon considerations other than, or in addition to, the market value of the Shares, including, among other things, asset values and earning capacity. In Weinberger v. UOP, Inc., the Delaware Supreme Court stated, among other things, that "proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court" should be considered in an appraisal proceeding. Therefore, the value so determined in any appraisal proceeding could be different from the price being paid in the Offer. In addition, several decisions by Delaware courts have held that, in certain circumstances, a controlling stockholder of a company involved in a merger has a fiduciary duty to other stockholders which requires that the merger be fair to such other stockholders. In determining whether a merger is fair to minority stockholders, Delaware courts have considered, among other things, the type and amount of consideration to be received by the stockholders and whether there was fair dealing among 17 the parties. The Delaware Supreme Court stated in Weinberger and Rabkin v. Philip A. Hunt Chemical Corp. that although the remedy ordinarily available to minority stockholders in a cash-out merger is the right to appraisal described above, a damages remedy or injunctive relief may be available if a merger is found to be the product of procedural unfairness, including fraud, misrepresentation or other misconduct. Rule 13e-3. The Commission has adopted Rule 13e-3 under the Exchange Act which is applicable to certain "going private" transactions and which may under certain circumstances be applicable to the Merger or another business combination following the purchase of Shares pursuant to the Offer or otherwise in which the Offeror seeks to acquire the remaining Shares not held by it. The Offeror believes, however, that Rule 13e-3 will not be applicable to the Merger if the Merger is consummated within one year after the termination of the Offer at the same per Share price as paid in the Offer. If applicable, Rule 13e-3 requires, among other things, that certain financial information concerning the Company and certain information relating to the fairness of the proposed transaction and the consideration offered to minority stockholders in such transaction, be filed with the Commission and disclosed to stockholders prior to consummation of the transaction. Plans for the Company. Except as otherwise set forth in this Offer to Purchase, it is expected that, initially following the Merger, the business and operations of the Company will be continued by the Surviving Corporation substantially as they are currently being conducted. The sole director of the Offeror will be the initial director of the Surviving Corporation and the officers of the Offeror and such other persons as are designated by Mallinckrodt Veterinary will be the initial officers of the Surviving Corporation. After the purchase of Shares pursuant to the Offer, and prior to the Effective Time, it is anticipated that the Company will not declare any dividends on the Shares. Mallinckrodt Veterinary will continue to evaluate the business and operations of the Company during the pendency of the Offer and after the consummation of the Offer and the Merger, and will take such actions as it deems appropriate under the circumstances then existing. Mallinckrodt Veterinary intends to seek additional information about the Company during this period. Thereafter, Mallinckrodt Veterinary intends to review such information as part of a comprehensive review of the Company's business, operations, capitalization and management with a view to optimizing exploitation of the Company's potential in conjunction with Mallinckrodt Veterinary's business. Except as indicated in this Offer to Purchase, neither Mallinckrodt Veterinary nor Mallinckrodt Group has any present plans or proposals which relate to or would result in an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries, a sale or transfer of a material amount of assets of the Company or any of its subsidiaries or any material change in the Company's capitalization or dividend policy or any other material changes in the Company's corporate structure or business, or the composition of the Company's Board of Directors or management. 13. THE MERGER AGREEMENT. The following summary of certain provisions of the Merger Agreement, a copy of which is filed as an exhibit to the Schedule 14D-1, is qualified in its entirety by reference to the text of the Merger Agreement. The Offer. The Offeror commenced the Offer in accordance with the terms of the Merger Agreement. Pursuant to the terms and conditions of the Merger Agreement, Mallinckrodt Veterinary, the Offeror and the Company are required to use all reasonable best efforts to take all action as may be necessary or appropriate in order to effectuate the Offer and the Merger as promptly as possible and to carry out the transactions provided for or contemplated by the Merger Agreement. 18 Company Actions. Pursuant to the Merger Agreement, the Company has agreed that on the date of the commencement of the Offer, it will file with the Commission and mail to its stockholders, a Solicitation/Recommendation Statement on Schedule 14D-9 containing the recommendation of the Board of Directors that the Company's stockholders accept the Offer and approve the Merger and the Merger Agreement. The Merger. The Merger Agreement provides that, upon the terms and subject to the conditions of the Merger Agreement, and in accordance with the DGCL, the Offeror shall be merged with and into the Company at the Effective Time. Upon the effectiveness of the Merger, the separate corporate existence of the Offeror shall cease and the Company shall continue as the Surviving Corporation and shall succeed to and assume all the rights and obligations of the Offeror in accordance with the DGCL. At the Effective Time, the Certificate of Incorporation of the Company shall be amended to change the registered agent and registered office, reduce the amount of authorized capital stock and to delete certain provisions regarding interested party transactions. The Certificate of Incorporation, as so amended, and the By-laws of the Company shall be the Certificate of Incorporation and By-laws of the Surviving Corporation. The directors and officers of the Offeror immediately prior to the Effective Time shall be the directors and officers of the Surviving Corporation as of the Effective Time. Conversion of Securities. At the Effective Time, each Share issued and outstanding immediately prior thereto shall be cancelled and extinguished and each Share (other than Shares held by the Company as treasury Shares, Shares owned by any subsidiary of the Company, Shares owned by Mallinckrodt Veterinary, the Offeror or any other wholly owned subsidiary of Mallinckrodt Veterinary, and Dissenting Shares) shall, by virtue of the Merger and without any action on the part of any stockholder of the Company or the Offeror be converted into and become the right to receive the Offer Price. Each share of common stock of the Offeror issued and outstanding immediately prior to the Effective Time shall, at the Effective Time, by virtue of the Merger and without any action on the part of the Offeror, the Company or the holders of Shares, be converted into and become one fully paid and nonassessable share of common stock of the Surviving Corporation. Dissenting Shares. If required by the DGCL, Shares which are held by holders who have properly exercised appraisal rights with respect thereto in accordance with Section 262 of the DGCL will not be exchangeable for the right to receive the Offer Price, and holders of such Shares will be entitled to receive payment of the appraised value of such Shares unless such holders fail to perfect or effectively withdraw or lose their right to appraisal and payment under the DGCL. If, after the Effective Time, any such holder fails to perfect or effectively withdraws or loses such right, such Shares will be treated as if they had been converted into and have become exchanged for the right to receive the Offer Price, without any interest thereon. Merger Without a Meeting of Stockholders. In the event that the Offeror shall acquire at least 90% of the outstanding Shares, the parties agree to take all necessary and appropriate actions to cause the Merger to become effective without a meeting of stockholders of the Company, in accordance with Section 253 of the DGCL. Representations and Warranties. In the Merger Agreement, the Company has made customary representations and warranties to the Offeror, including, but not limited to, representations and warranties relating to the Company's organization and qualification, capitalization, subsidiaries, its authority to enter into the Merger Agreement and carry out the related actions, filings made by the Company with the Commission under the Securities Act or the Exchange Act (including financial statements included in the documents filed by the Company under these acts), required consents and approvals, compliance with applicable laws, employee benefit plans, litigation, employment relations, contracts, intellectual property, title to property, the payment of taxes, environmental matters and the absence of certain material adverse changes or events. 19 The Offeror and Mallinckrodt Veterinary have also made customary representations and warranties to the Company, including, but not limited to, representations and warranties relating to the Offeror's and Mallinckrodt Veterinary's organization and qualification, authority to enter into the Merger Agreement and required consents and approvals. Covenants Relating to the Conduct of Business. The Company has agreed that it will, and will cause its subsidiaries to, in all material respects, carry on their respective businesses in, and not enter into any material transaction other than in accordance with, the regular and ordinary course and, to the extent consistent therewith, use their reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with customers, suppliers and others having business dealings with them. The Company has agreed that, except as contemplated by the Merger Agreement, it shall not, and shall not permit any of its subsidiaries to, without the prior written consent of Mallinckrodt Veterinary: (a) (x) declare, set aside or pay any dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its capital stock, or otherwise make any payments to stockholders of the Company in their capacity as such, other than dividends payable to the Company declared by any of the Company's subsidiaries, (y) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (z) except as disclosed by the Company to Mallinckrodt Veterinary pursuant to the Merger Agreement, purchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities; (b) issue, deliver, sell, pledge, dispose of or otherwise encumber any shares of its capital stock, any other voting securities or equity equivalent or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities or equity equivalent (other than, in the case of the Company, the issuance of Shares during the period from the date of the Merger Agreement through the Effective Time upon the exercise of certain outstanding stock options of the Company issued pursuant to the Company's 1984 Incentive Stock Option Plan, 1988 Executive Stock Option Plan, 1988 Stock Option Plan and 1994 Stock Option Plan (collectively, the "Stock Plans") and outstanding on the date of the Merger Agreement in accordance with their current terms); (c) amend its charter or bylaws; (d) acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of or equity in, or by any other manner, any business or any corporation, partnership, limited liability company, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets, in each case that are material, individually or in the aggregate, to the Company and its subsidiaries, taken as a whole; (e) sell, lease or otherwise dispose of or agree to sell, lease or otherwise dispose of, any of its assets that are material, individually or in the aggregate, to the Company and its subsidiaries, taken as a whole, except for sales of inventory or other assets in the ordinary course of business; (f) incur any indebtedness for borrowed money or guarantee any such indebtedness or issue or sell any debt securities or guarantee any debt securities of others, except for borrowings or guarantees incurred in the ordinary course of business consistent with past practice, or except as disclosed by the Company to Mallinckrodt Veterinary pursuant to the Merger Agreement, make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any wholly owned subsidiary of the Company and other than in the ordinary course of business consistent with past practice; (g) alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any subsidiary of the Company; 20 (h) enter into or adopt, or amend any existing severance plan, agreement or arrangement or, other than in the ordinary course of business, enter into or amend any employee benefit plan (including without limitation the Stock Plans of the Company) or employment or consulting agreement except, (i) with respect to employees that are not executive officers or directors, compensation increases associated with promotions and regular reviews in the ordinary course of business consistent with past practices, (ii) agreements with consultants of the Company of less than $20,000 to any individual consultant and less than $75,000 in the aggregate to all consultants, and (iii) after December 31, 1995, increases of not more than 10% to the base salary of executive officers of the Company; (i) waive, amend or allow to lapse any term or condition of any confidentiality or "standstill" agreement to which the Company is a party; (j) settle or compromise any suit, proceeding or claim or threatened suit, proceeding or claim for an amount that is more than $20,000 in the case of any individual suit, proceeding or claim or $100,000 for all suits, proceedings or claims; (k) knowingly violate or fail to perform any obligation or duty imposed upon it by any applicable federal, state or local law, rule, regulation, guideline or ordinance; (l) change its credit policies, procedures or practices, or commit or renew a prior commitment to lend money, purchase assets, issue a letter of credit, guarantee or similar instrument or otherwise extend credit to any person in a manner not in the ordinary course or in a manner inconsistent with past practice; (m) (i) modify, amend or terminate any contract, (ii) waive, release, relinquish or assign any contract (including any insurance policy) or other right or claim, (iii) prepay any indebtedness or (iv) cancel or forgive any indebtedness owed to it, other than in each case in a manner in the ordinary course of business consistent with past practice and which is not material to the business of the Company and its subsidiaries; (n) make any tax election or change any method of accounting for tax purposes, in each case except to the extent required by law, or settle or compromise any tax liability; (o) change any of the accounting principles or practices used by it except as required by the Commission or the Financial Accounting Standards Board; or (p) (i) enter into any research and development contract, (ii) enter into any production contract or "tolling agreement," or (iii) grant any license relating to its intellectual property except as required by existing agreements of the Company; or (q) authorize, recommend, announce, propose or agree to take any of the foregoing actions. During the period from the date of the Merger Agreement through the Effective Time, (i) as reasonably requested by Mallinckrodt Veterinary, the Company shall confer on a regular basis with one or more representatives of Mallinckrodt Veterinary with respect to material operational matters; (ii) the Company shall, within 25 days following each fiscal month, deliver to Mallinckrodt Veterinary financial statements, including an income statement and balance sheet for such month; and (iii) upon the knowledge of the Company of any Material Adverse Change (as defined below) in the Company, any material litigation or material governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated), or the breach in any material respect of any representation or warranty contained therein, the Company shall promptly notify Mallinckrodt Veterinary thereof. "Material Adverse Change" or "Material Adverse Effect" means, when used with respect to Mallinckrodt Veterinary, the Offeror or the Company, as the case may be, any change or effect, either individually or in the aggregate, that is or can reasonably be expected to be materially adverse to the business, assets, liabilities, properties, condition (financial or otherwise), results of operations or prospects of all or any material part of Mallinckrodt Veterinary and its subsidiaries taken as a whole, the Offeror, or the Company and its subsidiaries taken as a whole, as the case may be, except as agreed. 21 During the period from the date of the Merger Agreement through the Effective Time, the Offeror shall not engage in any activities of any nature except as provided in or contemplated by the Merger Agreement. No Solicitation. The Company has agreed in the Merger Agreement that, from the date of the Merger Agreement until the Effective Time, (a) neither the Company nor its subsidiaries shall, and the Company shall not authorize or permit its officers, directors, employees, authorized agents and representatives (including, without limitation, any investment banker, attorney or accountant retained by it or any of its subsidiaries) to, initiate, solicit or encourage, directly or indirectly, any inquiries or the making or implementation of any proposal or offer (including, without limitation any proposal or offer to its stockholders) with respect to a merger, acquisition, consolidation or similar transaction involving, or any purchase of all or any significant portion of the assets or any equity securities of, the Company or its subsidiaries (an "Acquisition Proposal"), or engage in any negotiations concerning, or provide any confidential information or data to, or have any substantive discussions with, any person relating to an Acquisition Proposal, or otherwise facilitate any effort or attempt to make or implement an Acquisition Proposal; (b) it will immediately cease and cause to be terminated any existing activities, discussions or negotiations with any parties conducted heretofore and will take the necessary steps to inform such parties of the obligations undertaken in the Merger Agreement and (c) the Company will notify Mallinckrodt Veterinary immediately if any such inquiries or proposals are received by, any such information is requested from, or any such negotiations or discussions are sought to be initiated or continued with, it, including the terms of its proposals; provided however, that nothing contained in the Merger Agreement shall prohibit the Board of Directors of the Company from (i) furnishing information to or entering into discussions or negotiations with, any person or entity that indicates an interest in making a Superior Proposal (as hereinafter defined) if, and only to the extent that (A) the Board of Directors determines in good faith after consultation with the Company's outside counsel that such action is required for the Board of Directors to comply with its fiduciary duties to stockholders imposed by laws and (B) the Company keeps Mallinckrodt Veterinary informed of the status of any such discussions or negotiations; and (ii) to the extent applicable, complying with Rule 14e-2 promulgated under the Exchange Act with regard to an Acquisition Proposal. If any person or entity makes a Superior Proposal, upon receipt thereof the Company shall provide written notice (a "Notice of a Superior Proposal") to Mallinckrodt Veterinary of such Superior Proposal, including the terms and structure thereof, and if within five business days following the delivery of the Notice of a Superior Proposal the Superior Proposal does not continue to be superior in terms of the aggregate value to be received by the Company's stockholders in light of any improved transaction proposed by Mallinckrodt Veterinary prior to the expiration of such five-day period, the Company shall cease all discussions or negotiations with such person or entity. For purposes of the Merger Agreement, "Superior Proposal" means an unsolicited bona fide Acquisition Proposal in writing that the Board of Directors determines in its good faith judgment (based on the advice of a nationally recognized investment banking firm) provides greater aggregate value to the Company's stockholders than the transactions contemplated by the Merger Agreement. Options. Pursuant to the Merger Agreement, at the Effective Time all outstanding stock options to purchase Shares heretofore issued under the Stock Plans or the Company's stock option agreements with consultants that are then fully exercisable or vested pursuant to the terms of the respective Stock Plan or the Merger Agreement (a "Vested Company Stock Option"), shall, pursuant to the terms of the respective Stock Plans pursuant to which they were issued and upon their surrender to the Company by the holders thereof, be cancelled by the Company, and the holders thereof shall receive a cash payment from the Company in an amount (if any) equal to the number of shares of Common Stock subject to each surrendered option multiplied by the difference (if positive) between the exercise price per Share covered by the option and the Offer Price. The Company shall use its best efforts to cause each holder of Vested Company Stock Options to surrender their Vested Company Stock Options in accordance with the prior sentence. At the Effective Time, all outstanding stock options to purchase 22 Shares issued under the Stock Plans or the stock option agreements with consultants that are not then exercisable or vested shall be cancelled without payment to the holders thereof and the Company shall use its best efforts to cause such stock options to be surrendered to the Company. Indemnification. For a period of not less than six years from and after the Effective Time, Mallinckrodt Veterinary agrees to, and to cause the Surviving Corporation to, indemnify and hold harmless all past and present officers, directors and employees (the "Indemnified Parties") of the Company and of its subsidiaries to the full extent such persons may be indemnified by the Company pursuant to the Company's Certificate of Incorporation and Bylaws as in effect as of the date of the execution of the Merger Agreement for acts and omissions occurring at or prior to the Effective Time and shall advance reasonable litigation expenses incurred by such persons in connection with defending any action arising out of such acts or omissions, provided that such persons provide the requisite affirmation and undertaking, as set forth in the Company's Bylaws in effect at the date of the execution of the Merger Agreement. Mallinckrodt Veterinary will provide, or cause the Surviving Corporation to provide, for a period of not less than six years after the Effective Time, the Company's current directors and officers an insurance and indemnification policy that provides coverage for events occurring at or prior to the Effective Time (the "D&O Insurance") that is no less favorable than the existing policy or, if substantially equivalent insurance coverage is unavailable, the best available coverage; provided, however, that Mallinckrodt Veterinary and the Surviving Corporation shall not be required to pay an annual premium for the D&O Insurance in excess of two times the last annual premium paid prior to the date of the execution of the Merger Agreement, but in such case shall purchase as much such coverage as possible for such amount. Employee Benefits. Until September 30, 1996, Mallinckrodt Veterinary has agreed to maintain employee benefits and programs for officers and employees of the Company and its subsidiaries that are no less favorable in the aggregate than those being provided to such officers and employees on the date of the execution of the Merger Agreement (it being understood that Mallinckrodt Veterinary will not be obligated to continue any one or more employee benefits or programs). For purposes of eligibility to participate in and vesting in all benefits provided to officers and employees, such officers and employees of the Company and its subsidiaries will be granted their years of service with the Company and its subsidiaries. Amounts paid before the Effective Time by officers and employees of the Company under any medical plans of the Company shall after the Effective Time be taken into account in calculating balances for deductibles and maximum out-of-pocket limits applicable under the medical plan of Mallinckrodt Veterinary for the plan year during which the Effective Time occurs as if such amounts had been paid under such medical plan of Mallinckrodt Veterinary. Mallinckrodt Veterinary has agreed to maintain an agreed upon severance policy for a period of at least twelve months from the Effective Time. Board Representation. The Merger Agreement provides that promptly upon the purchase of Shares pursuant to the Offer, Mallinckrodt Veterinary shall be entitled to designate members of the Board of Directors of the Company, rounded up to the next whole number, as will give Mallinckrodt Veterinary, subject to compliance with the provisions of Section 14(f) of the Exchange Act and the rules and regulations promulgated thereunder, representation on the Board of Directors of the Company equal to the product of (i) the total number of directors on such Board and (ii) the percentage that the number of Shares purchased by Mallinckrodt Veterinary bears to the number of outstanding Shares. The Company has agreed, upon the request of Mallinckrodt Veterinary, to promptly increase the size of the Board of Directors of the Company and/or exercise its reasonable best efforts to secure the resignations of such number of directors as is necessary to enable Mallinckrodt Veterinary's designees to be elected to the Board of Directors and shall cause Mallinckrodt Veterinary's designees to be so elected. The Company has agreed to take, at its expense, all actions required pursuant to Section 14(f) of the Exchange Act 23 and Rule 14f-1 promulgated thereunder to effect any such election, including the mailing to its stockholders of the information required to be disclosed pursuant thereto. Mallinckrodt Veterinary will supply to the Company in writing and be solely responsible for any information with respect to itself and its nominees, officers, directors and affiliates required by Section 14(f) and Rule 14f-1. Access to Information. The Company has agreed to, and to cause each of its subsidiaries to, afford to Mallinckrodt Veterinary, and to Mallinckrodt Veterinary's accountants, counsel, financial advisors and other representatives, access and permit them to make such inspections as they may require during normal business hours during the period from the date of the Merger Agreement through the Effective Time to all their respective properties, books, contracts, commitments and records and, during such period, the Company shall, and shall cause each of its subsidiaries to, furnish promptly to Mallinckrodt Veterinary (i) a copy of each report, schedule, negotiation statement and other document filed by it during such period pursuant to the requirements of federal or state laws and (ii) all other information concerning its business, properties and personnel as Mallinckrodt Veterinary may reasonably request. Conditions Precedent. The respective obligations of each party to effect the Merger shall be subject to the fulfillment at or prior to the Effective Time of the following conditions: (a) if required by applicable law, the Merger Agreement shall have been approved by the requisite vote of the holders of the Shares; and (b) no governmental entity or court of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any law, rule, regulation, executive order, decree or injunction which prohibits or has the effect of prohibiting the consummation of the Merger; provided, however, that the Company, Mallinckrodt Veterinary and the Offeror shall use their reasonable best efforts to have any such order, decree or injunction vacated. The respective obligations of Mallinckrodt Veterinary and the Offeror to effect the Merger shall be subject to the fulfillment at or prior to the Effective Time of the following conditions: (a) the Company shall have performed in all material respects each of its covenants and agreements contained in the Merger Agreement required to be performed on or prior to the Effective Time, and each of the representations and warranties of the Company contained in the Merger Agreement shall be true and correct in all material respects except as agreed by the parties pursuant to the Merger Agreement, in each case, on and as of the Effective Time as if made on and as of such date, except as contemplated or permitted by the Merger Agreement and except for such failures to perform or such failures to be true and correct as have not had and are not reasonably likely to have a Material Adverse Effect on the Company, and Mallinckrodt Veterinary shall have received a certificate of the Company, signed by the President or any Vice President of the Company, to that effect; provided, however, that any references in the Merger Agreement to the phrases "knowledge of the Company" and "to the best knowledge of the Company," and variants thereof, shall be disregarded for the purposes of determining whether the Company shall have breached its representations and warranties hereunder; and (b) except as disclosed by the Company to Mallinckrodt Veterinary pursuant to the Merger Agreement, all required authorizations, consents or approvals of any third party, the failure to obtain which would have a Material Adverse Effect on the Company (assuming the Merger had taken place) shall have been obtained. Termination. The Merger Agreement provides that it may be terminated at any time prior to the Effective Time, whether prior to or after approval by the stockholders of the Company: (a) by mutual written consent of Mallinckrodt Veterinary and the Company, (b) by the Company if: (i) the Offer has not been timely commenced (except as a result of actions or omissions by the Company); (ii) there is a Superior Proposal to acquire all of the Shares or substantially all of the assets of the Company and the Board of Directors of the Company determines in good faith after consultation with the Company's outside counsel that the failure to approve such Superior Proposal would be inconsistent with the fiduciary duties of the Board of Directors of the Company to stockholders of the Company, provided, however that the right to terminate the Merger Agreement pursuant to this clause (ii) will not be available (A) if the Company has breached in any material respect its obligations concerning Acquisition Proposals, (B) in respect of an offer involving consideration which is not entirely cash, or does not permit stockholders to receive the payment of the offered consideration in respect of all Shares at the same time, unless the Board of Directors of the Company has been furnished with a written opinion of a 24 nationally recognized investment banking firm to the effect that such offer provides a higher value per Share than the consideration per Share pursuant to the Offer or the Merger (as increased pursuant to any revised proposal of Mallinckrodt Veterinary pursuant to its rights in the event of a Superior Proposal) or (C) if, prior to or concurrently with any purported termination pursuant to this clause (ii), the Company shall not have paid the Termination Fee (as defined below); (iii) there has been a breach by Mallinckrodt Veterinary or the Offeror of any representation or warranty that would have a material adverse effect on Mallinckrodt Veterinary's or the Offeror's ability to perform its obligations under the Merger Agreement, and which is not cured within five business days following receipt by Mallinckrodt Veterinary or the Offeror of notice from the Company of the breach; or (iv) if Mallinckrodt Veterinary or the Offeror fails to comply in any material respect with any of its material obligations or covenants contained in the Merger Agreement, including, without limitation, the obligation of the Offeror to purchase Shares pursuant to the Offer, unless such a failure results from a breach by the Company of any obligation, representation or warranty under the Merger Agreement, which is not cured within five business days following Mallinckrodt Veterinary's receipt of notice from the Company of the breach; (c) by Mallinckrodt Veterinary if (i) the Board of Directors of the Company shall have failed to recommend, or withdrawn, modified or amended in any material respect its approval or recommendation of, the Offer or the Merger or shall have resolved to do any of the foregoing, or shall have failed to reject an Acquisition Proposal within ten business days after receipt by the Company or public announcement thereof; or (ii) any of the representations or warranties made by the Company in the Merger Agreement shall not have been true and correct in all material respects when made, or shall thereafter ceased to be true and correct in any material respect as if made as of such later date (other than representations and warranties made as of a specified date); provided, however, that all references in the Merger Agreement to the phrases "knowledge of the Company" and "to the best knowledge of the Company," and variants thereof, shall be disregarded for the purposes of determining whether the Company shall have breached its representations and warranties hereunder; or (iii) the Company shall not in all material respects have performed each obligation and agreement and complied with each covenant to be performed and complied with by it under the Merger Agreement, unless such failure results from a breach of Mallinckrodt Veterinary or the Offeror of any obligation, representation or warranty hereunder which has not been cured within five business days following the Company's receipt of notice from Mallinckrodt Veterinary of the breach; or (iv) the stockholders of the Company do not approve the Merger at the Stockholder Meeting in accordance with the DGCL, if such approval is required by the DGCL; or (v) if the Offeror is entitled to terminate the Offer as a result of the occurrence of any event described below in Section 15--"Certain Conditions to Offeror's Obligations"; or (d) by either Mallinckrodt Veterinary or the Company if (i) the Merger has not been effected on or prior to the close of business on April 30, 1996; provided, however, that the right to terminate the Merger Agreement pursuant to this clause shall not be available to any party whose failure to fulfill any obligation under the Merger Agreement has been the cause of, or resulted in, the failure of the Merger to have occurred on or prior to the aforesaid date; or (ii) any court of competent jurisdiction or any other governmental body shall have issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the Merger and such order, decree, ruling or other action shall have become final and non-appealable; or (iii) upon a vote at a duly held meeting or upon any adjournment thereof, the stockholders of the Company shall have failed to give any required approval or (iv) as the result of the failure of any of the conditions to the Offer as set forth in the Offer to Purchase (see Section 15), the Offer shall have terminated or expired in accordance with its terms without the Offeror having purchased any Shares pursuant to the Offer, provided, however, that the right to terminate the Merger Agreement pursuant to this clause (iv) shall not be available to any party whose failure to fulfill any of its obligations under the Merger Agreement results in the failure of any such condition; or (v) Mallinckrodt Veterinary or the Company shall have reasonably determined that any Offer condition (other than the Minimum Condition) is not capable of being satisfied at any time in the future; provided however, that the right to terminate the Merger Agreement pursuant to this clause (v) shall not be available to any party whose failure to fulfill any of its obligations under the Merger Agreement has been the cause of, or resulted in, such Offer condition being incapable of satisfaction. If the Merger Agreement is terminated, the Merger 25 Agreement will become void and there will be no liability or further obligation on the part of the Offeror, Mallinckrodt Veterinary or the Company or their respective officers or directors, except for the Company's obligations, under certain circumstances, to pay the Termination Fee or to reimburse Mallinckrodt Veterinary for certain expenses and except for the confidentiality obligations of the parties. Fees and Expenses. Except as where otherwise provided in the Merger Agreement, whether or not the Merger is consummated, all costs and expenses incurred in connection with the Merger Agreement and the transactions contemplated thereby shall be paid by the party incurring such costs and expenses. The Company has agreed in the Merger Agreement that, if (i) any person (other than Mallinckrodt Veterinary or any of its affiliates) shall have become, prior to the termination of the Merger Agreement, the beneficial owner of 50% or more of the outstanding Shares, (ii) the Offer shall have expired at a time when the Minimum Condition shall not have been satisfied and at any time on or prior to nine months after the date of the expiration of the Offer any person (other than Mallinckrodt Veterinary or any of its affiliates) shall acquire beneficial ownership of 50% or more of the outstanding Shares or shall consummate an Acquisition Proposal at a price per share less than the sum of the Offer Price plus the amount determined by dividing $1,500,000 by the number of Shares outstanding immediately prior thereto, (iii) at any time prior to the termination of the Merger Agreement any person (other than the Offeror or any of its affiliates) shall publicly announce any Acquisition Proposal and, at any time on or prior to nine months after the date of the termination of the Merger Agreement, shall become the beneficial owner of 50% or more of the outstanding Shares or shall consummate an Acquisition Proposal, or (iv) the Company terminates the Merger Agreement in accordance with clause (b) (ii) set forth above under "Termination", then the Company shall, in the case of clause (i), (ii) or (iii) above, promptly, but in no event later than two business days after the first of such events to occur, or, in the case of clause (iv), at or prior to the time of such termination, pay Mallinckrodt Veterinary the sum of $1,500,000 (the "Termination Fee"). If the Company fails to pay such amount when due, which failure is finally determined by a court of competent jurisdiction, Mallinckrodt Veterinary shall be entitled to the payment from the Company, in addition to any such amount, of any legal fees and expenses incurred in procuring such judicial determination. If (i) the Merger Agreement is terminated pursuant to clause (b)(ii) set forth above under "Termination" or clause (c)(i), (c)(ii) (but only if the Merger Agreement is terminated because the representations or warranties of the Company were not true and correct in all material respects when made (other than those qualified by "knowledge of the Company" or "to the best knowledge of the Company")), (c)(iii) or (c)(iv) as set forth above under "Termination" or (ii) at any time prior to the termination of the Merger Agreement, any person (other than Mallinckrodt Veterinary or any of its affiliates) shall publicly announce any Acquisition Proposal and, at any time on or prior to six months after the termination of the Merger Agreement, shall become the beneficial owner of 50% or more of the outstanding Shares or shall consummate an Acquisition Proposal, the Company shall reimburse Mallinckrodt Veterinary and the Offeror (not later than two business days after submission of statements therefor) for all documented costs and expenses (including without limitation, all legal, investment banking, printing, depositary and related fees and expenses) (the "Expenses"); provided, however, that the amount of Expenses to be paid to Mallinckrodt Veterinary and the Offeror shall not exceed $750,000; provided, further, that the amount of the Expenses paid shall be credited against the Termination Fee; and provided, further, that if the Company has paid the Termination Fee prior to any payment of Expenses, then no Expenses shall be payable. 14. DIVIDENDS AND DISTRIBUTIONS. The Merger Agreement provides that neither the Company nor any of its subsidiaries will, among other things, prior to the Effective Time (a)(i) declare, set aside or pay any dividends or make any other actual, constructive or deemed distributions in respect of any of its capital stock, or otherwise make 26 any payments to stockholders of the Company in their capacity as such, other than dividends payable to the Company declared by any of the Company's subsidiaries, (ii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (iii) except as disclosed by the Company to Mallinckrodt Veterinary pursuant to the Merger Agreement, purchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities; or (b) issue, deliver, sell, pledge, dispose of or otherwise encumber any shares of its capital stock, any other voting securities or equity equivalent or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities or equity equivalent (other than, in the case of the Company, the issuance of Shares during the period from the date of the Merger Agreement through the Effective Time upon the exercise of certain outstanding stock options of the Company issued pursuant to the Stock Plans on the date of the Merger Agreement in accordance with their current terms). 15. CERTAIN CONDITIONS TO THE OFFEROR'S OBLIGATIONS. Notwithstanding any other term of the Offer or the Merger Agreement, the Offeror shall not be required to accept for payment or pay for, subject to any applicable rules and regulations of the Commission, including Rule 14e-1(c) of the Exchange Act, any Shares not theretofore accepted for payment or paid for and may terminate or amend the Offer as to such Shares unless (i) there shall have been validly tendered and not withdrawn prior to the expiration of the Offer that number of Shares which would represent at least a majority of the outstanding Shares on a fully diluted basis and (ii) any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), applicable to the purchase of Shares pursuant to the Offer shall have expired or been terminated. Furthermore, notwithstanding any other term of the Offer or the Merger Agreement, the Offeror shall not be required to accept for payment or, subject as aforesaid, to pay for any Shares not theretofore accepted for payment or paid for, and may terminate or amend the Offer if at any time on or after the date of the Merger Agreement and before the acceptance of such Shares for payment or the payment therefor, any of the following conditions exist or shall occur and remain in effect: (a) there shall have been instituted or pending any action or proceeding by any governmental, regulatory or administrative agency or authority, which (i) seeks to challenge the acquisition by the Offeror of Shares pursuant to the Offer, restrain, prohibit or delay the making or consummation of the Offer or the Merger, or obtain any material damages in connection therewith, (ii) seeks to make the purchase of or payment for some or all of the Shares pursuant to the Offer or the Merger illegal, (iii) seeks to impose material limitations on the ability of the Offeror (or any of its affiliates) effectively to acquire or hold, or to require Mallinckrodt Veterinary or the Company or any of their respective affiliates or subsidiaries to dispose of or hold separate, any material portion of the assets or the business of Mallinckrodt Veterinary and its affiliates taken as a whole or the Company and its subsidiaries taken as a whole, or (iv) seeks to impose material limitations on the ability of the Offeror (or its affiliates) to exercise full rights of ownership of the Shares purchased by it, including, without limitation, the right to vote the Shares purchased by it on all matters properly presented to the stockholders of the Company; or (b) there shall have been promulgated, enacted, entered, enforced or deemed applicable to the Offer or the Merger, by any state, federal or foreign government or governmental authority or by any court, domestic or foreign, any statute, rule, regulation, judgment, decree, order or injunction, that could reasonably be expected to, in the judgment of Mallinckrodt Veterinary, directly or indirectly, result in any of the consequences referred to in clauses (i) through (iv) of subsection (a) above; or (c) there shall have occurred (i) any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market in the United 27 States, (ii) the declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (iii) the commencement of a war, armed hostilities or other international or national calamity directly or indirectly involving the United States which would reasonably be expected to have a Material Adverse Effect on the Company or prevent (or materially delay) the consummation of the Offer, (iv) any limitation (whether or not mandatory) by any governmental or regulatory authority on, or any other event which, in the reasonable judgment of Mallinckrodt Veterinary, has had a material adverse effect on the extension of credit by banks or other lending institutions in the United States, or (v) from the date of the Merger Agreement through the date of termination or expiration of the Offer, a decline of at least 25% in either the Dow Jones Industrial Average or the Standard & Poor's 500 Index; or (d) the Company and Mallinckrodt Veterinary shall have reached an agreement or understanding that the Offer or the Merger Agreement be terminated or the Merger Agreement shall have been terminated in accordance with its terms; or (e) any of the representations and warranties made by the Company in the Merger Agreement shall not have been true and correct in all material respects when made, or shall thereafter have ceased to be true and correct in any material respect as if made as of such later date (other than representations and warranties made as of a specified date), or the Company shall not in all material respects have performed each obligation and agreement and complied with each covenant to be performed and complied with by it under the Merger Agreement, which failure to be true and correct or such failure to perform or comply has not been cured within five business days following the Company's receipt of notice from Mallinckrodt Veterinary of notice of the breach and such failure to be true and correct or such failure to perform or comply shall be reasonably expected to have a Material Adverse Effect on the Company; provided, however, that all references in the Merger Agreement to the phrases "knowledge of the Company" and "to the best knowledge of the Company," and variants thereof, shall be disregarded for the purposes of determining whether the Company shall have breached its representations, warranties and covenants resulting in the ability of Mallinckrodt Veterinary to terminate the Merger Agreement pursuant to this clause (e); or (f) the Company's Board of Directors shall have modified or amended its recommendation of the Offer in any manner adverse to Mallinckrodt Veterinary or shall have withdrawn its recommendation of the Offer, or shall have recommended acceptance of any Acquisition Proposal or shall have resolved to do any of the foregoing, or shall have failed to reject any Acquisition Proposal within ten business days after receipt by the Company or public announcement thereof; or (g) (i) any corporation, entity, person or "group" (as defined in Section 13(d)(3) of the Exchange Act) other than Mallinckrodt Veterinary, shall have acquired beneficial ownership of 50% or more of the outstanding Shares, or shall have been granted any options or rights, conditional or otherwise, to acquire a total of 50% or more of the outstanding Shares; (ii) any new group shall have been formed which beneficially owns 50% or more of the outstanding Shares; or (iii) any person (other than Mallinckrodt Veterinary or one or more of its affiliates) shall have entered into an agreement in principle or definitive agreement with the Company with respect to a tender or exchange offer for any Shares or a merger, consolidation or other business combination with or involving the Company; or (h) there shall have occurred a Material Adverse Change to the Company. The foregoing conditions are for the sole benefit of Mallinckrodt Veterinary and may be asserted by Mallinckrodt Veterinary regardless of the circumstances giving rise to any such condition and may be waived by Mallinckrodt Veterinary, in whole or in part, at any time and from time to time, in the sole discretion of Mallinckrodt Veterinary. The failure by Mallinckrodt Veterinary at any time to exercise any of the foregoing rights will not be deemed a waiver of any right, the waiver of such right with respect to 28 any particular facts or circumstances shall not be deemed a waiver with respect to any other facts or circumstances, and each right will be deemed an ongoing right which may be asserted at any time and from time to time. Should the Offer be terminated pursuant to the foregoing provisions, all tendered Shares not theretofore accepted for payment shall forthwith be returned by the Depositary to the tendering stockholders. 16. CERTAIN LEGAL MATTERS. Except as set forth in this Section, the Offeror is not aware of any approval or other action by any governmental or administrative agency which would be required for the acquisition or ownership of Shares by the Offeror as contemplated herein. Should any such approval or other action be required, it will be sought, but the Offeror has no current intention to delay the purchase of Shares tendered pursuant to the Offer pending the outcome of any such matter, subject, however, to the Offeror's right to decline to purchase Shares if any of the conditions specified in Section 15 shall have occurred. There can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions, or that adverse consequences might not result to the Company's business or that certain parts of the Company's business might not have to be disposed of if any such approvals were not obtained or other action taken. Antitrust. Under the provisions of the HSR Act applicable to the Offer, the acquisition of Shares under the Offer may be consummated following the expiration of a 15-day waiting period following the filing by Mallinckrodt Group of a Notification and Report Form with respect to the Offer, unless Mallinckrodt Group receives a request for additional information or documentary material from the Department of Justice, Antitrust Division (the "Antitrust Division") or the Federal Trade Commission ("FTC") or unless early termination of the waiting period is granted. Mallinckrodt Group, made such a filing on September 29, 1995 and, accordingly, the initial waiting period will expire at 11:59 p.m., New York City time, on October 14, 1995. If, within the initial 15- day waiting period, either the Antitrust Division or the FTC request additional information or material from Mallinckrodt Group concerning the Offer, the waiting period will be extended to the tenth calendar day after the date of substantial compliance by Mallinckrodt Group with such request. Complying with a request for additional information or material can take a significant amount of time. The Antitrust Division and the FTC frequently scrutinize the legality under the antitrust laws of transactions such as the Offeror's proposed acquisition of the Company. At any time before or after the Offeror's acquisition of Shares pursuant to the Offer, the Antitrust Division or the FTC could take such action under the antitrust laws as either deems necessary or desirable in the public interest, including seeking to enjoin the purchase of Shares pursuant to the Offer or the consummation of the Merger or seeking the divestiture of Shares acquired by the Offeror or the divestiture of substantial assets of the Company or its subsidiaries or Mallinckrodt Group or its subsidiaries. Private parties may also bring legal action under the antitrust laws under certain circumstances. There can be no assurance that a challenge to the Offer on antitrust grounds will not be made, or, if such a challenge is made, of the result thereof. If any applicable waiting period under the HSR Act has not expired or been terminated prior to the Expiration Date, the Offeror will not be obligated to proceed with the Offer or the purchase of any Shares not theretofore purchased pursuant to the Offer. See Section 15. State Takeover Laws. The Company is incorporated under the laws of the State of Delaware. In general, Section 203 of the DGCL ("Section 203") prevents an "interested stockholder" (including a person who owns or has the right to acquire 15% or more of a corporation's outstanding voting stock) from engaging in a "business combination" (defined to include mergers and certain other actions) with 29 a Delaware corporation for a period of three years following the date such person became an interested stockholder unless, among other things, the "business combination" is approved by the Board of Directors of such corporation prior to such date. The Company's Board of Directors has approved the Offer and the Merger. Accordingly, Section 203 is inapplicable to the Offer and the Merger. A number of other states have adopted laws and regulations applicable to attempts to acquire securities of corporations which are incorporated, or have substantial assets, stockholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects in such states. In Edgar v. MITE Corp., in 1982, the Supreme Court of the United States (the "U.S. Supreme Court") invalidated on constitutional grounds the Illinois Business Takeover statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However in 1987, in CTS Corp. v. Dynamics Corp. of America, the U.S. Supreme Court held that the State of Indiana may, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquirer from voting on the affairs of a target corporation without the prior approval of the remaining stockholders. The state law before the U.S. Supreme Court was by its terms applicable only to corporations that had a substantial number of stockholders in the state and were incorporated there. The Company, directly or through subsidiaries, conducts business in a number of states throughout the United States, some of which have enacted takeover laws. The Offeror does not know whether any of these laws will, by their terms, apply to the Offer or the Merger and has not complied with any such laws. Should any person seek to apply any state takeover law, the Offeror will take such action as then appears desirable, which may include challenging the validity or applicability of any such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover laws is applicable to the Offer or the Merger, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Offeror might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, the Offeror might be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer and the Merger. In such case, the Offeror may not be obligated to accept for payment any Shares tendered. See Section 15. 17. FEES AND EXPENSES. Neither the Offeror, Mallinckrodt Veterinary nor Mallinckrodt Group, nor any of their officers, directors, stockholders, agents or other representatives, will pay any fees or commissions to any broker, dealer or other person (other than the Dealer Managers, the Information Agent and the Depositary) for soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust companies and other nominees will, upon request, be reimbursed by the Offeror for customary mailing and handling expenses incurred by them in forwarding materials to their customers. Goldman, Sachs & Co. ("Goldman Sachs") is acting as Dealer Managers in connection with the Offer and has provided certain financial advisory services to Mallinckrodt Veterinary and the Offeror in connection with the proposed acquisition of the Shares. Pursuant to its engagement letter with Goldman Sachs, Mallinckrodt Veterinary paid Goldman Sachs a fee of $250,000, $100,000 of which was paid upon the execution of the engagement letter and the remainder of which was paid upon the delivery to Mallinckrodt Veterinary and Mallinckrodt Group of an opinion with respect to the consideration to be paid to the Company's stockholders pursuant to the Offer and the Merger. In addition, the Offeror has agreed to reimburse Goldman Sachs for certain reasonable out-of- pocket expenses incurred by Goldman Sachs in connection with the Offer, including the reasonable fees and disbursements of their counsel, and to indemnify Goldman Sachs against certain liabilities and expenses. Goldman Sachs is not receiving any separate fee for acting as Dealer Managers in connection with the Offer. From time to time, Goldman Sachs performs investment banking services for Mallinckrodt Group, for which Goldman Sachs is separately compensated. 30 The Offeror has retained Georgeson & Company Inc., as Information Agent, and First Chicago Trust Company of New York, as Depositary, in connection with the Offer. The Information Agent and the Depositary will receive reasonable and customary compensation for their services hereunder and reimbursement for their reasonable out-of-pocket expenses. The Information Agent and the Depositary will also be indemnified by the Offeror against certain liabilities in connection with the Offer. The Information Agent may contact holders of Shares by mail, telex, telegraph and personal interviews and may request brokers, dealers and other nominee stockholders to forward materials relating to the Offer to beneficial owners of Shares. 18. MISCELLANEOUS. The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares residing in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. 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 Offeror by the Dealer Managers or one or more registered brokers or dealers licensed under the laws of such jurisdiction. No person has been authorized to give any information or make any representation on behalf of the Offeror other than as contained in this Offer to Purchase or in the Letter of Transmittal and, if any such information or representation is given or made, it should not be relied upon as having been authorized by the Offeror. The Offeror, Mallinckrodt Veterinary and Mallinckrodt Group have filed with the Commission the Schedule 14D-1, pursuant to Section 14(d)(1) of the Exchange Act and Rule 14d-1 promulgated thereunder, furnishing certain information with respect to the Offer. Such Schedule 14D-1 and any amendments thereto, including exhibits, may be examined and copies may be obtained at the same places and in the same manner as set forth with respect to the Company in Section 8 (except that they will not be available at the regional offices of the Commission). Mallinckrodt Veterinary Acquisitions, Inc. September 29, 1995 31 ANNEX I CERTAIN INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF MALLINCKRODT GROUP, MALLINCKRODT VETERINARY AND THE OFFEROR 1. DIRECTORS AND EXECUTIVE OFFICERS OF MALLINCKRODT GROUP. Set forth below are the name, current business address, citizenship, present principal occupation or employment and five-year employment history of each director and executive officer of Mallinckrodt Group. Unless otherwise indicated, each such person's business address is 7733 Forsyth Boulevard, St. Louis, Missouri 63105. Except for Herve M. Pinet, who is a citizen of France, all persons listed below are citizens of the United States.
PRESENT OCCUPATION OR EMPLOYMENT, MATERIAL POSITIONS HELD DURING PAST FIVE YEARS, AND NAME AND BUSINESS ADDRESS BUSINESS ADDRESS THEREOF ------------------------- ------------------------------------------ Barbara A. Abbett................... Vice President, Communications of Mallinc- krodt Group since April 1994; Vice Presi- dent and Senior Partner with Fleishman- Hilliard, Inc., 200 North Broadway, St. Louis, Missouri 63102, from 1979 to April 1994. Ashok Chawla........................ Vice President, Strategic Management of Mallinckrodt Group since July 1991; Vice President Strategic Planning and Business Development of Mallinckrodt Veterinary, 421 East Hawley Street, Mundelein, Illinois 60060, from August 1990 to July 1991. Paul D. Cottone..................... Senior Vice President of Mallinckrodt Group 421 East Hawley Street since October 1994; President and Chief Ex- Mundelein, Illinois 60060 ecutive Officer and Director of Mallinc- krodt Veterinary since October 1994; Vice President, U.S. Operations of the Merck & Co. AgVet Division, Metropolitan Corporate Plaza, 485 Rt. 1 South, Building F, Isle, New Jersey 08830, from 1993 to October 1994; Executive Director, International Op- erations of the Merck & Co. AgVet Division from 1987 to 1993. Bruce K. Crockett................... Vice President, Human Resources of Mallinc- krodt Group since March 1995; Vice Presi- dent, Organization Development at Eastern Enterprises, 9 Riverside Road, Weston, Mas- sachusetts 02193, from 1990 to February 1995. C. Ray Holman....................... Chairman of Mallinckrodt Group since Octo- ber 1994; President, Chief Executive Offi- cer and Director of Mallinckrodt Group since December 1992; Vice President of Mal- linckrodt Group from October 1990 to Decem- ber 1992; President and Chief Executive Of- ficer, Mallinckrodt Medical, Inc., 675 Mc- Donnell Boulevard, St. Louis, Missouri 63134 from January 1989 until December 1992; Director of Laclede Gas Company, Boatmen's Bancshares, Inc. and Barnes Hos- pital.
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PRESENT OCCUPATION OR EMPLOYMENT, MATERIAL POSITIONS HELD DURING PAST FIVE YEARS, AND NAME AND BUSINESS ADDRESS BUSINESS ADDRESS THEREOF ------------------------- ------------------------------------------ Roger A. Keller..................... Vice President, Secretary and General Coun- sel of Mallinckrodt Group since July 1993; Senior Vice President and General Counsel of Mallinckrodt Medical, Inc., 675 McDon- nell Boulevard, St. Louis, Missouri 63134 from September 1989 to March 1992. Robert G. Moussa.................... Senior Vice President of Mallinckrodt Group 675 McDonnell Boulevard since October 1993; Vice President of Mal- St. Louis, Missouri 63134 linckrodt Group from December 1992 to Octo- ber 1993; President and Chief Executive Of- ficer of Mallinckrodt Medical, Inc. since December 1992; Senior Vice President and Group Executive, Mallinckrodt Medical, Inc. from September 1992 to December 1992; Group Vice President, International, Mallinckrodt Medical, Inc., from January 1989 to Septem- ber 1992. Mack G. Nichols..................... Senior Vice President of Mallinckrodt Group 16305 Swingley Ridge Dr. since October 1993; Vice President of Mal- Chesterfield, Missouri 63017 linckrodt Group from October 1990 to Octo- ber 1993; President and Chief Executive Of- ficer of Mallinckrodt Chemical, Inc. since January 1989. Michael A. Rocca.................... Senior Vice President, Chief Financial Of- ficer and Treasurer of Mallinckrodt Group since April 1994; Corporate Vice President and Treasurer of Honeywell Inc., Honeywell Plaza, P.O. Box 5240, Minneapolis, Minne- sota 55440 from March 1992 to April 1994; Vice President, Finance for Honeywell Eu- rope, S.A., 3 Avenue du Bourget, Brussels, Belgium, from 1990 to 1992. William B. Stone.................... Vice President and Controller of Mallinc- krodt Group since November 1990 and Vice President of Mallinckrodt, Inc. since April 1983; Assistant Controller and Corporate Staff Vice President of Mallinckrodt Group from October 1989 to November 1990. Raymond F. Bentele.................. Director of Mallinckrodt Group since 1990; Executive Vice President of Mallinckrodt Group from 1989 until his retirement in De- cember 1992; President and Chief Executive Officer of Mallinckrodt, Inc. from 1981 un- til his retirement in 1992; Director of Kellwood Company, Leggett & Platt, Inc. and IMC Global Inc.
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PRESENT OCCUPATION OR EMPLOYMENT, MATERIAL NAME AND BUSINESS POSITIONS HELD DURING PAST FIVE YEARS, AND ADDRESS BUSINESS ADDRESS THEREOF ----------------- ------------------------------------------ William L. Davis, III... Director of Mallinckrodt Group since Febru- Emerson Electric Co. ary 1995; Senior Executive Vice President 8000 W. Florissant of Emerson Electric Co. since 1993; Execu- St. Louis, Missouri tive Vice President of Emerson Electric Co. 63136 from 1988 to 1993. Ronald G. Evens, M.D.... Director of Mallinckrodt Group since 1990; Mallinckrodt Institute Director of the Mallinckrodt Institute of of Radiology Radiology at Washington University, St. 510 South Kingshighway Louis, Missouri; Head of the University's St. Louis, MO 63110 Department of Radiology and Mallinckrodt Professor of Radiology of the University's Medical School; Professor of Medical Eco- nomics at Olin School of Business; Vice Chancellor for Financial Affairs of the University from 1988 to 1990; Director of The Boatmen's National Bank of St. Louis and Right Choice of Missouri (formerly, Blue Cross/Blue Shield of Missouri). Alec Flamm.............. Director of Mallinckrodt Group since 1986; Retired Vice Chairman, President and Chief Operating Officer of Union Carbide Corpora- tion; held various positions, including di- rector, at Union Carbide Corporation from 1949 until retirement from board of direc- tors in 1986. Roberta S. Karmel....... Director of Mallinckrodt Group since 1980; Kelley, Drye & Warren Professor of Law and Co-Director, Center 101 Park Avenue for the Study of International Business New York, New York 10178 Law, Brooklyn Law School since 1985; Of Counsel, Kelley Drye & Warren, since Janu- ary 1, 1995; Partner of Kelley Drye & War- ren from 1987 to 1994; Director of Kemper National Insurance Companies. Claudine B. Malone...... Director of Mallinckrodt Group since 1994; Financial & Management President of Financial & Management Con- Consulting sulting; Director of Dell Computer Corpora- 7570 Potomac Fall Road tion, Hannaford Bros. Co., Hasbro, Inc., McLean, Virginia 22102 Houghton Mifflin Company, Lafarge Corpora- tion, The Limited Inc., Lowe's Companies, Inc., Science Applications International Corporation and The Union Pacific Corpora- tion. Morton Moskin........... Director of Mallinckrodt Group since 1973; White & Case Consultant; Retired partner of White & 1155 Avenue of the Amer- Case; Partner of White & Case from 1962 to icas 1994. New York, New York 10036 Herve M. Pinet.......... Director of Mallinckrodt Group since 1973; c/o Compagnie Bancaire International consultant; Senior Advisor, 5 Avenue Kleber Merrill Lynch & Co., North Tower--31st 75116 Paris, FRANCE Floor, World Financial Center, New York, New York 10281, from 1984 until May 1991.
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PRESENT OCCUPATION OR EMPLOYMENT, MATERIAL POSITIONS HELD DURING PAST FIVE YEARS, AND NAME AND BUSINESS ADDRESS BUSINESS ADDRESS THEREOF ------------------------- ------------------------------------------ Brian M. Rushton, Ph. D............. Director of Mallinckrodt Group since 1994; 3366 Bingen Road President of the American Chemical Society; Bethlehem, PA 18015 Senior Vice President, Research and Devel- opment of Air Products and Chemicals, Inc., 7201 Hamilton Boulevard, Allentown, Penn- sylvania 18195, from 1992 to 1993; Vice President of Research and Development of Air Products and Chemicals, Inc. from 1981 to 1992. Daniel R. Toll...................... Director of Mallinckrodt Group since 1985; Corona Corporation Corporate and civic director; Director of 135 S. LaSalle St.--Suite 1117 Brown Group, Inc., A.P. Green Industries, Chicago, IL 60603 Inc., Kemper National Insurance Companies, Kemper Corporation, Lincoln National Con- vertible Securities Fund, Inc., Lincoln Na- tional Income Fund, Inc. and NICOR, Inc. Anthony Viscusi..................... Director of Mallinckrodt Group since April Vasomedical, Inc. 1995; President, Chief Executive Officer 150 Motor Parkway, Suite 408 and director of Vasomedical, Inc. since Hauppauge, New York 11788 June 1994; Senior Vice President, Worldwide Marketing for Merck & Co., Inc. AgVet Divi- sion; Metropolitan Corporate Plaza, 485 Rt. 1 South, Building F, Isle, New Jersey 08830, from 1987 to 1993.
A-4 2. DIRECTORS AND EXECUTIVE OFFICERS OF MALLINCKRODT VETERINARY. Set forth below are the name, current business address, citizenship, present principal occupation or employment and five-year employment history of each director and executive officer of Mallinckrodt Veterinary. Unless otherwise indicated, each such person's business address is 421 East Hawley Street, Mundelein, Illinois 60060. Except for Peter W. Baldwin, who is a citizen of the United Kingdom, and D. Hugh McIntyre, who is a citizen of the United Kingdom and Argentina, all persons listed below are citizens of the United States.
PRESENT OCCUPATION OR EMPLOYMENT, MATERIAL POSITIONS HELD DURING PAST FIVE YEARS, AND NAME AND BUSINESS ADDRESS BUSINESS ADDRESS THEREOF ------------------------- ------------------------------------------ Edwin J. Andrews, M.D............... Senior Vice President, Science & Technology of Mallinckrodt Veterinary since 1995; Uni- versity of Pennsylvania--Dean and Professor of Pathology, School of Veterinary Medi- cine, 3800 Spruce Street, Philadelphia, Pennsylvania 19104, from 1987 to 1994. Peter W. Baldwin.................... Vice President, Operations of Mallinckrodt Veterinary since 1993; Director of Opera- tions, Europe from 1990 to 1993. David S. Benson..................... Vice President, Asia Pacific of Mallinc- Mallinckrodt Veterinary Plc. Ltd. krodt Veterinary since 1995; General Manag- 101 Thomson Road er, Asia from 1993 to 1995; Area Manager #23-01 United Square Northeast Asia from 1991 to 1993; Market Singapore 1130 Development Manager, Asia from 1989 to 1991. Paul D. Cottone..................... Senior Vice President of Mallinckrodt Group since October 1994; President and Chief Ex- ecutive Officer and Director of Mallinc- krodt Veterinary since October 1994; Vice President, U.S. Operations of the Merck AgVet Division, Metropolitan Corporate Pla- za, 485 Rt. 1 South, Building F, Isle, New Jersey 08830, from 1993 to October 1994; Executive Director, International Opera- tions of the Merck AgVet Division from 1987 to 1993. Thomas L. Farquer................... Vice President, Law of Mallinckrodt Veteri- nary since 1990. David W. Froesel, Jr................ Vice President, Finance and Administration of Mallinckrodt Veterinary since 1993; Cor- porate Controller Mallinckrodt Medical, Inc., 675 McDonnell Boulevard, St. Louis, Missouri 63134, from 1991 to 1993; Corpo- rate Assistant Controller of Mallinckrodt Medical, Inc. from 1990 to 1991. Beverley L. Hayes................... Vice President, Human Resources of Mallinc- krodt Veterinary since 1994; Vice Presi- dent, Organization and Human Resources of Mallinckrodt Group from 1990 to 1994.
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PRESENT OCCUPATION OR EMPLOYMENT, MATERIAL POSITIONS HELD DURING PAST FIVE YEARS, AND NAME AND BUSINESS ADDRESS BUSINESS ADDRESS THEREOF ------------------------- ------------------------------------------ Thomas S. Lytle..................... Vice President, North America of Mallinc- krodt Veterinary since 1995; Vice Presi- dent, Marketing of Pfizer, Inc., One Pfizer Way, Lee's Summit, Missouri 64081, from 1991 to 1995; Vice President, Marketing of Lederle Laboratories, One Cyanamid Plaza, Wayne, New Jersey 07474, from 1989 to 1991. Kermit E. McCormick................. Senior Vice President, Feed Ingredients of Mallinckrodt Veterinary since 1995; Vice President and General Manager, Feed Ingre- dients from 1992 to 1994; General Manager, Feed Ingredients from 1991 to 1992; Direc- tor of Sales, Feed Ingredients from 1985 to 1991. D. Hugh McIntyre.................... Vice President, Latin America of Mallinc- Mallinckrodt Veterinary Ltda. krodt Veterinary since 1995; General Manag- Av. Sir Henry Wellcome, 335 er, South America from 1993 to 1994; Gen- 06700.00 Lotin, SP eral Manager, Pitman-Moore, Brasil from Brazil 1990 to 1993. David Morra......................... Senior Vice President, Europe of Mallinc- Mallinckrodt Limited Europe krodt Veterinary since 1995; Group Vice Breakspear Road South President, Europe/Australia, New Zealand Harefield, Urbridge from 1994 to 1995; Vice President and Gen- Middlesex, UB9 6LS eral Manager, Cardiology, U.S. of Mallinc- United Kingdom krodt Medical, Inc., 675 McDonnell Boule- vard St. Louis, Missouri 63134, from 1991 to 1994; General Manager, Cardiology Divi- sion of Mallinckrodt Medical, Inc. from 1989 to 1991.
3. DIRECTOR AND EXECUTIVE OFFICERS OF THE OFFEROR. Unless otherwise indicated, for each person identified below all information concerning the current business address, present principal occupation or employment and five- year employment history for such person is the same as the information given above. Each person was elected in September 1995. Except for Peter W. Baldwin, who is a citizen of the United Kingdom, all persons listed below are citizens of the United States. Edwin J. Andrews......................... Vice President of the Offeror. Peter W. Baldwin......................... Vice President of the Offeror. Paul D. Cottone.......................... President and Director of the Offeror. Thomas L. Farquer........................ Secretary of the Offeror. David W. Froesel, Jr..................... Vice President of the Offeror.
A-6 Facsimile copies of the Letter of Transmittal will be accepted. The Letter of Transmittal and certificates for Shares and any other required documents should be sent or delivered by each stockholder of the Company or his broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of the addresses set forth below: The Depositary for the Offer is: FIRST CHICAGO TRUST COMPANY OF NEW YORK ---------------- By Mail: By Hand or Overnight Delivery: Tenders & Exchanges Tenders & Exchanges Suite 4660-SYN Suite 4680-SYN P.O. Box 2559 14 Wall Street Jersey City, New Jersey 07303-2559 8th Floor New York, New York 10005 Facsimile for Eligible Institutions: (201) 222-4720 or 4721 To confirm receipt of notice of guaranteed delivery: (201) 222-4707 Any questions or requests for assistance or additional copies of the Offer to Purchase and the Letter of Transmittal and Notice of Guaranteed Delivery may be directed to the Information Agent or the Dealer Manager at their respective telephone numbers and locations listed below. Stockholders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer. The Information Agent for the Offer is: GEORGESON & COMPANY INC. WALL STREET PLAZA NEW YORK, NEW YORK 10005 BANKS AND BROKERS CALL COLLECT: (212) 440-9800 ALL OTHERS CALL TOLL-FREE: (800) 223-2064 The Dealer Managers for the Offer are: GOLDMAN, SACHS & CO. 85 BROAD STREET NEW YORK, NEW YORK 10004 EX-99.A2 3 LETTER OF TRANSMITTAL EXHIBIT (a)(2) LETTER OF TRANSMITTAL TO TENDER SHARES OF COMMON STOCK OF SYNTRO CORPORATION PURSUANT TO THE OFFER TO PURCHASE DATED SEPTEMBER 29, 1995 BY MALLINCKRODT VETERINARY ACQUISITIONS, INC. A WHOLLY OWNED SUBSIDIARY OF MALLINCKRODT VETERINARY, INC. AND AN INDIRECT WHOLLY OWNED SUBSIDIARY OF MALLINCKRODT GROUP INC. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, OCTOBER 27, 1995, UNLESS THE OFFER IS EXTENDED. The Depositary: FIRST CHICAGO TRUST COMPANY OF NEW YORK By Hand or Overnight Courier: By Mail: Tenders & Exchanges Tenders & Exchanges Suite 4680-SYN Suite 4660-SYN 14 Wall Street P.O. Box 2559 8th Floor Jersey City, NJ 07303-2559 New York, New York 10005 DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OTHER THAN AS SET FORTH ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE THEREFOR PROVIDED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW. 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 stockholders of Syntro Corporation if certificates are to be forwarded herewith or, unless an Agent's Message (as defined in the Offer to Purchase) is utilized, if delivery of Shares (as defined below) is to be made by book-entry transfer to the Depositary's account at The Depository Trust Company, the Midwest Securities Trust Company or the Philadelphia Depository Trust Company (hereinafter collectively referred to as the "Book-Entry Transfer Facilities") pursuant to the procedures set forth in Section 3 of the Offer to Purchase (as defined below). Stockholders whose certificates for Shares are not immediately available or who cannot deliver their Shares and all other documents required hereby to the Depositary by the Expiration Date (as defined in the Offer to Purchase), or who cannot comply with the book-entry transfer procedures on a timely basis, may nevertheless tender their Shares pursuant to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. See Instruction 2. DESCRIPTION OF SHARES TENDERED - --------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) (PLEASE FILL IN, IF SHARES TENDERED BLANK) (ATTACH ADDITIONAL LIST IF NECESSARY) - ------------------------------------------------------ NUMBER OF SHARE SHARES NUMBER OF CERTIFICATE REPRESENTED BY SHARES NUMBER(S)* CERTIFICATE(S)* TENDERED** - ------------------------------------------------------ - ------------------------------------------------------ - ------------------------------------------------------ - ------------------------------------------------------ - ------------------------------------------------------ TOTAL SHARES - ------------------------------------------------------
*Need not be completed by stockholders tendering by book-entry transfer. **Unless otherwise indicated, it will be assumed that all Shares represented by any certificates delivered to the Depositary are being tendered. See Instruction 4. NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY [_] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING: Name of Tendering Institution __________________________________________________ Account No. _________________________________________________________________ at [_] The Depository Trust Company [_] Midwest Securities Trust Company [_] Philadelphia Depository Trust Company Transaction Code No. ___________________________________________________________ [_] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of Tendering Stockholder(s) ____________________________________________ Date of Execution of Notice of Guaranteed Delivery _____________________________ Window Ticket Number (if any) __________________________________________________ Name of Institution which Guaranteed Delivery __________________________________ If delivery is by book-entry transfer __________________________________________ Name of Tendering Institution ______________________________________________ Account No. _____________________________________________________________ at [_] The Depository Trust Company [_] Midwest Securities Trust Company [_] Philadelphia Depository Trust Company Transaction Code No. ___________________________________________________________ Ladies and Gentlemen: The undersigned hereby tenders to Mallinckrodt Veterinary Acquisitions, Inc. (the "Offeror"), a Delaware corporation and a wholly owned subsidiary of Mallinckrodt Veterinary, Inc., a Delaware corporation ("Mallinckrodt Veterinary"), and an indirect wholly owned subsidiary of Mallinckrodt Group Inc., a New York corporation, the above-described shares of common stock, $0.01 par value per share (the "Shares") of Syntro Corporation, a Delaware corporation (the "Company"), pursuant to the Offeror's offer to purchase all of the outstanding Shares at a purchase price of $3.55 per Share, net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated September 29, 1995 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which together with the Offer to Purchase constitute the "Offer"). The Offer is being made in connection with the Agreement and Plan of Merger, dated as of September 25, 1995, among Mallinckrodt Veterinary, the Offeror and the Company. Subject to and effective upon acceptance for payment of and payment for the Shares tendered herewith, the undersigned hereby sells, assigns and transfers to or upon the order of the Offeror all right, title and interest in and to all the Shares that are being tendered hereby (and any and all other Shares or other securities issued or issuable in respect thereof on or after September 22, 1995) and appoints the Depositary the true and lawful agent and attorney- in-fact of the undersigned with respect to such Shares (and all such other Shares or securities), with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (a) deliver certificates for such Shares (and all such other Shares or securities), or transfer ownership of such Shares (and all such other Shares or securities) on the account books maintained by any of the Book-Entry Transfer Facilities, together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of the Offeror, (b) present such Shares (and all such other Shares or securities) for transfer on the books of the Company and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and all such other Shares or securities), all in accordance with the terms of the Offer. The undersigned hereby irrevocably appoints Roger A. Keller and Thomas L. Farquer and each of them, the attorneys and proxies of the undersigned, each with full power of substitution, to exercise all voting and other rights of the undersigned in such manner as each such attorney and proxy or his substitute shall in his sole judgment deem proper, with respect to all of the Shares tendered hereby which have been accepted for payment by the Offeror prior to the time of any vote or other action (and any and all other Shares or other securities or rights issued or issuable in respect of such Shares on or after September 22, 1995) at any meeting of stockholders of the Company (whether annual or special and whether or not an adjourned meeting) or otherwise. This proxy is irrevocable and is granted in consideration of, and is effective upon, the acceptance for payment of such Shares by the Offeror in accordance with the terms of the Offer. Such acceptance for payment shall revoke any other proxy or written consent granted by the undersigned at any time with respect to such Shares (and all such other Shares or other securities or rights), and no subsequent proxies will be given or written consents will be executed by the undersigned (and if given or executed, will not be deemed effective). The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby (and any and all other Shares or other securities or rights issued or issuable in respect of such Shares on or after September 22, 1995) and that when the same are accepted for payment by the Offeror, the Offeror will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claims. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or the Offeror to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby (and all such other Shares or other securities or rights). All authority herein conferred or agreed to be conferred 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. Except as stated in the Offer, this tender is irrevocable. The undersigned understands that tenders of Shares pursuant to any one of the procedures described in Section 3 of the Offer to Purchase and in the instructions hereto will constitute an agreement between the undersigned and the Offeror upon the terms and subject to the conditions of the Offer. Unless otherwise indicated under "Special Payment Instructions," please issue the check for the purchase price of any Shares purchased, and return any Shares not tendered or not purchased, in the name(s) of the undersigned. Similarly, unless otherwise indicated under "Special Delivery Instructions," please mail the check for the purchase price of any Shares purchased and return any certificates for Shares not tendered or not purchased (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned's signature(s). In the event that both "Special Payment Instructions" and "Special Delivery Instructions" are completed, please issue the check for the purchase price of any Shares purchased and return any Shares not tendered or not purchased in the name(s) of, and mail said check and any certificates to, the person(s) so indicated. The undersigned recognizes that the Offeror has no obligation, pursuant to the "Special Payment Instructions," to transfer any Shares from the name of the registered holder(s) thereof if the Offeror does not accept for payment any of the Shares so tendered. SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if the check for the purchase price of Shares purchased or certificates for Shares not tendered or not purchased are to be issued in the name of someone other than the undersigned. Issue check and/or certificates to: Name _______________________________ (Please Print) Address ____________________________ (Zip Code) ____________________________________ (Taxpayer Identification No.) (See Substitute Form W-9) SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 5 AND 7) To be completed ONLY if the check for the purchase price of Shares purchased or certificates for Shares not tendered or not purchased are to be mailed to someone other than the undersigned or to the undersigned at an address other than that shown below the undersigned's signature(s). Mail check and/or certificates to: Name _______________________________ Address ____________________________ ____________________________________ (Zip Code) INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. Guarantee of Signatures. Except as otherwise provided below, signatures on all Letters of Transmittal must be guaranteed by a firm that is 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 or by any other bank, broker, dealer, credit union, savings association or other entity which is an "eligible guarantor institution," as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (each of the foregoing constituting an "Eligible Institution"), unless the Shares tendered thereby are tendered (i) 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 (ii) for the account of an Eligible Institution. See Instruction 5. If the certificates are registered in the name of a person or persons other than the signer of this Letter of Transmittal, or if payment is to be made or delivered to, or certificates evidencing unpurchased Shares are to be issued or returned to, a person other than the registered owner or owners, then the tendered certificates must be endorsed or accompanied by duly executed stock powers, in either case signed exactly as the name or names of the registered owner or owners appear on the certificates or stock powers, with the signatures on the certificates or stock powers guaranteed by an Eligible Institution as provided herein. See Instruction 5. 2. Delivery of Letter of Transmittal and Shares. This Letter of Transmittal is to be used either if certificates are to be forwarded herewith or, unless an Agent's Message (as defined in the Offer to Purchase) is utilized, if the delivery of Shares is to be made by book-entry transfer pursuant to the procedures set forth in Section 3 of the Offer to Purchase. Certificates for all physically delivered Shares, or a confirmation of a book-entry transfer into the Depositary's account at one of the Book-Entry Transfer Facilities of all Shares delivered electronically, as well as a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) and any other documents required by this Letter of Transmittal or an Agent's Message in the case of a book-entry delivery, must be received by the Depositary at one of its addresses set forth on the front page of this Letter of Transmittal by the Expiration Date. Stockholders who cannot deliver their Shares and all other required documents to the Depositary by the Expiration Date must tender their Shares pursuant to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. Pursuant to such procedures: (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 provided by the Offeror, must be received by the Depositary prior to the Expiration Date; and (c) the certificates for all tendered Shares, in proper form for tender, or a confirmation of a book-entry transfer into the Depositary's account at one of the Book-Entry Transfer Facilities of all Shares delivered electronically, as well as a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof), and any other documents required by this Letter of Transmittal must be received by the Depositary within three trading days after the date of execution of such Notice of Guaranteed Delivery, all as provided in Section 3 of the Offer to Purchase. A "trading day" is any day on which the National Association of Securities Dealers Automated Quotation National Market is open for business. The method of delivery of Shares, the Letter of Transmittal and all other required documents, including delivery through a Book-Entry Transfer Facility, is at the option and risk of the tendering stockholder. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. No alternative, conditional or contingent tenders will be accepted, and no fractional Shares will be purchased. By executing this Letter of Transmittal (or a manually signed facsimile thereof), the tendering stockholder waives any right to receive any notice of the acceptance for payment of the Shares. 3. Inadequate Space. If the space provided herein is inadequate, the certificate numbers and/or the number of Shares should be listed on a separate schedule attached hereto. 4. Partial Tenders (not applicable to stockholders who tender by book-entry transfer). If fewer than all the Shares represented by any certificate delivered to the Depositary are to be tendered, fill in the number of Shares which are to be tendered in the box entitled "Number of Shares Tendered." In such case, a new certificate for the remainder of the Shares represented by the old certificate will be sent to the person(s) signing this Letter of Transmittal unless otherwise provided in the appropriate box on this Letter of Transmittal, as promptly as practicable following the expiration or termination of the Offer. All Shares represented by 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 certificates without alteration, enlargement or any change whatsoever. If any of the Shares tendered hereby are held of record by two or more persons, all such persons must sign this Letter of Transmittal. If any of the Shares tendered hereby are registered in different names on different certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of certificates. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, no endorsements of certificates or separate stock powers are required unless payment of the purchase price is to be made, or Shares not tendered or not purchased are to be returned, in the name of any person other than the registered holder(s). Signatures on any such 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 Shares tendered hereby, the certificate must be endorsed or accompanied by, appropriate stock powers, in either case, signed exactly as the name(s) of the registered holder(s) appear(s) on the certificates for such Shares. Signature(s) on any such certificates or stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal or any certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to the Offeror of the authority of such person so to act must be submitted. 6. Stock Transfer Taxes. The Offeror will pay any stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or Shares not tendered or not purchased are to be returned in the name of, any person other than the registered holder(s), then the amount of any stock transfer taxes (whether imposed on the registered holder(s), such other person or otherwise) 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 exemption therefrom, is submitted. Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the certificates listed in this Letter of Transmittal. 7. Special Payment and Delivery Instruction. If the check for the purchase price of any Shares purchased is to be issued, or any Shares not tendered or not purchased are to be returned, in the name of a person other than the person(s) signing this Letter of Transmittal or if the check or any certificates for Shares not tendered or not purchased are to be mailed to someone other than the person(s) signing this Letter of Transmittal or to the person(s) signing this Letter of Transmittal at an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed. Stockholders tendering Shares by book-entry transfer may request that Shares not purchased be credited to such account at any of the Book-Entry Transfer Facilities as such stockholder may designate under "Special Payment Instructions." If no such instructions are given, any such Shares not purchased will be returned by crediting the account at the Book-Entry Transfer Facilities designated above. 8. Substitute Form W-9. The tendering stockholder is required to provide the Depositary with such stockholder's correct TIN on Substitute Form W-9, which is provided below, unless an exemption applies. Failure to provide the information on the Substitute Form W-9 may subject the tendering stockholder to a $50 penalty and to 31% federal income tax backup withholding on the payment of the purchase price for the Shares. 9. Foreign Holders. Foreign holders must submit a completed IRS Form W-8 to avoid 31% backup withholding. IRS Form W-8 may be obtained by contacting the Depositary at one of the addresses on the face of this Letter of Transmittal. 10. Requests for Assistance or Additional Copies. Requests for assistance or additional copies of the Offer to Purchase and this Letter of Transmittal may be obtained from the Information Agent or the Dealer Managers at their respective addresses or telephone numbers set forth below. IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE COPY HEREOF (TOGETHER WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE). IMPORTANT TAX INFORMATION Under federal income tax law, a stockholder whose tendered Shares are accepted for payment is required to provide the Depositary with such stockholder's correct TIN on the Substitute Form W-9. If such stockholder is an individual, the TIN is such stockholder's social security number. If the Depositary is not provided with the correct TIN, the stockholder may be subject to a $50 penalty imposed by the Internal Revenue Service. In addition, payments that are made to such stockholder with respect to Shares purchased pursuant to the Offer may be subject to backup withholding. Certain stockholders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, that stockholder must submit a statement, signed under penalties of perjury, attesting to that individual's exempt status. Such statements may be obtained from the Depositary. All exempt recipients (including foreign persons wishing to qualify as exempt recipients) should see the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions. If backup withholding applies, the Depositary is required to withhold 31% of any payments made to the stockholder. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If backup withholding results in an overpayment of taxes, a refund may be obtained. PURPOSE OF SUBSTITUTE FORM W-9 To prevent backup federal income tax withholding on payments that are made to a stockholder with respect to Shares purchased pursuant to the Offer, the stockholder is required to notify the Depositary of such stockholder's correct TIN by completing the form certifying that the TIN provided on the Substitute Form W-9 is correct. WHAT NUMBER TO GIVE THE DEPOSITARY The stockholder is required to give the Depositary the social security number or employer identification number of the record owner of the Shares. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidelines on which number to report. SIGN HERE (COMPLETE SUBSTITUTE FORM W-9 BELOW) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Signature(s) of Owner(s) - -------------------------------------------------------------------------------- Name(s) ________________________________________________________________________ - -------------------------------------------------------------------------------- Capacity (full title) __________________________________________________________ Address ________________________________________________________________________ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Include Zip Code) - -------------------------------------------------------------------------------- Area Code and Telephone Number _________________________________________________ Taxpayer Identification Number _________________________________________________ Dated: __________________________________________________________________ , 1995 (Must be signed by registered holder(s) exactly as name(s) appear(s) on stock certificate(s) or on a security position listing or by the person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5). GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5) FOR USE BY FINANCIAL INSTITUTIONS ONLY, PLACE MEDALLION GUARANTEE IN SPACE BELOW. Authorized signature(s) ________________________________________________________ Name ___________________________________________________________________________ Name of Firm ___________________________________________________________________ Address ________________________________________________________________________ - -------------------------------------------------------------------------------- (Include Zip Code) Area Code and Telephone Number _________________________________________________ Dated: __________________________________________________________________ , 1995 PAYOR'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK - -------------------------------------------------------------------------------- PART 1--PLEASE PROVIDE YOUR TIN: _________________ SUBSTITUTE TIN IN THE BOX AT THE Social Security RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. Number or Employer FORM W-9 Identification Number ------------------------------------------------------------ Department of the Treasury PART 2--FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING, SEE THE Internal Revenue ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER Service IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 AND COMPLETE AS INSTRUCTED THEREIN. PAYOR'S REQUEST ------------------------------------------------------------ FOR TAXPAYER CERTIFICATION--UNDER PENALTIES OF PERJURY, I CERTIFY THAT IDENTIFICATION (1) The number shown on this form is my correct TIN (or I NUMBER ("TIN") am waiting for a number to be issued to me), and (2) I am AND CERTIFICATION 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 ("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. Signature: _______________________________________________ Date: ___________________________ 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 underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding, you received another notification from the IRS that you were no longer subject to backup withholding, do not cross out item (2). (Also see the instructions in the enclosed Guidelines.) NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 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. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING YOUR TIN. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a TIN has not been issued to me, and either (1) I have mailed or delivered an application to receive a TIN to the appropriate IRS Center or Social Security Administration Officer or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a TIN by the time of payment, 31% of all payments pursuant to the Offer made to me thereafter will be withheld until I provide a number. Signature: _______________________________________________________________ Date: _______________________________ The Information Agent for the Offer is: GEORGESON & COMPANY INC. Wall Street Plaza New York, New York 10005 Banks and Brokers Call Collect: (212) 440-9800 All Others Call Toll-Free: (800) 223-2064 The Dealer Managers for the Offer are GOLDMAN, SACHS & CO. 85 Broad Street New York, New York 10004 EX-99.A3 4 LETTER TO BROKER DEALERS EXHIBIT (a)(3) OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF SYNTRO CORPORATION AT $3.55 NET PER SHARE BY MALLINCKRODT VETERINARY ACQUISITIONS, INC. A WHOLLY OWNED SUBSIDIARY OF MALLINCKRODT VETERINARY, INC. AND AN INDIRECT WHOLLY OWNED SUBSIDIARY OF MALLINCKRODT GROUP INC. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, OCTOBER 27, 1995, UNLESS THE OFFER IS EXTENDED. September 29, 1995 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We have been appointed by Mallinckrodt Veterinary Acquisitions, Inc., a Delaware corporation (the "Offeror") and a wholly owned subsidiary of Mallinckrodt Veterinary, Inc., a Delaware corporation ("Mallinckrodt Veterinary"), and an indirect wholly owned subsidiary of Mallinckrodt Group Inc., a New York corporation, to act as Dealer Managers in connection with the Offeror's offer to purchase all outstanding shares of common stock, $0.01 par value per share (the "Shares"), of Syntro Corporation, a Delaware corporation (the "Company"), at a purchase price of $3.55 per Share, net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated September 29, 1995 (the "Offer to Purchase"), and in the related Letter of Transmittal (which together constitute the "Offer") enclosed herewith. The Offer is being made in connection with the Agreement and Plan of Merger, dated as of September 25, 1995, among Mallinckrodt Veterinary, the Offeror and the Company (the "Merger Agreement"). Holders of Shares whose certificates for such Shares (the "Certificates") are not immediately available or who cannot deliver their Certificates and all other required documents to the Depositary or complete the procedures for book- entry transfer prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase) 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 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 September 29, 1995. 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 (with manual signatures) may be used to tender Shares. 3. A letter to stockholders of the Company from J. Donald Todd, the President and Chief Executive Officer of the Company, together with a Solicitation/Recommendation Statement on Schedule 14D-9 filed with the Securities and Exchange Commission by the Company and mailed to the stockholders of the Company. 4. The Notice of Guaranteed Delivery for Shares to be used to accept the Offer if neither of the two procedures for tendering Shares set forth in the Offer to Purchase can be completed on a timely basis. 5. A printed form of letter which may be sent to your clients for whose accounts you hold Shares registered in your name, with space provided for obtaining such clients' instructions with regard to the Offer. 6. Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Substitute Form W-9. 7. A return envelope addressed to the 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 WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, OCTOBER 27, 1995, UNLESS THE OFFER IS EXTENDED. Please note the following: 1. The tender price is $3.55 per Share, net to the seller in cash without interest. 2. The Offer is being made for all of the outstanding Shares. 3. The Offer and withdrawal rights will expire at 12:00 Midnight, New York City time, on Friday, October 27, 1995, unless the Offer is extended. 4. The Offer is conditioned upon, among other things, there being validly tendered prior to the expiration of the Offer and not withdrawn a number of Shares which would constitute at least a majority of the outstanding Shares on a fully diluted basis. The Offer is also subject to the other terms and conditions contained in the Offer to Purchase. 5. Tendering stockholders 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 transfer of Shares pursuant to the Offer. In order to take advantage of the Offer, (i) a duly executed and properly completed Letter of Transmittal (or a manually signed facsimile thereof) and any required signature guarantees or, in the case of a book-entry transfer, an Agent's Message (as defined in the Offer to Purchase) or other required documents should be sent to the Depositary and (ii) Certificates representing the tendered Shares on a timely Book-Entry Confirmation (as defined in the Offer to Purchase) should be delivered to the Depositary in accordance with the instructions set forth in the Offer. If holders of Shares wish to tender, but it is impracticable for them to forward their Certificates or other required documents or complete the procedures for book-entry transfer prior to the Expiration 2 Date, a tender may be effected by following the guaranteed delivery procedures specified in Section 3 of the Offer to Purchase. Neither the Offeror, Mallinckrodt Veterinary nor any officer, director, stockholder, agent or other representative of the Offeror will pay any fees or commissions to any broker, dealer or other person (other than the Dealer Managers, the Depositary and the Information Agent as described in the Offer to Purchase) for soliciting tenders of Shares pursuant to the Offer. The Offeror will, however, upon request, reimburse you for customary mailing and handling expenses incurred by you in forwarding any of the enclosed materials to your clients. The Offeror will pay or cause to be paid any transfer taxes payable on the transfer of Shares to it, except as otherwise provided in Instruction 6 of the Letter of Transmittal. Any inquiries you may have with respect to the Offer should be addressed to Georgeson & Company Inc., the Information Agent for the Offer, Wall Street Plaza, New York, New York 10005, (212) 440-9800 or Goldman, Sachs & Co., the Dealer Managers for the Offer, at 85 Broad Street, New York, New York 10004. Requests for copies of the enclosed materials may be directed to the Information Agent at the above address and telephone number. Very truly yours, GOLDMAN, SACHS & CO. 85 Broad Street New York, New York 10004 NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON THE AGENT OF MALLINCKRODT VETERINARY, THE OFFEROR, THE DEPOSITARY, THE INFORMATION AGENT, THE DEALER MANAGERS 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.A4 5 LETTER TO CLIENTS EXHIBIT (a)(4) OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF SYNTRO CORPORATION AT $3.55 NET PER SHARE BY MALLINCKRODT VETERINARY ACQUISITIONS, INC. A WHOLLY OWNED SUBSIDIARY OF MALLINCKRODT VETERINARY, INC. AND AN INDIRECT WHOLLY OWNED SUBSIDIARY OF MALLINCKRODT GROUP INC. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, OCTOBER 27, 1995, UNLESS THE OFFER IS EXTENDED. September 29, 1995 To Our Clients: Enclosed for your consideration are the Offer to Purchase, dated September 29, 1995 (the "Offer to Purchase"), and the related Letter of Transmittal (which together constitute the "Offer") relating to an offer by Mallinckrodt Veterinary Acquisitions, Inc., a Delaware corporation (the "Offeror") and a wholly owned subsidiary of Mallinckrodt Veterinary, Inc., a Delaware corporation ("Mallinckrodt Veterinary"), and an indirect wholly owned subsidiary of Mallinckrodt Group Inc., a New York corporation, to purchase all outstanding shares of common stock, par value $0.01 per share (the "Shares") of Syntro Corporation, a Delaware corporation (the "Company"), at a purchase price of $3.55 per Share, net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in the Offer. The Offer is being made in connection with the Agreement and Plan of Merger, dated as of September 25, 1995, among Mallinckrodt Veterinary, the Offeror and the Company (the "Merger Agreement"). This material is being forwarded to you as the beneficial owner of Shares carried by us in your account but not registered in your name. 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. Accordingly, we request instructions as to whether you wish to tender any or all of the Shares held by us for your account, upon the terms and conditions set forth in the Offer. Please note the following: 1. The tender price is $3.55 per Share, net to you in cash without interest. 2. The Offer is being made for all of the outstanding Shares. 3. The Offer and withdrawal rights will expire at 12:00 Midnight, New York City time, on Friday, October 27, 1995, unless the Offer is extended. 4. The Offer is conditioned upon, among other things, there being validly tendered prior to the expiration of the Offer and not withdrawn a number of Shares which would constitute at least a majority of the outstanding Shares on a fully diluted basis. The Offer is also subject to the other terms and conditions contained in the Offer to Purchase. 5. Tendering stockholders 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 transfer of Shares pursuant to the Offer. If you wish to have us tender any or all of the Shares, please so instruct us by completing, executing, detaching and returning to us the instruction form contained in this letter. An envelope to return your instruction to us is enclosed. If you authorize tender of your Shares, all such Shares will be tendered unless otherwise indicated in such instruction form. PLEASE FORWARD YOUR INSTRUCTIONS TO US AS SOON AS POSSIBLE TO ALLOW US AMPLE TIME TO TENDER YOUR SHARES ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER. The Offer is made solely by the Offer to Purchase and the related Letter of Transmittal and any supplements or amendments thereto. The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares residing in any jurisdiction in which the making of the Offer or acceptance thereof would not be in compliance with the securities laws of such jurisdiction. 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 will be deemed to be made on behalf of the Offeror by Goldman, Sachs & Co. or by one or more registered brokers or dealers licensed under the laws of such jurisdiction. 2 INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF SYNTRO CORPORATION The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase dated September 29, 1995 (the "Offer to Purchase"), and the related Letter of Transmittal (which together constitute the "Offer") in connection with the offer by Mallinckrodt Veterinary Acquisitions, Inc., a Delaware corporation (the "Offeror") and a wholly owned subsidiary of Mallinckrodt Veterinary, Inc., a Delaware corporation, and an indirect wholly owned subsidiary of Mallinckrodt Group Inc., a New York corporation, to purchase all outstanding shares of common stock, par value $.01 per share ("Shares"), of Syntro Corporation, a Delaware corporation. This will instruct you to tender to the Offeror 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. Number of Shares to be Tendered:* SIGN HERE ------------------------------------- ------------------------------------- Signature(s) Account Number: ------------------------------------- Date: ------------------------------------- (Print Name(s)) ------------------------------------- ------------------------------------- (Print Address(es)) ------------------------------------- (Area Code and Telephone Number(s)) ------------------------------------- (Taxpayer Identification or Social Security Number(s)) - -------- *Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered. 3 EX-99.A5 6 NOTICE OF GTD DELIVERY EXHIBIT (a)(5) NOTICE OF GUARANTEED DELIVERY FOR TENDER OF SHARES OF COMMON STOCK OF SYNTRO CORPORATION This form, or one substantially equivalent hereto, must be used to accept the Offer (as defined below) if certificates for shares of common stock, $0.01, par value per share (the "Shares"), of Syntro Corporation, a Delaware corporation (the "Company"), are not immediately available or if the procedure for book- entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Depositary on or prior to the Expiration Date (as defined in the Offer to Purchase). Such form may be delivered by hand, facsimile transmission, or mail to the Depositary. See Section 3 of the Offer to Purchase, dated September 29, 1995 (the "Offer to Purchase"). THE DEPOSITARY FOR THE OFFER IS: FIRST CHICAGO TRUST COMPANY OF NEW YORK By Hand or Overnight Courier: By Mail: Tenders & Exchanges Suite 4680--SYN 14 Tenders & Exchanges Suite 4660--SYN Wall Street 8th Floor New York, New P.O. Box 2559 Jersey City, New Jersey York 10005 07303-2559 Facsimile for Eligible Institutions only: (201) 222-4720 or 4721 To confirm receipt of Notice of Guaranteed Delivery: (201) 222-4707 DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR TRANSMISSION OF INSTRUMENTS VIA A FACSIMILE, OTHER THAN AS SET FORTH ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY. This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an "Eligible Institution" under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal. The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal or an Agent's Message and certificates for Shares to the Depositary within the time period shown herein. Failure to do so could result in a financial loss to such Eligible Institution. THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED. Ladies and Gentlemen: The undersigned hereby tenders to Mallinckrodt Veterinary Acquisitions, Inc., a Delaware corporation, upon the terms and subject to the conditions set forth in the Offer to Purchase and the related Letter of Transmittal, receipt of which are hereby acknowledged, Shares of the Company, pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. Number of Shares: ___________________ SIGN HERE Certificate No(s) (if available): Name(s): - ------------------------------------- ------------------------------------- - ------------------------------------- ------------------------------------- (Please Print) If Securities will be tendered by book-entry transfer: ________________ Address: ____________________________ Name of Tendering Institution: ------------------------------------- (Zip Code) - ------------------------------------- Area Code and Telephone No: Account No.: _____________________ at [_] The Depository Trust Company ------------------------------------- [_] Midwest Securities Trust Company [_] Philadelphia Depository Trust Company Signature(s): _______________________ ------------------------------------- GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, 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 or a bank, broker, dealer, credit union, savings association or other entity which is an "eligible guarantor institution," as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, guarantees the delivery to the Depositary of the Shares tendered hereby, together with a properly completed and duly executed Letter of Transmittal (or manually signed facsimile(s) thereof) and any other required documents, or an Agent's Message (as defined in the Offer to Purchase) in the case of a book-entry delivery of Shares, all within three trading days of the date hereof. A "trading day" is any day on which the National Association of Securities Dealers Automated Quotation National Market is open for business. Name of Firm: _______________________ Title: ______________________________ - ------------------------------------- Name: _______________________________ (Authorized Signature) (Please Print or Type) Address: ____________________________ Area Code and Telephone No.: ________ DO NOT SEND CERTIFICATES FOR SHARES WITH THIS FORM--CERTIFICATES SHOULD BE SENT WITH LETTER OF TRANSMITTAL Date: ___________________, 1995 2 EX-99.A6 7 FORM W-9 GUIDELINES EXHIBIT (a)(6) GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYOR-- 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 Payor. - --------------------------------------- ---------------------------------------
GIVE THE FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY NUMBER OF-- - ----------------------------------------------- 1. An individual's account The individual 2. Two or more individuals The actual owner (joint account) of the account or, if combined funds, the first individual on the account(1) 3. Husband and wife (joint The actual owner account) of the account or, if joint funds, the first individual on the account(1) 4. Custodian account of a The minor(2) minor (Uniform Gift to Minors Act) 5. Adult and minor (joint The adult, or if account) the minor is the only contributor, the minor(1) 6. Account in the name of The ward, minor, guardian or committee for a or incompetent designated ward, minor, or person(3) incompetent person 7. a. The usual revocable The grantor- savings trust account trustee(1) (grantor is also trustee) b. So-called trust account The actual that is not a legal or owner(4) valid trust under State law
GIVE THE EMPLOYER FOR THIS TYPE OF ACCOUNT: IDENTIFICATION NUMBER OF-- ---------------------------------------------------- 8. Sole proprietorship The owner(4) account 9. A valid trust, estate, or Legal entity (Do pension trust not furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)(5) 10. Corporate account The corporation 11. Religious, charitable, or The organization educational organization account 12. Partnership account held The partnership in the name of the business 13. Association, club or The organization other tax-exempt organization 14. A broker or registered The broker or nominee nominee 15. Account with the The public entity Department of Agriculture in the name of a public entity (such as a State or local governmental school district or prison) that receives agricultural program payments
- -------------------------------------------------------------------------------- (1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's social security number. (3) Circle the ward's, minor's or incompetent person's name and furnish such person's social security number. (4) Show the name of the owner. (5) List first and circle the name of the legal trust, estate or pension trust. 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 don't have a taxpayer identification number or you don't know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number. PAYEES EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from backup withholding on interest, dividends, and broker transaction payments include the following: .A corporation. .A financial institution. . An organization exempt from tax under section 501(a), or an individual retirement plan, or a custodial account under Section 403(b)(7). . The United States or any agency or instrumentality thereof. . A State, the District of Columbia, a possession of the United States, or any political subdivision or instrumentality thereof. . A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof. . An international organization or any agency, or instrumentality thereof. . A registered dealer in securities or commodities registered in the U.S. or a possession of the U.S. . A real estate investment trust. . A common trust fund operated by a bank under section 584(a) . An entity registered at all times under the Investment Company Act of 1940. . A foreign central bank of issue. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: . Payments to nonresident aliens subject to withholding under section 1441. . Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner. . Payments of patronage dividends where the amount received is not paid in money. . Payments made by certain foreign organizations. . Payments made to a nominee. Payments to interest not generally subject to backup withholding include the following: . Payments of interest on obligations issued by individuals. NOTE: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. . Payments of tax-exempt interest (including exempt-interest dividends un- der section 852). . Payments described in section 6049(b)(5) to nonresident aliens. . Payments on tax-free covenant bonds under section 1451. . Payments made by certain foreign organizations. . Payments made to a nominee. Exempt payees described above should file Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM. Certain payments other than interest, dividends, and patronage dividends that are not subject to information reporting are also not subject to backup with- holding. For details, see the regulations under sections 6041, 6041A(a), 6045, and 6050A. PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend, inter- est, or other payments to give taxpayer identification numbers to payers who must report the payments to IRS. IRS uses the numbers for identification pur- poses. Payers must be given the numbers whether or not recipients are required to file tax returns. Beginning January 1, 1993, payers must generally withhold 31% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or affirmations may subject you to criminal penalties including fines and/or im- prisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. EX-99.A7 8 SUMMARY ANNOUNCEMENT EXHIBIT (A)(7) This announcement is neither an offer to purchase nor a solicitation of an offer to sell these securities. The Offer is made only by the Offer to Purchase and the related Letter of Transmittal and is not being made to (nor will tenders be accepted from) holders of Shares in any jurisdiction in which the Offer or the acceptance thereof would not be in compliance with the securities laws of such jurisdiction. In those jurisdictions where securities 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 Offeror by Goldman, Sachs & Co. 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 OF SYNTRO CORPORATION AT $3.55 PER SHARE BY MALLINCKRODT VETERINARY ACQUISITIONS, INC. A WHOLLY OWNED SUBSIDIARY OF MALLINCKRODT VETERINARY, INC. AND AN INDIRECT WHOLLY OWNED SUBSIDIARY OF MALLINCKRODT GROUP INC. Mallinckrodt Veterinary Acquisitions, Inc., a Delaware corporation (the "Offeror") and a wholly owned subsidiary of Mallinckrodt Veterinary, Inc., a Delaware corporation ("Mallinckrodt Veterinary"), and an indirect wholly owned subsidiary of Mallinckrodt Group Inc., a New York corporation, hereby offers to purchase all of the shares of common stock, par value $0.01 per share (the "Shares"), of Syntro Corporation, a Delaware corporation (the "Company"), for $3.55 per Share, net to the seller in cash without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated September 29, 1995 (the "Offer to Purchase"), and in the related Letter of Transmittal (which together constitute the "Offer"). THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, OCTOBER 27, 1995, UNLESS THE OFFER IS EXTENDED. The Offer is being made pursuant to an Agreement and Plan of Merger dated as of September 25, 1995 (the "Merger Agreement") among Mallinckrodt Veterinary, the Offeror and the Company. The Merger Agreement provides that, among other things, as soon as practicable after the purchase of Shares pursuant to the Offer and the satisfaction of the other conditions set forth in the Merger Agreement and in accordance with relevant provisions of Delaware law, the Offeror will be merged with and into the Company (the "Merger"). At the effective time of the Merger (the "Effective Time"), each Share issued and outstanding immediately prior to the Effective Time (other than Shares held in the treasury of the Company, Shares held by Mallinckrodt Veterinary, the Offeror or any other wholly owned subsidiary of Mallinckrodt Veterinary, or Shares which are held by stockholders, if any, who properly exercise their appraisal rights under Delaware law) will be converted into the right to receive $3.55 in cash, or any higher price that is paid in the Offer, without interest. The Offer is conditioned upon, among other things, (i) there being validly tendered and not withdrawn prior to the expiration of the Offer that number of Shares representing at least a majority of all outstanding Shares on a fully diluted basis, and (ii) satisfaction of certain other terms and conditions. THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY HAS DETERMINED THAT EACH OF THE OFFER AND THE MERGER IS FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY'S STOCKHOLDERS, HAS APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND MERGER, AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER ALL THEIR SHARES PURSUANT THERETO. For purposes of the Offer, the Offeror will be deemed to have accepted for payment, and thereby purchased Shares validly tendered and not withdrawn if and when the Offeror gives oral or written notice to First Chicago Trust Company of New York (the "Depositary") of the Offeror's acceptance of such Shares for payment. In all cases, payment for Shares purchased pursuant to the Offer will be made by deposit of the purchase price with the Depositary, which shall act as agent for tendering stockholders for the purpose of receiving payment from the Offeror and transmitting payment to the tendering stockholders. Payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of certificates for such Shares or timely confirmation of a book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facilities (as defined in the Offer to Purchase) pursuant to the procedures set forth in the Offer to Purchase and timely receipt by the Depositary of a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof), with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message (as defined in the Offer to Purchase) and any other documents required by the Letter of Transmittal. If any of the conditions set forth in the Offer to Purchase that relate to the Offeror's obligations to purchase the Shares are not satisfied by 12:00 Midnight, New York City time, on Friday, October 27, 1995 (or any other time then set as the Expiration Date), the Offeror may, subject to the terms of the Merger Agreement, (i) extend the Offer and, subject to applicable withdrawal rights, retain all tendered Shares until the expiration of the Offer as so extended, (ii) subject to complying with applicable rules and regulations of the Securities and Exchange Commission, accept for payment all Shares so tendered and not extend the Offer, or (iii) terminate the Offer and not accept for payment any Shares and return all tendered Shares to tendering stockholders. The term "Expiration Date" shall mean 12:00 Midnight, New York City time, on Friday, October 27, 1995, unless the Offeror shall have extended the period of time for which the Offer is open, in which event the term "Expiration Date" shall mean the latest time and date at which the Offer, as so extended by the Offeror, shall expire. The Offeror expressly reserves the right, in its sole discretion, at any time or from time to time, subject to applicable law and to the terms of the Merger Agreement, to extend the period during which the Offer is open by giving oral or written notice of such extension to the Depositary followed by, as promptly as practicable, a public announcement thereof no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. Except as otherwise provided in Section 4 of the Offer to Purchase, 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, may also be withdrawn at any time after Monday, November 27, 1995. For a withdrawal to be effective, a written, telegraphic 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 such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder if different from the name of the person who tendered the Shares. If certificates for Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then prior to the physical release of such certificates, the serial numbers shown on such certificates must be submitted to the Depositary and, unless such Shares have been tendered for the account of an Eligible Institution (as defined in the Offer to Purchase), the signature on the notice of withdrawal must be guaranteed by an Eligible Institution. All questions as to 2 the form and validity (including time of receipt) of a notice of withdrawal will be determined by the Offeror, in its sole discretion, and its determination shall be final and binding on all parties. The information required to be disclosed by Paragraph (e)(1)(vii) of Rule 14d-6 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is incorporated herein by reference. The Company has provided to the Offeror its lists of stockholders and security position listings for the purpose of disseminating the Offer to holders of Shares. The Offer to Purchase, the related Letter of Transmittal and other related materials are being mailed to record holders of Shares and will be mailed to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder lists 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 THAT SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. Requests for copies of the Offer to Purchase and the related Letter of Transmittal and other tender offer materials may be directed to the Information Agent or the Dealer Managers as set forth below, and copies will be furnished promptly at the Offeror's expense. No fees or commissions will be payable to brokers, dealers or other persons other than the Information Agent, the Dealer Managers and the Depositary for soliciting tenders of Shares pursuant to the Offer. The Information Agent for the Offer is: GEORGESON & COMPANY INC. WALL STREET PLAZA NEW YORK, NEW YORK 10005 BANKS AND BROKERS CALL COLLECT (212) 440-9800 ALL OTHERS CALL TOLL FREE: 1-800-223-2064 The Dealer Managers for the Offer are: GOLDMAN, SACHS & CO. 85 BROAD STREET NEW YORK, NEW YORK 10004 3 EX-99.A8 9 PRESS RELEASE DTD 9/25 Exhibit (a)(8) [LETTERHEAD OF MALLINCKRODT GROUP APPEARS HERE] FOR IMMEDIATE RELEASE Mallinckrodt Group - ------------------ Media Contact: Barbara Abbett, (314) 854-5230 Investor Contact: Cole Lannum, (314) 854-5370 Syntro Corporation - ------------------ Media & Investor Contact: Susan H. Strobel, (913) 888-8876 MALLINCKRODT TO MAKE TENDER OFFER FOR SYNTRO CORPORATION STOCK ST. LOUIS AND KANSAS CITY, MO, September 25, 1995 -- Mallinckrodt Group Inc. (NYSE:MKG) and Syntro Corporation (NASDAQ:SYNT) announced today that Mallinckrodt Group's subsidiary, Mallinckrodt Veterinary, Inc., has entered into a merger agreement to acquire all of the outstanding shares of Syntro Corporation, a biotechnology company focused on the development of innovative vaccines for the animal health market. A cash tender offer for Syntro's common stock at $3.55 per share will be made by Mallinckrodt Veterinary Acquisitions, Inc., a subsidiary of Mallinckrodt Veterinary, under terms of the merger agreement. The agreement has been unanimously approved by the Boards of Directors of both Syntro and Mallinckrodt Group. Mallinckrodt Veterinary reserves the right not to purchase any shares in the tender offer if fewer than a majority of the shares are tendered. It is expected that the tender offer will commence no later than September 29, 1995. Add One -- Mallinckrodt, Syntro Merger C. Ray Holman, chairman, president and chief executive officer of Mallinckrodt Group, said, "This an outstanding opportunity for Mallinckrodt Veterinary to continue expanding its global position in animal vaccines, which is at the center of the operating company's strategic focus. Under its new management team led by Paul Cottone, Mallinckrodt Veterinary made an important contribution to our overall results in fiscal 1995 and this acquisition should help to ensure the company's continued growth and presence in the animal health market." Paul D. Cottone, president and CEO of Mallinckrodt Veterinary, said, "The Syntro acquisition will give Mallinckrodt Veterinary access to advanced technology for a number of innovative vaccines for swine and poultry and also will give us a stronger position in the growing feline and canine segments of the animal health market. Syntro has achieved an excellent reputation for its technology research and innovative vaccine development. We look forward to building on that reputation through integration with our existing and planned activities in the area of biologicals." Syntro president and CEO J. Donald Todd, D.V.M., said, "The aligning of Syntro's platform of recombinant vaccine technologies with Mallinckrodt's existing vaccine technologies, global commercialization capabilities and resources represents an ideal strategic fit. The merger recognizes the value of technology developed by Syntro and opens the door for exciting new applications." (more) Add Two -- Mallinckrodt, Syntro Merger Syntro Corporation is a Kansas City and San Diego-based biotechnology company engaged in technology research and in the development, manufacture and commercialization of innovative vaccines for the animal health market. Mallinckrodt Group, a St. Louis-based company with fiscal 1995 sales of $2.2 billion, provides specialty products to the chemical, medical and animal health markets worldwide through its three technology-based businesses -- Mallinckrodt Chemical and Mallinckrodt Medical, also headquartered in St. Louis; and Mallinckrodt Veterinary, headquartered in the Chicago area. Mallinckrodt Veterinary is one of the world's leading animal health and nutrition companies, with approximately 1,000 products sold in more than 100 countries. Products include pharmaceuticals, livestock and pet vaccines, pesticides, surgical supplies, anesthetics and mineral feed ingredients. ### EX-99.A9 10 PRESS RELEASE DTD 9/29 Exhibit (a)(9) FOR IMMEDIATE RELEASE - --------------------- Mallinckrodt Group - ------------------ Media Contact: Barbara Abbett (314) 854-5230 Investor Contact: Cole Lannum (314) 854-5370 MALLINCKRODT ANNOUNCES TENDER OFFER FOR SYNTRO ST. LOUIS, MO, September 29, 1995--Mallinckrodt Group Inc. (NYSE: MKG) today announced that pursuant to the previously announced merger agreement between its subsidiary, Mallinckrodt Veterinary, Inc., and Syntro Corporation (NASDAQ: SYNT), Mallinckrodt Veterinary Acquisitions, Inc., a wholly-owned subsidiary of Mallinckrodt Veterinary, Inc., today began a tender offer to purchase for cash all outstanding shares of Syntro Corporation common stock at $3.55 per share net. Syntro Corporation is a Kansas City and San Diego based biotechnology company engaged in technology research and in the development, manufacture and commercialization of innovative vaccines for the animal health market. The offer will expire at 12:00 midnight EDT, on Friday, October 27, 1995, unless extended. The offer is conditioned upon, among other things, there being validly tendered and not withdrawn a number of shares which equals at least a majority of the outstanding shares on a fully diluted basis. The boards of directors of Mallinckrodt Group and Syntro Corporation have unanimously approved the merger agreement. Goldman, Sachs & Co. is the Dealer Manager for the offer. EX-99.C 11 AGREEMENT & PLAN OF MERGER Exhibit (c) ___________________________________ AGREEMENT AND PLAN OF MERGER AMONG MALLINCKRODT VETERINARY, INC., MALLINCKRODT VETERINARY ACQUISITIONS, INC. AND SYNTRO CORPORATION DATED AS OF SEPTEMBER 25, 1995 ___________________________________ TABLE OF CONTENTS -----------------
Page ---- Parties and Recitals................................................... 1 ARTICLE I THE OFFER Section 1.1 The Offer................................................. 1 Section 1.2 Company Actions........................................... 3 ARTICLE II THE MERGER Section 2.1 The Merger................................................ 4 Section 2.2 Effective Time............................................ 5 Section 2.3 Effects of the Merger..................................... 5 Section 2.4 Certificate of Incorporation and Bylaws; Directors and Officers.................................... 5 Section 2.5 Conversion of Securities.................................. 6 Section 2.6 Exchange of Certificates.................................. 6 Section 2.7 Dissenting Company Common Shares.......................... 8 Section 2.8 Merger Without Meeting of Stockholders.................... 9 Section 2.9 No Further Ownership Rights in Common Stock..................................................... 9 Section 2.10 Closing of Company Transfer Books........................ 9 Section 2.11 Further Assurances....................................... 9 ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT Section 3.1 Organization, Standing and Power.......................... 10 Section 3.2 Authority; Non-Contravention.............................. 10 Section 3.3 Offer Documents and Proxy Statement....................... 11 Section 3.4 Brokers................................................... 12 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY Section 4.1 Organization, Standing and Power......................... 12 Section 4.2 Capital Structure......................................... 12 Section 4.3 Subsidiaries.............................................. 13 Section 4.4 Other Interests........................................... 14 Section 4.5 Authority; Non-Contravention.............................. 14 Section 4.6 SEC Documents............................................. 15 Section 4.7 Offer Documents and Proxy Statement....................... 16 Section 4.8 Absence of Certain Events................................. 17 Section 4.9 Litigation................................................ 17 Section 4.10 Compliance with Applicable Law........................... 17 Section 4.11 Employee Plans........................................... 18
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Page ---- Section 4.12 Employment Relations and Agreement....................... 19 Section 4.13 Contracts................................................ 20 Section 4.14 Intellectual Property.................................... 21 Section 4.15 Title to Property........................................ 22 Section 4.16 State Takeover Statutes.................................. 22 Section 4.17 Taxes.................................................... 22 Section 4.18 Environmental Matters.................................... 24 Section 4.19 Vote Required............................................ 26 Section 4.20 Insurance................................................ 26 Section 4.21 Brokers.................................................. 26 ARTICLE V REPRESENTATIONS AND WARRANTIES REGARDING SUB Section 5.1 Organization and Standing................................. 26 Section 5.2 Capital Structure......................................... 27 Section 5.3 Authority; Non-Contravention.............................. 27 ARTICLE VI COVENANTS RELATING TO CONDUCT OF BUSINESS Section 6.1 Conduct of Business by the Company Pending the Merger........................................ 27 Section 6.2 Acquisition Proposals..................................... 30 Section 6.3 Conduct of Business of Sub Pending the Merger.................................................... 31 ARTICLE VII ADDITIONAL AGREEMENTS Section 7.1 Company Stockholder Approval; Proxy Statement................................................. 32 Section 7.2 Access to Information..................................... 33 Section 7.3 Fees and Expenses......................................... 33 Section 7.4 Company Stock Options..................................... 34 Section 7.5 Reasonable Best Efforts................................... 35 Section 7.6 Public Announcements...................................... 36 Section 7.7 Real Estate Transfer and Gains Taxes...................... 36 Section 7.8 Indemnification; Directors and Officers Insurance................................................. 36 Section 7.9 Board Representation...................................... 37 Section 7.10 Employee Benefits........................................ 38 Section 7.11 Severance Policy......................................... 38
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Page ---- ARTICLE VIII CONDITIONS PRECEDENT Section 8.1 Conditions to Each Party's Obligation to Effect the Merger......................................... 39 Section 8.2 Conditions to Obligations of Parent and Sub................................................... 39 ARTICLE IX TERMINATION, AMENDMENT AND WAIVER Section 9.1 Termination............................................... 40 Section 9.2 Effect of Termination..................................... 42 Section 9.3 Amendment................................................. 43 Section 9.4 Waiver.................................................... 43 Section 9.5 Procedure for Termination, Amendment or Waiver.................................................... 43 ARTICLE X GENERAL PROVISIONS Section 10.1 Non-Survival of Representations and Warranties............................................... 43 Section 10.2 Notices.................................................. 43 Section 10.3 Interpretation........................................... 45 Section 10.4 Counterparts............................................. 45 Section 10.5 Entire Agreement; No Third-Party Beneficiaries............................................ 45 Section 10.6 Governing Law............................................ 45 Section 10.7 Assignment............................................... 46 Section 10.8 Severability............................................. 46 Section 10.9 Enforcement of this Agreement............................ 46 Section 10.10 Incorporation of Exhibits............................... 46
iii AGREEMENT AND PLAN OF MERGER ---------------------------- AGREEMENT AND PLAN OF MERGER, dated as of September 25, 1995 (this "Agreement"), among Mallinckrodt Veterinary, Inc., a Delaware corporation --------- ("Parent"), Mallinckrodt Veterinary Acquisitions, Inc., a Delaware corporation ------ ("Sub") and a wholly owned subsidiary of Parent, and Syntro Corporation, a --- Delaware corporation (the "Company") (Sub and the Company being hereinafter ------- collectively referred to as the "Constituent Corporations"). ----------- ------------ W I T N E S S E T H: -------------------- WHEREAS, the respective Boards of Directors of Parent, Sub and the Company have approved the acquisition of the Company by Parent pursuant to a tender offer by Sub for all of the outstanding shares of Common Stock, par value $.01 per share (the "Common Stock"), of the Company at a price of $3.55 per ------------ share, net to the seller in cash (the "Offer"), followed by a merger (the ----- "Merger") of Sub with and into the Company upon the terms and subject to the ------ conditions set forth herein; WHEREAS, the Board of Directors of the Company has adopted resolutions approving the Offer and the Merger and recommending that the Company's stockholders accept the Offer; and WHEREAS, pursuant to the Merger, each issued and outstanding share of Common Stock not owned directly or indirectly by Parent or the Company will be converted into the right to receive the per share consideration paid pursuant to the Offer. NOW, THEREFORE, in consideration of the premises and the representations, warranties and agreements herein contained, the parties agree as follows: ARTICLE I THE OFFER --------- Section 1.1 The Offer. (a) Subject to the provisions of this --------- Agreement, as promptly as practicable but in no event later than September 29, 1995, Sub shall, and Parent shall cause Sub to, commence, within the meaning of Rule 14d-2 under the Exchange Act (as hereinafter defined), the Offer. The obligation of Sub to, and of Parent to cause Sub to, commence the Offer and accept for payment, and pay for, any shares of Common Stock tendered pursuant to the Offer shall be subject to the conditions set forth in Exhibit A and to the --------- terms and conditions of this Agreement. The initial expiration date of the Offer shall be 20 business days following the commencement of the Offer. Without the prior written consent of the Company, Sub shall not (i) waive the Minimum Condition (as defined in Exhibit A), (ii) reduce the number of shares of --------- Common Stock subject to the Offer, (iii) reduce the price per share of Common Stock to be paid pursuant to the Offer, (iv) extend the Offer if all of the Offer conditions are satisfied or waived, (v) change the form of consideration payable in the Offer, or (vi) amend, add or waive any term or condition of the Offer (including the conditions set forth in Exhibit A) in any manner that would --------- adversely affect the Company or its stockholders. Notwithstanding the foregoing, Sub may, without the consent of the Company, extend the Offer (i) if at the then scheduled expiration date of the Offer any of the conditions to Sub's obligation to accept for payment and pay for shares of Common Stock shall not have been satisfied or waived; (ii) for any period required by any rule, regulation, interpretation or position of the Securities and Exchange Commission (the "SEC") or its staff applicable to the Offer; or (iii) if all Offer --- conditions are satisfied or waived but the number of shares of Common Stock tendered is less than 90% of the then outstanding number of shares of Common Stock, for an aggregate period of not more than 15 business days (for all such extensions) beyond the latest expiration date that would otherwise be permitted under clause (i) or (ii) of this sentence. Subject to the terms and conditions of the Offer and the Agreement, Sub shall, and Parent shall cause Sub to, pay for all shares of Common Stock validly tendered and not withdrawn pursuant to the Offer as soon as practicable after the expiration of the Offer. (b) On the date of commencement of the Offer, Parent and Sub shall file with the SEC a Tender Offer Statement on Schedule 14D-1 with respect to the Offer, which shall contain an offer to purchase and a related letter of transmittal (such Schedule 14D-1 and the documents therein pursuant to which the Offer will be made, together with any supplements or amendments thereto, the "Offer Documents"). The Company and its counsel shall be given an opportunity --------------- to review and comment upon the Offer Documents prior to the filing thereof with the SEC. The Offer Documents shall comply as to form in all material respects with the requirements of the Securities Exchange Act of 1934, as amended (including the rules and regulations promulgated thereunder, the "Exchange -------- Act"), and on the date filed with the SEC and on the date first published, sent - --- or given to the Company's stockholders, the Offer Documents 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 therein, in light of the circumstances under which they were made, not misleading, except that no representation is made by Parent or Sub with respect to information supplied by the Company for inclusion in the Offer Documents. Each of Parent, Sub and the Company agrees promptly to correct any information provided by it for use in the Offer Documents if and to the extent that such information shall have become false or misleading in any material respect, and each of Parent and Sub further agrees to take all steps necessary, and the Company agrees to take all steps reasonably requested by Parent, to cause the Offer Documents as so corrected to be filed with the SEC and to be disseminated to holders of shares of Common Stock, in each case as and to the extent required by applicable federal securities laws. Parent and Sub agree to provide the Company and its counsel in writing with any comments Parent, Sub or their counsel may receive from the SEC or its staff with respect to the Offer Documents promptly after receipt of such comments. (c) Prior to or concurrently with the expiration of the Offer, Parent shall provide or cause to be provided to Sub all of the funds necessary to purchase any shares of Common Stock that Sub becomes obligated to purchase pursuant to the Offer. Section 1.2 Company Actions. (a) The Company hereby approves of and --------------- consents to the Offer and represents that the Board of Directors of the Company at a meeting duly called and held has unanimously duly adopted resolutions approving this Agreement, the Offer and the Merger, determining that the Merger is advisable and that the terms of the Offer and Merger are fair to, and in the best interests of, the Company's stockholders and recommending that the Company's stockholders accept the Offer and approve the Merger and this Agreement. The Company represents that its Board of Directors has received the written opinion of Piper Jaffray Inc. that the proposed consideration to be received by the holders of shares of Common Stock pursuant to the Offer and the Merger is fair to such holders from a financial point of view. The Company hereby consents to the inclusion in the Offer Documents of the recommendation of the Board of Directors of the Company described in the first sentence of this Section 1.2. - ----------- (b) On the date the Offer Documents are filed with the SEC, the Company shall file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as amended from time to time, the "Schedule 14D-9") containing the recommendations described in -------------- paragraph (a) above and shall mail the Schedule 14D-9 to the stockholders of the Company. The Company shall cooperate with Parent in mailing or otherwise disseminating the Schedule 14D-9 with the appropriate Offer Documents to the Company's stockholders. Parent and its counsel shall be given an opportunity to review and comment upon the Schedule 14D-9 prior to the filing thereof with the SEC. The Schedule 14D-9 shall comply as to form in all material respects with the requirements of the Exchange Act and, on the date filed with the SEC and on the date first published, sent or given to the Company's -3- stockholders, 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 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 Sub for inclusion in the Schedule 14D-9. Each of the Company, Parent and Sub agrees promptly to correct any information provided by it for use in the Schedule 14D-9 if and to the extent that such information shall have become false or misleading in any material respect, and the Company further agrees to take all steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the SEC and disseminated to the holders of shares of Common Stock, in each case as and to the extent required by applicable federal securities laws. The Company agrees to provide Parent and Sub and their counsel in writing with any comments the Company or its counsel may receive from the SEC or its staff with respect to the Schedule 14D-9 promptly after the receipt of such comments. (c) In connection with the Offer, the Company shall cause its transfer agent to furnish Sub with mailing labels containing the names and addresses of the record holders of Common Stock as of a recent date and of those persons becoming record holders subsequent to such date, together with copies of all lists of stockholders, security position listings and com puter files and all other information in the Company's possession or control regarding the beneficial ownership of Common Stock, and shall furnish to Sub such information and assistance (including updated lists of stockholders, security position listings and computer files) as Sub may reasonably request in communicating the Offer to the Company's stockholders. Subject to the requirements of law, and except for such steps as are necessary to disseminate the Offer Documents and any other documents necessary to consummate the Merger, Parent and Sub and each of their affiliates and associates shall hold in confidence the information contained in any of such labels, lists and files, will use such information only in connection with the Offer and the Merger, and, if this Agreement is terminated, will, upon request, deliver to the Company all copies of such information then in their possession. ARTICLE II THE MERGER ---------- Section 2.1 The Merger. Upon the terms and subject to the conditions ---------- hereof, and in accordance with the General Corporation Law of the State of Delaware, as amended (the "DGCL"), Sub shall be merged with and into the Company ---- at the Effective Time (as hereinafter defined). Upon the effectiveness of the Merger, the separate corporate existence of Sub shall -4- cease and the Company shall continue as the surviving corporation (the "Surviving Corporation") and shall succeed to and assume all the rights and --------------------- obligations of Sub in accordance with the DGCL. Section 2.2 Effective Time. The Merger shall become effective when -------------- the Certificate of Merger or, if applicable, the Certificate of Ownership and Merger (each, the "Certificate of Merger"), executed in accordance with the --------------------- relevant provisions of the DGCL, are accepted for record by the Secretary of State of the State of Delaware. When used in this Agreement, the term "Effective Time" shall mean the later of the date and time at which the -------------- Certificate of Merger is accepted for record or such later time established by the Certificate of Merger. The filing of the Certificate of Merger shall be made as soon as practicable after the satisfaction or waiver of the conditions to the Merger set forth herein. Section 2.3 Effects of the Merger. The Merger shall have the --------------------- effects set forth in the DGCL. Section 2.4 Certificate of Incorporation and Bylaws; Directors and ------------------------------------------------------ Officers. (a) At the Effective Time: - -------- (i) Article SECOND of the Certificate of Incorporation of the Company shall be amended to read in its entirety as follows: "The registered office of this Corporation in the State of Delaware is located at Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle, in the State of Delaware. The name of its registered agent at such address is The Corporation Trust Company."; (ii) Article FOURTH of the Certificate of Incorporation of the Company shall be amended to read in its entirety as follows: "The total number of shares of all classes of capital stock which this Corporation shall have the authority to issue is 1,000 shares of Common Stock, with a par value of $.01 per share." and (iii) Paragraph 3 of Article FIFTH of the Certificate of Incorporation of the Company shall be deleted in its entirety. As so amended, the Certificate of Incorporation of the Company in effect immediately prior to the Effective Time shall be the Certificate of Incorporation of the Surviving Corporation after such date, and thereafter may be amended in accordance with the terms of and as provided by applicable law. -5- (b) At the Effective Time the By-Laws of the Company, as in effect immediately prior to the Effective Time, shall continue as the By-Laws of the Surviving Corporation until thereafter changed or amended as provided therein or by the Certificate of Incorporation of the Surviving Corporation or by applicable law. (c) The directors and officers of Sub immediately prior to the Effective Time shall be the directors and officers, respectively, of the Surviving Corporation as of the Effective Time. Section 2.5 Conversion of Securities. As of the Effective Time, by ------------------------ virtue of the Merger and without any action on the part of any stockholder of the Company or Sub: (a) All shares of Common Stock that are held in the treasury of the Company or by any wholly owned Subsidiary (as hereinafter defined) of the Company and any shares of Common Stock owned by Parent, Sub or any other wholly owned Subsidiary of Parent shall be cancelled and no consideration shall be delivered in exchange therefor. (b) Each share of Common Stock issued and outstanding immediately prior to the Effective Time (other than shares to be cancelled in accordance with Section 2.5(a) and other than Dissenting Company Common ------------- Shares (as defined in Section 2.7)) shall be converted into and become the ----------- right to receive in cash, without interest, the per share consideration in the Offer (the "Merger Consideration") in accordance with Section 2.6(c). -------------------- -------------- All such shares of Common Stock, when so converted, shall no longer be outstanding and shall automatically be cancelled and retired and each holder of a certificate or certificates (the "Certificates") representing ------------ any such shares shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration. (c) Each issued and outstanding share of the capital stock of Sub shall be converted into and become one fully paid and nonassessable share of Common Stock, par value $.01 per share, of the Surviving Corporation. Section 2.6 Exchange of Certificates. (a) Paying Agent. Parent ------------------------ ------------ shall designate a commercial bank or trust company that is reasonably acceptable to the Company to act as paying agent hereunder (the "Paying Agent") for the ------------ payment of the Merger Consideration upon surrender of Certificates. All of the fees and expenses of the Paying Agent shall be borne by Parent. -6- (b) Parent to Provide Funds. Parent shall deposit or shall cause to ----------------------- be deposited (by Parent's affiliates other than the Company) in trust with the Paying Agent prior to the Effective Time cash in an amount necessary to pay for all of the shares of Common Stock pursuant to Section 2.5 (determined as though ----------- there are no Dissenting Company Common Shares). Such amount shall hereinafter be referred to as the "Exchange Fund." If the amount of cash in the Exchange ------------- Fund is insufficient to pay all of the amounts required to be paid pursuant to Sections 2.5, or 2.7, Parent from time to time after the Effective Time shall - ------------ --- deposit in trust additional cash with the Paying Agent sufficient to make all such payments. (c) Exchange Procedures. As soon as practicable after the Effective ------------------- Time, the Paying Agent shall mail to each holder of record of a Certificate, other than Parent, the Company and any Subsidiary of Parent or the Company, (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon actual delivery of the Certificates to the Paying Agent and shall be in a form and have such other provisions as Parent may reasonably specify) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the Merger Consideration. Upon surrender of a Certificate for cancellation to the Paying Agent or to such other agent or agents as may be appointed by Parent, together with such letter of transmittal, duly executed, and such other documents as may reasonably be required by the Paying Agent, the holder of such Certificate shall be entitled to receive in exchange therefor the amount of cash into which the shares of Common Stock theretofore represented by such Certificate shall have been converted pursuant to Section 2.5, and the ----------- Certificates so surrendered shall forthwith be cancelled. No interest will be paid or will accrue on the cash payable upon the surrender of any Certificate. If payment is to be made to a person other than the person in whose name the Certificate so surrendered is registered, it shall be a condition of payment that such Certificate shall be properly endorsed or otherwise in proper form for transfer and that the person requesting such payment shall pay any transfer or other Taxes (as hereinafter defined) required by reason of the delivery of such payment to a person other than the registered holder of such Certificate or establish to the satisfaction of Parent that any such Taxes have been paid or are not applicable. Until surrendered as contemplated by this Section 2.6, each ----------- Certificate (other than Certificates representing Dissenting Company Common Shares and Certificates representing any shares of Common Stock owned by Parent, the Company or any Subsidiary of Parent or the Company) shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the amount of cash, without interest, into which the shares of Common Stock theretofore represented by such Certificate shall have been converted pursuant to Section 2.5. Notwithstanding the foregoing, none of the Paying ----------- Agent, the Surviving Corporation or -7- any party hereto shall be liable to a former stockholder of the Company for any cash or interest delivered to a public official pursuant to applicable abandoned property, escheat or similar laws. Any portion of the Exchange Fund that remains unclaimed by the stockholders of the Company for one year after the Effective Time shall be repaid to Parent (including, without limitation, all interest and other income received by the Paying Agent in respect of all such funds). Thereafter, holders of shares of Common Stock shall look only to Parent or the Surviving Corporation (subject to the terms of this Agreement and abandoned property, escheat and other similar laws) as general creditors thereof with respect to any Merger Consideration that may be payable upon due surrender of the Certificates held by them. Parent or the Paying Agent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of shares of Common Stock such amounts as Parent or the Paying Agent is required to deduct and withhold with respect to the making of such payment under the Code (as hereinafter defined) or under any provision of state, local or foreign tax law. To the extent that amounts are so withheld by Parent or the Paying Agent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the shares of Common Stock in respect of which such deduction and withholding was made by the Parent or the Paying Agent. Section 2.7 Dissenting Company Common Shares. Notwithstanding any -------------------------------- provision of this Agreement to the contrary, if required by the DGCL but only to the extent required thereby, shares of Common Stock which are issued and outstanding immediately prior to the Effective Time and which are held by holders of such shares of Common Stock who have properly exercised appraisal rights with respect thereto in accordance with Section 262 of the DGCL (the "Dissenting Company Common Shares") will not be exchangeable for the right to -------------------------------- receive the Merger Consideration, and holders of such shares of Common Stock will be entitled to receive payment of the appraised value of such shares of Common Stock in accordance with the provisions of such Section 262 unless and until such holders fail to perfect or effectively withdraw or lose their rights to appraisal and payment under the DGCL. If, after the Effective Time, any such holder fails to perfect or effectively withdraws or loses such right, such shares of Common Stock will thereupon be treated as if they had been converted into and have become exchangeable for, at the Effective Time, the right to receive the Merger Consideration, without any interest thereon. The Company will give Parent prompt notice of any demands received by the Company for appraisals of shares of Common Stock. The Company shall not, except with the prior written consent of Parent, make any payment with respect to any demands for appraisal or offer to settle or settle any such demands. -8- Section 2.8 Merger Without Meeting of Stockholders. Notwithstanding -------------------------------------- the foregoing, in the event that Sub, or any other direct or indirect subsidiary of Parent, shall acquire at least 90 percent of the outstanding shares of Common Stock, the parties hereto agree to take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after the expiration of the Offer without a meeting of stockholders of the Company, in accordance with Section 253 of the DGCL. Section 2.9 No Further Ownership Rights in Common Stock. All cash ------------------------------------------- paid upon the surrender of Certificates in accordance with the terms hereof shall be deemed to have been paid in full satisfaction of all rights pertaining to the shares of Common Stock. Section 2.10 Closing of Company Transfer Books. At the Effective --------------------------------- Time, the stock transfer books of the Company shall be closed and no transfer of shares of Common Stock shall thereafter be made. If, after the Effective Time, Certificates are presented to the Surviving Corporation, they shall be cancelled and exchanged as provided in this Article II. ---------- Section 2.11 Further Assurances. If, at any time after the Effective ------------------ Time, the Surviving Corporation shall consider or be advised that any deeds, bills of sale, assignments or assurances or any other acts or things are necessary, desirable or proper (a) to vest, perfect or confirm, of record or otherwise, in the Surviving Corporation, its right, title or interest in, to or under any of the rights, privileges, powers, franchises, properties or assets of either of the Constituent Corporations, or (b) otherwise to carry out the purposes of this Agreement, the Surviving Corporation and its proper officers and directors or their designees shall be authorized to execute and deliver, in the name and on behalf of either of the Constituent Corporations in the Merger, all such deeds, bills of sale, assignments and assurances and do, in the name and on behalf of such Constituent Corporations, all such other acts and things necessary, desirable or proper to vest, perfect or confirm its right, title or interest in, to or under any of the rights, privileges, powers, franchises, properties or assets of such Constituent Corporation and otherwise to carry out the purposes of this Agreement. -9- ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT ---------------------------------------- Parent represents and warrants to the Company as follows: Section 3.1 Organization, Standing and Power. Parent is a -------------------------------- corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. Section 3.2 Authority; Non-Contravention. Parent has all requisite ---------------------------- power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Parent and the consummation by Parent of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Parent. This Agreement has been duly executed and delivered by Parent and (assuming the valid authorization, execution and delivery of this Agreement by the Company) consti tutes a valid and binding obligation of Parent enforceable against Parent in accordance with its terms. The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby and compliance with the provisions hereof will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of a material benefit under, or result in the creation of any lien, security interest, charge or encumbrance upon any of the properties or assets of Parent or any of its Subsidiaries under, any provision of (i) the Certificate of Incorporation or Bylaws of Parent or any provision of the comparable charter or organization documents of any of its Subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise or license applicable to Parent or any of its Subsidiaries or (iii) any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Parent or any of its Subsidiaries or any of their respective properties or assets, other than, in the case of clauses (ii) or (iii), any such conflicts, violations, defaults, rights, liens, security interests, charges or encumbrances that, individually or in the aggregate, would not have a Material Adverse Effect (as hereinafter defined) on Parent, materially impair the ability of Parent or Sub to perform its obligations hereunder or prevent the consummation of any of the transactions contemplated hereby. No filing or registration with, or authorization, consent or approval of, any domestic (federal and state), foreign or supranational court, commission, governmental body, regulatory or administrative agency, authority -10- or tribunal (a "Governmental Entity") is required by or with respect to Parent ------------------- or any of its Subsidiaries in connection with the execution and delivery of this Agreement by Parent or is necessary for the consummation of the Offer, the Merger and the other transactions contemplated by this Agreement, except for (i) in connection, or in compliance, with the Exchange Act, (ii) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware and appropriate documents with the relevant authorities of other states in which the Company is qualified to do business, (iii) such filings and consents, if any, as may be required under any environmental, health or safety law or regulation pertaining to any notification, disclosure or required approval triggered by the Offer, the Merger or the transactions contemplated by this Agreement, (iv) such filings, if any, as may be required in connection with the Gains Taxes described in Section 7.7, (v) such filings and approvals as may be required under the ----------- Hart-Scott-Rodino Improvements Act of 1976, as amended (the "Improvements Act"), ---------------- and (vi) such other consents, orders, authorizations, registrations, declarations and filings the failure of which to be obtained or made would not, individually or in the aggregate, have a Material Adverse Effect on Parent, materially impair the ability of Parent or Sub to perform its obligations hereunder or prevent the consummation of any of the transactions contemplated hereby. Section 3.3 Offer Documents and Proxy Statement. None of the ----------------------------------- information to be supplied by Parent or Sub for inclusion or incorporation by reference in the Offer Documents, the Schedule 14D-9, the information statement, if any, filed by the Company in connection with the Offer pursuant to Rule 14f-1 promulgated under the Exchange Act (the "Information Statement"), or the proxy --------------------- statement (together with any amendments or supplements thereto, the "Proxy ----- Statement") relating to the Stockholder Meeting (as defined in Section 7.1) will - --------- ----------- (i) in the case of the Offer Documents, the Schedule 14D-9 and the Information Statement, at the respective time such documents are filed with the SEC or first published, sent or given to the Company's stockholders, or (ii) in the case of the Proxy Statement, at the time of the mailing of the Proxy Statement and at the time of the Stockholder Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. If at any time prior to the purchase of shares of Common Stock pursuant to the Offer there shall occur any event with respect to Parent, its officers and directors or any of its Subsidiaries which is required to be described in the Offer Documents, such event shall be so described, and an amendment or supplement shall be promptly filed with the SEC and, as required by law, disseminated to the stockholders of the Company. -11- Section 3.4 Brokers. No broker, investment banker or other person, ------- other than Goldman, Sachs & Co., the fees and expenses of which will be paid by Parent, is entitled to any broker's, finder's or other similar fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Parent or Sub. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY --------------------------------------------- The Company represents and warrants to Parent and Sub as follows: Section 4.1 Organization, Standing and Power. The Company and each -------------------------------- of its Subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated and has the requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. The Company and each of its Subsidiaries is duly qualified to do business, and is in good standing, in each jurisdiction where the character of its properties owned or held under lease or the nature of its activities makes such qualification necessary, except where the failure to be so qualified would not, individually or in the aggregate, have a Material Adverse Effect on the Company. Section 4.2 Capital Structure. The authorized capital stock of the ----------------- Company consists of 25,000,000 shares of Common Stock and 225,000 shares of Preferred Stock, par value $1.00 per share ("Preferred Stock"). At the close of --------------- business on September 22, 1995, (i) 11,454,185 shares of Common Stock were issued and outstanding, (ii) 946,049 shares of Common Stock were reserved for issuance upon the exercise of outstanding vested and exercisable stock options issued under the Stock Plans (as hereinafter defined), 273,893 shares of Common Stock were reserved for issuance upon the exercise of outstanding unvested stock options issued under the Stock Plans, 3,000 shares of Common Stock were reserved for issuance pursuant to vested and exercisable stock options granted to consultants of the Company pursuant to written agreements which are attached to the Company Disclosure Letter (the "Consultant Option Agreements") and 4,000 ---------------------------- shares of Common Stock were reserved for issuance upon the exercise of outstanding unvested stock options granted to consultants of the Company pursuant to Consultant Option Agreements and (iii) no shares of Common Stock were held by the Company in its treasury. As of the date hereof there are no shares of Preferred Stock outstanding. There are no outstanding stock appreciation rights. All outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as -12- set forth in Section 4.2 of the Company Disclosure Letter and except for 1,219,942 stock options issued under the Company's 1984 Incentive Stock Option Plan, 1988 Executive Stock Option Plan, 1988 Stock Option Plan and 1994 Stock Option Plan (collectively, the "Stock Plans"), and 7,000 stock options issued by ----------- the Company to consultants pursuant to Consultant Option Agreements, there are no options, warrants, rights, commitments, agreements, arrangements or undertakings of any kind to which the Company or any of its Subsidiaries is a party or by which any of them is bound obligating the Company or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other voting securities of the Company or of any of its Subsidiaries. No shares of the Company's capital stock have been issued other than pursuant to the exercise of stock options already in existence on such date since September 1, 1995. The Company has not granted any stock options for any capital stock of the Company since September 1, 1995. The Company has not adopted a shareholder's rights or a similar plan. Section 4.3 Subsidiaries. The Company's Subsidiaries consist of (i) ------------ SyntroVet Incorporated, a Kansas corporation, the authorized capital stock of which consists of 1,000 shares of common stock, $1.00 par value per share, all of which are issued and outstanding, (ii) SyntroVenture Corporation, a Kansas corporation ("SyntroVenture"), the authorized capital stock of which consists of ------------- 1,000 shares of common stock, no par value per share, 100 shares of which are issued and outstanding, and (iii) Syntro Zeon, L.C., a Kansas limited liability company ("Syntro Zeon"). Except for Syntro Zeon, fifty percent of the ----------- membership interest of which is owned by SyntroVenture and fifty percent of the membership interest of which is owned by Nippon Zeon of America, Inc., all of the outstanding capital stock or ownership interest of each Subsidiary of the Company is owned by the Company, directly or indirectly. All of the capital stock or ownership interest of the Company's Subsidiaries owned by the Company, directly or indirectly, are owned by the Company free and clear of any security interests, liens, claims, pledges, options, rights of first refusal, agreements, charges or other encumbrances of any nature ("Liens") or any other limitation or ----- restriction (including any restriction on the right to vote or sell the same, except as may be provided as a matter of law), except as set forth in Section 4.3 of the Company Disclosure Letter. Except as set forth in Section 4.3 of the Company Disclosure Letter, there are no securities of the Company or any of its Subsidiaries convertible into or exchangeable for, options or other rights to acquire from the Company or any of its Subsidiaries, or other contracts, understandings, arrangements or obligations (whether or not contingent) providing for the issuance or sale, directly or indirectly, of, any capital stock or other ownership interests in, or any other securities of, any Subsidiary of the Company. There are no outstanding contractual obligations of the Company or any of its Subsidiaries to -13- repurchase, redeem or otherwise acquire any outstanding shares of capital stock or other ownership interest in any Subsidiary of the Company nor are there any irrevocable proxies with respect to any shares of the capital stock of any of the Company's Subsidiaries. All of the shares of capital stock of each Subsidiary of the Company are validly existing, fully paid and non-assessable. Except for statutory restrictions, there are no restrictions which prevent or limit the payment of dividends by any of the Company's Subsidiaries. Section 4.4 Other Interests. Except for the Company's interest in --------------- its Subsidiaries and investments in ordinary course consistent with past practice and except as set forth in Section 4.4 of the Company Disclosure Letter, neither the Company nor its Subsidiaries owns directly or indirectly any interest or investment (whether equity or debt) in, nor is the Company or any of its Subsidiaries subject to any obligation or requirement to provide for or to make any investment (in the form of a loan, capital contribution or otherwise) to or in, any corporation, partnership, joint venture, limited liability company, business, trust or entity. Section 4.5 Authority; Non-Contravention. The Board of Directors of ---------------------------- the Company has approved the Offer and declared the Merger advisable and the Company has all requisite power and authority to enter into this Agreement and, subject to approval of the Merger by the stockholders of the Company (if required), 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 authorized by all necessary corporate action on the part of the Company, subject to such approval of the Merger by the stockholders of the Company (if required). This Agreement has been duly executed and delivered by the Company and (assuming the valid authorization, execution and delivery of this Agreement by Parent and Sub) constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms. Except as set forth in the Company SEC Documents (as hereinafter defined) and except as set forth in Section 4.5 of ----------- the Company Disclosure Letter, the execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby and compliance with the provisions hereof will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of a material benefit under, or result in the creation of any lien, security interest, charge or encumbrance upon any of the properties or assets of the Company or any of its Subsidiaries under, any provision of (i) the Certificate of Incorporation or Bylaws of the Company (true and complete copies of which as of the date hereof have been delivered to Parent) or any provision of the comparable charter or organization documents -14- of any of its Subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage or indenture, any lease or other agreement pursuant to which the Company has paid or received more than $20,000 in the last year, or any instrument, permit, concession, franchise or license applicable to the Company or any of its Subsidiaries or (iii) any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Company or any of its Subsidiaries or any of their respective properties or assets, other than, in the case of clause (ii) or (iii), any such conflicts, violations, defaults, rights, liens, security interests, charges or encumbrances that, individually or in the aggregate, would not have a Material Adverse Effect on the Company, materially impair the ability of the Company to perform its obligations hereunder or prevent the consummation of any of the transactions contemplated hereby. No filing or registration with, or authorization, consent or approval of, any Governmental Entity is required by or with respect to the Company or any of its Subsidiaries in connection with the execution and delivery of this Agreement by the Company or the consummation by the Company of the transactions contemplated hereby, except for (i) in connection or in compliance with the provisions of the Exchange Act, (ii) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware and appropriate documents with the relevant authorities of other states in which the Company is qualified to do business, (iii) such filings and consents, if any, as may be required under any environmental, health or safety law or regulation pertaining to any notification, disclosure or required approval triggered by the Offer, the Merger or the transactions contemplated by this Agreement, (iv) such filings, if any, as may be required in connection with the Gains Taxes described in Section 7.7, ----------- (v) such filings and approvals as may be required under the Improvements Act, (vi) such filings as may be required under state securities laws or the rules of the Nasdaq Stock Market, and (vii) such other consents, orders, authorizations, registrations, declarations and filings the failure of which to be obtained or made would not, individually or in the aggregate, have a Material Adverse Effect on the Company, materially impair the ability of Company to perform its obligations hereunder or prevent the consummation of any of the transactions contemplated hereby. Section 4.6 SEC Documents. (a) Since October 1, 1993, the Company ------------- has filed all documents with the SEC required to be filed under the Securities Act of 1933, as amended (including the rules and regulations promulgated thereunder), or the Exchange Act (the "Company SEC Documents"). As of their --------------------- respective dates, the Company SEC Documents complied in all material respects as to form with the requirements of the Securities Act or the Exchange Act, as the case may be, and none of the Company SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the -15- circumstances under which they were made, not misleading. The financial statements of the Company included in the Company SEC Documents as at the dates thereof complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, were prepared in accordance with generally accepted accounting principles (except, in the case of unaudited statements, as permitted by Form 10-Q of the SEC) applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto) and fairly present the consolidated financial position of the Company and its consolidated Subsidiaries as at the dates thereof and the consolidated results of their operations and changes in financial position for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments and to any other adjustments described therein). (b) Except as set forth in the Company SEC Documents, neither the Company nor any of its Subsidiaries has any liability or obligation of any nature (whether accrued, absolute, contingent or otherwise) which would be required to be reflected on a balance sheet, or in the notes thereto, prepared in accordance with generally accepted accounting principles, except for liabilities and obligations incurred in the ordinary course of business consistent with past practice since September 30, 1994 which would not, individually or in the aggregate, have a Material Adverse Effect. Section 4.7 Offer Documents and Proxy Statement. None of the ----------------------------------- information supplied or to be supplied by the Company for inclusion or incorporation by reference in the Offer Documents or the Schedule 14D-9, the Information Statement, if any, the Proxy Statement, if any, or any amendment or supplement thereto, will (i) in the case of the Offer Documents, the Schedule 14D-9 and the Information Statement, at the respective times such documents are filed with the SEC or first published, sent or given to the Company's stockholders, or (ii) in the case of the Proxy Statement, at the time of the mailing of the Proxy Statement and at the time of the Stockholder Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. If at any time prior to the Effective Time any event with respect to the Company, its officers and directors or any of its Subsidiaries should occur which is required to be described in an amendment of, or a supplement to, the Proxy Statement or the Offer Documents, such event shall be so described, and such amendment or supplement shall be promptly filed with the SEC and, as required by law, disseminated to the stockholders of the Company. The Proxy Statement will comply as to form in all material respects with the requirements of the Exchange Act. -16- Section 4.8 Absence of Certain Events. Since September 30, 1994, the ------------------------- Company and its Subsidiaries have operated their respective businesses in the ordinary course consistent with its historical practices and there has not occurred (i) any event, occurrence or conditions which, individually or in the aggregate, has had, or is reasonably likely to have, a Material Adverse Effect on the Company; (ii) any entry into or any commitment or transaction that, individually or in the aggregate, has or is reasonably likely to have, a Material Adverse Effect on the Company; (iii) any change by the Company or any of its Subsidiaries in its accounting methods, principles or practices; (iv) except as set forth in Section 4.8 of the Company Disclosure Letter, any amendments or changes in the Certificate of Incorporation or Bylaws of the Company; (v) any revaluation by the Company or any of its Subsidiaries of any of their respective assets, including, without limitation, write-offs of accounts receivable, other than in the ordinary course of the Company's and each of its Subsidiaries' businesses consistent with past practices; (vi) any damage, destruction or loss which resulted in or is reasonably likely to result in a Material Adverse Effect on the Company; or (vii) any declaration, setting aside or payment of any dividend or other distribution with respect to any shares of capital stock of the Company, or any repurchase, redemption or other acquisition by the Company or any of its Subsidiaries of any outstanding shares of capital stock or other securities of, or other ownership interests in, the Company. Section 4.9 Litigation. Except as set forth in Section 4.9 of the ---------- Company Disclosure Letter, there are no actions, suits or proceedings pending against the Company or any of its Subsidiaries or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries, at law or in equity, or before or by any federal or state commission, board, bureau, agency, regulatory or administrative instrumentality or other Governmental Entity or any arbitrator or arbitration tribunal, that are reasonably likely to have a Material Adverse Effect on the Company or would prevent or delay the consummation of the transactions contemplated hereby. Section 4.10 Compliance with Applicable Law. The Company and its ------------------------------ Subsidiaries hold, and at all required times have held, all permits, licenses, variances, exemptions, orders and approvals of all Governmental Entities necessary for the lawful conduct of their respective businesses (the "Company ------- Permits"), except for failures to hold such permits, licenses, variances, - ------- exemptions, orders and approvals which have not had, and are not reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on the Company from and after the date of this Agreement. The Company and its Subsidiaries are, and at all times have been, in compliance with the terms of the Company Permits, except where the failure so to comply has not had, and is not reasonably likely to have, a Material Adverse Effect on -17- the Company. The businesses of the Company and its Subsidiaries are not being, and have not been, conducted in violation of any law, ordinance or regulation of any Governmental Entity except for violations or possible violations which individually or in the aggregate do not and will not have a Material Adverse Effect on the Company. No investigation or review by any Governmental Entity with respect to the Company or any of its Subsidiaries is pending or, to the knowledge of the Company, threatened, nor, to the knowledge of the Company, has any Governmental Entity indicated an intention to conduct the same, other than, in each case, those which the Company reasonably believes will not have a Material Adverse Effect on the Company. The Company makes no representations in this Section 4.10 with respect to any Environmental Laws (as hereinafter ------------ defined). Section 4.11 Employee Plans. (a) The Company and each of its -------------- Subsidiaries have complied with all requirements, and performed all obligations, imposed by or in connection with any Company Benefit Plan (as hereinafter defined) or any related trust agreement or insurance contract and the requirements and obligations imposed by applicable law (including, without limitation, the reporting and disclosure requirements imposed by ERISA or the Code (each, as hereinafter defined), other than where the failure to so comply or perform has not had, and is not reasonably likely to have, a Material Adverse Effect on the Company. All contributions and other payments required by any Company Benefit Plan or applicable law to be made by the Company or its Subsidiaries to any Company Benefit Plan have been made or are properly reflected on their financial statements, other than where the failure to do so has not had, and is not reasonably likely to have a Material Adverse Effect on the Company. There is no claim, dispute, grievance, charge, complaint, restraining or injunctive order, litigation or proceeding pending, or to the knowledge of the Company, threatened (other than routine claims for benefits) against or relating to any Company Benefit Plan or against the assets of any Company Benefit Plan, which has had, or is reasonably likely to have, a Material Adverse Effect on the Company. Neither the Company nor any of its Subsidiaries has communicated generally to employees or specifically to any employee regarding any future increase of benefit levels (or future creations of new benefits) with respect to any Company Benefit Plan beyond those reflected in the Company Benefit Plans, which benefit increases or creations, either individually or in the aggregate, has had or is reasonably likely to have, a Material Adverse Effect on the Company. Neither the Company nor any of its Subsidiaries presently sponsors, maintains, contributes to, nor is the Company or its Subsidiaries required to contribute to, nor has the Company or any of its Subsidiaries ever sponsored, maintained, contributed to, or been required to contribute to, any employee pension benefit plan within the meaning of section 3(2) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), other than the Company's 401(k) Deferred Savings Plan which is ----- qualified under -18- Section 401 of the Code, or any multiemployer plan within the meaning of section 3(37) or 4001(a)(3) of ERISA. Except as set forth in Section 4.11 of the ------------ Company Disclosure Letter, no Company Benefit Plan provides medical or life insurance coverage for periods after termination of employment other than as required by Section 601 et. seq. of ERISA. ------- (b) The execution, delivery and performance of this Agreement and the transactions contemplated hereby will not result in the imposition of any federal excise tax with respect to any Company Benefit Plan. (c) As a result of the transactions contemplated by this Agreement, none of the Company, any of its Subsidiaries or Parent will be obligated to make a payment to an individual that would be a "parachute payment" to a "disqualified individual" as those terms are defined in Section 280G of the Code, without regard to whether such payment is reasonable compensation for personal services performed or to be performed in the future. (d) No entity other than any of the Company's Subsidiaries is, together with the Company, treated as a single employer under section 414 of the Code. (e) (i) "Company Benefit Plan" means any bonus, incentive -------------------- compensation, deferred compensation, pension, profit sharing, retirement, stock purchase, stock option, stock ownership, stock appreciation rights, phantom stock, leave of absence, layoff, vacation, day or dependent care, legal services, cafeteria, life, health, accident, disability, workers' compensation or other insurance, severance, separation or other employee benefit plan, program, practice, policy or arrangement of any kind, including, but not limited to, any "employee benefit plan" within the meaning of section 3(3) of ERISA, other than a multiemployer plan within the meaning of section 3(37) or 4001(a)(3) of ERISA, established by the Company or any of its Subsidiaries or to which the Company or any of its Subsidiaries contributes or has contributed (including any such plan, program, practice policy or arrangement not now maintained by the Company or any of its Subsidiaries or to which the Company or any of its Subsidiaries does not now contribute, but with respect to which the Company or any of its Subsidiaries has or may have any liability). Section 4.12 Employment Relations and Agreement. (a) Except as would ---------------------------------- not constitute a Material Adverse Effect on the Company, (i) each of the Company and its Subsidiaries is, and at all times has been, in compliance in all material respects with all federal, state or other applicable laws respecting employment and employment practices, terms and conditions of employment and wages and hours, and has not and is not engaged in any unfair labor practice; (ii) no unfair labor practice complaint against the Company or any of its Subsidiaries is pending before the -19- National Labor Relations Board; (iii) there is no labor strike, dispute, slowdown or stoppage actually pending or, to the knowledge of the Company, threatened against or involving the Company or any of its Subsidiaries, (iv) no representation question exists respecting the employees of the Company or any of its Subsidiaries; (v) no grievance exists, no arbitration proceeding arising out of or under any collective bargaining agreement is pending and no claim therefor has been asserted; (vi) no collective bargaining agreement is currently being negotiated by the Company or any of its Subsidiaries; and (vii) the Company and its Subsidiaries taken as a whole have not experienced any material labor difficulty during the last three years. Since October 1, 1993, no union organizing or election activities involving employees of the Company or its Subsidiaries have occurred or, to the knowledge of the Company, been threatened. There has not been and, to the knowledge of the Company, there will not be, any change in relations with employees of the Company or any of its Subsidiaries as a result of the transactions contemplated by this Agreement which could have a Material Adverse Effect on the Company. (b) Except for as reflected in the Company SEC Documents or as set forth in Section 4.12(b) of the Company Disclosure Letter, neither the Company nor any of its Subsidiaries has any written, or to the knowledge of the Company, any binding oral (other than oral employment agreements which are binding under Kansas and California law, all of which are terminable at will by the Company without penalty arising under terms of the oral employment agreements), employment or severance agreement with any other person. Section 4.13 Contracts. Except as set forth in Section 4.13(i) of --------- the Company Disclosure Letter, neither the Company nor its Subsidiaries is a party to, or has any obligation under, any contract or agreement, written or oral, which contains any covenants currently or prospectively limiting the freedom of the Company, any of its Subsidiaries or any of their respective affiliates to engage in any line of business or to compete with any entity. All contracts and agreements to which the Company or any of its Subsidiaries is a party or by which any of their respective assets is bound are valid and binding, in full force and effect and enforceable against the parties thereto in accordance with their respective terms, other than (i) such failures to be so valid and binding, in full force and effect or enforceable which, either individually or in the aggregate, has not had, or is not reasonably likely to have, a Material Adverse Effect on the Company, and (ii) subject to applicable bankruptcy, insolvency, moratorium or other similar laws relating to creditors' rights and general principles of equity. There is not under any such contract or agreement any existing default, or event which, after notice or lapse of time, or both, would constitute a default, by the Company or any of its Subsidiaries, or to the Company's knowledge, any other party, except as set -20- forth in Section 4.13(ii) of the Company Disclosure Letter and except to the extent such default has not had, or is not reasonably likely to have, a Material Adverse Effect on the Company. The Company has delivered to Parent true and complete copies of each of the contracts and agreements (and any and all amendments thereto) listed in the Company Disclosure Schedule. Neither the Company nor any of its Subsidiaries has waived any material rights under any of such contracts or agreements. Section 4.14 Intellectual Property. (a) Except as would not --------------------- reasonably be expected to have a Material Adverse Effect on the Company and except as set forth in Section 4.14 of the Company Disclosure Letter (i) to the knowledge of the Company, the Company and/or each of its Subsidiaries owns, or is licensed or otherwise has the right to use (in each case, clear of any liens or encumbrances of any kind), all Intellectual Property (as hereinafter defined) used in or necessary for the conduct of its business as currently conducted; (ii) no claims are pending or, to the knowledge of the Company, threatened that the Company or any of its Subsidiaries is infringing on or otherwise violating the rights of any person with regard to any Intellectual Property owned by and/or licensed to the Company or its Subsidiaries; (iii) to the knowledge of the Company, no person is infringing on or otherwise violating any right of the Company or any of its Subsidiaries with respect to any Intellectual Property owned by and/or licensed to the Company or its Subsidiaries; (iv) all registrations for copyrights, trademarks, service marks, trade names and patents of the Company and its Subsidiaries are valid and in force, and all applications therefor are pending, in good standing, and, to the knowledge of the Company, without challenge of any kind; and (v) the Company and/or each of its Subsidiaries has taken reasonable and necessary steps to protect their Intellectual Property and their rights thereunder, and to the knowledge of the Company no such rights or Intellectual Property have been lost or are in jeopardy of being lost through failure to act by the Company or any of its Subsidiaries. All of the Patents (as hereinafter defined) owned or licensed by the Company and its Subsidiaries, and any licenses granted by the Company or any of its Subsidiaries relating thereto, are listed in the Company Disclosure Letter. (b) For purposes of this Agreement, "Intellectual Property" means (i) --------------------- all United States and foreign copyrights, whether registered or unregistered, and pending applications to register the same, and all copyrightable works, including, without limitation, software; (ii) all United States, state and foreign trademarks, service marks and trade names (including all assumed or fictitious names under which the Company is conducting the business or has within the previous three years conducted the business), whether registered or unregistered, and pending applications to register the foregoing; (iii) all United States and foreign patents, patent applications, continuations, continuations-in-part, divisions, reissues, patent disclosures, -21- inventions (whether or not patentable or reduced to practice) or improvements thereto ("Patents"); (iv) all confidential ideas, know-how, methods, formulae, ------- trade secrets, processes, reports, data, customer lists, business plans, or other proprietary information; (v) all agreements, commitments, contracts, under standings, licenses, sublicenses, assignments and indemnities which relate or pertain to any of the intellectual property identified in subsections (i) through (v) above or to disclosure or use of ideas of third parties. Section 4.15 Title to Property. The Company or its Subsidiaries has ----------------- good and, with respect to real property, marketable title to all of the material assets reflected on the consolidated financial statements of the Company included in the Company SEC Documents as being owned by it or its Subsidiaries and all of the material assets thereafter acquired by it or its Subsidiaries (except to the extent that such assets have thereafter been disposed of in the ordinary course of business consistent with past practice), subject to no Liens. Section 4.16 State Takeover Statutes. The Board of Directors of the ----------------------- Company has approved the Offer, the Merger and this Agreement and such approval is sufficient to render inapplicable to the Offer, the Merger and this Agreement and the transactions contemplated by this Agreement the provisions of Section 203 of the DGCL. To the knowledge of the Company (without investigation), no other state takeover statute or similar statute or regulation applies or purports to apply to the Offer, the Merger, this Agreement or any of the transactions contemplated by this Agreement. Section 4.17 Taxes. (a) (i) Except as provided in the Company ----- Disclosure Letter, the Company and each of its Subsidiaries have filed (or will timely file) all Tax Returns required to have been filed on or before the date hereof or the Effective Time, which returns are true and complete in all material respects; (ii) all Taxes shown to be due on such Tax Returns have been timely paid; (iii) all Taxes (whether or not shown on any Tax Return) owed by the Company or any Subsidiary of the Company and required to be paid on or before the Effective Time have been (or will be) timely paid or, in the case of Taxes which the Company or any Subsidiary of the Company is presently contesting in good faith, the Company or such Subsidiary has established an adequate reserve for such Taxes on the books of the Company; (iv) neither the Company nor any Subsidiary has waived any statute of limitations in respect of Taxes; (v) the Tax Returns referred to in clause (i) relating to federal and state income Taxes have never been examined by the Internal Revenue Service or the appropriate state taxing authority; (vi) there is no suit, audit, or assessment pending with respect to Taxes of the Company or any Subsidiary of the Company; (vii) all deficiencies asserted or assessments made as a result of any examination of the Tax Returns referred to in clause (i) by a -22- taxing authority have been paid in full; and (viii) the Company and each of its Subsidiaries have complied in all material respects with their legal obligations to withhold and collect Taxes, and such withheld and collected Taxes have been paid or accrued, reserved against and entered on the books of the Company. (b) As of September 30, 1994, the "affiliated group" (as defined in Section 1504(a) of the Code) of which Company is the common parent had consolidated net operating loss carryforwards for federal income Tax purposes of not less than $21,200,000 that expire in years 1996 through 2009 (the "NOLs"), ---- and between September 30, 1994 and the Effective Time none of the NOLs will have been utilized or otherwise reduced. As of the Effective Time, (i) none of the NOLs are disallowed or limited under the provisions of the Code or regulations relating to separate return limitation years ("SRLY") or consolidated return ---- changes of ownership ("CRCO"), (ii) none of the NOLs are disallowed or limited ---- under the provisions of the Code and regulations relating to "dual consolidated losses" (as defined in Section 1503 of the Code or the regulations thereunder), and (iii) none of the NOLs are disallowed or subject to any limitation by reason of Sections 269, 382, or 384 of the Code or the regulations thereunder, except to the extent that the acquisition or right to acquire shares of Common Stock by Parent, Sub or any of their affiliates results in any such disallowance or limitation. (c) As of September 30, 1994, the "affiliated group" (as defined in Section 1504(a) of the Code) of which Company is the common parent has consolidated credits described in Section 38(b) of the Code of not less than $1,100,000 that expire in years 1996 through 2003 (the "Credits"), and between ------- September 30, 1994 and the Effective Time none of the Credits will have been utilized or otherwise reduced. The allocation of the total Credits among the types of credits described in Section 38(b) of the Code is set forth in the Company Disclosure Letter. As of the Effective Time, none of the Credits are disallowed or subject to any limitation, including any disallowance or limitation by reason of Section 269, 381 or 383 of the Code or the regulations thereunder, except to the extent that the acquisition or right to acquire shares of Common Stock by Parent, Sub or any of their affiliates results in any such disallowance or limitation. (d) For purposes of this Agreement (i) "Tax" (and, with correlative --- meaning, "Taxes" and "Taxable") means any federal, state, local or foreign ----- ------- income, gross receipts, property, sales, use, license, excise, franchise, employment, payroll, premium, withholding, alternative or added minimum, ad valorem, transfer or excise tax, or any other tax, custom, duty, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or penalty, imposed by any Governmental Entity, and (ii) "Tax Return" ---------- means any return, -23- report or similar statement required to be filed with respect to any Tax (including any attached schedules), including, without limitation, any information return, claim for refund, amended return or declaration of estimated Tax; and (iii) "Code" means the Internal Revenue Code of 1986, as amended. ---- Section 4.18 Environmental Matters. (a) The Company's and each of --------------------- its Subsidiaries' past and present operations of its business have complied and are in compliance with all applicable foreign, federal, state and local laws, statutes, regulations, codes or ordinances enacted, adopted, issued or promulgated by any Governmental Entity relating to or addressing the environment, health or safety as in the effect at the relevant time, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act, any amendments thereto, any successor statute and any regulations promulgated thereunder ("CERCLA"), the Occupational Safety and Health Act, any ------ amendments thereto, any successor statute and any regulations promulgated thereunder ("OSHA") and the Resource Conservation and Recovery Act, any ---- amendments thereto, any successor statute and any applicable regulations promulgated thereunder ("RCRA"), and any state equivalent ("Environmental ---- ------------- Laws"), except for such failures to so comply that would not have a Material Adverse Effect on the Company. (b) Except as set forth in Section 4.18 of the Company Disclosure Letter and except for such permits that the failure to so obtain would not have a Material Adverse Effect on the Company, the Company and each of its Subsidiaries has obtained all environmental, health and safety permits from Governmental Entities necessary for the operation of its business, and all such permits are in good standing and the Company and each of its Subsidiaries is in compliance with all terms and conditions of such permits except where the failure to so comply would not have a Material Adverse Effect on the Company. (c) To the best knowledge of the Company, none of the Company or its Subsidiaries, nor any of the Company's or its Subsidiaries' properties or its past or present operations, is subject to any on-going investigation by, order from or agreement with any person (including without limitation any prior owner or operator of any property of the Company or its Subsidiaries) respecting (i) any Environmental Law, (ii) any remedial action or (iii) any claim of losses and expenses arising from the release or threatened release of any waste, pollutant, hazardous or toxic substance or waste, petroleum, petroleum-based substance or waste, special waste, biohazardous material (including genetically engineered/recombinant material), radioactive material or any constituent of any such substance or waste ("Contaminant") into the environment. ----------- (d) Neither the Company nor any of its Subsidiaries is subject to any judicial or administrative proceeding, order, -24- judgment, decree or settlement alleging or addressing a violation of or liability under any Environmental Law. (e) Except as set forth in Section 4.18 of the Company Disclosure Letter, 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; (iii) filed notice pursuant to Section 3010 of RCRA, indicating the generation of any hazardous waste, as that term is defined under 40 CFR Part 261 or any state equivalent; or (iv) filed any notice under any applicable Environmental Law reporting a substantial violation of any applicable Environmental Law. (f) There is not now, nor to the knowledge of the Company has there even been, on or in any property of the Company or any of its Subsidiaries (i) any treatment, recycling, storage or disposal of any hazardous waste, as that term is defined under 40 CFR Part 261 or any state equivalent that requires or required a permit pursuant to Section 3005 of RCRA or (ii) any underground storage tank or surface impoundment or landfill or waste pile. (g) Except as set forth in Section 4.18 of the Company Disclosure Letter, there is not now on or in any property of the Company or any of its Subsidiaries any polychlorinated biphenyls (PCBs) used in pigments, hydraulic oils, electrical transformers or other equipment. (h) Neither the Company nor any of its Subsidiaries has received any notice or claim to the effect that it is or may be liable to any person as a result of, and the Company has no knowledge of any basis for any claim of liability for, the release or threatened release of a Contaminant into the environment on any property of the Company or any of its Subsidiaries. (i) No property of the Company or any of its Subsidiaries has been listed or, to the knowledge of the Company, proposed for listing on the National Priorities List pursuant to CERCLA, on the Comprehensive Environmental Response, Compensation and Liability Information System List or any state list of sites requiring remedial action. (j) To the best knowledge of the Company, neither the Company nor any of its Subsidiaries has sent or arranged for the transport of any Contaminant to any site listed on the National Priorities List pursuant to CERCLA. (k) Any asbestos-containing material which is on or part of any property of the Company or any of its Subsidiaries (excluding any raw materials used in the manufacture of products or products themselves) is in good repair according to the current standards and practices governing such material, and its -25- presence or condition does not violate any currently applicable Environmental Law. Section 4.19 Vote Required. The affirmative vote of the holders of a ------------- majority of the outstanding shares of Common Stock of the Company entitled to vote with respect to the Merger is the only vote of the holders of any class or series of the Company's capital stock necessary to approve this Agreement, the Merger and any transactions contemplated hereby. Section 4.20. Insurance. The Company and its Subsidiaries maintain --------- policies of fire and casualty, liability (general, products and other liability), workers' compensation and other forms of insurance and bonds in such amounts and against such risks and losses as are insured against by companies engaged in the same or a similar business. The Company shall keep or cause such insurance or comparable insurance to be kept in full force and effect through the Effective Time. The Company and its Subsidiaries have complied with each of such insurance policies and have not failed to give any notice or present any claim thereunder in a due and timely manner. Section 4.21 Brokers. No broker, investment banker or other person, ------- other than Piper Jaffray Inc., the fees and expenses of which will be paid by the Company, is entitled to any broker's, finder's or other similar fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company, which arrangements provide for the payment to Piper Jaffray Inc. of a fee of $500,000 and expenses in connection with the transactions contemplated by this Agreement, and do not bind Parent and its affiliates (including, after consummation of the Offer, the Company and its Subsidiaries) other than with respect to indemnification and contribution and the payment of such fees and expenses. ARTICLE V REPRESENTATIONS AND WARRANTIES REGARDING SUB -------------------------------------------- Parent and Sub jointly and severally represent and warrant to the Company as follows: Section 5.1 Organization and Standing. Sub is a corporation duly ------------------------- organized, validly existing and in good standing under the laws of the State of Delaware. Sub was organized solely for the purpose of acquiring the Company engaging in the transactions contemplated by this Agreement and has not engaged in any business since it was incorporated which is not in connection with the acquisition of the Company and this Agreement. -26- Section 5.2 Capital Structure. The authorized capital stock of Sub ----------------- consists of 1,000 shares of common stock, par value $.01 per share, all of which are validly issued and outstanding, fully paid and nonassessable and are owned by Parent free and clear of all Liens. Section 5.3 Authority; Non-Contravention. Sub has the requisite ---------------------------- power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement, the performance by Sub of its obligations hereunder and the consummation of the transactions contemplated hereby have been duly authorized by its Board of Directors and Parent as its sole stockholder, and, except for the corporate filings required by state law, no other corporate proceedings on the part of Sub are necessary to authorize this Agreement and the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Sub and (assuming the due authorization, execution and delivery hereof by the Company) constitutes a valid and binding obligation of Sub enforceable against Sub in accordance with its terms. ARTICLE VI COVENANTS RELATING TO CONDUCT OF BUSINESS ----------------------------------------- Section 6.1 Conduct of Business by the Company Pending the Merger. ----------------------------------------------------- Except as otherwise expressly contemplated by this Agreement, during the period from the date of this Agreement through the Effective Time, the Company shall, and shall cause its Subsidiaries to, in all material respects carry on their respective businesses in, and not enter into any material transaction other than in accordance with, the regular and ordinary course and, to the extent consistent therewith, use its reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with customers, suppliers and others having business dealings with them. Without limiting the generality of the foregoing, and, except as otherwise expressly contemplated by this Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Parent: (a) (x) declare, set aside or pay any dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its capital stock, or otherwise make any payments to stockholders of the Company in their capacity as such, other than dividends payable to the Company declared by any of the Company's Subsidiaries, (y) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its -27- capital stock or (z) except as set forth in Section 4.2 of the Company Disclosure Letter, purchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its Subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities; (b) issue, deliver, sell, pledge, dispose of or otherwise encumber any shares of its capital stock, any other voting securities or equity equivalent or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities or equity equivalent (other than, in the case of the Company, the issuance of Common Stock during the period from the date of this Agreement through the Effective Time upon the exercise of stock options issued pursuant to the Stock Plans and outstanding (as set forth in Section ------- 4.2) on the date of this Agreement in accordance with their current terms; --- (c) amend its charter or bylaws; (d) acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of or equity in, or by any other manner, any business or any corporation, partnership, limited liability Company, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets, in each case that are material, individually or in the aggregate, to the Company and its Subsidiaries, taken as a whole; (e) sell, lease or otherwise dispose of or agree to sell, lease or otherwise dispose of, any of its assets that are material, individually or in the aggregate, to the Company and its Subsidiaries, taken as a whole, except for sales of inventory or other assets in the ordinary course of business; (f) incur any indebtedness for borrowed money or guarantee any such indebtedness or issue or sell any debt securities or guarantee any debt securities of others, except for borrowings or guarantees incurred in the ordinary course of business consistent with past practice, or, except as set forth in Section 4.2 of the Company Disclosure Letter, make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any wholly owned Subsidiary of the Company and other than in the ordinary course of business consistent with past practice; -28- (g) alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiary of the Company; (h) enter into or adopt or amend any existing severance plan, severance agreement or severance arrangement or, other than in the ordinary course of business, enter into or amend any Company Benefit Plan (including without limitation, the Stock Plans) or employment or consulting agreement except, (i) with respect to employees that are not executive officers or directors, compensation increases associated with promotions and regular reviews in the ordinary course of business consistent with past practices, (ii) agreements with consultants of the Company providing for payments by the Company of less than $20,000 to any individual consultant and less than $75,000 in the aggregate to all consultants, and (iii) after December 31, 1995, increases of not more than 10% to the base salary of executive officers of the Company; (i) waive, amend or allow to lapse any term or condition of any confidentiality or "standstill" agreement to which the Company is a party; (j) settle or compromise any suit, proceeding or claim or threatened suit, proceeding or claim for an amount that is more than $20,000 in the case of any individual suit, proceeding or claim or $100,000 for all suits, proceedings or claims; (k) knowingly violate or fail to perform any obligation or duty imposed upon it by any applicable federal, state or local law, rule, regulation, guideline or ordinance; (l) change its credit policies, procedures or practices, or commit or renew a prior commitment to lend money, purchase assets, issue a letter of credit, guarantee or similar instrument or otherwise extend credit to any person in a manner not in the ordinary course or in a manner inconsistent with past practice; (m) (i) modify, amend or terminate any contract, (ii) waive, release, relinquish or assign any contract (including any insurance policy) or other right or claim, (iii) prepay any indebtedness or (iv) cancel or forgive any indebtedness owed to it, other than in each case in a manner in the ordinary course of business consistent with past practice and which is not material to the business of the Company and its Subsidiaries; (n) make any Tax election or change any method of accounting for Tax purposes, in each case except to the -29- extent required by law, or settle or compromise any Tax liability; (o) change any of the accounting principles or practices used by it except as required by the SEC or the Financial Accounting Standards Board; (p) (i) enter into any research and development contract, (ii) enter into any production contract or "tolling agreement," or (iii) grant any license relating to its Intellectual Property, except as required by existing agreements of the Company, copies of which have been provided to Parent; or (q) authorize, recommend, announce, propose or agree to take any of the foregoing actions. During the period from the date of this Agreement through the Effective Time, (i) as reasonably requested by Parent, the Company shall confer on a regular basis with one or more representatives of Parent with respect to material operational matters; (ii) the Company shall, within 25 days following each fiscal month, deliver to Parent financial statements, including an income statement and balance sheet for such month; and (iii) upon the knowledge of the Company of any Material Adverse Change (as hereinafter defined) in the Company, any material litigation or material governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated), or the breach in any material respect of any representation or warranty contained herein, the Company shall promptly notify Parent thereof. Section 6.2 Acquisition Proposals. From and after the date of this --------------------- Agreement and prior to the Effective Time, except as provided below, the Company agrees that (a) neither the Company nor its Subsidiaries shall, and the Company shall not authorize or permit its officers, directors, employees and authorized agents and representatives (including, without limitation, any investment banker, attorney or accountant retained by it or any of its Subsidiaries) to, initiate, solicit or encourage, directly or indirectly, any inquiries or the making or implementation of any proposal or offer (including, without limitation, any proposal or offer to its stockholders) with respect to a merger, acquisition, consolidation or similar transaction involving, or any purchase of all or any significant portion of the assets or any equity securities of, the Company or its Subsidiaries (any such proposal or offer being hereinafter referred to as an "Acquisition Proposal") or engage in any negotiations ----------- -------- concerning, or provide any confidential information or data to, or have any substantive discussions with, any person relating to an Acquisition Proposal, or otherwise facilitate any effort or attempt to make or implement an Acquisition Proposal; (b) it will immediately cease and cause to be terminated any existing -30- activities, discussions or negotiations with any parties conducted heretofore with respect to any of the foregoing and will take the necessary steps to inform the individuals or entities referred to above of the obligations undertaken in this Section 6.2; and (c) it will notify Parent immediately if any such ----------- inquiries or proposals are received by, any such information is requested from, or any such negotiations or discussions are sought to be initiated or continued with, it, including the terms of its proposals; provided, however, that nothing -------- ------- contained in this Section 6.2 shall prohibit the Board of Directors of the ----------- Company from (i) furnishing information to or entering into discussions or negotiations with, any person or entity that indicates an interest in making a Superior Proposal (as hereinafter defined) if, and only to the extent that (A) the Board of Directors determines in good faith after consultation with the Company's outside counsel that such action is required for the Board of Directors to comply with its fiduciary duties to stockholders imposed by laws and (B) the Company keeps Parent informed of the status of any such discussions or negotiations; and (ii) to the extent applicable, complying with Rule 14e-2 promulgated under the Exchange Act with regard to an Acquisition Proposal. If any person or entity makes a Superior Proposal, upon receipt thereof the Company shall provide written notice (a "Notice of a Superior Proposal") to Parent of ----------------------------- such Superior Proposal, including the terms and structure thereof, and if within five business days following the delivery of the Notice of a Superior Proposal the Superior Proposal does not continue to be superior in terms of the aggregate value to be received by the Company's stockholders in light of any improved transaction proposed by Parent prior to the expiration of such five-day period, the Company shall cease all discussions or negotiations with such person or entity. For purposes of this Agreement, "Superior Proposal" means an ----------------- unsolicited bona fide Acquisition Proposal in writing that the Board of Directors determines in its good faith judgment (based on the advice of a nationally recognized investment banking firm) provides greater aggregate value to the Company's stockholders than the transactions contemplated by this Agreement. Subject to Article IX, nothing in this Section 6.2 shall (x) permit ---------- ----------- the Company to terminate this Agreement, (y) permit the Company to enter into any agreement with respect to an Acquisition Proposal during the term of this Agreement, or (z) affect any other obligation of any party under this Agreement. Section 6.3 Conduct of Business of Sub Pending the Merger. During --------------------------------------------- the period from the date of this Agreement through the Effective Time, Sub shall not engage in any activities of any nature except as provided in or contemplated by this Agreement. -31- ARTICLE VII ADDITIONAL AGREEMENTS --------------------- Section 7.1 Company Stockholder Approval; Proxy Statement. (a) If --------------------------------------------- approval of the Merger by the stockholders of the Company is required by applicable law, the Company shall call a meeting of its stockholders (the "Stockholder Meeting") for the purpose of voting upon the Merger and shall use ------------------- its best efforts to obtain stockholder approval of the Merger. The Stockholder Meeting shall be held as soon as practicable following the purchase of shares of Common Stock pursuant to the Offer and the Company will, through its Board of Directors but subject to the fiduciary duties of its Board of Directors under applicable law as determined by the Board of Directors in good faith after consultation with the Company's outside counsel, recommend to its stockholders the approval of the Merger and not rescind its declaration that the Merger is advisable. The record date for the Stockholder Meeting shall be a date subsequent to the date Parent or Sub becomes a record holder of Common Stock purchased pursuant to the Offer. (b) If required by applicable law, the Company will, as soon as practicable following the expiration of the Offer, prepare and file a preliminary Proxy Statement with the SEC and will use its best efforts to respond to any comments of the SEC or its staff and to cause the Proxy Statement to be cleared by the SEC. The Company will notify Parent of the receipt of any comments from the SEC or its staff and of any request by the SEC or its staff for amendments or supplements to the Proxy Statement or for additional information and will supply Parent with copies of all correspondence between the Company or any of its representatives, on the one hand, and the SEC or its staff, on the other hand, with respect to the Proxy Statement or the Merger. The Company shall give Parent and its counsel the opportunity to review the Proxy Statement prior to its being filed with the SEC and shall give Parent and its counsel the opportunity to review all amendments and supplements to the Proxy Statement and all responses to requests for additional information and replies to comments prior to their being filed with, or sent to, the SEC. Each of the Company and Parent agrees to use its best efforts, after consultation with the other parties hereto, to respond promptly to all such comments of and requests by the SEC. As promptly as practicable after the Proxy Statement has been cleared by the SEC, the Company shall mail the Proxy Statement to the stockholders of the Company. If at any time prior to the approval of this Agreement by the Company's stockholders there shall occur any event that should be set forth in an amendment or supplement to the Proxy Statement, the Company will prepare and mail to its stockholders such an amendment or supplement. -32- (c) The Company shall use its best efforts to obtain the necessary approvals by its stockholders of the Merger, this Agreement and the transactions contemplated hereby (subject to the fiduciary duties of its Board of Directors under applicable law as determined by the Board of Directors in good faith after consultation with the Company's outside counsel). (d) Parent agrees, subject to applicable law, to cause all shares of Common Stock purchased pursuant to the Offer and all other shares of Common Stock owned by Sub or any other Subsidiary of Parent to be voted in favor of the approval of the Merger. Section 7.2 Access to Information. The Company shall, and shall --------------------- cause each of its Subsidiaries to, afford to Parent, and to Parent's accountants, counsel, financial advisers and other representatives, access and permit them to make such inspections as they may require during normal business hours during the period from the date of this Agreement through the Effective Time to all their respective properties, books, contracts, commitments and records and, during such period, the Company shall, and shall cause each of its Subsidiaries to, furnish promptly to Parent (i) a copy of each report, schedule, registration statement and other document filed by it during such period pursuant to the requirements of federal or state laws and (ii) all other information concerning its business, properties and personnel as Parent may reasonably request. Except as required by law, Parent will hold, and will cause its affiliates, associates and representatives to hold, any nonpublic information in confidence until such time as such information otherwise becomes publicly available and shall use its best efforts to ensure that such affiliates, associates and representatives do not disclose such information to others without the prior written consent of the Company. In the event of termination of this Agreement for any reason, Parent shall, upon request, return to the Company all nonpublic documents so obtained from the Company or any of its Subsidiaries and any copies made of such documents for Parent. Section 7.3 Fees and Expenses. (a) Except as otherwise provided in ----------------- this Agreement, whether or not the Merger is consummated, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses. (b) If (A) any person (other than Parent or any of its affiliates) shall have become, prior to the termination of this Agreement, the beneficial owner of 50% or more of the outstanding shares of Common Stock, (B) the Offer shall have expired at a time when the Minimum Condition (as defined in Exhibit ------- A) shall not have been satisfied and at any time on or prior to nine months - - after the expiration of the Offer any person (other than Parent or any of its affiliates) shall acquire beneficial -33- ownership of 50% or more of the outstanding shares of Common Stock or shall consummate an Acquisition Proposal, at a price per share less than the sum of the Merger Consideration plus the amount determined by dividing $1,500,000 by the number of shares of Common Stock outstanding immediately prior thereto, (C) at any time prior to the termination of this Agreement any person (other than Parent or any of its affiliates) shall publicly announce any Acquisition Proposal and, at any time on or prior to nine months after the termination of this Agreement, shall become the beneficial owner of 50% or more of the outstanding shares of Common Stock or shall consummate an Acquisition Proposal, or (D) the Company terminates this Agreement pursuant to Section 9.1(b)(ii), ----------------- then the Company shall, in the case of clause (A), (B) or (C), promptly, but in no event later than two business days after the first of such events to occur, or, in the case of clause (D) at or prior to the time of such termination, pay Parent $1,500,000. If the Company fails to pay such amount when due in accordance with the immediately preceding sentence, which failure is finally determined by a court of competent jurisdiction, Parent shall be entitled to the payment from the Company, in addition to such amount, of any legal fees and expenses incurred in procuring such judicial determination. (c) If (i) this Agreement is terminated pursuant to Section 9.1(b)(ii) ------------------ or Section 9.1(c)(i), 9.1(c)(ii) (but only if this Agreement is terminated ----------------- ---------- because the representations or warranties of the Company were not true and correct in all material respects when made (other than those qualified by "knowledge of the Company" or "to the best knowledge of the Company")), 9.1(c)(iii) or 9.1(c)(iv) or (ii) at any time prior to the termination of this - ----------- ---------- Agreement any person (other than Parent or any of its affiliates) shall publicly announce any Acquisition Proposal and, at any time on or prior to six months after the termination of this Agreement, shall become the beneficial owner of 50% or more of the outstanding shares of Common Stock or shall consummate an Acquisition Proposal, the Company shall reimburse Parent and Sub (not later than two business days after submission of statements therefor) for all documented costs and expenses (including, without limitation, all legal, investment banking, printing, depositary and related fees and expenses); provided, however, -------- ------- that the amount to be paid to Parent and Sub pursuant to this Section 7.3(c) -------------- shall not exceed $750,000; provided, further, that any amount paid pursuant to -------- ------- this Section 7.3(c) shall be credited against any amount that may become payable -------------- pursuant to Section 7.3(b); and provided, further, that if the Company has paid -------------- -------- ------- $1,500,000 pursuant to Section 7.3(b) prior to any payment pursuant to this -------------- Section 7.3(c), then no amount shall be payable pursuant to this Section 7.3(c). - -------------- -------------- Section 7.4 Company Stock Options. (a) The Company shall (i) --------------------- terminate the Stock Plans immediately prior to the Effective Time without prejudice to the holders of Vested Company Stock Options (as hereinafter defined), (ii) grant no additional -34- stock options under the Stock Plans and (iii) accelerate the vesting to the date of the consummation of the Offer of stock options for (A) 21,734 shares granted on March 24, 1995 with an exercise price of $1.50 per share currently scheduled to vest on March 24, 1996 and (B) 21,667 shares granted on December 28, 1993 with an exercise price of $2.938 per share currently scheduled to vest on December 28, 1995. (b) At the Effective Time, all outstanding stock options to purchase shares of Common Stock heretofore issued under the Stock Plans or the Consultant Option Agreements that are then fully exercisable or vested (including those options vested pursuant to Section 7.4(a)(iii)) (a "Vested Company Stock ------------------- -------------------- Option"), shall, pursuant to the terms of the respective Stock Plans pursuant to which they were issued and upon their surrender to the Company by the holders thereof, be cancelled by the Company, and the holders thereof shall receive a cash payment from the Company in an amount (if any) equal to the number of shares of Common Stock subject to each surrendered option multiplied by the difference (if positive) between the exercise price per share of Common Stock covered by the option and the Merger Consideration. The Company shall use its best efforts to cause each holder of Vested Company Stock Options to surrender their Vested Company Stock Options in accordance with the prior sentence. At the Effective Time, all outstanding stock options to purchase shares of Common Stock issued under the Stock Plans or the Consultant Option Agreements that are not then exercisable or vested shall be cancelled without payment to the holders thereof and the Company shall use its best efforts to cause such stock options to be surrendered to the Company. Section 7.5 Reasonable Best Efforts. Upon the terms and subject to ----------------------- the conditions set forth in this Agreement, each of the parties agrees to use its reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Merger, and the other transactions contemplated by this Agreement, including (a) promptly making their respective filings and thereafter making any other required submission under the Improvements Act with respect to the Offer and the Merger; (b) diligently opposing any objections to, appeals from or petitions to reconsider or reopen any such approval by persons not a party to this Agreement; (c) in addition to the foregoing, the obtaining of all necessary actions or non-actions, waivers, consents and approvals from Governmental Entities and the making of all necessary registrations and filings (including filings with Governmental Entities) and the taking of all reasonable steps as may be necessary to obtain an approval or waiver from, or to avoid an action or proceeding by, any Governmental Entity, (d) the obtaining of all necessary consents, approvals or waivers from third parties, (e) the defending of any lawsuits or other -35- legal proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the transactions contemplated hereby, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Entity vacated or reversed, and (f) the execution and delivery of any additional instruments necessary to consummate the transactions contemplated by this Agreement. Section 7.6 Public Announcements. Parent and Sub, on the one hand, -------------------- and the Company, on the other hand, will consult with each other before issuing any press release or otherwise making any public statements with respect to the transactions contemplated by this Agreement, and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable law or by obligations pursuant to any listing agreement with any national securities exchange or national automated interdealer quotation system. Section 7.7 Real Estate Transfer and Gains Taxes. The Company will ------------------------------------ pay any real property transfer or gains Tax or any similar state or local tax which is attributable to the transfer of the beneficial ownership of the Company's or its Subsidiaries' real property, if any (collectively, the "Gains ----- Taxes"), and any penalties or interest with respect to the Gains Taxes, payable - ----- following the consummation of the Offer or the Merger. The Company agrees to cooperate with Sub in the timely filing of any Tax Returns with respect to the Gains Taxes, including supplying in a timely manner a complete list of all real property interests held by the Company or its Subsidiaries and any information with respect to such property that is reasonably necessary to complete such Tax Returns. The portion of the consideration allocable to the real property of the Company and its Subsidiaries shall be determined by Sub or Parent in its reasonable discretion and such allocated amount will be used to determine Gains Taxes. The stockholders of the Company shall be deemed to have agreed to be bound by the allocation established pursuant to this Section 7.7 in the ----------- preparation of any Tax Return with respect to the Gains Taxes. Section 7.8 Indemnification; Directors and Officers Insurance. (a) ------------------------------------------------- For a period of not less than six years from and after the Effective Time, Parent agrees to, and to cause the Surviving Corporation to, indemnify and hold harmless all past and present officers, directors and employees (the "Indemnified Parties") of the Company and of its Subsidiaries to the full extent - -------------------- such persons may be indemnified by the Company pursuant to the Company's Certificate of Incorporation and Bylaws as in effect as of the date hereof for acts and omissions occurring at or prior to the Effective Time and shall advance reasonable litigation expenses incurred by such persons in connection with defending any action arising out of such acts or omissions, provided that such persons provide the requisite affirmations and -36- undertaking, as set forth in the Company's Bylaws in effect at the date of this Agreement. (b) Any Indemnified Party will promptly notify the Parent and the Surviving Corporation of any claim, action, suit, proceeding or investigation for which such party may seek indemnification under this Section; provided, -------- however, that the failure to furnish any such notice shall not relieve Parent or - ------- the Surviving Corporation from any indemnification obligation under this Section except to the extent Parent or the Surviving Corporation is materially prejudiced thereby. In the event of any such claim, action, suit, proceeding, or investigation, (x) the Surviving Corporation will have the right to assume the defense thereof, and the Surviving Corporation will not be liable to such Indemnified Parties for any legal expenses of other counsel or any other expenses subsequently incurred thereafter by such Indemnified Parties in connection with the defense thereof, except that all Indemnified Parties (as a group) will have the right to retain one separate counsel, reasonably acceptable to such Indemnified Party and Parent, at the expense of the indemnifying party if the named parties to any such proceeding include both the Indemnified Party and the Surviving Corporation and the representation of such parties by the same counsel would be inappropriate due to a conflict of interest between them, (y) the Indemnified Parties will cooperate in the defense of any such matter, and (z) the Surviving Corporation will not be liable for any settlement effected without its prior written consent. In addition, Parent will provide, or cause the Surviving Corporation to provide, for a period of not less than six years after the Effective Time, the Company's current directors and officers an insurance and indemnification policy that provides coverage for events occurring at or prior to the Effective Time (the "D&O Insurance") that is no less --- --------- favorable than the existing policy or, if substantially equivalent insurance coverage is unavail able, the best available coverage; provided, however, that -------- ------- Parent and the Surviving Corporation shall not be required to pay an annual premium for the D&O Insurance in excess of two times the last annual premium paid prior to the date hereof, but in such case shall purchase as much such coverage as possible for such amount. Section 7.9 Board Representation. Promptly upon the purchase of -------------------- shares of Common Stock pursuant to the Offer, Parent shall be entitled to designate such number of directors, rounded up to the next whole number, on the Board of Directors of the Company as will give Parent, subject to compliance with Section 14(f) of the Exchange Act and the rule and regulations promulgated thereunder, representation on the Board of Directors equal to the product of (a) the total number of directors on the Board of Directors and (b) the percentage that the number of shares of Common Stock purchased by Parent bears to the number of shares of Common Stock outstanding, and the Company shall, upon request by Parent, promptly increase the size of the Board of -37- Directors and/or exercise its reasonable best efforts to secure the resignations of such number of directors as is necessary to enable Parent's designees to be elected to the Board of Directors and shall cause Parent's designees to be so elected. The Company shall take, at its expense, all action required pursuant to Section 14(f) and Rule 14f-1 in order to fulfill its obligations under this Section 7.9 and shall include in the Schedule 14D-9 or otherwise timely mail to - ----------- its stockholders such information with respect to the Company and its officers and directors as is required by Section 14(f) and Rule 14f-1 in order to fulfill its obligations under this Section 7.9. Parent will supply to the Company in ----------- writing and be solely responsible for any information with respect to itself and its or Parent's nominees, officers, directors and affiliates required by Section 14(f) and Rule 14f-1. Section 7.10 Employee Benefits. (a) Until September 30, 1996 Parent ----------------- shall maintain employee benefits and programs for officers and employees of the Company and its Subsidiaries that are no less favorable in the aggregate than those being provided to such officers and employees on the date hereof (it being understood that Parent will not be obligated to continue any one or more employee benefits or programs). For purposes of eligibility to participate in and vesting in all benefits provided to officers and employees of the Company and its Subsidiaries, such officers and employees of the Company and its Subsidiaries will be granted their years of service with the Company and its Subsidiaries. To the extent officers or employees of the Company or its Subsidiaries shall be covered by any medical plan of Parent, amounts paid under any medical plans of the Company during the year such coverage becomes effective shall be taken into account in calculating deductibles and maximum out-of-pocket limits applicable under the medical plan of Parent as if such amounts had been paid under such medical plan of Parent. (b) The foregoing shall not constitute any commitment, contract, understanding or guarantee (express or implied) on the part of the Surviving Corporation of a post-Effective Time employment relationship of any term or duration or on any terms other than those the Surviving Corporation may establish. Employment of any of the employees by the Surviving Corporation shall be "at will" and may be terminated by the Surviving Corporation at any time for any reason (subject to any legally binding agreement, or any applicable laws or collective bargaining agreement, or any arrangement or commitment). No provision of this Agreement shall create any third-party beneficiary with respect to any employee (or dependent thereof) of the Company or any of its Subsidiaries in respect of continued employment or resumed employment. Section 7.11 Severance Policy. Parent shall maintain the severance ---------------- policy set forth in Section 7.11 of the Company -38- Disclosure Letter hereof for a period of at least twelve months from the Effective Time. ARTICLE VIII CONDITIONS PRECEDENT -------------------- Section 8.1 Conditions to Each Party's Obligation to Effect the --------------------------------------------------- Merger. The respective obligations of each party to effect the Merger shall be - ------ subject to the fulfillment at or prior to the Effective Time of the following conditions: (a) Stockholder Approval. If approval of the Merger by the holders -------------------- of the Common Stock is required by applicable law, the Merger shall have been approved by the requisite vote of such holders. (b) No Order. No Governmental Entity or court of competent -------- jurisdiction shall have enacted, issued, promulgated, enforced or entered any law, rule, regulation, executive order, decree or injunction which prohibits or has the effect of prohibiting the consummation of the Merger; provided, however, that the Company, Parent and Sub shall use their -------- ------- reasonable best efforts to have any such order, decree or injunction vacated. Section 8.2 Conditions to Obligations of Parent and Sub. The ------------------------------------------- respective obligations of each of Parent and Sub to effect the Merger shall be subject to the fulfillment at or prior to the Effective Time of the following conditions: (a) Performance of Obligations; Representations and Warranties. The ---------------------------------------------------------- Company shall have performed in all material respects each of its covenants and agreements contained in this Agreement required to be performed on or prior to the Effective Time, and each of the representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects (except as set forth in Section 8.2 of the Company Disclosure Letter), in each case, on and as of the Effective Time as if made on and as of such date, except as contemplated or permitted by this Agreement and except for such failures to perform or such failures to be true and correct as have not had and are not reasonably likely to have a Material Adverse Effect on the Company, and Parent shall have received a certificate of the Company, signed by the President or any Vice President of the Company, to that effect; provided, however, that any references in -------- ------- this Agreement to the phrases "knowledge of the Company" and "to the best knowledge of the Company," and variants thereof, shall be disregarded for the purposes of determining whether the Company shall have breached its representations and warranties hereunder. -39- (b) Third Party Consents. Except as set forth in Section 8.2 of the -------------------- Company Disclosure Letter, all required authorizations, consents or approvals of any third party, the failure to obtain which would have a Material Adverse Effect on the Company (assuming the Merger had taken place) shall have been obtained. ARTICLE IX TERMINATION, AMENDMENT AND WAIVER --------------------------------- Section 9.1 Termination. This Agreement may be terminated at any ----------- time prior to the Effective Time, whether before or after any approval by the stockholders of the Company: (a) by mutual written consent of Parent and the Company; (b) by the Company if: (i) the Offer has not been timely commenced (except as a result of actions or omissions by the Company) in accordance with Section 1.1(a); -------------- or (ii) there is a Superior Proposal to acquire all of the outstanding shares of Common Stock or substantially all of the assets of the Company and the Board of Directors of the Company determines in good faith after consultation with the Company's outside counsel that the failure to approve such Superior Proposal would be inconsistent with the fiduciary duties to stockholders of the Board of Directors of the Company; provided, however, that the right to terminate this Agreement pursuant to -------- ------- this clause shall not be available (A) if the Company has breached in any material respect its obligations under Section 6.2, (B) in respect of an ----------- offer involving consideration that is not entirely cash or does not permit stockholders to receive the payment of the offered consideration in respect of all shares at the same time, unless the Board of Directors of the Company has been furnished with a written opinion of a nationally recognized investment banking firm to the effect that such offer provides a higher value per share than the consideration per share pursuant to the Offer or the Merger (as increased pursuant to any revised proposal of Parent pursuant to Section 6.2) or (C) if, prior to or concurrently with ----------- any purported termination pursuant to this clause, the Company shall not have paid the fee contemplated by Section 7.3(b); or -------------- (iii) there has been a breach by Parent or Sub of any representation or warranty that would have a material adverse effect on Parent's or Sub's ability to perform its obligations under this Agreement and which breach has not -40- been cured within five business days following receipt by Parent or Sub of notice from the Company of the breach; or (iv) Parent or Sub fails to comply in any material respect with any of its material obligations or covenants contained herein, including, without limitation, the obligation of Sub to purchase shares of Common Stock pursuant to the Offer, unless such failure results from a breach of the Company of any obligation, representation, or warranty hereunder, which has not been cured within five business days following Parent's receipt of notice from the Company of the breach; (c) by Parent if: (i) the Board of Directors of the Company shall have failed to recommend, or withdrawn, modified or amended in any material respect its approval or recommendations of, the Offer or the Merger or shall have resolved to do any of the foregoing, or shall have failed to reject an Acquisition Proposal within ten business days after receipt by the Company or public announcement thereof; or (ii) any of the representations or warranties made by the Company in this Agreement shall not have been true and correct in all material respects when made, or shall thereafter ceased to be true and correct in any material respect as if made as of such later date (other than representations and warranties made as of a specified date), which failure to be true and correct has not been cured within five business days following the Company's receipt of notice from Parent of the breach and such failure to be true and correct shall be reasonably expected to have a Material Adverse Effect on the Company; provided, however, that all -------- ------- references in this Agreement to the phrases "knowledge of the Company" and "to the best knowledge of the Company," and variants thereof, shall be disregarded for the purposes of determining whether the Company shall have breached its representations and warranties hereunder; or (iii) the Company shall not in all material respects have performed each obligation and agreement and complied with each covenant to be performed and complied with by it under this Agreement, unless such failure results from a breach of Parent or Sub of any obligation, representation or warranty hereunder, which has not been cured within five business days following the Company's receipt of notice from the Parent of the breach; or (iv) the stockholders of the Company do not approve the Merger at the Stockholder Meeting in accordance with the DGCL, if such approval is required by the DGCL; or -41- (v) if Sub is entitled to terminate the Offer as a result of the occurrence of any event described in Exhibit A; or --------- (d) by either Parent or the Company if: (i) the Merger has not been effected on or prior to the close of business on April 30, 1996; provided, however, that the right to terminate -------- ------- this Agreement pursuant to this clause shall not be available to any party whose failure to fulfill any obligation of this Agreement has been the cause of, or resulted in, the failure of the Merger to have occurred on or prior to the aforesaid date; or (ii) any court of competent jurisdiction or any governmental, administrative or regulatory authority, agency or body shall have issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the transactions contemplated by this Agreement and such order, decree, ruling or other action shall have become final and nonappealable; or (iii) upon a vote at a duly held meeting or upon any adjournment thereof, the stockholders of the Company shall have failed to give any approval required by applicable law; or (iv) as the result of the failure of any of the conditions set forth in Exhibit A hereto, the Offer shall have terminated or expired in --------- accordance with its terms without Sub having purchased any shares of Common Stock pursuant to the Offer; provided, however, that the right to terminate -------- ------- this Agreement pursuant to this Section 9.1(d)(iv) shall not be available ----------------- to any party whose failure to fulfill any of its obligations under this Agreement results in the failure of any such condition; or (v) Parent or the Company shall have reasonably determined that any Offer condition (other than the Minimum Condition (as defined in Exhibit A)) is not capable of being satisfied at any time in the future; --------- provided, however, that the right to terminate this Agreement pursuant to -------- ------- this clause shall not be available to any party whose failure to fulfill any obligation of this Agreement has been the cause of, or resulted in, such Offer condition being incapable of satisfaction. Section 9.2 Effect of Termination. In the event of termination of --------------------- this Agreement by either Parent or the Company, as provided in Section 9.1, this ----------- Agreement shall forthwith become void and there shall be no liability hereunder on the part of the Company, Parent or Sub or their respective officers or directors (except as set forth in the last two sentences of Section 7.2 and ----------- except for Section 7.3, which shall survive the termination); provided, however, ----------- -------- ------- that nothing contained in this Section 9.2 ----------- -42- shall relieve any party hereto from any liability for any breach of this Agreement. Section 9.3 Amendment. This Agreement may be amended by the parties --------- hereto, by or pursuant to action taken by their respective Boards of Directors, at any time before or after any approval of the Merger by the stockholders of the Company but, after the purchase of shares of Common Stock pursuant to the Offer, no amendment shall be made which decreases the Merger Consideration or which in any way materially adversely affects the rights of such stockholders, without the further approval of such stockholders. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. Section 9.4 Waiver. At any time prior to the Effective Time, the ------ parties hereto may (i) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (ii) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto and (iii) waive compliance with any of the agreements or conditions contained herein which may legally be waived. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. Section 9.5 Procedure for Termination, Amendment or Waiver. A ---------------------------------------------- termination of this Agreement pursuant to Section 9.1, an amendment of this ----------- Agreement pursuant to Section 9.3 or a waiver pursuant to Section 9.4 shall, in ----------- ----------- order to be effective, require (a) in the case of Parent, action by its Board of Directors or the duly authorized designee of its Board of Directors and (b) in the case of the Company, action by its Board of Directors. ARTICLE X GENERAL PROVISIONS ------------------ Section 10.1 Non-Survival of Representations and Warranties. None of ---------------------------------------------- the representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Effective Time. Section 10.2 Notices. All notices and other communications hereunder ------- shall be in writing and shall be deemed given if delivered personally, sent by overnight courier or telecopied (with a confirmatory copy sent by overnight courier) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): -43- (a) if to Parent or Sub, to: Mallinckrodt Veterinary, Inc. 421 East Hawley Street Mundelein, Illinois 60060 Attention: Paul D. Cottone, President and Chief Executive Officer Fax: (708) 949-3756 with a copy to: Mallinckrodt Veterinary, Inc. 421 East Hawley Street Mundelein, Illinois 60060 Attention: Thomas L. Farquer, Vice President, Law Fax: (708) 949-3754 Mallinckrodt Group Inc. 7733 Forsyth Boulevard St. Louis, Missouri 63105 Attention: Roger A. Keller, Vice President, Secretary and General Counsel Fax: (314) 854-5366 and Sidley & Austin One First National Plaza Chicago, Illinois 60603 Attn: Dennis V. Osimitz Fax: (312) 853-7036 (b) if to the Company, to: Syntro Corporation 9669 Lackman Road Lenexa, Kansas 66219 Attention: J. Donald Todd Fax: (913) 894-9373 with a copy to: Husch & Eppenberger 1200 Main Street, Suite 1700 Kansas City, Missouri 64105 Attention: Mary Anne O'Connell Fax: (816) 421-0596 The parties hereby agree that all reports, schedules, registration statements and other documents to be provided to Parent pursuant to Section ------- 7.2(i) shall be delivered only to Thomas L. Farquer, Vice President, Law of - ------ Parent, at the address listed above. -44- Section 10.3 Interpretation. When a reference is made in this -------------- Agreement to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." As used in this Agreement, (a) "business day" shall have the meaning ascribed thereto in Rule 14d-1(c)(6) under the Exchange Act, (b) "Material Adverse Change" or "Material Adverse Effect" ----------------------- ----------------------- means, when used with respect to Parent, Sub or the Company, as the case may be, any change or effect, either individually or in the aggregate, that is or can reasonably be expected to be materially adverse to the business, assets, liabilities, properties, condition (financial or otherwise), results of operations or prospects of all or any material part of Parent and its Subsidiaries taken as a whole, Sub, or the Company and its Subsidiaries taken as a whole, as the case may be, except as set forth in Section 8.2 of the Company Disclosure Letter, (c) "Subsidiary" means any corporation, partnership, limited ---------- liability company, joint venture or other legal entity of which Parent or the Company, as the case may be (either alone or through or together with any other Subsidiary), owns, directly or indirectly, 50% or more of the stock or other equity interests the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such corporation or other legal entity and (d) "Company Disclosure Letter" means the letter dated ------------------------- the date hereof from the Company to Parent and Sub. Section 10.4 Counterparts. This Agreement may be executed in ------------ counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. Section 10.5 Entire Agreement; No Third-Party Beneficiaries. This ---------------------------------------------- Agreement, including the Company Disclosure Letter and the other documents and instruments referred to herein, (a) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and (b) except for Sections 7.4 and 7.8, is not intended to confer upon any person other than the - ------------ --- parties any rights or remedies hereunder. Section 10.6 Governing Law. 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. Section 10.7 Assignment. Neither this Agreement nor any of the ---------- rights, interests or obligations hereunder shall be assigned by any of the parties without the prior written consent -45- of the other parties, except that Sub may assign, in its sole discretion, any of or all its rights, interests and obligations under this Agreement to Parent or to any direct or indirect wholly owned subsidiary of Parent, but no such assignment shall relieve Sub of any of its obligations hereunder. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns. Section 10.8 Severability. If any term or other provision of this ------------ Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions be consummated as originally contemplated to the fullest extent possible. Section 10.9 Enforcement of this Agreement. The parties agree that ----------------------------- irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions 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. Section 10.10 Incorporation of Exhibits. All Schedules, Exhibits and ------------------------- Annexes attached hereto and referred to herein are hereby incorporated herein and made a part hereof for all purposes as if fully set forth herein. -46- IN WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement to be signed by their respective officers thereunto duly authorized all as of the date first written above. MALLINCKRODT VETERINARY, INC. By: /s/ Paul D. Cottone --------------------------- Name: Paul D. Cottone Title: President MALLINCKRODT VETERINARY ACQUISITIONS, INC. By: /s/ Paul D. Cottone --------------------------- Name: Paul D. Cottone Title: President SYNTRO CORPORATION By: /s/ J. Donald Todd --------------------------- Name: J. Donald Todd Title: President -47- EXHIBIT A Notwithstanding any other term of the Offer or this Agreement, Sub shall not be required to accept for payment or pay for, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) of the Exchange Act, any shares of Common Stock not theretofore accepted for payment or paid for and may terminate or amend the Offer as to such shares of Common Stock unless (i) there shall have been validly tendered and not withdrawn prior to the expiration of the Offer that number of shares of Common Stock which would represent at least a majority of the outstanding shares of Common Stock on a fully diluted basis (the "Minimum Condition") and (ii) any waiting period under ----------------- the Improvements Act applicable to the purchase of shares of Common Stock pursuant to the Offer shall have expired or been terminated. Furthermore, notwithstanding any other term of the Offer of this Agreement, Sub shall not be required to accept for payment or, subject as aforesaid, to pay for any shares of Common Stock not theretofore accepted for payment or paid for, and may terminate or amend the Offer if at any time on or after the date of this Agreement and before the acceptance of such shares of Common Stock for payment or the payment therefor, any of the following conditions exist or shall occur and remain in effect: (a) there shall have been instituted or pending any action or proceeding by any Governmental Entity, which (i) seeks to challenge the acquisition by Sub of shares of Common Stock pursuant to the Offer, restrain, prohibit or delay the making or consummation of the Offer or the Merger, or obtain any material damages in connection therewith, (ii) seeks to make the purchase of or payment for some or all of the shares of Common Stock pursuant to the Offer or the Merger illegal, (iii) seeks to impose material limitations on the ability of Sub (or any of its affiliates) effectively to acquire or hold, or to require Parent or the Company or any of their respective affiliates or subsidiaries to dispose of or hold separate, any material portion of the assets or the business of Parent and its affiliates taken as a whole or the Company and its subsidiaries taken as a whole, or (iv) seeks to impose material limitations on the ability of Sub (or its affiliates) to exercise full rights of ownership of the shares of Common Stock purchased by it, including, without limitation, the right to vote the shares purchased by it on all matters properly presented to the stockholders of the Company; or (b) there shall have been promulgated, enacted, entered, enforced or deemed applicable to the Offer or the Merger, by any state, federal or foreign government or governmental authority or by any court, domestic or foreign, any statute, rule, regulation, judgment, decree, order or injunction, that could reasonably be expected to, in the judgment of Parent, directly or indirectly, result in any of the consequences referred to in clauses (i) through (iv) of subsection (a) above; or (c) there shall have occurred (i) any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market in the United States, (ii) the declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (iii) the commencement of a war, armed hostilities or other international or national calamity directly or indirectly involving the United States which would reasonably be expected to have a Material Adverse Effect on the Company or prevent (or materially delay) the consummation of the Offer, (iv) any limitation (whether or not mandatory) by any governmental or regulatory authority on, or any other event which, in the reasonable judgment of Parent, has had a material adverse effect on the extension of credit by banks or other lending institutions in the United States, or (v) from the date of this Agreement through the date of termination or expiration of the Offer, a decline of at least 25% in either the Dow Jones Industrial Average or the Standard & Poor's 500 Index; or (d) the Company and Parent shall have reached an agreement or understanding that the Offer or this Agreement be terminated or this Agreement shall have been terminated in accordance with its terms; or (e) any of the representations and warranties made by the Company in this Agreement shall not have been true and correct in all material respects when made, or shall thereafter have ceased to be true and correct in any material respect as if made as of such later date (other than representations and warranties made as of a specified date), or the Company shall not in all material respects have performed each obligation and agreement and complied with each covenant to be performed and complied with by it under this Agreement, which failure to be true and correct or such failure to perform or comply has not been cured within five business days following the Company's receipt of notice from Parent of the breach and such failure to be true and correct or such failure to perform or comply shall be reasonably expected to have a Material Adverse Effect on the Company; provided, however, that all references in this Agreement to the -------- ------- phrases "knowledge of the Company" and "to the best knowledge of the Company," and variants thereof, shall be disregarded for the purposes of determining whether the Company shall have breached its representations, warranties and covenants resulting in the ability of Parent to terminate this Agreement pursuant to this clause (e); (f) the Company's Board of Directors shall have modified or amended its recommendation of the Offer in any manner adverse to Parent or shall have withdrawn its recommendation of the Offer, or shall have recommended acceptance of any Acquisition Proposal or shall have resolved to do any of the foregoing, or shall have failed to -2- reject any Acquisition Proposal within ten business days after receipt of the Company or public announcement thereof; (g) (i) any corporation, entity or "group" (as defined in Section 13(d)(3) of the Exchange Act) ("person"), other than Parent, shall have acquired beneficial ownership of 50% or more of the outstanding shares of Common Stock, or shall have been granted any options or rights, conditional or otherwise, to acquire a total of 50% or more of the outstanding shares of Common Stock; (ii) any new group shall have been formed which beneficially owns 50% or more of the outstanding shares of Common Stock; or (iii) any person (other than Parent or one or more of its affiliates) shall have entered into an agreement in principle or definitive agreement with the Company with respect to a tender or exchange offer for any shares of Common Stock or a merger, consolidation or other business combination with or involving the Company; or (h) there shall have occurred a Material Adverse Change to the Company. The foregoing conditions are for the sole benefit of Parent and may be asserted by Parent regardless of the circumstances giving rise to any such condition and may be waived by Parent, in whole or in part, at any time and from time to time, in the sole discretion of Parent. The failure by Parent at any time to exercise any of the foregoing rights will not be deemed a waiver of any right, the waiver of such right with respect to any particular facts or circumstances shall not be deemed a waiver with respect to any other facts or circumstances, and each right will be deemed an ongoing right which may be asserted at any time and from time to time. Should the Offer be terminated pursuant to the foregoing provisions, all tendered shares of Common Stock not theretofore accepted for payment shall forthwith be returned by the depositary for the Offer to the tendering stockholders. -3- -----END PRIVACY-ENHANCED MESSAGE-----