-----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, DKOf6Tkj94tyihwYvlGNzJWPGWLuI7rPeoiyV9URciuTO+DA/YcLbRKJPWNBlgXN kTtxCAV+65UaR3O8V36wMA== 0001047469-10-006609.txt : 20100726 0001047469-10-006609.hdr.sgml : 20100726 20100726152536 ACCESSION NUMBER: 0001047469-10-006609 CONFORMED SUBMISSION TYPE: SC TO-T PUBLIC DOCUMENT COUNT: 30 FILED AS OF DATE: 20100726 DATE AS OF CHANGE: 20100726 GROUP MEMBERS: TYCO ELECTRONICS MINNESOTA, INC. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ADC TELECOMMUNICATIONS INC CENTRAL INDEX KEY: 0000061478 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 410743912 STATE OF INCORPORATION: MN FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: SC TO-T SEC ACT: 1934 Act SEC FILE NUMBER: 005-19057 FILM NUMBER: 10969320 BUSINESS ADDRESS: STREET 1: 13625 TECHNOLOGY DRIVE CITY: EDEN PRAIRIE STATE: MN ZIP: 55344 BUSINESS PHONE: 9529388080 MAIL ADDRESS: STREET 1: 13625 TECHNOLOGY DRIVE CITY: EDEN PRAIRIE STATE: MN ZIP: 55344 FORMER COMPANY: FORMER CONFORMED NAME: MAGNETIC CONTROLS CO DATE OF NAME CHANGE: 19850605 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Tyco Electronics Ltd. CENTRAL INDEX KEY: 0001385157 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-ELECTRONIC PARTS & EQUIPMENT, NEC [5065] IRS NUMBER: 980518048 STATE OF INCORPORATION: V8 FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC TO-T BUSINESS ADDRESS: STREET 1: RHEINSTRASSE 20 CITY: CH-8200 SCHAFFHAUSEN STATE: V8 ZIP: 1 BUSINESS PHONE: 41 (0)52 633 6661 MAIL ADDRESS: STREET 1: RHEINSTRASSE 20 CITY: CH-8200 SCHAFFHAUSEN STATE: V8 ZIP: 1 SC TO-T 1 a2199448zscto-t.htm SC TO-T
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



SCHEDULE TO

Tender Offer Statement Under Section 14(d)(1) or 13(e)(1) of
the Securities Exchange Act of 1934

ADC Telecommunications, Inc.
(Name of Subject Company)

Tyco Electronics Minnesota, Inc.
Tyco Electronics Ltd.
(Names of Filing Persons—Offeror)

COMMON STOCK, PAR VALUE $0.20 PER SHARE
(Title of Class of Securities)
(including the associated preferred stock purchase rights)



000886-309
(Cusip Number of Class of Securities)

Robert A. Scott
Executive Vice President and General Counsel
Tyco Electronics Ltd.
1050 Westlakes Drive
Berwyn, Pennsylvania 19312
Telephone: (610) 893-9560
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Filing Persons)

Copies to:
William H. Aaronson, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telephone: (212) 450-4000

CALCULATION OF FILING FEE

Transaction Valuation*   Amount of Filing Fee**
$1,296,275,249.25   $92,424.42

*
Estimated for purposes of calculating the filing fee only. This amount is based on the offer to purchase all 97,030,661 outstanding shares of common stock of ADC Telecommunications, Inc., all 2,296,524 shares of common stock of ADC Telecommunications, Inc. subject to issuance pursuant to outstanding restricted stock units, all 610,241 shares of common stock of ADC Telecommunications, Inc. subject to issuance pursuant to outstanding performance stock units and all 1,731,221 shares of common stock of ADC Telecommunications, Inc. subject to issuance pursuant to outstanding restricted stock unit rights at a purchase price of $12.75 cash per share, as of July 23, 2010, the most recent practicable date.

**
The amount of the filing fee is calculated in accordance with Rule 0-11 of the Securities Exchange Act of 1934, as amended, by multiplying the transaction valuation by .0000713.
o
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:  
 
o
Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

Check the appropriate boxes below to designate any transactions to which the statement relates:

ý
third-party tender offer subject to Rule 14d-1.

o
issuer tender offer subject to Rule 13e-4.

o
going-private transaction subject to Rule 13e-3.

o
amendment to Schedule 13D under Rule 13d-2.

Check the following box if the filing is a final amendment reporting the results of the tender offer. o


Items 1 through 9, and Item 11.

        This Tender Offer Statement on Schedule TO (the "Schedule TO") relates to the offer by Tyco Electronics Minnesota, Inc., a Minnesota corporation ("Purchaser") and an indirect wholly owned subsidiary of Tyco Electronics Ltd., a Swiss corporation ("Tyco Electronics"), to purchase all outstanding shares of common stock, par value $0.20 per share (together with the associated preferred stock purchase rights, the "Shares") of ADC Telecommunications, Inc., a Minnesota corporation ("ADC"), at $12.75 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 July 26, 2010 (the "Offer to Purchase"), and in the related Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2), respectively (which, together with any amendments or supplements thereto, collectively constitute the "Offer").

        The information set forth in the Offer to Purchase, including all schedules thereto, is hereby expressly incorporated herein by reference in response to all of the items of this Schedule TO, except as otherwise set forth below.

Item 10. Financial Statements.

        Not applicable.

Item 12. Exhibits.

Exhibit No.   Description
(a)(1)   Offer to Purchase dated July 26, 2010.

(a)(2)

 

Letter of Transmittal (including Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9).

(a)(3)

 

Notice of Guaranteed Delivery.

(a)(4)

 

Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.

(a)(5)

 

Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.

(a)(6)

 

Summary Advertisement dated July 26, 2010.

(a)(7)

 

Notice to Participants in the ADC Telecommunications, Inc. Retirement Savings Plan dated July 26, 2010.

(a)(8)

 

Complaint filed by Lawrence Barone, individually and on behalf of all others similarly situated, on July 14, 2010, in the District Court of the State of Minnesota, Hennepin County.

(a)(9)

 

Complaint filed by Robert Freeman, individually and on behalf of all others similarly situated, and derivatively on behalf of Nominal Defendant ADC Telecommunications, Inc., on July 14, 2010, in the District Court of the State of Minnesota, Hennepin County.

(a)(10)

 

Complaint filed by Thomas Haller, individually and on behalf of all others similarly situated, on July 14, 2010, in the District Court of the State of Minnesota, Hennepin County.

(a)(11)

 

Complaint filed by Gunter Jacobius, individually and on behalf of all others similarly situated, and derivatively on behalf of Nominal Defendant ADC Telecommunications, Inc., on July 14, 2010, in the District Court of the State of Minnesota, Hennepin County.

(a)(12)

 

Complaint filed by Asbestos Workers Local Union 42 Pension Fund, individually and on behalf of all others similarly situated, on July 15, 2010, in the District Court of the State of Minnesota, Hennepin County.

Exhibit No.   Description
(a)(13)   Complaint filed by Joel Gerber, individually and on behalf of all others similarly situated, on July 15, 2010, in the District Court of the State of Minnesota, Hennepin County.

(a)(14)

 

Complaint filed by Gary Novitsky, individually and on behalf of all others similarly situated, and derivatively on behalf of Nominal Defendant ADC Telecommunications, Inc., on July 15, 2010, in the District Court of the State of Minnesota, Hennepin County.

(a)(15)

 

Complaint filed by Michael Partansky, individually and on behalf of all others similarly situated, on July 16, 2010, in the District Court of the State of Minnesota, Hennepin County.

(a)(16)

 

Complaint filed by Brad Bjorkland and Karl A. Lacher, individually and on behalf of all others similarly situated, on July 20, 2010, in the District Court of the State of Minnesota, Hennepin County.

(a)(17)

 

Complaint filed by Jack Borror and Pat Borror, individually and on behalf of all others similarly situated, on July 23, 2010, in the District Court of the State of Minnesota, Hennepin County.

(b)(1)

 

Five-Year Senior Credit Facility among Tyco International Ltd., Tyco Electronics Group, S.A., Tyco Electronics Ltd., the lenders party thereto and Bank of America, N.A., as administrative agent, dated as of April 25, 2007 (incorporated by reference to Exhibit 10.4 to the Form 8-K filed by Tyco Electronics Ltd. on July 5, 2007).

(b)(2)

 

Guarantor Assumption Agreement by and between Tyco International Ltd. and Tyco Electronics Ltd., dated as of June 29, 2007 (incorporated by reference to Exhibit 10.6 to the Form 8-K filed by Tyco Electronics Ltd. on July 5, 2007).

(c)

 

Not applicable.

(d)(1)

 

Agreement and Plan of Merger dated as of July 12, 2010 among ADC Telecommunications, Inc., Tyco Electronics Ltd. and Tyco Electronics Minnesota, Inc. (incorporated by reference to Exhibit 2.1 to the Form 8-K filed by Tyco Electronics Ltd. on July 13, 2010).

(d)(2)

 

Amendment No. 1 to Agreement and Plan of Merger dated as of July 24, 2010 among ADC Telecommunications, Inc., Tyco Electronics Ltd. and Tyco Electronics Minnesota, Inc.

(d)(3)

 

Confidentiality Agreement dated as of March 26, 2010 between ADC Telecommunications, Inc. and Tyco Electronics Ltd.

(d)(4)

 

Exclusivity Letter Agreement dated as of July 11, 2010 between ADC Telecommunications, Inc. and Tyco Electronics Ltd.

(e)

 

Not applicable.

(f)

 

Not applicable.

(g)

 

Not applicable.

(h)

 

Not applicable.


SIGNATURES

        After due inquiry and to the best knowledge and belief of the undersigned, each of the undersigned certify that the information set forth in this statement is true, complete and correct.

Date: July 26, 2010

 
   
   
   
    Tyco Electronics Minnesota, Inc.

 

 

By:

 

/s/ TERRENCE R. CURTIN

        Name:  Terrence R. Curtin
        Title:    Treasurer and Chief Financial Officer

 

 

Tyco Electronics Ltd.

 

 

By:

 

/s/ TERRENCE R. CURTIN

        Name:  Terrence R. Curtin
        Title:    Executive Vice President and
             Chief Financial Officer



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SIGNATURES
EX-99.(A)(1) 2 a2199448zex-99_a1.htm EXHIBIT 99.(A)(1)
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Exhibit (a)(1)

        Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(including the associated preferred stock purchase rights)
of
ADC Telecommunications, Inc.
at
$12.75 Net Per Share
by
Tyco Electronics Minnesota,  Inc.
An Indirect Wholly Owned Subsidiary of
Tyco Electronics Ltd.




    THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
    TIME, ON MONDAY, AUGUST 23, 2010, UNLESS THE OFFER IS EXTENDED.


 

        THIS OFFER IS BEING MADE PURSUANT TO THE AGREEMENT AND PLAN OF MERGER, DATED AS OF JULY 12, 2010, AS AMENDED, BY AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER DATED AS OF JULY 24, 2010 AMONG ADC TELECOMMUNICATIONS, INC. ("ADC"), TYCO ELECTRONICS LTD. AND TYCO ELECTRONICS MINNESOTA, INC. THE BOARD OF DIRECTORS OF ADC HAS UNANIMOUSLY (I) DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT, INCLUDING THE OFFER AND THE MERGER, ARE FAIR TO AND IN THE BEST INTERESTS OF ADC'S SHAREHOLDERS AND (II) APPROVED AND ADOPTED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT, INCLUDING THE OFFER AND THE MERGER, IN ACCORDANCE WITH THE REQUIREMENTS OF MINNESOTA LAW. ADC'S BOARD OF DIRECTORS RECOMMENDS THAT ADC'S SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES IN THE OFFER.

        THE OFFER IS SUBJECT TO VARIOUS CONDITIONS. A SUMMARY OF THE PRINCIPAL TERMS OF THE OFFER APPEARS ON PAGES (1) THROUGH (7). YOU SHOULD READ THIS ENTIRE DOCUMENT CAREFULLY BEFORE DECIDING WHETHER TO TENDER YOUR SHARES.

The Dealer Manager for the Offer is:
Barclays Capital Inc.

July 26, 2010



IMPORTANT

        If you desire to tender all or any portion of your shares of ADC common stock in the Offer, this is what you must do:

    If you are a record holder (i.e., a stock certificate or uncertificated stock has been issued to you), you must complete and sign the enclosed Letter of Transmittal and send it with your stock certificate to Mellon Investor Services LLC, the Depositary for the Offer, or follow the procedures for book-entry transfer set forth in Section 3 of this Offer to Purchase. These materials must reach Mellon Investor Services LLC before the Offer expires. Detailed instructions are contained in the Letter of Transmittal and in "Section 3—Procedures for Tendering Shares" of this Offer to Purchase.

    If you are a record holder and your stock is certificated but your stock certificate is not available or you cannot deliver it to Mellon Investor Services LLC before the Offer expires, you may be able to tender your shares of ADC common stock using the enclosed Notice of Guaranteed Delivery. Please call Innisfree M&A Incorporated, the Information Agent, toll free, at (888) 750-5834 for assistance. See "Section 3—Procedures for Tendering Shares" for further details.

    If you hold your shares of ADC common stock through a broker, dealer, commercial bank, trust company or other nominee, you must contact your broker, dealer, commercial bank, trust company or other nominee and give instructions that your ADC shares be tendered.

    If you hold your shares of ADC common stock through the ADC Telecommunications, Inc. Retirement Savings Plan, you must contact Wells Fargo Shareowner Services and give instructions that your ADC shares be tendered. Detailed instructions are contained in the Notice to Participants in the ADC Telecommunications, Inc. Retirement Savings Plan.

* * *

        Questions and requests for assistance may be directed to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers set forth on the back cover of this Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and other related materials may be obtained from the Information Agent or from your broker, dealer, commercial bank, trust company or other nominee. Copies of these materials may also be found at the website maintained by the Securities and Exchange Commission at www.sec.gov.



TABLE OF CONTENTS



 
   
   
  Page

SUMMARY TERM SHEET

  1

INTRODUCTION

  8

THE OFFER

  11

  1.  

Terms of the Offer

  11

  2.  

Acceptance for Payment and Payment for Shares

  12

  3.  

Procedures for Tendering Shares

  13

  4.  

Withdrawal Rights

  16

  5.  

Material U.S. Federal Income Tax Consequences

  17

  6.  

Price Range of Shares; Dividends

  18

  7.  

Possible Effects of the Offer on the Market for the Shares; Stock Exchange Listing(s); Registration under the Exchange Act; Margin Regulations

  19

  8.  

Certain Information Concerning ADC

  20

  9.  

Certain Information Concerning Purchaser and Tyco Electronics

  22

  10.  

Source and Amount of Funds

  23

  11.  

Background of the Offer; Contacts with ADC

  24

  12.  

Purpose of the Offer; Plans for ADC; Shareholder Approval; Dissenters' Rights

  27

  13.  

The Transaction Documents

  28

  14.  

Dividends and Distributions

  38

  15.  

Conditions of the Offer

  38

  16.  

Certain Legal Matters; Regulatory Approvals

  39

  17.  

Fees and Expenses

  45

  18.  

Miscellaneous

  45


Schedule I Directors and Executive Officers of Tyco Electronics Ltd. and Tyco Electronics Minnesota, Inc.

i



SUMMARY TERM SHEET

        We, Tyco Electronics Minnesota, Inc. ("Purchaser"), an indirect wholly owned subsidiary of Tyco Electronics Ltd. ("Tyco Electronics"), are offering to purchase all outstanding shares of common stock, par value $0.20 per share, of ADC Telecommunications, Inc. ("ADC"), including the associated preferred stock purchase rights, for $12.75 per share in cash, net to the seller, without interest, upon the terms and subject to the conditions set forth in this Offer to Purchase and the related Letter of Transmittal and pursuant to the Agreement and Plan of Merger dated as of July 12, 2010, as amended, by Amendment No. 1 to Agreement and Plan of Merger dated as of July 24, 2010 among ADC, Tyco Electronics and Purchaser. The following are some of the questions you, as an ADC shareholder, may have and answers to those questions. You should carefully read this Offer to Purchase and the accompanying Letter of Transmittal in their entirety because the information in this summary term sheet is not complete and additional important information is contained in the remainder of this Offer to Purchase and the Letter of Transmittal. In this Offer to Purchase, unless the context otherwise requires, the terms "we", "our" and "us" refer to Purchaser.

Who is offering to buy my securities?

        Our name is Tyco Electronics Minnesota, Inc. We are a Minnesota corporation formed for the purpose of making this tender offer for all of the common stock of ADC. We are an indirect wholly owned subsidiary of Tyco Electronics, a Swiss corporation. See the "Introduction" to this Offer to Purchase and "Section 9—Certain Information Concerning Purchaser and Tyco Electronics."

What securities are you offering to purchase?

        We are offering to purchase all of the outstanding common stock, par value $0.20 per share, of ADC, including the associated preferred stock purchase rights. See the "Introduction" to this Offer to Purchase and "Section 1—Terms of the Offer."

How much are you offering to pay for my securities and what is the form of payment?

        We are offering to pay you $12.75 per share in cash, without interest, less any applicable withholding taxes but without brokerage fees, commissions or, except in certain circumstances, transfer taxes. If you are the record holder of your shares (i.e., a stock certificate or uncertificated stock has been issued to you) and you directly tender your shares to us in the offer, you will not have to pay brokerage fees or similar expenses. If you own your shares through a broker, dealer, commercial bank, trust company or other nominee, and your broker, dealer, commercial bank, trust company or other nominee tenders your shares on your behalf, they may charge you a fee for doing so. You should consult your broker, dealer, commercial bank, trust company or other nominee to determine whether any charges will apply. See the "Introduction" to this Offer to Purchase.

Do you have the financial resources to make payment?

        Yes. We will need approximately $1.97 billion to purchase all shares pursuant to the offer, to pay the merger consideration in connection with the subsequent merger of us into ADC, which is expected to follow the successful completion of the offer (including in respect of shares issued in settlement of certain restricted stock units, performance stock units and restricted stock unit rights), to pay related fees and expenses and to pay all other amounts which may become due and payable as a result of the offer and the merger (including in respect of certain outstanding convertible notes). Tyco Electronics will provide us with sufficient funds to satisfy these obligations. In addition to internally available cash, Tyco Electronics may use funds available under its existing credit facility or use alternative borrowing sources, including issuing new notes or commercial paper, to finance approximately $250 million of such obligations. Completion of the offer and the merger is not conditioned upon obtaining or the funding of any financing arrangements. See "Section 13—The Transaction Documents—The Merger Agreement—Convertible Notes."

1


Is your financial condition relevant to my decision to tender in the offer?

        No. We do not think our financial condition is relevant to your decision whether to tender shares and accept the offer because:

    the offer is being made for all outstanding shares of ADC common stock solely for cash;

    as described above, we, through our parent company, Tyco Electronics, will have sufficient funds to purchase all shares validly tendered, and not withdrawn, in the offer and to provide funding for the merger, which is expected to follow the successful completion of the offer;

    consummation of the offer is not subject to any financing condition; and

    if we consummate the offer, we expect to acquire any remaining shares for the same cash per share price in any subsequent offering period or the merger.

        See "Section 9—Certain Information Concerning Purchaser and Tyco Electronics."

What are the most significant conditions to the offer?

        The offer is conditioned upon, among other things:

    a majority of the outstanding shares of ADC common stock, on a fully diluted basis, having been validly tendered and not withdrawn prior to the expiration of the offer (as may be extended from time to time); and

    our receiving U.S. antitrust clearance required for the offer.

        Other conditions of the offer are described in "Section 15—Conditions of the Offer." See also "Section 16—Certain Legal Matters; Regulatory Approvals." Consummation of the offer is not conditioned on Tyco Electronics or Purchaser obtaining financing.

Is there an agreement governing the offer?

        Yes. ADC, Tyco Electronics and Purchaser have entered into an agreement and plan of merger dated as of July 12, 2010, as amended. The merger agreement provides, among other things, for the terms and conditions of the offer and, following consummation of the offer, the merger of Purchaser into ADC. See the "Introduction" to this Offer to Purchase and "Section 13—The Transaction Documents—The Merger Agreement."

What does ADC's board of directors think about the offer?

        ADC's board of directors unanimously:

    determined that the merger agreement, the offer, the merger and the other transactions contemplated by the merger agreement are fair to and in the best interests of ADC's shareholders;

    approved and adopted the merger agreement, the offer, the merger, the plan of merger and the other transactions contemplated by the merger agreement; and

    recommends that, subject to its right to withdraw, modify or amend such recommendation pursuant to the merger agreement, ADC's shareholders accept the offer and, if required by applicable law, approve the merger and the adoption of the plan of merger.

        See "Section 11—Background of the Offer; Contacts with ADC" and "Section 13—The Transaction Documents—The Merger Agreement—ADC Board Recommendation."

How long do I have to decide whether to tender in the offer?

        You have until at least 12:00 Midnight, New York City time, on August 23, 2010, to decide whether to tender your shares in the offer. See "Section 1—Terms of the Offer." If you cannot deliver everything required to make a valid tender to Mellon Investor Services LLC, the depositary for the offer, prior to such time, you may be able to use a guaranteed delivery procedure, which is described in

2



"Section 3—Procedure for Tendering Shares." In addition, if we extend the offer or provide a subsequent offering period in the offer as described below under "Introduction" to this Offer to Purchase, you will have an additional opportunity to tender your shares. Please be aware that if your shares are held by a broker, dealer, commercial bank, trust company or other nominee, they may require advance notification before the expiration time of the offer.

When and how will I be paid for my tendered shares?

        Subject to the terms and conditions of the offer, we will pay for all validly tendered and not properly withdrawn shares of ADC common stock promptly after the later of the date of expiration of the offer and the satisfaction or waiver of the conditions to the offer set forth in "Section 15—Conditions of the Offer." We do, however, reserve the right, in our sole discretion and subject to applicable law and the terms of the merger agreement, to delay the acceptance for payment or payment for shares of ADC common stock until satisfaction of all conditions to the offer relating to governmental or regulatory approvals.

        We will pay for your validly tendered and not withdrawn shares by depositing the purchase price with Mellon Investor Services LLC, which will act as your agent for the purpose of receiving payments from us and transmitting such payments to you. In all cases, payment for tendered shares of ADC common stock will be made only after timely receipt by Mellon Investor Services LLC of certificates for such shares (or of a confirmation of a book-entry transfer of such shares as described in "Section 3—Procedure for Tendering Shares"), a properly completed and duly executed Letter of Transmittal (or facsimile thereof) and any other required documents for such shares.

Can the offer be extended and under what circumstances?

        Yes. If at the scheduled expiration time of the offer, including following a prior extension, any condition to the offer is not satisfied or waived, we are required to extend the offer for one or more periods until March 14, 2011, subject to limited exceptions. In addition, we will extend the offer for any period required by any rule, regulation, interpretation or position of the Securities and Exchange Commission or its staff or of the NASDAQ Stock Market applicable to the offer or for any period otherwise required by applicable law. See "Section 1—Terms of the Offer."

How will I be notified if the offer is extended?

        If we extend the offer, we will inform Mellon Investor Services LLC, the depositary for the offer, of that fact and will make a public announcement of the extension, no later than 9:00 a.m., New York City time, on the business day after the day on which the offer was scheduled to expire.

Will there be a subsequent offering period?

        Following the satisfaction of all the conditions to the offer and the acceptance for payment of all the shares tendered during the initial offering period (including any extensions), we may elect to provide a subsequent offering period of at least three business days, during which time shareholders whose shares have not been tendered into the offer and accepted for payment may tender, but not withdraw, their shares and receive the offer consideration. We may also extend the subsequent offering period for any period or periods. We have not at this time made a final decision whether to provide a subsequent offering period. See "Section 1—Terms of the Offer" and "Section 4—Withdrawal Rights" of this document for more information concerning any subsequent offering period.

What is the difference between an extension of the offer and a subsequent offering period?

        If the offer is extended, no shares will be accepted or paid for until the extension expires, and you will be able to withdraw your shares until then. A subsequent offering period, if there is one, would occur after we have accepted, and are obligated to pay for, all the shares that were validly tendered and not withdrawn by the time the initial offering period (including any extensions) expires. Shares that are validly tendered during a subsequent offering period will be accepted and paid for as they are

3



received, and cannot be withdrawn. See "Section 1—Terms of the Offer" and "Section 4—Withdrawal Rights."

How do I tender my shares?

        If you wish to accept the offer, this is what you must do:

    If you are a record holder (i.e., a stock certificate or uncertificated stock has been issued to you), you must complete and sign the enclosed Letter of Transmittal and send it with your stock certificate to Mellon Investor Services LLC, the depositary for the offer, or follow the procedures for book-entry transfer set forth in Section 3 of this Offer to Purchase. These materials must reach Mellon Investor Services LLC before the offer expires. Detailed instructions are contained in the Letter of Transmittal and in "Section 3—Procedure for Tendering Shares."

    If you are a record holder and your stock is certificated but your stock certificate is not available or you cannot deliver it to the depositary before the offer expires, you may be able to tender your shares using the enclosed Notice of Guaranteed Delivery. Please call Innisfree M&A Incorporated, the information agent, toll free, at (888) 750-5834 for assistance. See "Section 3—Procedure for Tendering Shares" for further details.

    If you hold your ADC shares through a broker, dealer, commercial bank, trust company or other nominee, you must contact your broker, dealer, commercial bank, trust company or other nominee and give instructions that your ADC shares be tendered.

    If you hold your ADC shares through the ADC Telecommunications, Inc. Retirement Savings Plan, you must contact Wells Fargo Shareowner Services and give instructions that your ADC shares be tendered. Detailed instructions are contained in the Notice to Participants in the ADC Telecommunications, Inc. Retirement Savings Plan.

I understand that, since 2005, shares of ADC have been issued only in uncertificated form. How do I tender ADC shares that are not represented by a certificate?

        If you directly hold uncertificated ADC shares in an account with ADC's transfer agent, Computershare Investor Services LLC, you should follow the instructions for book-entry transfer of your shares as described in Section 3 of this Offer to Purchase and in the attached Letter of Transmittal. If you hold your uncertificated ADC shares through a broker, dealer, commercial bank, trust company or other nominee, you must contact your broker, dealer, commercial bank, trust company or other nominee and give instructions that your ADC shares be tendered. If you hold your uncertificated ADC shares through the ADC Telecommunications, Inc. Retirement Savings Plan, you must contact Wells Fargo Shareowner Services and give instructions that your ADC shares be tendered. Detailed instructions are contained in the Notice to Participants in the ADC Telecommunications, Inc. Retirement Savings Plan.

Until what time can I withdraw tendered shares?

        You can withdraw some or all of the shares that you previously tendered in the offer at any time prior to the expiration time of the offer (as it may be extended). Further, if we have not accepted your shares for payment by September 23, 2010, you may withdraw them at any time after September 23, 2010. Once we accept your tendered shares for payment upon expiration of the offer, however, you will no longer be able to withdraw them. In addition, you may not withdraw shares tendered during a subsequent offering period, if we elect to have such a period. See "Section 4—Withdrawal Rights."

How do I withdraw tendered shares?

        To withdraw shares, you must deliver a written notice of withdrawal, or a facsimile of one, with the required information to Mellon Investor Services LLC, the depositary for the offer, while you have the right to withdraw the shares. If you tendered shares by giving instructions to a broker, dealer,

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commercial bank, trust company or other nominee, you must instruct the broker, dealer, commercial bank, trust company or other nominee to arrange to withdraw the shares. See "Section 4—Withdrawal Rights."

Can holders of stock options, time-based restricted stock units, performance-based restricted stock units and restricted stock unit rights participate in the offer?

        The offer is only for shares of common stock of ADC and not for any options to acquire shares, restricted stock units, performance-based restricted stock units or restricted stock unit rights. If you hold unexercised stock options and you wish to participate in the offer, you must exercise your stock options (to the extent they are exercisable) in accordance with the terms of the applicable company stock plan and stock option award agreement, and tender the shares received upon the exercise in accordance with the terms of the offer. As of the Acceptance Time, all then-outstanding restricted stock units, performance-based restricted stock units and restricted stock unit rights will, to the extent not already fully vested, fully vest if and as provided under the terms of the applicable award agreement. At the Effective Time, the Shares issued pursuant to such stock awards will be cancelled and converted into a right to receive the Offer Price (subject to any applicable withholding taxes required by applicable law). See "Section 13—The Transaction Documents—The Merger Agreement—Stock Options."

What is the Top-Up Option and when could it be exercised?

        As part of the merger agreement, ADC has granted us an option to purchase up to a number of shares from ADC at a per Share purchase price equal to the offer price that, when added to the number of shares owned by us (including shares owned by Tyco Electronics) immediately following consummation of the offer, results in us (including shares owned by Tyco Electronics) owning at least one more share than 90% of the Shares outstanding after the issuance of all shares to be issued upon exercise of the top-up option. The top-up option will not be exercisable (i) to the extent the number of shares issuable would exceed the number of authorized but unissued Shares, (ii) if any judgment, injunction, order or decree prohibits such exercise of the top-up option or the delivery of such shares and (iii) unless we have accepted for payment and paid for all shares validly tendered in the offer and not withdrawn. See "Section 13—The Transaction Documents—The Merger Agreement—Top-Up Option."

Will the offer be followed by a merger if all ADC shares are not tendered in the offer?

        If we purchase shares in the offer and the other conditions to the merger are satisfied or, where permissible, waived, we will be merged with and into ADC. If we purchase shares in the offer, we will have sufficient voting power to approve the merger without the affirmative vote of any other shareholder of ADC. Furthermore, if we acquire pursuant to the offer, the top-up option or otherwise 90% or more of the outstanding shares, we may effect the merger without any further action by the shareholders of ADC. If the merger takes place, ADC will become an indirect wholly owned subsidiary of Tyco Electronics, and all remaining shareholders (other than ADC, Tyco Electronics, any of their respective subsidiaries (including us) or any shareholders properly exercising their dissenters' rights) will receive $12.75 net per share in cash (or any higher price per share which is paid in the offer). See the "Introduction" to this Offer to Purchase and "Section 12—Purpose of the Offer; Plans for ADC; Shareholder Approval; Dissenters' Rights" and "Section 13—The Transaction Documents—The Merger Agreement."

If I decide not to tender, how will the offer affect my shares?

        If the merger takes place between ADC and us, ADC shareholders not tendering their shares in the offer (other than ADC, Tyco Electronics, any of their respective subsidiaries (including us) or any shareholders properly exercising their dissenters' rights) will receive cash in an amount equal to the price per share paid in the offer. Therefore, if the merger takes place, the only difference between

5



tendering and not tendering your shares is that tendering shareholders will be paid earlier, unless you dissent from the merger and obtain payment for the "fair value" of your shares. If, however, the merger does not take place and the offer is consummated, the number of ADC shareholders and of shares that are still in the hands of the public may be so small that there will no longer be an active or liquid public trading market (or, possibly, any public trading market) for shares held by shareholders other than us. We cannot predict whether the reduction in the number of shares that might otherwise trade publicly would have an adverse or beneficial effect on the market price for, or marketability of, the shares. Also, as described above, ADC may no longer be required to make filings with the United States Securities and Exchange Commission or otherwise may no longer be required to comply with the Securities and Exchange Commission rules relating to publicly held companies. See "Section 7—Possible Effects of the Offer on the Market for the Shares; Stock Exchange Listing(s); Registration under the Exchange Act; Margin Regulations" and "Section 13—The Transaction Documents—The Merger Agreement."

Are dissenters' rights available in either the offer or the merger?

        Dissenters' rights are not available as a result of the offer. However, if the merger is consummated, dissenters' rights will be available to holders of shares that are not tendered and who do not vote in favor of the merger, subject to and in accordance with Minnesota law. A holder of shares must properly perfect such holder's right to seek the "fair value" of his, her or its shares under Minnesota law in connection with the merger in order to exercise dissenters' rights under Minnesota law. See "Section 12—Purpose of the Offer; Plans for ADC; Shareholder Approval; Dissenters' Rights—Dissenters' Rights." Any dilutive impact on the value of the Shares as a result of Tyco Electronics' exercise of the top-up option will not be taken into account in the determination of the "fair value" of the Shares.

If you successfully complete the offer, what will happen to ADC's board of directors?

        If we accept shares of ADC common stock for payment pursuant to the offer, under the merger agreement, Tyco Electronics will have the right (but not the obligation) to designate a majority of the members of ADC's board of directors. To the extent Tyco Electronics elects to exercise this right, ADC has agreed to use its reasonable best efforts to cause Tyco Electronics' designees to be elected or appointed to its board of directors in such number as is proportionate to Tyco Electronics' share ownership, provided that prior to the consummation of the Merger, ADC's board of directors will always have at least three directors who either (i) served on ADC's board of directors immediately prior to the purchase of shares pursuant to the offer or (ii) if less than three such directors remain, were designated by such directors and are not affiliates, shareholders or employees of Tyco Electronics and any of its subsidiaries. Therefore, if we accept shares of ADC common stock for payment pursuant to the offer, Tyco Electronics will have the right to obtain control of ADC. Prior to the effective time of the merger, the approval of a majority of ADC's directors then in office who were not designated by Tyco Electronics will be required for ADC to authorize any termination of the merger agreement by ADC, any amendment of the merger agreement requiring action by ADC's board of directors or to effect certain other actions related to or in connection with the merger. See "Section 12—Purpose of the Offer; Plans for ADC; Shareholder Approval; Dissenters' Rights."

What is the market value of my shares as of a recent date?

        On July 12, 2010, the last full trading day before we announced the offer and the possible subsequent merger, the closing price of ADC common stock reported on the NASDAQ Global Select Market was $8.85 per share. On July 23, 2010, the last full trading day before the date of this Offer to Purchase, the closing price of a share of ADC common stock on the NASDAQ Global Select Market was $12.56. You should obtain current market quotations for shares of ADC common stock before deciding whether to tender your shares.

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What are the U.S. federal income tax consequences of exchanging my shares pursuant to the offer, during a subsequent offering period or pursuant to the merger?

        In general, your exchange of shares of ADC common stock for cash pursuant to the offer, during a subsequent offering period or pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes and may also be a taxable transaction under applicable state, local or foreign income or other tax laws. You should consult your tax advisor about the tax consequences to you of exchanging your shares pursuant to the offer, during a subsequent offering period or pursuant to the merger in light of your particular circumstances. See "Section 5—Material U.S. Federal Income Tax Consequences."

Who can I talk to if I have questions about the offer?

        You can call Innisfree M&A Incorporated, the information agent for the offer, toll free, at (888) 750-5834 or Barclays Capital Inc., the dealer manager for the offer, toll free, at (888) 610-5877.

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To the Shareholders of ADC Telecommunications, Inc.:


INTRODUCTION

        Tyco Electronics Minnesota, Inc., a Minnesota corporation ("Purchaser") and an indirect wholly owned subsidiary of Tyco Electronics Ltd., a Swiss corporation ("Tyco Electronics"), is offering to purchase all outstanding shares of common stock, par value $0.20 per share, of ADC Telecommunications, Inc. (the "Common Stock"), a Minnesota corporation ("ADC"), together with the associated preferred stock purchase rights ("Rights" and together with the Common Stock, "Shares") issued pursuant to the Amended and Restated Rights Agreement dated as of May 9, 2007 between ADC and Computershare Investor Services, LLC (the "Rights Agreement"), for $12.75 per Share (the "Offer Price"), net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in this Offer to Purchase and the related Letter of Transmittal (which, as amended or supplemented from time to time, together constitute the "Offer").

        You will not be required to pay brokerage fees, commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the sale of Shares pursuant to the Offer. However, if you do not complete and sign the Substitute Form W-9 that is included in the Letter of Transmittal (or other applicable form), you may be subject to backup withholding at a current rate of 28% on the gross proceeds payable to you. See "Section 3—Procedure for Tendering Shares—Backup U.S. Federal Income Tax Withholding." Shareholders with Shares held in street name by a broker, dealer, commercial bank, trust company or other nominee should consult with their nominee to determine if they will be charged any transaction fees. We will pay all charges and expenses of Barclays Capital Inc. (the "Dealer Manager"), Mellon Investor Services LLC (the "Depositary") and Innisfree M&A Incorporated (the "Information Agent") incurred in connection with the Offer. See "Section 17—Fees and Expenses."

        We are making the Offer pursuant to an Agreement and Plan of Merger dated as of July 12, 2010, as amended by Amendment No. 1 to the Agreement and Plan of Merger dated as of July 24, 2010 (as amended, the "Merger Agreement"), among ADC, Tyco Electronics and Purchaser. The Merger Agreement provides, among other things, that as soon as possible after consummation of the Offer, Purchaser will merge with and into ADC (the "Merger"), with ADC continuing as the surviving corporation and an indirect wholly owned subsidiary of Tyco Electronics. At the effective time of the Merger (the "Merger Effective Time"), each outstanding Share (other than any Shares in respect of which dissenters' rights are validly exercised under the Minnesota Business Corporation Act (the "MBCA") and any Shares held by ADC, Tyco Electronics or any subsidiary of ADC or Tyco Electronics (including Purchaser)) will be converted into the right to receive the Offer Price without interest. The Merger Agreement provides that, upon the time at which Shares are first accepted for payment under the Offer (the "Acceptance Time"), each then-outstanding option to purchase Shares under any employee stock option or compensation plan or arrangement of ADC (an "ADC Stock Option") will, to the extent not already fully vested, fully vest if and as provided under the terms of the applicable stock option award agreement. At or immediately prior to the Merger Effective Time, each ADC Stock Option will be assumed by Tyco Electronics subject to the same terms and conditions in the ADC Stock Option immediately prior to the Merger Effective Time, except that (i) each ADC Stock Option will be exercisable for a whole number of shares of Tyco Electronics common stock equal to the number of Shares issuable upon exercise of such ADC Stock Option, immediately prior to the Merger Effective Time multiplied by a fraction, the numerator of which will be the Offer Price and the denominator of which will be the volume weighted average trading price per share of Tyco Electronics common stock in the ten trading days preceding the Merger Effective Time (the "Conversion Ratio"), rounded down to the nearest whole number of shares of Tyco Electronics common stock and (ii) the per share exercise price will be equal to the exercise price of such option divided by the Conversion Ratio, rounded up to the nearest whole cent. The Merger is subject to the satisfaction or waiver of

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certain conditions described in "Section 15—Conditions of the Offer." "Section 13—The Transaction Documents—The Merger Agreement" contains a more detailed description of the Merger Agreement. "Section 5—Material U.S. Federal Income Tax Consequences" describes the material U.S. federal income tax consequences of the sale of Shares in the Offer and the Merger.

        The Offer is being made only for Shares and is not made for any ADC Stock Options or outstanding restricted stock units, performance stock units, or restricted stock unit rights. Holders of unexercised ADC Stock Options may exercise such ADC Stock Options (to the extent they are exercisable) in accordance with the terms of the applicable ADC Stock Options and tender some or all of the Shares issued upon such exercise. As of the Acceptance Time, all then-outstanding restricted stock units, performance-based restricted stock units and restricted stock unit rights will, to the extent not already fully vested, fully vest if and as provided under the terms of the applicable award agreement. At the Effective Time, the Shares issued pursuant to such stock awards will be cancelled and converted into a right to receive the Offer Price (subject to any applicable withholding taxes required by applicable law).

        The Board of Directors of ADC (the "ADC Board") has unanimously (i) determined that the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Offer and the Merger, are advisable and in the best interests of ADC's shareholders and (ii) approved and adopted the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Offer and the Merger, in accordance with the requirements of the MBCA. The ADC Board recommends that ADC's shareholders accept the Offer and tender their Shares in the Offer. ADC has been advised that all of its directors and executive officers intend to tender all of their Shares pursuant to the Offer.

        The Offer is conditioned upon, among other things, (i) there being validly tendered in accordance with the terms of the Offer and not withdrawn, prior to the expiration of the Offer, a number of Shares that, together with the Shares then-owned by Tyco Electronics and/or Purchaser, represents a majority of the total number of Shares outstanding on a fully diluted basis (the "Minimum Condition") and (ii) expiration or termination of the applicable waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, and the regulations promulgated thereunder (the "HSR Act") and approval under Article 4(5) of the European Union Council Regulation (EEC) No. 139/2004 (the "EU Regulations"). The Offer is not conditioned upon Tyco Electronics or Purchaser obtaining financing. See "Section 15—Conditions of the Offer" and "Section 16—Certain Legal Matters; Regulatory Approvals."

        For purposes of the Offer, the words "fully diluted," when referring to Shares mean, as of any time, the number of Shares outstanding, together with all Shares that ADC would be required to issue pursuant to any then-outstanding options, rights or other securities convertible into or exercisable or exchangeable for Shares. According to ADC, as of July 9, 2010, there were (i) 97,030,661 Shares issued and outstanding, (ii) 7,650,886 Shares subject to issuance pursuant to ADC's outstanding stock options, (iii) 2,296,524 Shares subject to issuance pursuant to ADC's outstanding restricted stock units, (iv) 610,241 Shares subject to issuance pursuant to ADC's outstanding performance stock units, (v) 1,731,221 Shares subject to issuance pursuant to ADC's outstanding restricted stock unit rights, (vi) 7,119,718 Shares reserved and available for issuance upon conversion of ADC's Floating Rate Convertible Subordinated Notes due 2013, (vii) 8,332,560 Shares reserved and available for issuance upon conversion of ADC's 3.50% Convertible Subordinated Notes due 2015 and (viii) 7,882,155 Shares reserved and available for issuance upon conversion of ADC's 3.50% Convertible Subordinated Notes due 2017 (the notes in items (vi), (vii) and (viii) collectively, the "ADC Convertible Notes"). Accordingly, we anticipate that the Minimum Condition would be satisfied if approximately 66,326,984 Shares are validly tendered pursuant to the Offer and not withdrawn.

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        Upon the Acceptance Time, the Merger Agreement provides that Tyco Electronics will have the right (but not the obligation) to designate the number of directors, rounded to the nearest whole number, to the ADC Board that is in the same proportion as the Shares beneficially owned by Tyco Electronics to the total number of Shares outstanding, provided that, prior to the Merger Effective Time, the ADC Board will always have at least three directors who either (i) served on the ADC Board immediately prior to the purchase of Shares pursuant to the Offer or (ii), if less than three such directors remain, were designated by such directors and are not affiliates, shareholders or employees of Tyco Electronics and any of its subsidiaries (the "Continuing Directors"). Tyco Electronics has yet to determine whether it will exercise such right, but if it does, such designees will likely be directors of Tyco Electronics. We expect that such representation on the ADC Board would permit us to exert substantial influence over ADC's conduct of its business and operations. Prior to the Merger Effective Time, the approval of a majority of the Continuing Directors will be required for certain actions related to the Merger Agreement, including the amendment of the Merger Agreement or the waiver of any conditions thereunder. Purchaser currently intends, as soon as possible after consummation of the Offer, to consummate the Merger pursuant to the Merger Agreement. Following the Merger, the directors of Purchaser will be the directors of ADC.

        Under the MBCA, if we acquire, pursuant to the Offer, the Top-Up Option (as defined below) or otherwise, 90% or more of the outstanding Shares, we believe we would be able to effect the Merger under the short-form merger provisions of the MBCA without a vote of ADC shareholders. If we do not acquire 90% or more of the outstanding Shares (including pursuant to the Top-Up Option described below), we will have to seek approval of the Merger Agreement and the Merger by ADC's shareholders. Such approval of the Merger Agreement and the Merger would require the affirmative vote of holders of a majority of the outstanding Shares. Assuming that the Minimum Condition and the other conditions to the Offer are satisfied, upon consummation of the Offer, we would own sufficient Shares to enable us, without the affirmative vote of any other ADC shareholders, to satisfy the shareholder approval requirement to approve the Merger Agreement and the Merger. See "Section 13—The Transaction Documents—The Merger Agreement."

        The Offer is conditioned upon the fulfillment of the conditions described in "Section 15—Conditions of the Offer." The Offer will expire at 12:00 midnight, New York City time, on August 23, 2010, unless we extend the Offer.

        THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION, AND YOU SHOULD CAREFULLY READ BOTH IN THEIR ENTIRETY BEFORE YOU MAKE A DECISION WITH RESPECT TO THE OFFER.

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THE OFFER

        1.    Terms of the Offer.    Upon the terms and subject to the conditions set forth in the Offer, we will accept for payment and pay for all Shares that are validly tendered, and not withdrawn in accordance with the procedures set forth in "Section 3—Procedure for Tendering Shares", on or prior to the Expiration Time. "Expiration Time" means 12:00 Midnight, New York City time, August 23, 2010, unless extended, in which event "Expiration Time" means the latest time and date at which the Offer, as so extended, will expire.

        The Offer is subject to the conditions set forth in "Section 15—Conditions of the Offer," which include, among other things, satisfaction of the Minimum Condition, expiration or termination of any applicable waiting period relating to the Offer under the HSR Act and approval under the EU Regulations. See "Section 16—Certain Legal Matters; Regulatory Approvals." Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any extension or amendment), we will purchase, promptly after the expiration of the Offer, all Shares validly tendered and not withdrawn prior to the Expiration Time. If any condition to the Offer is not satisfied or waived on any scheduled Expiration Time, Purchaser must extend the Offer for one or more periods until March 14, 2011 (the "End Date") to permit such condition to be satisfied; provided, however, that if all conditions of the Offer other than the Minimum Condition (and any conditions that are by their nature to be satisfied at the expiration of the Offer) have been satisfied or waived, Purchaser has the right, but not the obligation, to terminate the Offer 60 days after such conditions have been satisfied or waived. Notwithstanding the foregoing, under the terms of the Merger Agreement, Purchaser may not terminate or withdraw the Offer other than in connection with the termination of the Merger Agreement. During any extension of the Offer, all Shares previously tendered and not withdrawn will remain subject to the Offer and subject to your right to withdraw such Shares. See "Section 4—Withdrawal Rights." In addition, pursuant to the terms of the Merger Agreement, we will extend the Offer for any period required by any rule, regulation, interpretation or position of the Securities and Exchange Commission (the "SEC") or its staff or of the NASDAQ Stock Market ("NASDAQ") applicable to the Offer or for any period otherwise required by applicable law.

        In accordance with Rule 14d-11 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), subject to the restrictions in the Merger Agreement, we expressly reserve the right to provide, at our option, a subsequent offering period following the Expiration Time (a "Subsequent Offering Period"). If provided, a Subsequent Offering Period will be an additional period of time, following the expiration of the Offer and the purchase of Shares in the Offer, during which shareholders may tender any Shares not previously tendered in the Offer. If a Subsequent Offering Period is made available, (i) it will remain open for such period or periods as we will specify of at least three business days, (ii) Shares may be tendered in the same manner as was applicable to the Offer except that any Shares tendered may not be withdrawn, (iii) we will immediately accept and promptly pay for Shares as they are tendered and (iv) the price per Share will be the same as the Offer Price. We may extend any initial Subsequent Offering Period by any period or periods. Pursuant to Rule 14d-7(a)(2) under the Exchange Act, withdrawal rights do not apply to Shares tendered during a Subsequent Offering Period. A Subsequent Offering Period, if one is provided, is not an extension of the Offer, which already would have been completed. For purposes of the Offer, including for the purposes of determining the Expiration Time, a "business day" means any day other than a Saturday, Sunday or a U.S. federal holiday and consists of the time period from 12:01 a.m. through 12:00 Midnight, New York City time.

        We have not at this time made a decision about whether to provide or not to provide a Subsequent Offering Period. If we elect to provide or extend a Subsequent Offering Period, we will make a public announcement of such Subsequent Offering Period or the extension of the Subsequent Offering Period no later than 9:00 a.m., New York City time, on the next business day after the Expiration Time or the date of termination of the prior Subsequent Offering Period.

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        We also reserve the right to waive any of the conditions to the Offer and to make any change in the terms of or conditions to the Offer, provided that ADC's consent is required for us to (i) waive or change the Minimum Condition, (ii) decrease the Offer Price, (iii) change the form of consideration payable in the Offer, (iv) decrease the number of Shares sought in the Offer, (v) extend or otherwise change the Expiration Time (except to the extent permitted or required by the Merger Agreement) or (vi) otherwise amend, modify or supplement the conditions to the Offer set forth in "Section 15—Conditions of the Offer" or any other term of the Offer in a manner that adversely affects, or would reasonably be expected to adversely affect, the holders of the Shares.

        If we make a material change in the terms of the Offer or waive a material condition to the Offer, we will extend the Offer and disseminate additional tender offer materials to the extent required by applicable law. The minimum period during which a tender offer must remain open following material changes in the terms of the offer, other than a change in price or a change in percentage of securities sought, depends upon the facts and circumstances, including the materiality of the changes. In a published release, the SEC has stated that in its view an offer must remain open for a minimum period of time following a material change in the terms of such offer and that the waiver of a condition such as the Minimum Condition is a material change in the terms of an offer. The release states that an offer should remain open for a minimum of five business days from the date the material change is first published, sent or given to shareholders, and that if material changes are made with respect to information that approaches the significance of price and the percentage of securities sought, a minimum of ten business days generally is required to allow adequate dissemination and investor response. Accordingly, if, prior to the Expiration Time, we increase the consideration to be paid for Shares in the Offer, and if the Offer is scheduled to expire at any time before the expiration of a period of ten business days from, and including, the date that notice of such increase is first published, sent or given in the manner specified below, we will extend the Offer at least until the expiration of that period of ten business days. If, prior to the Expiration Time, Purchaser increases the consideration being paid for Shares accepted for payment pursuant to the Offer, such increased consideration will be paid to all shareholders whose Shares are purchased pursuant to the Offer, whether or not such Shares were tendered prior to the announcement of the increase in consideration.

        Any extension, termination or amendment of the Offer will be followed as promptly as practicable by a public announcement thereof. Without limiting the manner in which we may choose to make any public announcement, we will have no obligation (except as otherwise required by applicable law) to publish, advertise or otherwise communicate any such public announcement other than by making a release to the Dow Jones News Service. In the case of an extension of the Offer, we will make a public announcement of such extension no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Time.

        ADC has provided us with its shareholder list and security position listings for the purpose of disseminating the Offer to holders of Shares. We will send this Offer to Purchase, the related Letter of Transmittal and other related documents to record holders of Shares and to brokers, dealers, commercial banks, trust companies and other nominees whose names appear on the shareholder list or, if applicable, who are listed as participants in a clearing agency's security position listing for subsequent transmittal to beneficial owners of Shares.

        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 extension or amendment), we will accept for payment and pay for all Shares validly tendered and not properly withdrawn prior to the Expiration Time promptly after the later of (i) the Expiration Time and (ii) the satisfaction or waiver of the conditions of the Offer set forth in "Section 15—Conditions of the Offer." If we provide a Subsequent Offering Period, we will immediately accept and promptly pay for Shares as they are tendered during the Subsequent Offering Period. Notwithstanding the foregoing, subject to the terms and conditions of the Merger Agreement and any applicable rules and regulations of the SEC, including Rule 14(e)-1(c) under the Exchange Act, we reserve the right, in our sole discretion and subject to applicable law, to delay the acceptance for payment or payment for Shares

12



until satisfaction of all conditions to the Offer relating to governmental or regulatory approvals specified in "Section 16—Certain Legal Matters; Regulatory Approvals." For information with respect to approvals that we are or may be required to obtain prior to the completion of the Offer, including under the HSR Act and the EU Regulations, see "Section 16—Certain Legal Matters; Regulatory Approvals."

        We will pay for Shares accepted for payment pursuant to the Offer by depositing the purchase price with the Depositary, which will act as your agent for the purpose of receiving payments from us and transmitting such payments to you. Upon the deposit of such funds with the Depositary, Purchaser's obligation to make such payment will be satisfied, and tendering shareholders must thereafter look solely to the Depositary for payment of amounts owed to them by reason of the acceptance for payment of Shares pursuant to the Offer.

        In all cases (including during any Subsequent Offering Period), payment for Shares accepted for payment will be made only after timely receipt by the Depositary of (i) certificates for such Shares (or of a confirmation of a book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility (defined in "Section 3—Procedure for Tendering Shares—Book-Entry Delivery")), (ii) a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof), with any required signature guarantees or an Agent's Message (defined in "Section 3—Procedure for Tendering Shares—Book-Entry Delivery") in connection with a book-entry transfer and (iii) any other documents required by the Letter of Transmittal. For a description of the procedure for tendering Shares pursuant to the Offer, see "Section 3—Procedure for Tendering Shares." Accordingly, payment may be made to tendering shareholders at different times if delivery of the Shares and other required documents occurs at different times.

        For purposes of the Offer, we will be deemed to have accepted for payment tendered Shares when, as and if we give oral or written notice of our acceptance to the Depositary.

        Under no circumstances will we pay interest on the consideration paid for Shares pursuant to the Offer, regardless of any extension of the Offer or any delay in making such payment.

        If we do not accept for payment any tendered Shares pursuant to the Offer for any reason, or if you submit certificates for more Shares than are tendered, we will return certificates (or issue new certificates) representing unpurchased or untendered Shares, without expense to you (or, in the case of Shares delivered by book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility pursuant to the procedures set forth in "Section 3—Procedure for Tendering Shares," the Shares will be credited to an account maintained at the Book-Entry Transfer Facility), promptly following the expiration, termination or withdrawal of the Offer.

        We reserve the right to transfer or assign, in whole or from time to time in part, to one or more of our affiliates the right to purchase Shares tendered pursuant to the Offer, but any such transfer or assignment will not relieve us of our obligations under the Offer or prejudice your rights to receive payment for Shares validly tendered and accepted for payment.

        3.     Procedures for Tendering Shares.

        Valid Tender of Shares.    Except as set forth below, in order for you to tender Shares in the Offer, the Depositary must receive the Letter of Transmittal (or a manually signed facsimile thereof), properly completed and signed, together with any required signature guarantees or an Agent's Message in connection with a book-entry delivery of Shares, and any other documents that the Letter of Transmittal requires, at one of its addresses set forth on the back cover of this Offer to Purchase on or prior to the Expiration Time and either (i) you must deliver certificates for the Shares representing tendered Shares to the Depositary or you must cause your Shares to be tendered pursuant to the procedure for book-entry transfer set forth below and the Depositary must receive timely confirmation of the book-entry transfer of the Shares into the Depositary's account at the Book-Entry Transfer Facility or (ii) you must comply with the guaranteed delivery procedures set forth below.

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        The method of delivery of Shares and all other required documents, including through the Book-Entry Transfer Facility, is at your election and sole risk, and delivery will be deemed made only when actually received by the Depositary. If certificates for Shares are sent by mail, we recommend that you use registered mail with return receipt requested, properly insured, in time to be received on or prior to the Expiration Time. In all cases, you should allow sufficient time to ensure timely delivery.

        The tender of Shares pursuant to any one of the procedures described above will constitute your acceptance of the Offer, as well as your representation and warranty that (i) you own the Shares being tendered within the meaning of Rule 14e-4 under the Exchange Act, (ii) the tender of such Shares complies with Rule 14e-4 under the Exchange Act and (iii) you have the full power and authority to tender, sell, assign and transfer the Shares tendered, as specified in the Letter of Transmittal. Our acceptance for payment of Shares tendered by you pursuant to the Offer will constitute a binding agreement between us with respect to such Shares, upon the terms and subject to the conditions of the Offer.

        Book-Entry Delivery.    The Depositary will establish an account with respect to the Shares for purposes of the Offer at The Depository Trust Company (the "Book-Entry Transfer Facility") within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in the system of the Book-Entry Transfer Facility may deliver Shares by causing the Book-Entry Transfer Facility to transfer such Shares into the Depositary's account in accordance with the procedures of the Book-Entry Transfer Facility. However, although delivery of Shares may be effected through book-entry transfer, either the Letter of Transmittal (or a manually signed facsimile thereof) properly completed and duly executed together with any required signature guarantees or an Agent's Message in lieu of the Letter of Transmittal and any other required documents must, in any case, be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase by the Expiration Time, or the guaranteed delivery procedure described below must be complied with.

        Required documents must be transmitted to and received by the Depositary at one of its addresses set forth on the back cover page of this Offer to Purchase. Delivery of the Letter of Transmittal and any other required documents to the Book-Entry Transfer Facility does not constitute delivery to the Depositary.

        "Agent's Message" means a message transmitted by the Book-Entry Transfer Facility to and received by the Depositary and forming a part of a book-entry confirmation stating that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares that are the subject of such book-entry confirmation that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that we may enforce that agreement against the participant.

        Signature Guarantees.    All signatures on a Letter of Transmittal must be guaranteed by a financial institution (including most banks, savings and loan associations and brokerage houses) that is a member of a recognized Medallion Program approved by The Securities Transfer Association, Inc., including the Securities Transfer Agents Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the New York Stock Exchange, Inc. Medallion Signature Program (MSP) or any other "eligible guarantor institution" (as such term is defined in Rule 17Ad-15 under the Exchange Act) (each, an "Eligible Institution"), unless the Shares tendered 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 Instructions 1 and 5 of the Letter of Transmittal.

        If the Shares are certificated and are registered in the name of a person other than the signer of the Letter of Transmittal, or if payment is to be made to, or certificates for the Shares for unpurchased Shares are to be issued or returned to, a person other than the registered holder, then the tendered certificates for the Shares must be endorsed or accompanied by appropriate stock powers, signed exactly as the name or names of the registered holder or holders appear on the certificates for the Shares, with the signatures on the certificates for the Shares or stock powers guaranteed by an Eligible Institution as provided in the Letter of Transmittal. See Instructions 1 and 5 of the Letter of Transmittal.

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        If the Shares are certificated and the certificates representing the Shares are forwarded separately to the Depositary, a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) must accompany each delivery of certificates for the Shares.

        Guaranteed Delivery.    If you wish to tender Shares pursuant to the Offer and cannot deliver such Shares and all other required documents to the Depositary by the Expiration Time or cannot complete the procedure for delivery by book-entry transfer on a timely basis, you may nevertheless tender such Shares if all of the following conditions are met:

    such tender is made by or through an Eligible Institution;

    a properly completed and duly executed Notice of Guaranteed Delivery in the form provided by us with the Offer to Purchase is received by the Depositary (as provided below) by the Expiration Time; and

    any certificates for all such tendered Shares (or a confirmation of a book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility), together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) together with any required signature guarantee (or an Agent's Message) and any other required documents, are received by the Depositary within three NASDAQ trading days after the date of execution of the Notice of Guaranteed Delivery.

        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 such Notice.

        ADC Telecommunications, Inc. Retirement Savings Plan.    The description of the procedures for tendering Shares in this "Section 3—Procedure for Tendering Shares" does not apply to Shares held through the ADC Telecommunications, Inc. Retirement Savings Plan. If you hold Shares through the ADC Telecommunications, Inc. Retirement Savings Plan, you must contact Wells Fargo Shareowner Services and give instructions that these shares be tendered. Detailed instructions are contained in the Notice to Participants in the ADC Telecommunications, Inc. Retirement Savings Plan.

        Backup U.S. Federal Income Tax Withholding.    Under the U.S. federal income tax laws, the Depositary generally will be required to withhold at the applicable backup withholding rate (currently 28%) from any payments made pursuant to the Offer unless you provide the Depositary with your correct taxpayer identification number and certify that you are not subject to such backup withholding by completing the Substitute Form W-9 included in the Letter of Transmittal or otherwise establish an exemption from backup withholding. If you are a nonresident alien or foreign entity, you generally will not be subject to backup withholding if you certify your foreign status on the appropriate Internal Revenue Service Form W-8.

        Appointment of Proxy.    By executing a Letter of Transmittal, you irrevocably appoint our designees as your attorneys-in-fact and proxies, with full power of substitution, in the manner set forth in the Letter of Transmittal to the full extent of your rights with respect to the Shares tendered and accepted for payment by us (and any and all other Shares or other securities issued or issuable in respect of such Shares on or after the date of this Offer to Purchase). All such powers of attorney and proxies are irrevocable and coupled with an interest in the tendered Shares. Such appointment is effective only upon our acceptance for payment of such Shares in accordance with the terms of the Offer. Upon such acceptance for payment, all prior powers of attorney and proxies and consents granted by you with respect to such Shares and other securities will, without further action, be revoked, and no subsequent powers of attorney or proxies may be given nor subsequent written consents executed (and, if previously given or executed, will cease to be effective). Upon such acceptance for payment, our designees will be empowered to exercise all of your voting and other rights as they, in their sole discretion, may deem proper at any annual, special or adjourned meeting of ADC's shareholders, by written consent or otherwise. We reserve the right to require that, in order for Shares to be validly tendered, immediately upon our acceptance for payment of such Shares, we are able to exercise full voting rights with respect to such Shares and other securities (including voting at any meeting of shareholders then scheduled or acting by written consent without a meeting).

15


        The foregoing powers of attorney and proxies are effective only upon acceptance for payment of Shares pursuant to the Offer. The Offer does not constitute a solicitation of proxies, absent a purchase of Shares, for any meeting of ADC's shareholders.

        Determination of Validity.    We will determine, in our sole discretion, 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, and our determination will be final and binding. We reserve the absolute right to reject any or all tenders of Shares that we determine not to be in proper form or the acceptance for payment of or payment for which may, in the opinion of our counsel, be unlawful. We also reserve the absolute right to waive any defect or irregularity in any tender of Shares. No tender of Shares will be deemed to have been validly made until all defects and irregularities with respect to such tender have been cured or waived. None of Purchaser, the Dealer Manager, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defect or irregularity in tenders or waiver of any such defect or irregularity or incur any liability for failure to give any such notification. Purchaser's interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the instructions thereto) will be final and binding.

        4.    Withdrawal Rights.    Except as described in this Section 4, tenders of Shares made in the Offer are irrevocable. You may withdraw tenders of Shares made pursuant to the Offer at any time before the Expiration Time and, unless theretofore accepted for payment as provided herein, tenders of Shares may also be withdrawn after September 23, 2010.

        If we extend the period of time during which the Offer is open, are delayed in accepting for payment or paying for Shares or are unable to accept for payment or pay for Shares pursuant to the Offer for any reason, then, without prejudice to our rights under the Offer, the Depositary may, on our behalf, retain all Shares tendered, and such Shares may not be withdrawn except to the extent that you duly exercise withdrawal rights as described in this Section 4 before the Expiration Time or at any time after September 23, 2010, unless theretofore accepted for payment as provided herein.

        For your withdrawal to be effective, a written, telegraphic or facsimile transmission notice of withdrawal with respect to the Shares must be timely received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase, and the notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of Shares, if different from that of the person who tendered such Shares. If the Shares to be withdrawn have been delivered to the Depositary, a signed notice of withdrawal with (except in the case of Shares tendered by an Eligible Institution) signatures guaranteed by an Eligible Institution must be submitted before the release of such Shares. In addition, such notice must specify, in the case of Shares tendered by delivery of certificates, the serial numbers shown on the specific certificates evidencing the Shares to be withdrawn or, in the case of Shares tendered by book-entry transfer, the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares. Withdrawals may not be rescinded, and Shares withdrawn will thereafter be deemed not validly tendered. However, withdrawn Shares may be retendered at any time before the Expiration Time (or during the Subsequent Offering Period, if any) by again following any of the procedures described in "Section 3—Procedure for Tendering Shares."

        If we provide a Subsequent Offering Period (as described in more detail in "Section 1—Terms of the Offer") following the Offer, no withdrawal rights will apply to Shares tendered in such Subsequent Offering Period or to Shares previously tendered in the Offer and accepted for payment.

        We will determine, in our sole discretion, all questions as to the form and validity (including time of receipt) of any notice of withdrawal, and our determination will be final and binding. None of Purchaser, the Dealer Manager, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defect or irregularity in any notice of withdrawal or waiver of any such defect or irregularity or incur any liability for failure to give any such notification.

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        5.    Material U.S. Federal Income Tax Consequences.    The following discussion summarizes the material U.S. federal income tax consequences to U.S. Holders and Non-U.S. Holders (in each case, as defined below) who exchange Shares pursuant to the Offer, during a Subsequent Offering Period or pursuant to the Merger, and is based upon present law (which may change, possibly with retroactive effect). Due to the individual nature of tax consequences, you are urged to consult your tax advisors as to the specific tax consequences to you of the exchange of Shares pursuant to the Offer, during a Subsequent Offering Period or pursuant to the Merger, including the effects of applicable state, local, foreign and other tax laws. The following discussion applies only if you hold your Shares as a capital asset and may not apply if you acquired your Shares pursuant to the exercise of stock options or are a person otherwise subject to special tax treatment under the Internal Revenue Code of 1986, as amended (the "Code"). This discussion assumes that the Shares are not United States real property interests within the meaning of Section 897 of the Code.

        U.S. Holders.    Except as otherwise set forth below, the following discussion is limited to the material U.S. federal income tax consequences relevant to a beneficial owner of Shares that is a citizen or resident of the United States, a domestic corporation (or any other entity or arrangement treated as a corporation for U.S. federal income tax purposes), an estate that is subject to U.S. federal income tax on its worldwide income from all sources and a trust if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and (ii) one or more U.S. persons have the authority to control all substantial decisions of the trust (a "U.S. Holder"). If a partnership (including any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds Shares, the tax treatment of a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership. Persons holding Shares through a partnership should consult their own tax advisors regarding the tax consequences of exchanging the Shares pursuant to the Offer, during a Subsequent Offering Period or pursuant to the Merger.

        Your exchange of Shares pursuant to the Offer, during a Subsequent Offering Period or pursuant to the Merger, will be a taxable transaction for U.S. federal income tax purposes and may also be a taxable transaction under applicable state, local, foreign and other tax laws. In general, if you exchange Shares pursuant to the Offer, during a Subsequent Offering Period or pursuant to the Merger, you will recognize gain or loss equal to the difference between the adjusted tax basis of your Shares and the amount of cash received in exchange therefor (determined before the deduction of backup withholding, if any). Gain or loss will be determined separately for each block of Shares (i.e., Shares acquired for the same cost in a single transaction) exchanged pursuant to the Offer, during a Subsequent Offering Period or pursuant to the Merger. Such gain or loss generally will be capital gain or loss and generally will be long-term capital gain or loss if your holding period for the Shares is more than one year as of the date of the exchange of such Shares. Long-term capital gains of noncorporate taxpayers generally are subject to U.S. federal income tax at preferential rates. The deduction of capital losses is subject to limitations.

        Non-U.S. Holders.    The following is a summary of the material U.S. federal income tax consequences that will apply if you are a Non-U.S. Holder of Shares. The term "Non-U.S. Holder" means a beneficial owner of Shares that is not a U.S. Holder or a partnership.

        Payments made to a Non-U.S. Holder with respect to Shares exchanged in the Offer, during a Subsequent Offering Period or pursuant to the Merger generally will not be subject to U.S. federal income tax, unless (i) the gain, if any, on Shares is effectively connected with the conduct by the Non-U.S. Holder of a trade or business in the United States (and, if certain income tax treaties apply, is attributable to the Non-U.S. Holder's permanent establishment in the United States), in which event (a) the Non-U.S. Holder will be subject to U.S. federal income tax as described under "U.S. Holders," but such Non-U.S. Holder should provide an IRS Form W-8ECI instead of a Substitute Form W-9, and (b) if the Non-U.S. Holder is a corporation, it may also be subject to a branch profits tax at a rate of 30% (or such lower rate as may be specified under an applicable income tax treaty); (ii) the Non-U.S.

17



Holder is an individual who was present in the United States for 183 days or more in the taxable year of sale and certain other conditions are met, in which event the Non-U.S. Holder will be subject to tax at a rate of 30% (or such lower rate as may be specified under an applicable income tax treaty) on the gain from the exchange of the Shares net of applicable U.S. losses from sales or exchanges of other capital assets recognized during the year; or (iii) the Non-U.S. Holder is an individual subject to tax pursuant to U.S. tax rules applicable to certain expatriates.

        Information Reporting and Backup Withholding.    Proceeds from the sale of Shares pursuant to the Offer, during a Subsequent Offering Period or pursuant to the Merger generally are subject to information reporting, and may be subject to backup withholding at the applicable rate (currently 28%, which rate is scheduled to increase to 31% for taxable years beginning after December 31, 2010) if the shareholder or other payee fails to provide a valid taxpayer identification number and comply with certain certification procedures or otherwise establish an exemption from backup withholding. Backup withholding is not an additional federal income tax. Rather, the federal income tax liability of the person subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may generally be obtained, that the required information is timely furnished to the Internal Revenue Service. See "Section 3—Procedures for Tendering Shares—Backup U.S. Federal Income Tax Withholding."

        6.    Price Range of Shares; Dividends.    The Shares are listed and principally traded on the NASDAQ Global Select Market under the symbol "ADCT". The following table sets forth the high and low sales prices per Share on the NASDAQ Global Select Market for each quarter during ADC's fiscal years ended September 30, 2009 and October 31, 2008, as reported in ADC's Annual Report on Form 10-KT for the transition period ended September 30, 2009, and thereafter as reported in published financial sources:

 
  High ($)   Low ($)  

FY 2008

             
 

First Quarter

    19.10     12.63  
 

Second Quarter

    14.84     11.59  
 

Third Quarter

    17.45     9.21  
 

Fourth Quarter

    10.94     4.13  

FY 2009

             
 

First Quarter

    7.20     4.28  
 

Second Quarter

    7.52     2.47  
 

Third Quarter

    8.85     6.25  
 

Fourth Quarter

    9.78     6.90  

FY 2010

             
 

First Quarter

    8.35     5.35  
 

Second Quarter

    7.55     5.18  
 

Third Quarter

    8.73     6.90  
 

Fourth Quarter (through July 23, 2010)

    12.65     7.55  

        ADC does not pay cash dividends on the Shares and, under the terms of the Merger Agreement, ADC is not permitted to declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of the Shares. If we acquire control of ADC, we currently intend that no dividends will be declared on the Shares prior to the Merger Effective Time.

        On July 12, 2010, the last full trading day before the announcement of the Offer and the Merger, the reported closing sales price per Share on the NASDAQ Global Select Market was $8.85 in published financial sources. Between July 13, 2010 and July 22, 2010, the closing price per Share on the

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NASDAQ Global Select Market ranged between $12.50 and $12.60. On July 23, 2010, the last full trading day before the date of this Offer to Purchase, the reported closing sales price per Share on the NASDAQ Global Select Market was $12.56. Before deciding whether to tender, you should obtain a current market quotation for the Shares.

        7.     Possible Effects of the Offer on the Market for the Shares; Stock Exchange Listing; Registration under the Exchange Act; Margin Regulations.

        Possible Effects of the Offer on the Market for the Shares.    If the Offer is consummated but the Merger does not occur, the number of shareholders, and the number of Shares that are still in the hands of the public, may be so small that there will no longer be an active or liquid public trading market (or possibly any public trading market) for Shares held by shareholders other than Purchaser. We cannot predict whether the reduction in the number of Shares that might otherwise trade publicly would have an adverse or beneficial effect on the market price for, or marketability of, the Shares or whether such reduction would cause future market prices to be greater or less than the price paid in the Offer. If the Merger is consummated, shareholders not tendering their Shares in the Offer (other than those properly exercising their dissenters' rights) will receive cash in an amount equal to the price per Share paid in the Offer. Therefore, if the Merger takes place, the only difference between tendering and not tendering Shares in the Offer is that tendering shareholders will be paid earlier, unless you dissent from the Merger and obtain payment for the "fair value" of your shares.

        Stock Exchange Listing.    Depending upon the number of Shares purchased pursuant to the Offer, the Shares may no longer meet the standards for continued listing on the NASDAQ. If, as a result of the purchase of Shares pursuant to the Offer, the Shares no longer meet the criteria for continued listing on the NASDAQ, the market for the Shares could be adversely affected. According to the NASDAQ's published guidelines, the Shares would not meet the criteria for continued listing on the NASDAQ if, among other things, (i) the number of publicly held Shares were less than 750,000, (ii) the aggregate market value of the publicly held Shares was less than $5,000,000, (iii) there were fewer than 400 shareholders or (iv) there were fewer than two market makers for the Shares. If, as a result of the purchase of Shares pursuant to the Offer, the Shares no longer meet the standards for continued listing on the NASDAQ and the listing of Shares is discontinued, the market for the Shares could be adversely affected.

        If the NASDAQ were to delist the Shares (we intend to cause ADC to seek delisting if we acquire control of ADC and the Shares no longer meet the criteria for continued listing on the NASDAQ), it is possible that the Shares would trade on another securities exchange or in the over-the-counter market and that price quotations for the Shares would be reported by such exchange or other sources. The extent of the public market for the Shares and availability of such quotations would, however, depend upon such factors as the number of holders and/or the aggregate market value of the publicly held Shares at such time, the interest in maintaining a market in the Shares on the part of securities firms, and the possible termination of registration of the Shares under the Exchange Act.

        Registration under the Exchange Act.    The Shares are currently registered under the Exchange Act. The purchase of the Shares pursuant to the Offer may result in the Shares becoming eligible for deregistration under the Exchange Act. Registration may be terminated upon application of ADC to the SEC if the Shares are neither listed on a national securities exchange nor held by 300 or more holders of record. Termination of the registration of the Shares under the Exchange Act, assuming there are no other securities of ADC subject to registration, would substantially reduce the information required to be furnished by ADC to holders of Shares and to the SEC and would make certain of the provisions of the Exchange Act, such as the short-swing profit recovery provisions of Section 16(b), the requirement to furnish a proxy statement pursuant to Section 14(a) in connection with a shareholder's meeting and the related requirement to furnish an annual report to shareholders, and the requirements of Rule 13e-3 under the Exchange Act with respect to "going private" transactions, no longer

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applicable to ADC. Furthermore, "affiliates" of ADC and persons holding "restricted securities" of ADC may be deprived of the ability to dispose of such securities pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended. If registration of the Shares under the Exchange Act were terminated, the Shares would no longer be "margin securities" or eligible for stock exchange listing. We believe that the purchase of the Shares pursuant to the Offer may result in the Shares becoming eligible for deregistration under the Exchange Act, and it would be our intention to cause ADC to terminate registration of the Shares under the Exchange Act as soon after consummation of the Offer as the requirements for termination of registration of the Shares are met.

        If registration of the Shares under the Exchange Act is not terminated prior to the Merger, then the registration of the Shares under the Exchange Act and the listing of the Shares on the NASDAQ will be terminated following the completion of the Merger.

        Margin Regulations.    The Shares are currently "margin securities" under the regulations of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), which has the effect, among other things, of allowing brokers to extend credit on the collateral of such Shares. Depending upon factors similar to those described above regarding listing and market quotations, following the purchase of Shares pursuant to the Offer, the Shares might no longer constitute "margin securities" for the purposes of the Federal Reserve Board's margin regulations and, therefore, could no longer be used as collateral for loans made by brokers.

        8.    Certain Information Concerning ADC.    ADC is a Minnesota corporation incorporated in 1953, with principal executive offices at 13625 Technology Drive, Eden Prairie, Minnesota. The telephone number of ADC's principal executive offices is (952) 938-8080.

        The following description of ADC and its business has been taken from ADC's Annual Report on Form 10-KT for the transition period ended September 30, 2009, and is qualified in its entirety by reference to such Form 10-KT:

            ADC is a leading global provider of broadband communications network infrastructure products and related services. ADC's products offer comprehensive solutions that enable the delivery of high-speed Internet, data, video and voice communications over wireline, wireless, cable, enterprise and broadcast networks. These products include fiber-optic, copper and coaxial based frames, cabinets, cables, connectors and cards, wireless capacity and coverage solutions, network access devices and other physical infrastructure components.

            ADC's products and services are deployed primarily by communications service providers and owners and operators of private enterprise networks. ADC's products are used mainly in the "edge" of communications networks where Internet, data, video and voice traffic are linked from the serving office of a communications service provider to the end-user of communication services. ADC's products include:

      Connectivity solutions that provide the physical interconnections between network components and network access points. These products connect wireline, wireless, cable, enterprise and broadcast communication networks over fiber-optic, copper (twisted pair), coaxial, and wireless media.

      Wireless solutions that help improve coverage and capacity for wireless networks. These products improve signal quality, increase coverage and capacity into expanded geographic areas, increase the speed and expand the delivery and capacity of networks, and help reduce the capital and operating costs of delivering wireless services. Applications for these products include in-building solutions, outdoor coverage solutions and mobile network solutions.

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            ADC also provides professional services to its customers. These services help ADC's customers plan, deploy and maintain Internet, data, video and voice communication networks. ADC also assists its customers in integrating broadband communications equipment used in wireline, wireless, cable and enterprise networks. By providing these services, ADC has additional opportunities to sell its products.

        Projections.    In connection with Tyco Electronics' due diligence review of ADC, ADC provided to Tyco Electronics certain projected and budgeted financial information concerning ADC. ADC advised Tyco Electronics that ADC's internal financial forecasts (upon which the projections provided to Tyco Electronics were based in part) are, in general, prepared solely for internal use and capital budgeting and other management decisions and are subjective in many respects and, thus, susceptible to multiple interpretations and periodic revisions based on actual experience and business developments. The projections also reflect numerous estimates and assumptions (not all of which were provided to Tyco Electronics), all made by ADC management, with respect to general business, economic, market and financial conditions and other matters. These estimates and assumptions regarding future events are difficult to predict, and many are beyond ADC's control. Accordingly, there can be no assurance that the estimates and assumptions made by ADC in preparing the projections will be realized and actual results may be materially greater or less than those contained in the projections provided by ADC.

        The inclusion of the projections in this Offer to Purchase should not be regarded as an indication that any of Tyco Electronics, Purchaser, ADC or their respective affiliates or representatives consider the projections to be necessarily predictive of actual future events, and the projections should not be relied upon as such. These projections are being provided in this document only because ADC made them available to Tyco Electronics in connection with Tyco Electronics' due diligence review of ADC. None of Tyco Electronics, Purchaser, ADC or any of their respective affiliates or representatives makes any representation to any person regarding the projections by virtue of their inclusion in this Offer to Purchase, and none of them intends to update or otherwise revise the projections to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying the projections are shown to be in error. In this regard, investors are cautioned not to place undue reliance on the projected information provided.

        It is Tyco Electronics' understanding that the projections were not prepared with a view to public disclosure or compliance with published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants regarding projections or forecasts. The projections do not purport to present operations in accordance with U.S. generally accepted accounting principles ("GAAP"), and ADC's independent auditors have not examined, compiled or performed any procedures with respect to the projections presented in this Offer to Purchase, nor have they expressed any opinion or any other form of assurance of such information or the likelihood that ADC may achieve the results contained in the projections, and accordingly assume no responsibility for them.

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        The projections provided by ADC management included:

ADC Telecommunications, Inc.

FY10—FY12 Financial Projections

As of 6/16/10

 
  FY10    
   
 
 
  Q1   Q2   Q3   Q4   Total   FY11   FY12  

Revenue

    266     274     302     300     1,142     1,283     1,430  

Earnings Before Interest, Taxes, Depreciation and Amortization

    22     30     42     41     134     172     199  
                               

Adjusted Operating Income

    10     18     30     29     88     128     157  

Adjusted Gross Margin

    92     100     113     111     416     440     479  

Free Cash Flow

                            45     75     109  
                               

        Additional Information.    ADC is subject to the informational and reporting requirements of the Exchange Act and in accordance therewith files and furnishes periodic reports, proxy statements and other information with the SEC relating to its business, financial condition and other matters. You may read and copy any such reports, statements or other information at the SEC's Public Reference Room located at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call 1-800-SEC-0330 for further information on the operation of the Public Reference Room. ADC's filings are also available to the public from commercial document retrieval services and at the SEC's Web site at http://www.sec.gov.

        9.    Certain Information Concerning Purchaser and Tyco Electronics.    Purchaser is a Minnesota corporation incorporated on July 9, 2010, with principal executive offices at 1050 Westlakes Drive, Berwyn, Pennsylvania 19312. The telephone number of our principal executive offices is (610) 893-9800. To date, we have engaged in no activities other than those incidental to our formation, entry into the Merger Agreement and commencement of the Offer. Purchaser is an indirect wholly owned subsidiary of Tyco Electronics.

        Tyco Electronics was incorporated in Bermuda on February 10, 2000 and continued its existence as a Swiss corporation effective June 25, 2009 with principal executive offices at Rheinstrasse 20, CH-8200 Schaffhausen, Switzerland. The telephone number of Tyco Electronics' principal executive offices is +41 (0)52 633 66 61. Tyco Electronics is a leading global provider of engineered electronic components, network solutions, specialty products and subsea communication systems, with fiscal 2009 sales of $10.3 billion to customers in more than 150 countries. Tyco Electronics designs, manufactures and markets products for customers in a broad array of industries including automotive, data communication systems and consumer electronics, telecommunications, aerospace, defense and marine, medical, energy and lighting.

        The name, business address, current principal occupation or employment, five-year employment history and citizenship of each director and executive officer of Tyco Electronics and Purchaser and certain other information are set forth on Schedule I to this Offer to Purchase.

        Except as set forth elsewhere in this Offer to Purchase or Schedule I to this Offer to Purchase: (i) none of Purchaser, Tyco Electronics and, to Purchaser's and Tyco Electronics' knowledge, the persons listed in Schedule I to this Offer to Purchase or any associate or majority owned subsidiary of Tyco Electronics, Purchaser or of any of the persons so listed, beneficially owns or has a right to acquire any Shares or any other equity securities of ADC; (ii) none of Purchaser, Tyco Electronics and, to Purchaser's and Tyco Electronics' knowledge, the persons or entities referred to in clause (i) above has effected any transaction in the Shares or any other equity securities of ADC during the past

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60 days; (iii) none of Purchaser, Tyco Electronics and, to Purchaser's and Tyco Electronics' knowledge, the persons listed in Schedule I to this Offer to Purchase, has any contract, arrangement, understanding or relationship with any other person with respect to any securities of ADC (including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against loss or the giving or withholding of proxies, consents or authorizations); (iv) during the two years before the date of this Offer to Purchase, there have been no transactions between Purchaser, Tyco Electronics, their subsidiaries or, to Purchaser's and Tyco Electronics' knowledge, any of the persons listed in Schedule I to this Offer to Purchase, on the one hand, and ADC or any of its executive officers, directors or affiliates, on the other hand, that would require reporting under SEC rules and regulations; (v) during the two years before the date of this Offer to Purchase, there have been no contracts, negotiations or transactions between Purchaser, Tyco Electronics, their subsidiaries or, to Purchaser's and Tyco Electronics' knowledge, any of the persons listed in Schedule I to this Offer to Purchase, on the one hand, and ADC or any of its subsidiaries or affiliates, on the other hand, concerning a merger, consolidation or acquisition, a tender offer or other acquisition of securities, an election of directors or a sale or other transfer of a material amount of assets; (vi) none of Purchaser, Tyco Electronics and, to Purchaser's and Tyco Electronics' knowledge, the persons listed in Schedule I to this Offer to Purchase has been convicted in a criminal proceeding during the past five years (excluding traffic violations or similar misdemeanors); and (vii) none of Purchaser, Tyco Electronics and, to Purchaser's and Tyco Electronics' knowledge, the persons listed in Schedule I to this Offer to Purchase has been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree or final order enjoining that person from future violations of, or prohibiting activities subject to, federal or state securities laws or a finding of any violation of federal or state securities laws.

        We do not believe our financial condition or the financial condition of Tyco Electronics is relevant to your decision whether to tender your Shares and accept the Offer because (i) the Offer is being made for all outstanding Shares solely for cash, (ii) consummation of the Offer is not subject to any financing condition, (iii) if we consummate the Offer, we expect to acquire all remaining Shares for the same cash price in the Merger and (iv) Tyco Electronics will have, and will arrange for us to have, sufficient funds to purchase all Shares validly tendered and not properly withdrawn in the Offer and to acquire the remaining outstanding Shares in the Merger.

        Additional Information.    Tyco Electronics is subject to the informational requirements of the Exchange Act and in accordance therewith files periodic reports, proxy statements and other information with the SEC relating to its business, financial condition and other matters. Tyco Electronics is required to disclose in such proxy statements certain information, as of particular dates, concerning its directors and officers, their remuneration, stock options granted to them, the principal holders of its securities and any material interests of such persons in transactions with Tyco Electronics. You may read and copy any such reports, statements or other information at the SEC's Public Reference Room located at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call 1-800-SEC-0330 for further information on the operation of the Public Reference Room. Tyco Electronics' filings are also available to the public from commercial document retrieval services and at the SEC's Web site at http://www.sec.gov.

        10.   Source and Amount of Funds. We will need approximately $1.97 billion to purchase all Shares pursuant to the Offer, to pay the consideration in respect of Shares converted in the Merger into the right to receive the same per Share amount paid in the Offer (including in respect of Shares issued in settlement of certain restricted stock units, performance stock units and restricted stock unit rights), to pay related fees and expenses and to pay all other amounts which may become due and payable as a result of the Offer and the Merger (including in respect of the ADC Convertible Notes). See "Section 13—The Transaction Documents—The Merger Agreement—Convertible Notes." Completion

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of the Offer and the Merger is not conditioned upon obtaining or the funding of any financing arrangements.

        Tyco Electronics will provide us with sufficient funds to satisfy the foregoing financial obligations. In addition to internally available cash, Tyco Electronics may use funds available under its existing credit facility or use alternative borrowing sources, including issuing new notes or commercial paper, to finance approximately $250 million of such obligations.

        11.   Background of the Offer; Contacts with ADC.

        As part of the continuous evaluation of its businesses and plans, Tyco Electronics regularly considers a variety of strategic options and transactions. One of Tyco Electronics' key strategic objectives is to strengthen its position in the market for broadband infrastructure connectivity.

        Since Tyco Electronics' separation from Tyco International Ltd. in July 2007, Tyco Electronics has been focused on reshaping and improving the operating performance of its core connectivity businesses, and the next phase of its strategy is to accelerate sales and profit growth in these core businesses.

        As part of this process, Tyco Electronics has evaluated various alternatives for expanding its business, including through an acquisition, and has, from time to time, analyzed opportunities for expansion and discussed such matters with its board of directors.

        On March 15, 2010, at the request of Thomas Lynch ("Lynch"), the Chief Executive Officer of Tyco Electronics, Robert Switz, Chairman, President and Chief Executive Officer of ADC ("Switz"), met with Lynch at ADC's headquarters in Minneapolis. Lynch and Switz discussed, among other things, current industry conditions and dynamics. They also preliminarily discussed Tyco Electronics' interest in exploring a possible combination of Tyco Electronics' connectivity business unit with ADC, and a process that might lead to exploratory discussion around that topic. Switz informed Lynch that he would discuss this matter with the ADC Board.

        Effective March 26, 2010, ADC and Tyco Electronics entered into a mutual confidentiality agreement that would enable each party to conduct further discussions and confidential due diligence. The agreement also contained mutual standstill and employee nonsolicitation covenants. The parties agreed to have their management teams meet on March 31, 2010 to begin the diligence process.

        On March 31, 2010, senior officers of each of ADC and Tyco Electronics, including Switz and Lynch, met to conduct exploratory discussions, including business presentations by each party and an initial discussion of the strategic rationale for a possible transaction between the companies. At this meeting, Tyco Electronics delivered to ADC a proposed, detailed timeline and process proposal for the parties to continue and complete exploratory discussions by the end of April. The timeline contemplated that Tyco Electronics would deliver a non-binding indication of value during the first week of May.

        On April 15, 2010, management teams from ADC and Tyco Electronics held a preliminary due diligence process call.

        On April 27, 2010, Lynch sent a letter to the board of directors of Tyco Electronics (the "Tyco Electronics Board") summarizing the strategic rationale for the proposed acquisition and Tyco Electronics' intention to submit a non-binding indication of interest in the first week of May, 2010. Between April 27, 2010 and May 6, 2010, Tyco Electronics management participated in individual phone calls with members of the Tyco Electronics Board to provide further information on the proposed acquisition.

        On April 28, 2010, management teams from ADC and Tyco Electronics met at an airport conference center in Minneapolis and discussed business diligence and potential synergies.

        On May 7, 2010, management teams from ADC and Tyco Electronics, along with Morgan Stanley & Co. Incorporated ("Morgan Stanley"), financial advisor to ADC, and Barclays Capital Inc.

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("Barclays"), financial advisor to Tyco Electronics, met at an airport conference center in Minneapolis to discuss Tyco Electronics' preliminary valuation of ADC. At the conclusion of the meeting, Tyco Electronics delivered its indication of interest letter containing its preliminary range of value of $10.55 to $11.55 per share for an all-cash acquisition of ADC. Tyco Electronics also requested a period of exclusivity in which to continue diligence and negotiate a transaction agreement with ADC.

        On May 17, 2010, ADC's senior management (not including Switz) and Morgan Stanley met with their counterparts from Tyco Electronics at an airport hotel in Minneapolis to provide them with information regarding potentially undervalued assets of ADC, including its auction rate securities ("ARS") portfolio and certain other assets, to enable Tyco Electronics to consider increasing its valuation of ADC. Tyco Electronics' representatives stated that they would reconsider the $10.55 to $11.55 per share range previously proposed and respond to ADC in the near future.

        On May 25, 2010, Tyco Electronics delivered a revised indication of interest letter to ADC. The range of value indicated was increased to $11.00 to $11.80 per share, for an all-cash acquisition of ADC. Tyco Electronics also requested a period of exclusivity in which to complete due diligence and negotiate a definitive agreement with ADC. Along with the letter, Tyco Electronics delivered a detailed draft transaction timeline outlining the process to signing and then closing.

        On June 4, 2010, Switz contacted Lynch and Morgan Stanley contacted Barclays. Lynch and Barclays were each informed that, while ADC's Board had made no decision with respect to a sale of ADC, a party seeking to acquire ADC would need to satisfy ADC as to three principal factors: value, certainty of closing and timing. Switz and Morgan Stanley explained to Tyco Electronics and Barclays the competitive dynamic of the current process and that ADC was expecting to receive by June 11, 2010 Tyco Electronics' best proposal regarding value, and to do whatever they could to demonstrate certainty and timing to ADC. Switz and Morgan Stanley informed Tyco Electronics and Barclays that the ADC Board had not authorized the granting of exclusivity to any party, but would consider doing so at the appropriate time.

        During the week of June 7, 2010, ADC management held two telephonic meetings with Tyco Electronics management to discuss the financial impact to ADC of the recently announced ARS settlement and Tyco Electronics' due diligence requests. Tyco Electronics also expressed its desire to target an announcement date of July 19, 2010.

        At a meeting held on June 9, 2010, the Tyco Electronics Board received an update from Tyco Electronics management on discussions with ADC. During the course of subsequent negotiations, Tyco Electronics management regularly updated the Tyco Electronics Board as to the status of the negotiations by email and telephone conversations.

        On Friday, June 11, 2010, Tyco Electronics submitted its updated indication of interest. Tyco Electronics submitted an all-cash proposal with a range of $11.50 to $12.00 per share, with no request for exclusivity. In addition, Tyco Electronics delivered a proposed agreement and plan of merger for the transaction, and a draft proposed summary timeline to signing and closing.

        On June 15, 2010, Morgan Stanley and Switz contacted their counterparts at Tyco Electronics and Barclays to explain that ADC intended to proceed with a dual-track due diligence process with Tyco Electronics and another competing bidder for ADC. Tyco Electronics was informed that neither party would receive exclusivity, and each party would have access to management personnel and ADC information to conduct their remaining diligence. Each party would be expected to deliver its best proposal on value, along with a mark-up of a definitive agreement (to be delivered by ADC) that each would be prepared to sign, to ADC by Friday, July 9, 2010. Morgan Stanley and Switz reminded their counterparts that, in addition to value, the Board would seriously consider the certainty and timing associated with each proposal.

        Also, on June 22, 2010, Morgan Stanley delivered a proposed agreement and plan of merger (the "Draft Agreement"), prepared by Dorsey and Whitney LLP ("Dorsey") in consultation with ADC and

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Morgan Stanley, to Barclays. Also during the week of June 21, 2010, Dorsey's antitrust counsel began working with their counterparts at Davis Polk & Wardwell LLP ("Davis Polk"), the law firm representing Tyco Electronics, in order to assess the Tyco Electronics' competition law considerations. In addition, ADC made Dorsey's corporate counsel available to Davis Polk to discuss any questions with respect to the Draft Agreement.

        ADC arranged for two days of in-person, in-depth management presentations and diligence discussions to be held at an offsite location in the Twin Cities with Tyco Electronics during the week of June 28, 2010, and also arranged for visits to select ADC plants around the world by Tyco Electronics. In addition, ADC provided additional confidential information to Tyco Electronics.

        In addition to the due diligence contacts occurring in the three week period prior to the delivery of final indications of interest, Morgan Stanley was in contact with Barclays, confirming that July 9, 2010 was a firm deadline, and urging Barclays to present whatever it could to convince ADC as to certainty and timing.

        During the week of July 5, 2010, representatives of ADC and Dorsey had discussions with Davis Polk regarding the Draft Agreement.

        At a meeting held on July 9, 2010, the Tyco Electronics Board reviewed all aspects of the proposed transaction and authorized Tyco Electronics to enter into a binding agreement for the acquisition of ADC within the parameters proposed by Tyco Electronics management.

        At the close of business on July 9, 2010, Tyco Electronics delivered to ADC an updated indication of interest letter, reflecting an updated price of $11.75 per share, and a mark-up of the Draft Agreement. In addition, Tyco Electronics delivered a detailed draft communications plan leading up to announcement and a proposed a draft press release announcing a transaction with ADC.

        On July 10, 2010, Morgan Stanley contacted Barclays to discuss the status of the process and how to improve Tyco Electronics' proposal. Also during that day, Dorsey negotiated the Draft Agreement with Davis Polk. At the end of July 10, 2010, the Draft Agreement was largely negotiated with Tyco Electronics in a form substantially satisfactory to ADC, with few issues remaining to be resolved.

        On July 11, 2010, Davis Polk and Dorsey resolved the few remaining substantive issues in the Draft Agreement with Tyco Electronics.

        Also, during the afternoon of July 11, 2010, Morgan Stanley informed Barclays that Tyco Electronics' proposal was not competitive with respect to value, and that Tyco Electronics would not be granted an exclusivity period at the current valuation. Barclays responded later in the afternoon by informing Morgan Stanley that Tyco Electronics would not improve the per share price contained in its proposal unless ADC provided Tyco Electronics with meaningful price guidance, a revised Draft Agreement reflecting the current status of negotiations between those parties and a timing commitment for the ADC Board's prompt consideration of its possible revised proposal.

        On the evening of July 11, 2010, Morgan Stanley contacted Barclays and offered a short period of exclusivity to consummate a transaction if Tyco Electronics would increase its proposed price per share to $12.75 in cash. Barclays, noting that it expected to be able to respond with a definitive answer, requested a short period of time to contact Tyco Electronics' executives.

        Switz was contacted by an executive of Tyco Electronics and, concurrently, Morgan Stanley was contacted by Barclays, each with the same response to the ADC's proposal: Tyco Electronics would offer a purchase price of $12.75 per share in cash only if ADC would immediately enter into an exclusivity agreement with Tyco Electronics, the ADC Board would be in a position to hold a meeting after the major U.S. stock exchanges (the "U.S. Exchanges") closed on Monday, July 12, 2010, for the purpose of considering and approving a transaction with Tyco Electronics, and ADC would be in a position to announce the transaction prior to the opening of the U.S. Exchanges on Tuesday, July 13, 2010. ADC agreed to Tyco Electronics' conditions. Shortly after those concurrent discussions concluded,

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the parties entered into an exclusivity letter during the evening of July 11, 2010 that prohibited ADC from soliciting or continuing negotiations with any other party for a period ending at the time that the U.S. Exchanges opened on Wednesday, July 14, 2010.

        From that point during the evening of July 11, 2010, until the evening of July 12, 2010, ADC management, Morgan Stanley and Dorsey, and Tyco Electronics management, Barclays and Davis Polk negotiated and finalized the Draft Agreement and communications plan. ADC also provided to Tyco Electronics the last remaining requested items of due diligence during July 12, 2010.

        On the evening of July 12, 2010, the Merger Agreement was executed by ADC and Tyco Electronics. Prior to the U.S. Exchanges opening on July 13, 2010, Tyco Electronics and ADC issued a press release announcing the execution of the Merger Agreement. For a summary of the Merger Agreement, see "Section 13—The Transaction Documents—Merger Agreement."

        On July 26, 2010, Purchaser commenced the Offer.

        12.   Purpose of the Offer; Plans for ADC; Shareholder Approval; Dissenters' Rights.

        Purpose of the Offer; Plans for ADC.    The purpose of the Offer and the Merger is to acquire control of, and the entire equity interest in, ADC. The Offer, as the first step in the acquisition of ADC, is intended to facilitate the acquisition of all of the Shares. The purpose of the Merger is to acquire all capital stock of ADC not purchased pursuant to the Offer or otherwise.

        Upon the purchase of Shares pursuant to the Offer, the Merger Agreement provides that Tyco Electronics will have the right (but not the obligation) to designate representatives, rounded to the nearest whole number, to serve on the ADC Board in proportion to our ownership of Shares following such purchase, provided that, prior to the Merger Effective Time, the ADC Board will always have at least three Continuing Directors. Tyco Electronics has yet to determine whether it will exercise such right, but if it does, such designees are likely to be directors of Tyco Electronics. We expect that, if we exercise such right, our representation on the ADC Board would permit us to exert substantial influence over ADC's conduct of its business and operations. In addition, if we accept for payment and pay for a majority of the outstanding Shares, we expect to merge with and into ADC. We currently intend, as soon as possible after consummation of the Offer, to consummate the Merger pursuant to the Merger Agreement. Following the Merger, the directors of Purchaser will be the directors of ADC. See "Section 13—The Transaction Documents—The Merger Agreement."

        As described herein, upon completion of the Offer, Purchaser will merge with and into ADC, which will continue as the surviving corporation and an indirect wholly owned subsidiary of Tyco Electronics. Tyco Electronics will continue to evaluate the business and operations of ADC during and after the consummation of the Offer and prior to the Merger Effective Time and, following the Merger, will take such actions as it deems appropriate under the circumstances then existing. Thereafter, Tyco Electronics intends to conduct a comprehensive review of ADC's business, operations, capitalization and management with a view to optimizing development of ADC's potential in conjunction with Tyco Electronics' business.

        If, for any reason following completion of the Offer, the Merger is not consummated, Tyco Electronics and Purchaser reserve the right to acquire additional Shares through private purchases, market transactions, tender or exchange offers or otherwise on terms and at prices that may be more or less favorable than those of the Offer, or, subject to any applicable legal restrictions, to dispose of any or all Shares acquired by them.

        Shareholder Approval.    Under the MBCA, if we acquire, pursuant to the Offer, the Top-Up Option or otherwise, 90% or more of the outstanding Shares, the Merger will be effected under the short-form merger provisions of the MBCA without prior notice to, or any action by, any other ADC shareholder. If we do not acquire 90% or more of the outstanding Shares (pursuant to the Offer, the Top-Up Option or otherwise), we will seek approval of the Merger Agreement and the Merger by ADC's

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shareholders. Approval of the Merger Agreement and the Merger requires the approval of holders of not less than a majority of the outstanding Shares, including the Shares owned by us. Thus, assuming that the Minimum Condition is satisfied, upon consummation of the Offer, we would own sufficient Shares to enable us, without the affirmative vote of any other ADC shareholder, to satisfy the shareholder approval requirement to approve the Merger. Under the terms of the Merger Agreement, ADC has agreed to call and hold a meeting of ADC's shareholders as soon as reasonably practicable after the purchase of Shares pursuant to the Offer for purposes of voting on the approval of the Merger if shareholder approval is required under the MBCA to effect the Merger.

        Dissenters' Rights.    No dissenters' rights are available in connection with the Offer. However, under the MBCA, shareholders who do not sell their Shares in the Offer will have the right, by fully complying with the applicable provisions of Sections 302A.471 and 302A.473 of the MBCA, to dissent with respect to the Merger and to receive payment in cash for the "fair value" of their Shares after the Merger is completed. The term "fair value" means the value of the Shares immediately before the Merger Effective Time and may be less than, equal to or greater than the Offer Price. Any dilutive impact on the value of the Shares as a result of Tyco Electronics' exercise of the Top-Up Option will not be taken into account in the determination of the "fair value" of the Shares.

        To be entitled to payment, the dissenting shareholder must not accept the Offer. In addition, if a vote of shareholders is required to approve the Merger under the MBCA, a dissenting shareholder also (i) must file with ADC, prior to the vote for the Merger, a written notice of intent to demand payment of the fair value of the dissenting shareholder's Shares, (ii) must not vote in favor of the Merger and (iii) must satisfy the other procedural requirements of the MBCA. Any shareholder contemplating the exercise of such dissenters' rights should review carefully the provisions of Sections 302A.471 and 302A.473 of the MBCA, particularly the procedural steps required to perfect such rights, and should consult legal counsel. Dissenters' rights will be lost if the procedural requirements of the statute are not fully and precisely satisfied.

        If a vote of shareholders is required to approve the Merger under the MBCA, the notice and proxy or information statement for the meeting of the shareholders will again inform each shareholder of record as of the record date of the meeting of the shareholders (excluding persons who tender all of their Shares pursuant to the Offer if such Shares are purchased in the Offer) of their dissenters' rights and will include a copy of Sections 302A.471 and 302A.473 of the MBCA and a summary description of the procedures to be followed to obtain payment of fair value for their Shares. If a vote of the shareholders is not required to approve the Merger, the surviving corporation will send a notice to those persons who are shareholders of the surviving corporation immediately prior to the Merger Effective Time which, among other things, will include a copy of Sections 302A.471 and 302A.473 of the MBCA and a summary description of the procedures to be followed to obtain payment of fair value for their Shares.

        The foregoing summary of the rights of dissenting shareholders under the MBCA does not purport to be a statement of the procedures to be followed by shareholders desiring to exercise any dissenters' rights under the MBCA. The preservation and exercise of dissenters' rights require strict adherence to the applicable provisions of the MBCA which will be set forth in their entirety in the proxy statement or information statement for the Merger, unless the Merger is effected as a short-form merger, in which case they will be set forth in the notice of merger. The foregoing discussion is not a complete statement of law pertaining to dissenters' rights under Minnesota law and is qualified in its entirety by reference to Minnesota law.

        13.   The Transaction Documents.

        The Merger Agreement.    The following summary description of the Merger Agreement is qualified in its entirety by reference to the Merger Agreement, a copy of which Purchaser has included as an exhibit to the Tender Offer Statement on Schedule TO, which you may examine and copy as set forth

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in "Section 8—Certain Information Concerning ADC" above. The summary description has been included in this Offer to Purchase to provide you with information regarding the terms of the Merger Agreement and is not intended to modify or supplement any factual disclosures about ADC or Tyco Electronics in ADC's or Tyco Electronics' public reports filed with the SEC. In particular, the Merger Agreement and this summary of terms are not intended to be, and should not be relied upon as, disclosures regarding any facts and circumstances relating to ADC or Tyco Electronics. The representations and warranties have been negotiated with the principal purpose of establishing the circumstances under which Purchaser may have the right not to consummate the Offer, or a party may have the right to terminate the Merger Agreement, if the representations and warranties of the other party prove to be untrue due to a change in circumstance or otherwise, and allocating risk between the parties, rather than establishing matters as facts. The representations and warranties may also be subject to a contractual standard of materiality different from those generally applicable to shareholders.

        The Offer.    The Merger Agreement provides for the making of the Offer by Purchaser as promptly as practicable, but in no event later than July 26, 2010. Purchaser's obligation to accept for payment and pay for Shares tendered pursuant to the Offer is subject to the satisfaction of the Minimum Condition, the expiration or termination of any applicable waiting period under the HSR Act and approval under the EU Regulations and the satisfaction of the other conditions set forth in "Section 15—Conditions of the Offer." The Merger Agreement provides that each ADC shareholder who tenders Shares in the Offer will receive $12.75 for each Share tendered, net to the shareholder in cash, without interest. Purchaser has agreed that it will not terminate or withdraw the Offer other than in connection with the termination of the Merger Agreement. Purchaser has also agreed that, without the prior written consent of ADC, it will not:

    waive or change the Minimum Condition;

    decrease the Offer Price;

    change the form of consideration to be paid in the Offer;

    decrease the number of Shares sought in the Offer;

    extend or otherwise change the Expiration Time, except as described under "—Mandatory Extensions of the Offer" below; or

    otherwise amend, modify or supplement the conditions to the Offer set forth in "Section 15—Conditions of the Offer" or any other terms to the Offer in a manner that adversely affects, or would reasonably be expected to adversely affect, the holders of the Shares.

        Extensions of the Offer.    If any condition to the Offer is not satisfied or waived on any scheduled Expiration Time, Purchaser must extend the Offer for one or more periods until the End Date to permit such condition to be satisfied; provided, however, that if all conditions of the Offer other than the Minimum Condition (and any conditions that are by their nature to be satisfied at the expiration of the Offer) have been satisfied or waived, Purchaser has the right, but not the obligation, to terminate the Offer 60 days after such conditions have been satisfied or waived. Purchaser must also extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC or its staff or of the NASDAQ applicable to the Offer or for any period otherwise required by applicable law.

        The Merger Agreement obligates Purchaser, subject to applicable securities laws and the satisfaction of the conditions set forth in "Section 15—Conditions of the Offer," to accept for payment and pay for, promptly after the expiration of the Offer, all Shares validly tendered and not withdrawn pursuant to the Offer.

        Subsequent Offering Period.    Following expiration of the Offer, the Merger Agreement permits Purchaser, in its sole discretion, to provide a Subsequent Offering Period in accordance with Rule 14d-11 of the Exchange Act if, immediately following the Acceptance Time, Tyco Electronics,

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Purchaser and their respective subsidiaries and affiliates beneficially own less than 90% of the Shares outstanding at that time (which Shares beneficially owned shall include Shares tendered in the Offer and not withdrawn). Purchaser is required pursuant to the Merger Agreement to immediately accept for payment and promptly pay for Shares validly tendered during any Subsequent Offering Period.

        Directors.    The Merger Agreement provides that upon the Acceptance Time, Tyco Electronics will have the right (but not the obligation) to designate the number of directors, rounded to the nearest whole number, to the ADC Board that equals the product of (i) the total number of directors on the ADC Board (giving effect to the election of any additional directors pursuant to the Merger Agreement) and (ii) the percentage that the number of Shares beneficially owned by Tyco Electronics and/or Purchaser (including Shares accepted for payment) bears to the total number of Shares outstanding. ADC is required under the Merger Agreement to cause Tyco Electronics' designees to be elected or appointed to the ADC Board, including by increasing the number of directors and seeking and accepting resignations of incumbent directors, provided that, prior to the Merger Effective Time, the ADC Board will always have at least three Continuing Directors. ADC will also cause individuals designated by Tyco Electronics to constitute the number of members, rounded to the nearest whole number, on each committee of the ADC Board and, as requested by Tyco Electronics, the board of directors of each subsidiary of ADC (and each committee thereof) that represents the same percentage as such individuals represent on the ADC Board.

        Following the election or appointment of Tyco Electronics' designees and until the Merger Effective Time, the approval of a majority of the Continuing Directors will be required to authorize (and such authorization will constitute the authorization of the ADC Board):

    any termination of the Merger Agreement by ADC;

    any amendment of the Merger Agreement requiring action by the ADC Board;

    any extension of time for performance of any of the obligations or actions under the Merger Agreement by Tyco Electronics or Purchaser;

    any waiver of compliance with any agreement or condition contained in the Merger Agreement for the benefit of ADC; or

    any other consent, action or recommendation by ADC or the ADC Board with respect to the Merger Agreement, the Offer or the Merger or any other transaction contemplated thereby or in connection therewith.

        Top-Up Option.    As part of the Merger Agreement, ADC granted to Purchaser an option (the "Top-Up Option") to purchase up to a number of Shares from ADC at a per Share purchase price equal to the Offer Price that, when added to the number of Shares owned by Purchaser and Tyco Electronics immediately following consummation of the Offer, results in Purchaser and Tyco Electronics owning at least one more Share than 90% of the Shares outstanding after the issuance of all Shares to be issued upon exercise of the Top-Up Option. The Top-Up Option will not be exercisable (i) to the extent the number of Shares issuable would exceed the number authorized but unissued Shares, (ii) if any judgment, injunction, order or decree prohibits such exercise of the Top-Up Option or the delivery of such Shares and (iii) unless Tyco Electronics or Purchaser has accepted for payment and paid for all Shares validly tendered in the Offer and not withdrawn. If the Top-Up Option is exercised by Purchaser (resulting in Purchaser owning 90% or more of the outstanding Shares), Purchaser will be able to effect, subject to the terms and conditions of the Merger Agreement, a short-form merger under the MBCA. Any dilutive impact on the value of the Shares as a result of Tyco Electronics' exercise of the Top-Up Option will not be taken into account in the determination of the "fair value" of the Shares.

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        The Merger.    The Merger Agreement provides that, at the Merger Effective Time, Purchaser will be merged with and into ADC. Following the Merger, the separate existence of Purchaser will cease, and ADC will continue as the surviving corporation.

        Under the terms of the Merger Agreement, at the Merger Effective Time, each Share outstanding immediately prior to the Merger Effective Time will be converted automatically into the right to receive a cash amount equal to the per Share amount paid in the Offer, without interest. Notwithstanding the foregoing, the merger consideration will not be payable in respect of Shares owned by ADC shareholders who properly exercised dissenters' rights under the MBCA, Shares owned by Tyco Electronics, Purchaser or ADC, which shall be cancelled, or Shares owned by any subsidiary of ADC or Tyco Electronics (other than the Purchaser), which shall be converted into shares of the surviving corporation such that each subsidiary owns the same percentage of the outstanding stock of the surviving corporation after the Merger Effective Time as it owned of the Shares immediately prior to the Merger Effective Time.

        If we acquire 90% or more of the outstanding Shares pursuant to the Offer, the Top-Up Option or otherwise, the Merger will be effected as a short-form merger without prior notice to, or any action by, any other ADC shareholder. If we do not acquire 90% or more of the outstanding Shares in the Offer or otherwise, we will seek approval of the Merger Agreement and the Merger by ADC's shareholders. Such approval would require the approval of holders of not less than a majority of the outstanding Shares, including the Shares owned by us, and, if required, ADC has agreed that it will, among other things, cause a meeting of its shareholders to be duly called and held as soon as reasonably practicable after the Acceptance Time (or, as applicable, the consummation of any Subsequent Offering Period) for the purpose of voting on the approval of the Merger and the ADC Board will recommend approval of the Merger by ADC's shareholders.

        Stock Options.    The Merger Agreement provides that, at the Acceptance Time, each then-outstanding ADC Stock Option will, to the extent not already fully vested, fully vest if and as provided under the terms of the applicable stock option award agreement. At or immediately prior to the Merger Effective Time, each ADC Stock Option will be assumed by Tyco Electronics subject to the same terms and conditions in the ADC Stock Option immediately prior to the Merger Effective Time, except that (i) each ADC Stock Option will be exercisable for a whole number of shares of Tyco Electronics common stock equal to the number of Shares issuable upon exercise of such ADC Stock Option, immediately prior to the Merger Effective Time multiplied by the Conversion Ratio, rounded down to the nearest whole number of shares of Tyco Electronics common stock and (ii) the per share exercise price will be equal to the exercise price of such option divided by the Conversion Ratio, rounded up to the nearest whole cent.

        Convertible Notes.    The Merger Agreement provides that, after the Acceptance Time, ADC will fulfill its obligations pursuant to the indentures governing the ADC Convertible Notes to make offers to purchase the ADC Convertible Notes, and to purchase any ADC Convertible Notes tendered for purchase in response to the offers, at a purchase price equal to 100% of the principal amount of the ADC Convertible Notes, plus accrued and unpaid interest.

        Representations and Warranties.    In the Merger Agreement, ADC has made customary representations and warranties to Tyco Electronics and Purchaser, including representations relating to its corporate existence and power, corporate authorization, governmental authorization, non-contravention, capitalization, subsidiaries, SEC filings and the Sarbanes-Oxley Act of 2002, financial statements, information to be included in the Schedule 14D-9, the Information Statement and other documents to be filed in connection with the transactions contemplated by the Merger Agreement, the absence of certain changes, the absence of undisclosed material liabilities, compliance with laws and court orders, litigation, regulatory compliance, properties, intellectual property, employee benefit plans and employment arrangements, environmental matters, material contracts, finders' fees, the opinion of its financial advisor, antitakeover statutes matters and ADC's rights agreement. Tyco

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Electronics and Purchaser have made customary representations and warranties to ADC with respect to, among other matters, their corporate existence and power, corporate authorization, governmental authorization, non-contravention, information to be included in the Offer documents, the Information Statement and other documents to be filed in connection with the transactions contemplated by the Merger Agreement, litigation, ownership of Shares and financing of the transactions contemplated by the Merger Agreement.

        The representations and warranties will not survive consummation of the Merger, and cannot be the basis for claims under the Merger Agreement by the other party after termination of the Merger Agreement.

        Operating Covenants.    Pursuant to the Merger Agreement, from the date of the Merger Agreement until the earlier of the Acceptance Time and the termination of the Merger Agreement, ADC will, and will cause each of its subsidiaries to, conduct its business in the ordinary course consistent with past practice and use its commercially reasonable efforts to preserve intact its business organization, maintain in effect all of its licenses, permits and other authorizations, keep available the services of its directors, officers and key employees, and maintain satisfactory relationships with its customers, lenders, suppliers and others having material business relationships with it. The Merger Agreement also contains specific restrictive covenants as to certain impermissible activities of ADC prior to the earlier of the Acceptance Time and the termination of the Merger Agreement, which provide that, subject to certain exceptions, including as contemplated or permitted by the Merger Agreement, ADC will not, and will not permit its subsidiaries to, among other things: amend its articles of incorporation, bylaws or other organizational documents (whether by merger, consolidation or otherwise); split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution in respect of its capital stock; redeem, repurchase, acquire, issue, deliver or sell any ADC securities or securities of any of its subsidiaries; place any limitation on the ability of a subsidiary to pay dividends or return capital or repay intercompany loans or interest due thereon; constrict or prohibit any Subsidiary from selling, transferring, conveying or assigning any rights, assets or liabilities or any other Subsidiary; issue, deliver or sell, or amend the terms of, any shares of ADC securities or securities of any of its subsidiaries, other than issuance of (i) Shares upon the exercise of ADC Stock Options or the vesting and settlement of awards outstanding under ADC's stock plans, (ii) Shares upon the conversion of the ADC Convertible Notes, or (iii) securities of any of ADC's subsidiaries to ADC or any other of its subsidiaries; incur capital expenditures or any obligations or liabilities in respect thereof other than budgeted capital expenditures made available to Tyco Electronics and unbudgeted capital expenditures in excess of $1,000,000 individually or $5,000,000 in the aggregate; acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any assets, securities, properties, interests or businesses; sell, lease or otherwise transfer, or create any lien on any of ADC's or any of its subsidiaries' assets, securities, properties, interests or businesses having an aggregate value in excess of $1,000,000 individually or $5,000,000 in the aggregate; permit to lapse any material intellectual property owned by ADC or any of its subsidiaries; make any loans, advances or capital contributions to, or investments in any other person; create, incur, assume, suffer to exist or otherwise be liable with respect to any indebtedness for borrowed money or guarantees thereof; enter into, amend or modify in any material respect, or terminate any material contract or waive, release or assign any material rights, claims or benefits of ADC or any of its subsidiaries; with respect to any director, officer or employee of ADC or any of its subsidiaries whose annual base salary exceeds $175,000, grant, increase or amend any severance or termination pay or enter into or amend any employment, deferred compensation or other similar agreement; increase benefits payable under ADC's severance or termination pay policies, fund any benefit payable under ADC's change in control or similar plans or terminate the employment of any participant in such plans other than for "Cause" (as defined therein) or make any changes that would give any such participant "Good Reason" (as defined therein); establish, adopt or amend any collective bargaining, bonus, retirement, deferred compensation or other benefit plan or arrangement; increase compensation, bonus or other benefits payable to any employee of ADC or any of its subsidiaries whose annual base salary is $175,000 or

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greater; change the position or job grade of any employee such as to make them eligible to participate or to receive increased benefits under any of ADC's change in control plans; change financial accounting methods; settle shareholder litigation, litigation relating to the Merger or any material litigation; make or change any material tax election, tax accounting period, method of tax accounting or material tax return or claim; or modify or withdraw approval of certain matters for purposes of the safe-harbor provisions contained in Rule 14d-10 under the Exchange Act.

        No Solicitation.    In the Merger Agreement, ADC has agreed that neither it nor any of its subsidiaries will, and ADC will use its reasonable best efforts to cause its or any of its subsidiaries' officers, directors, investment bankers, attorneys, accountants, consultants or other agents or advisors ("Representatives") not to, directly or indirectly:

    solicit, initiate or knowingly take any action to facilitate or encourage the submission of any Acquisition Proposal (as defined below);

    enter into or participate in any discussions or negotiations with, furnish any information relating to ADC or any of its subsidiaries or afford access to the business, properties, assets, books or records of ADC or any of its subsidiaries to, any Person with respect to inquiries regarding, or the making of, an Acquisition Proposal;

    fail to make, withdraw, modify or amend in a manner adverse to Tyco Electronics, the ADC Board Recommendation (as defined below) (or recommend an Acquisition Proposal or knowingly take any action or make any statement inconsistent with the ADC Board Recommendation) (each, an "Adverse Recommendation Change");

    grant any waiver or release under any standstill or similar agreement with respect to any class of equity securities of ADC or any of its subsidiaries or under the Rights Agreement;

    take any action to render the restrictions on a "control share acquisition" set forth in Section 302A.671 of the MBCA inapplicable to any transaction;

    approve any transaction under, or any Person becoming an "interested shareholder" under, Section 302A.673 of the MBCA; or

    enter into any agreement in principle, letter of intent, term sheet, merger agreement, acquisition agreement, option agreement or other similar instrument relating to an Acquisition Proposal (other than a permitted confidentiality agreement).

        Notwithstanding the foregoing, at any time prior to the Acceptance Time, (i) ADC, directly or indirectly through its Representatives, may (a) engage in negotiations or discussions with any third party and its Representatives that, subject to ADC's compliance with the non-solicitation provisions described above, has made after the date of the Merger Agreement a bona fide, written Acquisition Proposal that the ADC Board reasonably believes will lead to a Superior Proposal (as defined below) and (b) furnish to such third party or its Representatives non-public information relating to ADC or any of its subsidiaries pursuant to a confidentiality agreement with such third party with terms no less favorable to ADC than those contained in the Confidentiality Agreement (as defined below), if in the case of either clause (a) or (b), the ADC Board determines in good faith, after consultation with outside legal counsel, that the failure to take such action is reasonably likely to result in a breach of its fiduciary duties under applicable law; provided that (1) such confidentiality agreement may contain a less restrictive or no standstill restriction, in which case the Confidentiality Agreement will be deemed to be amended to contain such less restrictive or no standstill restriction, as the case may be, and (2) all such information (to the extent that such information has not been previously provided or made available to Tyco Electronics) is provided or made available to Tyco Electronics, as the case may be, prior to or substantially concurrent with the time it is provided or made available to such third party); and (ii) the ADC Board may make an Adverse Recommendation Change if the ADC Board determines in good faith, after consultation with outside legal counsel (and a financial advisor, in the

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case of clause (A)), that (A) an Acquisition Proposal constitutes a Superior Proposal and the failure to take such action is reasonably likely to result in a breach of its fiduciary duties under Applicable Law or (B) in the absence of an Acquisition Proposal, due to material events or changes in circumstances after the date hereof that were neither known to nor reasonably foreseeable by ADC as of or prior to the date hereof, the failure to take such action is reasonably likely to result in a breach of its fiduciary duties under applicable law.

        ADC will notify Tyco Electronics in writing within one business day after receipt of any Acquisition Proposal, any inquiry or meaningful communication with respect to an Acquisition Proposal, or request for access to the properties, books or records of ADC or any subsidiary by any third party that informs the ADC Board or such subsidiary that it is considering making, or has made, an Acquisition Proposal. ADC will provide such notice in writing and will identify the third party making, and the material terms of, the Acquisition Proposal, or such inquiry, communication or request, and, will provide to Tyco Electronics a copy of such Acquisition Proposal, inquiry, communication or request. ADC will keep Tyco Electronics reasonably informed of any material changes with respect to such Acquisition Proposal, inquiry, communication or request and will as soon as reasonably practicable (but in no event later than two business days after receipt) provide to Tyco Electronics copies of all correspondence and written material sent or provided to ADC in connection with such Acquisition Proposal, inquiry, communication or request.

        The ADC Board will not make an Adverse Recommendation Change in response to, or terminate the Merger Agreement in order to enter into a definitive agreement with respect to, a Superior Proposal unless (i) ADC promptly notifies Tyco Electronics in writing that the ADC Board has determined that an Acquisition Proposal is a Superior Proposal or that the ADC Board intends to make an Adverse Recommendation Change in connection with such Superior Proposal, (ii) ADC specifies in reasonable detail the material terms and conditions of such Superior Proposal, the identity of the Person making such Superior Proposal and, if applicable, the terms and conditions of any proposed agreement relating to such Superior Proposal, and (iii) Tyco Electronics does not make, within three business days after its receipt of that written notification, an offer that is at least as favorable, from a financial point of view, to the shareholders of ADC as such Superior Proposal.

        The Merger Agreement also provides that nothing therein will prevent the ADC Board from (i) complying with Rule 14d-9 and 14e-2(a) under the Exchange Act with regard to an Acquisition Proposal or (ii) issuing a "stop, look and listen" disclosure or similar communication of the type contemplated by Rule 14d-9 and 14e-2(a) under the Exchange Act.

        "Acquisition Proposal" means, other than the transactions contemplated by the Merger Agreement, any third-party offer, proposal or inquiry relating to, or any third-party indication of interest in, (i) any acquisition or purchase, direct or indirect, of 25% or more of the consolidated assets of ADC and its subsidiaries or 25% or more of any class of equity or voting securities of ADC or any of its subsidiaries whose assets, individually or in the aggregate, constitute 25% or more of the consolidated assets of ADC, (ii) any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in any third party beneficially owning 25% or more of any class of equity or voting securities of ADC or any of its subsidiaries whose assets, individually or in the aggregate, constitute 25% or more of the consolidated assets of ADC, or (iii) a merger, consolidation, share exchange, business combination, sale of substantially all the assets, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving ADC or any of its subsidiaries whose assets, individually or in the aggregate, constitute 25% or more of the consolidated assets of ADC.

        "ADC Board Recommendation" means, at a meeting duly called and held, the unanimous resolution of the ADC Board to recommend acceptance of the Offer and approval and adoption of the Merger Agreement by ADC's shareholders.

        "Superior Proposal" means a bona fide, unsolicited written Acquisition Proposal (provided that, for the purposes of this definition, references to "25%" in the definition of Acquisition Proposal are

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deemed replaced with reference to "50%") that the ADC Board determines in good faith by a majority vote, after considering the advice of a financial advisor of nationally recognized reputation and outside legal counsel, would result in a transaction more favorable, from a financial point of view, to ADC's shareholders than the transactions provided under the Merger Agreement (taking into account, among other things, (i) all the terms and conditions of the Acquisition Proposal, including any break-up fees, expense reimbursement provisions and conditions to consummation, the likelihood of consummation without undue delay relative to the transactions contemplated by the Merger Agreement and, if such Acquisition Proposal involves any financing, the likelihood of obtaining such financing and the terms on which such financing may be secured and (ii) any, bona fide, written proposal by Tyco Electronics to amend the terms of the Merger Agreement).

        The Merger Agreement requires ADC and its subsidiaries and its and their Representatives to cease immediately and cause to be terminated any and all existing activities, discussions or negotiations, if any, with any third party and its Representatives conducted prior to the date of the Merger Agreement with respect to any Acquisition Proposal. ADC is to promptly request that each third party, if any, that has executed a confidentiality agreement within the 24-month period prior to the date of the Merger Agreement that is still in effect in accordance with the terms thereof in connection with its consideration of any Acquisition Proposal return or destroy all confidential information furnished to such person by or on behalf of ADC or any of its subsidiaries (and all analyses and other materials prepared by or on behalf of such person that contains, reflects or analyzes that information). ADC will use its reasonable best efforts to secure certifications of such return or destruction from such other persons as promptly as practicable, to the extent it is entitled to such certifications under the terms of the relevant confidentiality agreements.

        Regulatory Undertaking.    See "Section 16—Certain Legal Matters; Regulatory Approvals."

        Indemnification and Insurance.    The Merger Agreement provides that, for six years after the Merger Effective Time, Tyco Electronics will cause the surviving company to indemnify and hold harmless each current and former officer and director of ADC in respect of acts or omissions occurring at or prior to the Effective Time to the fullest extent permitted by the MBCA or any other applicable law, subject to any provisions in ADC's articles of incorporation and bylaws in effect on the date of the Merger Agreement. The indemnification obligations described in this paragraph are subject to any limitations imposed from time to time under applicable law.

        In addition, Tyco Electronics will cause the surviving company to continue in full force and effect for a period of six years from the Merger Effective Time the provisions in existence in the surviving company's articles of incorporation and bylaws in effect on the date of the Merger Agreement regarding elimination of liability of directors, indemnification of officers, directors and employees and advancement of expenses.

        Tyco Electronics agreed pursuant to the Merger Agreement that Tyco Electronics will or will cause the surviving company to maintain for a period of at least six years after the Merger Effective Time the non-cancellable extension of the directors' and officers' liability coverage of ADC's existing directors' and officers' insurance policies and ADC's existing fiduciary liability insurance policies containing terms, conditions, retentions and limits of liability that are no less favorable than ADC's existing officers' and directors' liability and fiduciary liability insurance policies. In satisfying its obligations described in this paragraph, Tyco Electronics will not be obligated to pay amounts in the aggregate in excess of 175% of the amount per annum ADC paid in its last full fiscal year for such policies.

        Conditions of the Offer.    See "Section 15—Conditions of the Offer."

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        Conditions of the Merger.    The obligations of each party to consummate the Merger are subject to the satisfaction of the following conditions:

    if required by the MBCA, the Merger has been approved by the shareholders of ADC in accordance with the MBCA;

    no applicable law prohibits the consummation of the Merger; and

    Purchaser has purchased Shares pursuant to the Offer.

        Termination.    The Merger Agreement may be terminated and the Merger may be abandoned at any time prior to the Merger Effective Time (notwithstanding any approval of the Merger Agreement by the shareholders of ADC):

        (a)   by mutual written agreement of ADC and Tyco Electronics;

        (b)   by either ADC or Tyco Electronics if:

            (i)    the Offer is not consummated on or before the End Date; provided that the right to terminate the Merger Agreement pursuant to this termination right will not be available to any party whose breach of any provision of the Merger Agreement results in the failure of the Offer to be consummated by such time; or

            (ii)   there is any applicable law that enjoins Purchaser from consummating the Offer or ADC, Tyco Electronics or Purchaser from consummating the Merger and such injunction is final and nonappealable; provided that the right to terminate the Merger Agreement pursuant to this termination right will not be available to any party which has not complied with its obligations with respect to the receipt of regulatory approvals;

        (c)   by Tyco Electronics if, prior to the Acceptance Time:

            (i)    an Adverse Recommendation Change occurs or at any time after receipt or public announcement of an Acquisition Proposal by ADC, the ADC Board fails to reaffirm the ADC Board Recommendation as promptly as practicable (but in any event within five business days) after receipt of a written request by Tyco Electronics to do so;

            (ii)   ADC breaches or fails to perform any of its representations, warranties, covenants or agreements contained in the Merger Agreement, which breach or failure to perform (A) would give rise to the failure of a condition set forth in clauses (ii)(C) and (ii)(D) of "Section 15—Conditions of the Offer" and (B) is either incurable or, if curable, is not cured by ADC within 30 days following receipt by ADC of written notice of such breach or failure;

        (d)   by ADC: (i) if, prior to the Acceptance Time, Tyco Electronics or Purchaser breaches or fails to perform in any material respect any of their respective representations, warranties, covenants or agreements contained in the Merger Agreement and, such breach or failure is either incurable or, if curable, is not cured by Tyco Electronics or Purchaser within 30 days following receipt by Tyco Electronics and Purchaser of written notice of such breach or failure; or (ii) in order to enter into a definitive agreement with respect to a Superior Proposal.

        In the event of the termination of the Merger Agreement in accordance with its terms, the Merger Agreement will become void and of no effect without liability of any party (or any shareholder, director, officer, employee, agent, consultant or representative of such party) to the other party; provided that, if such termination will result from the intentional (i) failure of either party to fulfill a condition to the performance of the obligations of the other party or (ii) failure of either party to perform a covenant of the Merger Agreement, such party will be fully liable for any and all liabilities and damages incurred or suffered by the other party as a result of such failure.

        Termination Fees.    If the Merger Agreement is terminated by Tyco Electronics pursuant to clause (c)(i) of the "—Termination" section above or by ADC pursuant to clause (d)(ii) of the

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"—Termination" section above, then ADC will pay to Tyco Electronics in immediately available funds $38,000,000 (the "Termination Fee"), in the case of termination by ADC, at the time of such termination and, in the case of termination by Tyco Electronics, within two business days after such termination.

        If (i) the Merger Agreement is terminated by Tyco Electronics or ADC pursuant to clause (b)(i) of the "—Termination" section above and all the conditions of the Offer other than the Minimum Condition have been satisfied or waived, (ii) the event giving rise to the right to terminate occurred at a time when an Acquisition Proposal (with 50% being substituted for references to 25% in the definition thereof) had been made (other than by Tyco Electronics or its affiliates) and not withdrawn and (iii) within nine months following the date of such termination, ADC enters into a definitive agreement with respect to or recommends to its shareholders an Acquisition Proposal or an Acquisition Proposal is consummated, then ADC will pay to Tyco Electronics in immediately available funds, concurrently with the occurrence of the applicable event described in clause (iii), the Termination Fee.

        Amendment; Waiver.    Any provision of the Merger Agreement may be amended or waived prior to the Merger Effective Time if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to the Merger Agreement or, in the case of a waiver, by each party against whom the waiver is to be effective; provided that (i) after the Acceptance Time, (A) no amendment will be made that decreases the Offer Price or the merger consideration and (B) any such amendment will require the approval of a majority of the directors of ADC then in office who were not designated by Tyco Electronics in order to be binding on, or effective against, ADC and (ii) after the approval of the Merger by the shareholders of ADC (if required by the MBCA), no amendment that would require further approval by shareholders of ADC under the MBCA will be without such approval having first been obtained.

        The Confidentiality Agreement.    On March 26, 2010, ADC and Tyco Electronics entered into a confidentiality agreement (the "Confidentiality Agreement") to (a) facilitate the mutual sharing of information in order to allow Tyco Electronics and ADC to evaluate a potential transaction, (b) restrict for a period of twelve months the ability of both parties to: (i) pursue transactions involving the other party's securities or property (including that of its subsidiaries), (ii) propose to enter into any merger or business combination with or purchase a material portion of the assets of the other party or its subsidiaries, or (iii) seek to influence to voting of securities or control or influence the management or board of directors of the other party or its subsidiaries, and (c) restrict for a period of six months the ability of both parties to hire or solicit for hire certain employees of the other party.

        The foregoing summary description of the Confidentiality Agreement does not purport to be complete and is qualified in its entirety by reference to the Confidentiality Agreement, which Purchaser has filed as an exhibit to the Schedule TO, and which you may examine and copy as set forth in "Section 8—Certain Information Concerning ADC" above.

        The Exclusivity Letter.    During the evening of July 11, 2010, ADC and Tyco Electronics entered in an exclusivity letter agreement (the "Exclusivity Letter") whereby, in order to provide the necessary assurance to Tyco Electronics during the final negotiations of the Merger Agreement, ADC agreed that, for a period beginning as of the execution of the Exclusivity Letter and ending on the opening of the U.S. stock markets on July 14, 2010, ADC would cease any negotiations with respect to transactional alternatives to the Merger, not solicit proposals which constituted (or could reasonably have been expected to lead to) transactional alternatives to the Merger and not grant any waiver or release under any standstill agreement with respect to ADC's securities or property.

        The foregoing summary description of the Exclusivity Letter does not purport to be complete and is qualified in its entirety by reference to the Exclusivity Letter, which Purchaser has filed as an exhibit to the Schedule TO, and which you may examine and copy as set forth in "Section 8—Certain Information Concerning ADC" above.

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        14.    Dividends and Distributions.    As discussed in "Section 13—The Transaction Documents—The Merger Agreement—Operating Covenants," pursuant to the Merger Agreement, from the date of the Merger Agreement until the earlier of the Merger Effective Time and the termination of the Merger Agreement, ADC has agreed not to: (i) split, combine or reclassify any shares of its capital stock; (ii) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock; (iii) redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any securities of ADC or any of its subsidiaries; (iv) place any limitation on the ability of any subsidiary to pay dividends or return capital or repay intercompany loans or interest due thereon; or (v) constrict or prohibit any subsidiary from selling, transferring, conveying or assigning any rights, assets or liabilities to any other subsidiary.

        15.    Conditions of the Offer.    Pursuant to the Merger Agreement, Purchaser is not required to accept for payment or pay for any Shares, and, only after complying with any obligation to extend the Expiration Time of the Offer pursuant to the Merger Agreement, may terminate the Offer, if:

        (i)    prior to the expiration of the Offer, (A) the Minimum Condition is not satisfied or (B) (1) the applicable waiting period (and any extension thereof) under the HSR Act has not expired or been terminated or (2) the applicable waiting period (and any extension thereof) has not expired or been terminated, or approval has not been obtained as the case may be, under the EU Regulations or other analogous laws existing in foreign jurisdictions;

        (ii)   at any time on or after the date of the Merger Agreement and prior to the expiration of the Offer, any of the following conditions exists:

            (A)  there is instituted or pending any action or proceeding by any governmental authority challenging or seeking to make illegal, to delay materially or otherwise directly or indirectly to restrain or prohibit the making of the Offer, the acceptance for payment of or payment for some or all of the Shares by Tyco Electronics or Purchaser or the consummation of the Merger;

            (B)  any applicable law has been proposed, enacted, enforced, promulgated, issued or deemed applicable to the Offer or the Merger, by any governmental authority, other than the application of the waiting period provisions of the HSR Act and the waiting period provisions or approval provisions, as the case may be, of the EU Regulations and other analogous laws existing in foreign jurisdictions, that would or is reasonably likely, directly or indirectly, to make illegal, to delay materially or otherwise directly or indirectly to restrain or prohibit the making of the Offer, the acceptance for payment of or payment for some or all of the Shares by Tyco Electronics or Purchaser or the consummation of the Merger;

            (C)  (1) the representations and warranties of ADC relating to its capitalization in the Merger Agreement are not true in all respects (other than such inaccuracies as are de minimis to the equity capitalization of ADC in the aggregate or that result from permitted equity incentive plans), (2) the representations and warranties of ADC relating to its corporate existence and power, corporate authorization, and antitakeover statutes and the Rights Agreement in the Merger Agreement are not true in all material respects at and as of immediately prior to the expiration of the Offer as if made at and as of such time (other than such representations and warranties that by their terms address matters only as of another specified time, which will be true only as of such time) or (3) any of the other representations and warranties of ADC contained in the Merger Agreement (disregarding all materiality and Material Adverse Effect (as defined below) qualifications contained therein) are not true and correct at and as of immediately prior to the expiration of the Offer as if made at and as of such time (other than representations and warranties that by their terms address matters only as of another specified time, which will be true only as of such time), except, in the case of clause (3) only, for such matters as have not had and

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    would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect;

            (D)  ADC breaches or fails to perform in all material respects any of its covenants or obligations to be performed or complied with by it under the Merger Agreement prior to such time;

            (E)  ADC fails to deliver to Tyco Electronics a certificate signed by an executive officer of ADC dated as of the date on which the Offer expires certifying that the conditions specified in clauses (C) and (D) of this paragraph (ii) do not exist;

            (F)  there has occurred any event, occurrence, revelation or development of a state of circumstances which, individually or in the aggregate, has had or would reasonably be expected to have a Company Material Adverse Effect; or

            (G)  the Merger Agreement is terminated in accordance with its terms.

        "Company Material Adverse Effect" means a material adverse effect on the condition (financial or otherwise), business, assets or results of operations of ADC and its subsidiaries, taken as a whole, excluding any effect resulting from (A) changes in the financial or securities markets or general economic or political conditions in the United States not having a materially disproportionate effect on ADC and its subsidiaries, taken as a whole, relative to other participants in the industry in which ADC operates, (B) changes or conditions generally affecting the industry in which ADC operates not having a materially disproportionate effect on ADC and its subsidiaries, taken as a whole, relative to other participants in the industry in which ADC operates, (C) changes in Applicable Law or GAAP not having a materially disproportionate effect on ADC and its subsidiaries, taken as a whole, relative to other participants in the industry in which ADC operates, (D) acts of war, sabotage or terrorism or natural disasters involving the United States of America not having a materially disproportionate effect on ADC relative to other participants in the industry in which ADC operates, (E) the announcement or consummation of the transactions contemplated by the Merger Agreement, including the impact thereof on relationships, contractual or otherwise, with customers, suppliers, vendors, lenders, investors, joint venture partners or employees, (F) any failure by ADC and its subsidiaries to meet any internal or external budgets, projections, forecasts or predictions of financial performance for any period (it being understood that this clause (F) will not prevent a party from asserting that any fact, change, event, occurrence or effect that may have contributed to such failure independently constitutes or contributes to a Company Material Adverse Effect), (G) a change in the market price or trading volume of the Shares (it being understood that this clause (G) will not prevent a party from asserting that any fact, change, event, occurrence or effect that may have contributed to such decrease independently constitutes or contributes to a Company Material Adverse Effect) or (H) any action by ADC made pursuant to the express terms of the Merger Agreement or otherwise made upon the written request or direction of Tyco Electronics.

16.
Certain Legal Matters; Regulatory Approvals.

        General.    Based on our examination of publicly available information filed by ADC with the SEC and other publicly available information concerning ADC, we are not aware of any governmental license or regulatory permit that appears to be material to ADC's business that might be adversely affected by our acquisition of Shares pursuant to the Offer or, except as set forth below, of any approval or other action by any government or governmental administrative or regulatory authority or agency, domestic or foreign, that would be required for our acquisition or ownership of Shares pursuant to the Offer. Should any such approval or other action be required or desirable, we currently contemplate that, except as described below under "State Takeover Statutes", such approval or other action will be sought. Except as described under "Antitrust", there is, however, no current intent to

39


delay the purchase of Shares tendered pursuant to the Offer pending the outcome of any such matter. We are unable to predict whether we will determine that we are required to delay the acceptance for payment of or payment for Shares tendered pursuant to the Offer pending the outcome of any such matter. There can be no assurance that any such approval or other action, if needed, would be obtained (with or without substantial conditions) or that if such approvals were not obtained or such other actions were not taken adverse consequences might not result to ADC's business or certain parts of ADC's business might not have to be disposed of, any of which could cause us to elect to terminate the Offer without the purchase of Shares thereunder. Our obligation under the Offer to accept for payment and pay for Shares is subject to the conditions set forth in "Section 15—Conditions of the Offer".

        Minnesota Law.    Under the MBCA and other Minnesota statutes, ADC is subject to several state takeover laws including, but not limited to, Section 302A.671 of the MBCA (the "Control Share Acquisition Act") and Section 302A.673 of the MBCA (the "Combination Act"). As described below, ADC has taken appropriate action in connection with its approval of the Merger Agreement and the consummation of the transactions contemplated thereby so that these laws do not affect the ability of Tyco Electronics and the Purchaser to consummate the Offer or the Merger.

        Minnesota Control Share Acquisition Act.    ADC is currently subject to the Control Share Acquisition Act, which provides that, absent certain exceptions, a person who becomes the beneficial owner of a new range of the voting power of the shares of an issuing publicly held Minnesota corporation (i.e., from less than 20% to 20% or more, from less than 331/3% to 331/3% or more, or from less than a majority to a majority) will lose voting rights with respect to the shares above any such new percentage level of voting control, in the absence of special shareholder approval. That approval can be obtained only by a resolution adopted by (i) the affirmative vote of the holders of a majority of the voting power of all shares entitled to vote, including all shares held by the acquiring person, and (ii) the affirmative vote of the holders of a majority of the voting power of all shares entitled to vote, excluding all "interested shares" (generally, shares held by the acquiring person, any officer of the issuing public corporation, or any director who is also an employee of the issuing public corporation). If such approval is not obtained, the issuing public corporation may redeem the shares that exceed the new percentage level of voting control at their market value. A shareholders' meeting to vote on whether to grant voting power to the acquiring person may not be held unless the acquiring person has delivered an information statement to the issuing public corporation. These provisions do not apply if the issuing public corporation's articles of incorporation or bylaws approved by the corporation's shareholders provide that the statute is inapplicable or if there is an applicable exception. The statute contains several exceptions, including an exception for cash tender offers (i) approved by a majority vote of the members of a committee composed solely of one or more disinterested directors of the issuing public corporation formed pursuant to MBCA Section 302A.673, subdivision 1, paragraph (d), prior to the commencement of, or the public announcement of the intent to commence, the offer, and (ii) pursuant to which the acquiring person will become the owner of over 50% of the voting stock of the issuing public corporation. Under MBCA Section 302A.673, a director or person is "disinterested" if the director or person is neither an officer nor an employee, nor has been an officer or employee within five years preceding the formation of the committee, of the publicly held Minnesota corporation or of a related organization. ADC's articles of incorporation and bylaws do not exclude ADC from the restrictions imposed by the Control Share Acquisition Act. However, because a special committee of disinterested members of the ADC Board has approved the Merger Agreement and the transactions contemplated thereby, the restrictions of Section 302A.671 are inapplicable to the Merger Agreement and the transactions contemplated thereby, including the Offer, the Top-Up Option and the Merger.

        Minnesota Business Combination Act.    ADC is currently subject to the Combination Act, which prohibits a publicly held Minnesota corporation, such as ADC, from engaging in any "business combination," including a merger, with an "interested shareholder" (defined generally as any beneficial

40



owner, directly or indirectly, of 10% or more of the voting power of the outstanding shares of such corporation entitled to vote) for a period of four years after the date of the transaction in which the person became an interested shareholder, unless, among other things, a committee of that corporation's board of directors comprised solely of one or more disinterested directors has given its approval of either the business combination or the transaction which resulted in the shareholder becoming an "interested shareholder" prior to the shareholder becoming an interested shareholder. Under the Combination Act, a director or person is "disinterested" if the director or person is neither an officer nor an employee, nor has been an officer or employee within five years preceding the formation of the committee, of the publicly held Minnesota corporation or of a related organization. However, because a special committee of disinterested directors of the ADC Board has approved the Merger Agreement and the transactions contemplated thereby, the restrictions of Section 302A.673 are inapplicable to the Merger Agreement and the transactions contemplated thereby, including the Offer, the Top-Up Option and the Merger.

        "Fair Price" Provision.    MBCA Section 302A.675 provides that an offeror may not acquire shares of a Minnesota publicly held corporation from a shareholder within two years following the offeror's last purchase of shares of the same class pursuant to a takeover offer, including, but not limited to, acquisitions made by purchase, exchange or merger, unless the selling shareholder is afforded, at the time of the proposed acquisition, a reasonable opportunity to dispose of the shares to the offeror upon substantially equivalent terms as those provided in the earlier takeover offer. The provision described above does not apply if the proposed acquisition of shares is approved, before the purchase of any shares by the offeror pursuant to the earlier takeover offer, by a committee of the board of directors of the corporation, comprised solely of directors who: (i) are not, nor have been in the preceding five years, officers or directors of the corporation or a related organization, (ii) are not the offerors in the takeover offer or any affiliates or associates of the offeror, (iii) were not nominated for election as directors by the offeror or any affiliates or associates of the offeror and (iv) were directors at the time of the first public announcement of the earlier takeover offer or were nominated, elected, or recommended for election as directors by a majority of the directors who were directors at that time. However, because a special committee of disinterested directors of the ADC Board has approved the Merger Agreement and the transactions contemplated thereby, the restrictions of Section 302A.675 are inapplicable to the Merger Agreement and the transactions contemplated thereby, including the Offer, the Top-Up Option and the Merger.

        Takeover Disclosure Statute.    The Minnesota Takeover Disclosure Law (the "Takeover Disclosure Statute"), Minnesota Statutes Sections 80B.01-80B.13, by its terms requires the filing of a registration statement (the "Minnesota Registration Statement") with specified disclosures with the Minnesota Commissioner of Commerce (the "Commissioner") with respect to any tender offer for shares of a corporation, such as ADC, that (i) has its principal place of business or principal executive office in Minnesota, or owns and controls assets in Minnesota having a fair market value of at least $1,000,000 and (ii) has a certain number or percentage of shareholders resident in Minnesota or a specified percentage of its shares owned by Minnesota residents. The Purchaser will file the Minnesota Registration Statement with the Commissioner on the date of this Offer to Purchase. Although the Commissioner does not have an approval right with respect to the Offer, the Commissioner will review the Minnesota Registration Statement for the adequacy of disclosure and is empowered to suspend summarily the Offer in Minnesota within three business days of the filing if the Commissioner determines that the registration statement does not (or the material provided to beneficial owners of the Shares residing in Minnesota does not) provide adequate disclosure under Chapter 80B of the Minnesota Statutes. If this summary suspension occurs, the Commissioner must hold a hearing within 10 calendar days of the summary suspension to determine whether to permanently suspend the Offer in Minnesota, subject to corrective disclosure. If the Commissioner takes action to suspend the effectiveness of the Offer, this action may have the effect of significantly delaying the Offer. In filing

41



the Minnesota Registration Statement, the Purchaser does not concede that some or all of the provisions of the Takeover Disclosure Statute are applicable, valid, enforceable or constitutional.

        State Takeover Statutes.    A number of states have adopted laws which purport, to varying degrees, to apply to attempts to acquire corporations that are incorporated in, or which have substantial assets, shareholders, principal executive offices or principal places of business or whose business operations otherwise have substantial economic effects in, such states. ADC, directly or through subsidiaries, conducts business in a number of states throughout the United States, some of which may have enacted such laws. Except as described herein, we do not know whether any of these laws will, by their terms, apply to the Offer or the Merger, and we have not complied with any such laws. To the extent that certain provisions of these laws purport to apply to the Offer or the Merger, we believe that there are reasonable bases for contesting such laws.

        In 1982, in Edgar v. MITE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover Statute which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However, in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana could, as a matter of corporate law, constitutionally disqualify a potential acquiror from voting shares of a target corporation without the prior approval of the remaining shareholders where, among other things, the corporation is incorporated, and has a substantial number of shareholders, in the state. Subsequently, in TLX Acquisition Corp. v. Telex Corp., a U.S. federal district court in Oklahoma ruled that the Oklahoma statutes were unconstitutional as applied to corporations incorporated outside Oklahoma in that they would subject such corporations to inconsistent regulations. Similarly, in Tyson Foods, Inc. v. McReynolds, a U.S. federal district court in Tennessee ruled that four Tennessee takeover statutes were unconstitutional as applied to corporations incorporated outside Tennessee. This decision was affirmed by the United States Court of Appeals for the Sixth Circuit. In December 1988, a U.S. federal district court in Florida held in Grand Metropolitan PLC v. Butterworth, that the provisions of the Florida Affiliated Transactions Act and the Florida Control Share Acquisition Act were unconstitutional as applied to corporations incorporated outside of Florida.

        If any government official or third party seeks to apply any state takeover law to the Offer or the Merger, we will take such action as then appears desirable, which action may include challenging the applicability or validity of such statute in appropriate court proceedings. If it is asserted that one or more state takeover statutes 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 or the Merger, we may be required to file certain information with, or to receive approvals from, the relevant state authorities or holders of Shares, and we may be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer or the Merger. In such case, we may not be obligated to accept for payment or pay for any tendered Shares. See "Section 15—Conditions of the Offer".

        U.S. Antitrust.    Under the HSR Act and the rules that have been promulgated thereunder, certain acquisition transactions may not be consummated unless Premerger Notification and Report Forms have been filed with the Federal Trade Commission (the "FTC") and the Antitrust Division of the United States Department of Justice (the "Antitrust Division") and certain waiting period requirements have been satisfied. The purchase of Shares pursuant to the Offer is subject to such requirements.

        We currently anticipate filing a Premerger Notification and Report Form under the HSR Act with respect to the Offer with the Antitrust Division and the FTC on August 2, 2010. The waiting period applicable to the purchase of Shares pursuant to the Offer will expire at 11:59 p.m., New York City time, 15 calendar days after such filing, unless earlier terminated by the FTC or the Antitrust Division. However, before such time, the Antitrust Division or the FTC may extend the waiting period by

42



requesting additional information or documentary material relevant to the Offer from us. If such a request is made, the waiting period will be extended until 11:59 p.m., New York City time, ten calendar days after our substantial compliance with such request. Thereafter, such waiting period can be extended only by court order or agreement of Tyco Electronics, ADC, Purchaser and the Antitrust Division or the FTC, as applicable. We intend to make a request pursuant to the HSR Act for early termination of the waiting period applicable to the Offer. There can be no assurance, however, that the 15-day HSR Act waiting period will be terminated early.

        European Union Approval.    We also intend to seek approval of the Offer and the Merger in the European Union ("EU"). Since the transaction is reportable under local merger control rules in at least three countries in the EU, the transaction is eligible for a single review at the EU level pursuant to Article 4(5) of the European Union Council Regulation (EEC) No.#139/2004. We must first submit to the European Commission ("EC") a reasoned submission (Form RS) and, thereafter, a formal notification (Form CO). The EC has 25 business days (beginning on the first business day following the date on which a complete formal notification is received), which period may be extended to 35 business days under certain circumstances, to issue a decision as to whether to clear the Offer and the Merger or to initiate a formal investigation. The EC will initiate a formal investigation if it finds that the Offer and the Merger give rise to serious doubts as to its compatibility with the European common market and such doubts cannot be satisfied by remedial commitments offered by the parties during the initial review period. Alternatively, the EC could decide at the end of the initial review period not to oppose the Offer and the Merger and declare it compatible with the European common market. If the EC initiates a formal investigation, it has 90 business days, which period may be extended by up to 35 business days under certain circumstances, following the decision to open the investigation to consider whether the Offer and the Merger will significantly impede effective competition in the European common market, or a substantial part of it, in particular as a result of the creation or strengthening of a dominant position in any market within the European Economic Area. At the end of this period, the EC will issue a decision, either declaring the Offer and the Merger compatible with the European common market or prohibiting its implementation.

        People's Republic of China.    Under the Antimonopoly Law and its implementing regulations, certain acquisition transactions may not be consummated unless notification has been filed with the Chinese authorities and certain review period requirements have been satisfied. The purchase of Shares pursuant to the Offer is subject to such requirements. The initial statutory review period is 30 working days from the date that the Chinese authorities deem the notification to be complete and formally accept it. The authorities may initiate a "Phase II" investigation which could extend the review period by 90 days or more.

        Other Foreign Filings.    ADC and its subsidiaries own property and conduct business in a number of countries outside of the United States, the European Union and the People's Republic of China. Based on our review of the information currently available about the businesses in which ADC and its subsidiaries are engaged, in connection with the acquisition of Shares pursuant to the Offer and/or in the Merger, filings are required to be made under the antitrust and competition laws of a number of foreign jurisdictions, including Mexico, Russia and Ukraine, and may also be required to be made under the analogous laws of Brazil, Israel, Saudi Arabia, Taiwan and Vietnam. We expect to make all the necessary filings as expeditiously as possible.

43


        Regulatory Review.    While Tyco Electronics and Purchaser believe that either the required pre-merger notification approvals or exemptions can be obtained in each of these countries, we cannot be certain that such approvals or exemptions will be granted, and if such approvals or exemption are granted, we cannot be certain as to the date of those approvals or exemption. The Antitrust Division, the FTC, the EC and other foreign antitrust authorities frequently scrutinize the legality of transactions such as our acquisition of Shares pursuant to the Offer under applicable antitrust and competition laws. At any time before or after the consummation of any such transactions, these authorities could take such actions as they deem necessary or desirable in the public interest, including seeking to enjoin the purchase of Shares pursuant to the Offer, divestiture of the Shares so acquired or divestiture of our or ADC's substantial assets. In some cases, private parties may also bring legal action under the antitrust laws. There can be no assurance that a challenge to the Offer on antitrust or competition grounds will not be made, or if such a challenge is made, what the result will be. If any applicable waiting period has not expired or been terminated or any approval or exemption required to consummate the Offer has not been obtained, we will not be obligated to accept for payment or pay for any tendered Shares unless and until such approval has been obtained or such applicable waiting period has expired or exemption been obtained. See "Section 15—Conditions of the Offer" for certain conditions to the Offer, including conditions with respect to certain governmental actions, "Section 13—The Transaction Documents—The Merger Agreement—Termination" for certain termination rights pursuant to the Merger Agreement with respect to certain governmental actions.

        Regulatory Undertaking.    Purchaser has agreed to take all commercially reasonable steps to avoid or eliminate impediments under any antitrust, competition, or trade regulation law that may be asserted by the FTC, the Antitrust Division, any State Attorney General or any other governmental authority with respect to the Offer and the Merger so as to enable the consummation of the Offer and the Merger as promptly as reasonably practicable; provided, however, Tyco Electronics is not required to agree to or accept (i) limitations on its ability to vote the capital stock of ADC or the surviving corporation on any matter or (ii) any divestitures by Tyco Electronics, ADC or any of their respective subsidiaries of shares of capital stock or of any business, assets, rights or property of Tyco Electronics or its subsidiaries or of ADC or its subsidiaries or the imposition of any limitations on the ability of any of them to conduct their business or to own or exercise control of such assets, properties and stock.

        Obligation to Extend the Offer.    If any condition to the Offer, including the condition set forth in paragraph (i)(B) under "Section 15—Conditions of the Offer" above, has not been satisfied or waived on any scheduled Expiration Time of the Offer, Purchaser has agreed under the Merger Agreement to extend the Offer for one or more periods until the End Date to permit such condition to be satisfied; provided, however, that if all conditions of the Offer other than the Minimum Condition (and any conditions that are by their nature to be satisfied at the expiration of the Offer) have been satisfied or waived, Purchaser has the right, but not the obligation, to terminate the Offer 60 days after such conditions have been satisfied or waived.

        Shareholder Litigation.    Beginning on July 14, 2010, ten putative shareholder class action complaints challenging the transaction were filed in the District Court of Hennepin County, Minnesota, Fourth Judicial District against various combinations of Tyco Electronics, Purchaser, ADC and the individual members of the ADC Board, and one of ADC's non-director officers. The complaints generally allege, among other things, that the members of the ADC Board breached their fiduciary duties owed to the public shareholders of ADC by entering into the Merger Agreement, approving the Offer and the proposed Merger and failing to take steps to maximize the value of ADC to its public shareholders, and that ADC, Tyco Electronics and Purchaser aided and abetted such breaches of fiduciary duties. In addition, the complaints allege that the transaction improperly favors Tyco Electronics; that certain provisions of the Merger Agreement unduly restrict ADC's ability to negotiate with rival bidders; and that ADC shareholders have been deprived of the ability to make an informed decision as to whether to tender their shares. In several of these actions, plaintiffs also purport to bring

44



derivative actions on behalf of ADC against the individual members of the ADC Board, alleging that the individual members of the ADC Board are wasting corporate assets, abusing their ability to control ADC and breaching their fiduciary duties. The complaints generally seek, among other things, declaratory and injunctive relief concerning the alleged fiduciary breaches, injunctive relief prohibiting the defendants from consummating the Merger and other forms of equitable relief.

        17.    Fees and Expenses.    Barclays Capital Inc. is acting as financial advisor to Tyco Electronics in connection with the Offer and the other transactions contemplated by the Merger Agreement for which services Barclays Capital Inc. will receive reasonable and customary compensation. In connection with its engagement as financial advisor, Barclays Capital Inc. has agreed to act as the Dealer Manager in connection with the Offer. We have also agreed to reimburse Barclays Capital Inc. for certain reasonable out-of-pocket expenses incurred in connection with the Offer (including the fees and disbursements of outside counsel) and to indemnify Barclays Capital Inc. against certain liabilities, including certain liabilities under the U.S. federal securities laws. In the ordinary course of business, Barclays Capital Inc. and its successors and affiliates may trade Shares for their own accounts and accounts of customers, and, accordingly, may at any time hold a long or short position in the Shares.

        We have retained Innisfree M&A Incorporated to act as the Information Agent and Mellon Investor Services LLC to act as the Depositary in connection with the Offer. The Information Agent may contact holders of Shares by mail, telephone and personal interviews and may request brokers, dealers, commercial banks, trust companies and other nominees to forward materials relating to the Offer to beneficial owners. The Information Agent and the Depositary each will receive reasonable and customary compensation for their respective services, will be reimbursed for certain reasonable out-of-pocket expenses and will be indemnified against certain liabilities in connection therewith, including certain liabilities under the U.S. federal securities laws.

        We will not pay any fees or commissions to any broker or dealer or any other person (other than the Dealer Manager, the Information Agent and the Depositary) for soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks, trust companies and other nominees will, upon request, be reimbursed by us for reasonable and necessary costs and expenses incurred by them in forwarding materials to their customers.

        18.    Miscellaneous.    The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares in any jurisdiction in which the making of the Offer or acceptance thereof would not be in compliance with the laws of such jurisdiction. We are not aware of any jurisdiction where the making of the Offer is prohibited by any administrative or judicial action pursuant to any valid state statute. If we become aware of any valid state statute prohibiting the making of the Offer or the acceptance of the Shares, we will make a good faith effort to comply with that state statute. If, after a good faith effort, we cannot comply with the state statute, we will not make the Offer to, nor will we accept tenders from or on behalf of, the holders of Shares in that state. 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 Purchaser by the Dealer Manager or by one or more registered brokers or dealers licensed under the laws of such jurisdiction.

        No person has been authorized to give any information or make any representation on behalf of Purchaser or Tyco Electronics not contained in this Offer to Purchase or in the Letter of Transmittal and, if given or made, such information or representation must not be relied upon as having been authorized.

        We have filed with the SEC a Schedule TO, together with exhibits, furnishing certain additional information with respect to the Offer, and may file amendments to our Schedule TO. In addition, ADC has filed the Schedule 14D-9 pursuant to Rule 14d-9 under the Exchange Act, together with exhibits thereto, setting forth its recommendation and furnishing certain additional related information. Our Schedule TO and the Schedule 14D-9 and any exhibits or amendments thereto may be examined and

45



copies may be obtained from the SEC in the same manner as described in "Section 8—Certain Information Concerning ADC" with respect to information concerning ADC.


Tyco Electronics Minnesota, Inc.

July 26, 2010

46



SCHEDULE I

DIRECTORS AND EXECUTIVE OFFICERS OF TYCO ELECTRONICS

        The name, current principal occupation or employment and material occupations, positions, offices or employment for the past five years, of each director and executive officer of Tyco Electronics are set forth below. Unless otherwise indicated, each occupation set forth opposite an individual's name refers to employment with Tyco Electronics. The business address of each director and officer is Tyco Electronics Ltd., Rheinstrasse 20, CH-8200 Schaffhausen, Switzerland. All directors and executive officers listed below are United States citizens, except for Pierre R. Brondeau who is a citizen of France, Juergen W. Gromer who is a citizen of Germany, and Alan C. Clarke and Robert N. Shaddock who are citizens of the United Kingdom. Directors are identified by an asterisk.

Name
  Age   Current Principal Occupation or Employment and Five-Year Employment History

Pierre R. Brondeau*

   
52
 

Dr. Brondeau joined our Board of Directors in June 2007, immediately following our separation from Tyco International Ltd. ("Tyco International"). Dr. Brondeau has been President, Chief Executive Officer and a Director of FMC Corporation, a specialty chemical and agricultural products manufacturer, since January 1, 2010. Prior to joining FMC Corporation, he was President and Chief Executive Officer of Rohm & Haas Company, a U.S.-based manufacturer of specialty materials and a wholly owned subsidiary of the Dow Chemical Company, upon the April 2009 merger of Rohm & Haas Company and Dow Chemical Company until September 2009. From 2006 to 2009, Dr. Brondeau served as Executive Vice President of electronics materials and specialty materials of Rohm & Haas Company. He also has served as Vice-President, Business Group Executive, Electronic Materials, President and Chief Executive Officer, Rohm & Haas Electronic Materials LLC, and Regional Director, Europe, from 2003 to 2006, and previously as Vice-President, Business Group Director, Electronic Materials, President and Chief Executive Officer, Shipley Company, LLC, from 1999 to 2003. Dr. Brondeau received a masters degree from Universite de Montpellier and a Doctorate from Institut National des Sciences appliquees de Toulouse.

Ram Charan*

   
70
 

Dr. Charan joined our Board of Directors in June 2007, immediately following our separation from Tyco International. Since 1978, Dr. Charan has served as an advisor to executives and corporate boards and provides expertise in corporate governance, global strategy and succession. Dr. Charan received a bachelor's degree from Banaras Hindu University and an MBA and a DBA from Harvard Business School.

47


Name
  Age   Current Principal Occupation or Employment and Five-Year Employment History

Juergen W. Gromer*

    65  

Dr. Gromer joined our Board of Directors in June 2007, immediately following our separation from Tyco International. Dr. Gromer was President of Tyco Electronics from April 1999 until he retired from that position on December 31, 2007. From September 2006 until our separation from Tyco International, he also held the position of President of the Electronic Components Business segment of Tyco International. Dr. Gromer held a number of senior executive positions over the previous 16 years with AMP Incorporated, which was acquired by Tyco International in 1999. Dr. Gromer received his undergraduate degree and doctorate in physics from the University of Stuttgart. Dr. Gromer is a Director of WABCO Holdings Inc. and Marvell Technology Group Ltd. He is also Chairman of the Board of the Society for Economic Development of the District Bergstrasse/Hessen, a member of the Advisory Board of Commerzbank, and a Director of the Board and Vice President of the American Chamber of Commerce Germany.

Robert M. Hernandez*

   
65
 

Mr. Hernandez joined our Board of Directors in June 2007, immediately following our separation from Tyco International. Mr. Hernandez has served as Chairman of the Board of RTI International Metals, Inc., a producer of titanium mill products and fabricated metal components, from 1990 to the present. From 1994 to 2001, he served as Vice Chairman and Chief Financial Officer of USX Corporation and prior to that served in a variety of positions during his career at USX, beginning in 1968. Mr. Hernandez received a bachelor's degree from the University of Pittsburgh and an MBA from the Wharton Graduate School of the University of Pennsylvania. Mr. Hernandez is Lead Director of ACE Ltd., a Director of Eastman Chemical Company and Chairman of the Board of Trustees of the Equity-Bond Complex of the BlackRock Mutual Funds.(1)

Thomas J. Lynch*

   
55
 

Mr. Lynch serves on our Board of Directors and has been Chief Executive Officer of Tyco Electronics since January 2006 and was previously President of Tyco Engineered Products and Services since joining Tyco International in September 2004. Prior to joining Tyco International, Mr. Lynch was at Motorola where he was Executive Vice President and President and Chief Executive Officer, Personal Communications Sector from August 2002 to September 2004; Executive Vice President and President, Integrated Electronic Systems Sector from January 2001 to August 2002; Senior Vice President and General Manager, Satellite & Broadcast Network Systems, Broadband Communications Sector from February 2000 to January 2001; and Senior Vice President and General Manager, Satellite & Broadcast Network Systems, General Instrument


(1)
According to its Schedule 13G statement of acquisition of beneficial ownership, filed with the SEC on January 29, 2010, BlackRock, Inc., located at 40 East 52nd Street, New York, NY 10022, and certain of its subsidiaries beneficially own 8,828,328 shares or 9.14% of ADC Telecommunications, Inc.'s common stock.

48


Name
  Age   Current Principal Occupation or Employment and Five-Year Employment History

       

Corporation from May 1998 to February 2000. Mr. Lynch holds a bachelor of science degree in commerce from Rider University. Mr. Lynch is a Director of Thermo Fisher Scientific Inc.

Daniel J. Phelan*

   
60
 

Mr. Phelan joined our Board of Directors in June 2007, immediately following our separation from Tyco International. Mr. Phelan has served as Chief of Staff of GlaxoSmithKline, a manufacturer of pharmaceuticals and consumer health related products, from May 2008 to the present and previously was Senior Vice President, Human Resources from 1994. Mr. Phelan is responsible for information technology, human resources, corporate strategy and development, world wide real estate and facilities, environmental health and safety, and global security. Mr. Phelan received bachelor's and law degrees from Rutgers University and a master's degree from Ohio State University.

Frederic M. Poses*

   
67
 

Mr. Poses joined our Board of Directors as Chairman in June 2007, immediately following our separation from Tyco International. Mr. Poses is Chief Executive Officer and Partner of Ascend Performance Materials, a private manufacturer of nylon related chemicals, resins and fibers for commercial and industrial products, since June 2009. He previously was Chairman and Chief Executive Officer of Trane Inc. (formerly American Standard Companies Inc.), a manufacturer and provider of air conditioning systems and services, vehicle control systems and bath and kitchen products, from 1999 until its acquisition by Ingersoll Rand in 2008. From 1998 to 1999, Mr. Poses was President and Chief Operating Officer of AlliedSignal, Inc., where he served in various capacities over his career, beginning in 1969. Mr. Poses holds a bachelor's degree in business administration from New York University. Mr. Poses is a Director of Raytheon Company.

Lawrence S. Smith*

   
62
 

Mr. Smith joined our Board of Directors in June 2007, immediately following our separation from Tyco International. Mr. Smith was named Executive Vice President in 1995 and Co-Chief Financial Officer in 2002 of Comcast Corporation, a broadband cable provider, from which he retired in March 2007. He served in finance and administration positions at Comcast from 1988 to 1995. Prior to joining Comcast, Mr. Smith was the Chief Financial Officer of Advanta Corporation. He also worked for Arthur Andersen LLP for 18 years, where he was a tax partner. Mr. Smith has a bachelor's degree from Ithaca College. Mr. Smith is a Director of Air Products and Chemicals, Inc. and GSI Commerce Inc.

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Name
  Age   Current Principal Occupation or Employment and Five-Year Employment History

Paula A. Sneed*

    62  

Ms. Sneed joined our Board of Directors in June 2007, immediately following our separation from Tyco International. Ms. Sneed is Chair and Chief Executive Officer of Phelps Prescott Group, LLC, a strategy and management consulting firm, since 2008. Previously she was Executive Vice President of Global Marketing Resources and Initiatives for Kraft Foods,  Inc., a worldwide producer of branded food and beverage products, until her retirement in December 2006. She served as Group Vice President and President of Electronic Commerce and Marketing Services for Kraft Foods North America, part of Kraft Foods, Inc., from 2000 until 2004, and Senior Vice President, Global Marketing Resources and Initiatives from December 2004 to July 2005. She joined General Foods Corporation (which later merged with Kraft Foods) in 1977 and has held a variety of management positions. Ms. Sneed received a bachelor's degree from Simmons College and an MBA from Harvard Graduate School of Business. Ms. Sneed is a Director of Airgas Inc. and Charles Schwab Corporation.

David P. Steiner*

   
50
 

Mr. Steiner joined our Board of Directors in June 2007, immediately following our separation from Tyco International. Since March 2004, Mr. Steiner has served as Chief Executive Officer and a Director of Waste Management, Inc., a provider of integrated waste management services, and has also been its President since June 2010. His previous positions at Waste Management included Executive Vice President and Chief Financial Officer from 2003 to 2004, Senior Vice President, General Counsel and Corporate Secretary from 2001 to 2003 and Vice President and Deputy General Counsel from 2000 to 2001. Mr. Steiner received a bachelor's degree from Louisiana State University and a law degree from the University of California, Los Angeles. Mr. Steiner is a Director of FedEx Corporation.

John C. Van Scoter*

   
49
 

Mr. Van Scoter joined our Board of Directors on December 1, 2008. Since February 1, 2010, Mr. Van Scoter has been Chief Executive Officer of eSolar, Inc., a producer of modular, scalable concentrating solar thermal power technology. He is also a Director of eSolar, Inc. From 2005 through 2010, he was Senior Vice President of Texas Instruments Incorporated, a global semiconductor company. During his 25 year career at Texas Instruments, he also served as General Manager of the Digital Light Processing (DLP®) Products Division and various Digital Signal Processor business units, manager of application specific integrated circuit (ASIC) product development and engineering, product engineer and technical sales engineer. Mr. Van Scoter holds a bachelor of science degree in mechanical engineering from the University of Vermont.

50


Name
  Age   Current Principal Occupation or Employment and Five-Year Employment History

Mario Calastri

    52  

Mr. Calastri has been Senior Vice President and Treasurer of Tyco Electronics since our separation from Tyco International in June 2007 and he served on the Tyco Electronics Board prior to the separation. He was Vice President and Assistant Treasurer of Tyco International between 2005 and June 2007. Prior to joining Tyco International, Mr. Calastri was Vice President, Finance and Planning for IBM Global Financing EMEA in 2004 and Assistant Treasurer of IBM Corporation from 1999 to 2003.

Alan C. Clarke

   
57
 

Mr. Clarke has been President, Network Solutions of Tyco Electronics since September 2006 and served as a Vice President of Tyco Electronics since 1999. Prior to that, Mr. Clarke worked for Raychem Corporation, which was acquired by Tyco International in 1999, for 17 years in various senior management positions.

Terrence R. Curtin

   
42
 

Mr. Curtin has been Executive Vice President and Chief Financial Officer of Tyco Electronics since October 2006 and he served on the Tyco Electronics Board prior to the separation. Mr. Curtin previously served as Vice President and Corporate Controller since 2001. Prior to joining Tyco Electronics, Mr. Curtin worked for Arthur Andersen LLP.

Cuong V. Do

   
44
 

Mr. Do has been Senior Vice President, Corporate Strategy and Business Development of Tyco Electronics since June 2009. Prior to that, he was Senior Vice President and Chief Strategy Officer at Lenovo, a global leader in personal computers, from December 2008. Previously, he was a director with McKinsey & Company from 1989 to 2008.

Joseph B. Donahue

   
52
 

Mr. Donahue has been President, Global Automotive Division, for Tyco Electronics since July 2008 and was Senior Vice President from August 2007 until then. From 2006 to August 2007, he was Group Vice President, Woodcoatings Division for Valspar Corporation, a manufacturer of commercial and industrial coating. Over the prior 16 years, Mr. Donahue held a variety of senior management roles at Tyco Electronics and AMP Incorporated, leading the North America automotive business from 2001 to 2006.

Charles P. Dougherty

   
48
 

Mr. Dougherty has been President, Communications & Industrial Solutions of Tyco Electronics since January 2010. From June 2009 to December 2009, he was President, Public Safety and Professional Communications at Harris Corporation, a communications and information technology company. Previously, Mr. Dougherty was President of the Wireless Systems business of Tyco Electronics from October 2006 to May 2009, when the business was sold to Harris Corporation. Prior to joining Tyco Electronics, Mr. Dougherty was at Motorola for 25 years where he last served as Corporate Vice President and General Manager, Voice and Data Solutions from July 2004 and previously held a variety of senior management positions.

51


Name
  Age   Current Principal Occupation or Employment and Five-Year Employment History

Jane A. Leipold

    49  

Ms. Leipold has been Senior Vice President, Global Human Resources since 2006 and was previously Vice President, Global Human Resources for Tyco Electronics since 2001. She has a total of 28 years of Tyco Electronics and AMP Incorporated experience and has held various human resources, purchasing and engineering positions.

Robert J. Ott

   
49
 

Mr. Ott has been Senior Vice President and Corporate Controller of Tyco Electronics since our separation from Tyco International in June 2007. Prior to that, he was Vice President, Corporate Audit of Tyco International from March 2003 to June 2007 and Vice President of Finance-Corporate Governance of Tyco International from August 2002 until March 2003. Prior to joining Tyco International, Mr. Ott was Chief Financial Officer of Multiplex, Inc. from 2001 to 2002 and Chief Financial Officer of SourceAlliance, Inc. from 2000 to 2001.

Jeffrey G. Rea

   
45
 

Mr. Rea joined Tyco Electronics in December 2008 and has been President of the Specialty Products Group since January 1, 2009. Prior to joining Tyco Electronics, Mr. Rea was Senior Vice President, JM Building Products group for Johns Mansville, a Berkshire Hathaway company, from 2002. Prior to 2002, Mr. Rea held various leadership positions with General Electric Company where he began his career in 1987.

Eric J. Resch

   
53
 

Mr. Resch has been Senior Vice President and Chief Tax Officer of Tyco Electronics since our separation from Tyco International in June 2007 and he served on the Tyco Electronics Board prior to the separation. He was Vice President, Tax Reporting of Tyco International from 2003 until June 2007. Prior to joining Tyco International, Mr. Resch was Director, Tax Reporting for United Technologies Corporation from 2001 to 2003.

Michael Robinson

   
53
 

Mr. Robinson has been Senior Vice President, Operations of Tyco Electronics since August 2007. Prior to that, he spent 27 years at United Technologies Corporation where he most recently was Vice President of Operations for the Residential and Light Commercial International business at Carrier Corporation.

Robert A. Scott

   
60
 

Mr. Scott has been Executive Vice President and General Counsel of Tyco Electronics since 2006 and prior to that was Senior Vice President, Corporate Planning for Tyco International from January 2006 and Vice President of Strategy and Business Planning for Engineered Products and Services from May 2004 to January 2006. He also served on the Tyco Electronics Board prior to our separation from Tyco International in June 2007. Prior to joining Tyco International, Mr. Scott was Senior Vice President and Chief of Staff of Motorola's Integrated Electronics sector during 2002 and 2003 and Motorola's Senior Vice President of Business Integration in 2001. Prior to joining Motorola, Mr. Scott was Senior Vice President, General Counsel and Corporate Secretary of General Instrument Corporation.

52


Name
  Age   Current Principal Occupation or Employment and Five-Year Employment History

Robert N. Shaddock

    52  

Mr. Shaddock has been Senior Vice President and Chief Technology Officer of Tyco Electronics since September 2008. Previously, he was Senior Vice President of the Consumer Products business at Motorola from August 2007 to August 2008 and prior to that he was Chief Technology Officer for Motorola's Mobile Devices business from January 2004 to August 2007.

Joan E. Wainwright

   
50
 

Ms. Wainwright has been Senior Vice President, Marketing and Communications at Tyco Electronics since February 2008, and she previously was Senior Vice President, Communications and Public Affairs since joining us in June 2006. Previously, she served as Vice President, Public Affairs and Vice President, Corporate Communications for Merck & Co., Inc. from June 2000 to June 2006. Ms. Wainwright also served as Deputy Commissioner of Communications for the U.S. Social Security Administration and in the communica- tions and public relations departments of the University Health System of New Jersey, the Children's Hospital of Philadelphia, the University of Delaware and Villanova University.


DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER

        The name, current principal occupation or employment and material occupations, positions, offices or employment for the past five years of each director and executive officer of Purchaser are set forth below. Unless otherwise indicated, each occupation set forth opposite an individual's name refers to employment with Purchaser. The business address of each director and officer is Tyco Electronics Minnesota, Inc., 1050 Westlakes Drive, Berwyn, Pennsylvania 19312. All directors and executive officers listed below are United States citizens. Directors are identified by an asterisk.

Name
  Age   Current Principal Occupation or Employment and Five-Year Employment History

Harold G. Barksdale*

   
45
 

Secretary since Purchaser was formed, Mr. Barksdale is Chief Corporate Counsel and Corporate Secretary of Tyco Electronics since the company's separation from Tyco International in 2007 and is responsible for federal securities and treasury compliance, internal corporate transactions and all corporate governance related to Tyco Electronics Ltd. and its subsidiaries. He is also responsible for all matters related to the Board of Directors. Prior to joining Tyco Electronics, Mr. Barksdale spent two years as Corporate Securities Counsel for Tyco International. Previously, he held corporate and securities positions with three other Fortune 500 companies as well as serving as a special counsel for the United States Securities and Exchange Commission.

Mario Calastri*

   
52
 

Vice President since Purchaser was formed, Mr. Calastri has been Senior Vice President and Treasurer of Tyco Electronics since its separation from Tyco International in June 2007 and he served on the Tyco Electronics Board prior to the separation. He was Vice President and Assistant Treasurer of Tyco International between 2005 and June 2007. Prior to joining Tyco International, Mr. Calastri was Vice President, Finance and Planning for IBM Global Financing EMEA in 2004 and Assistant Treasurer of IBM Corporation from 1999 to 2003.

53


Name
  Age   Current Principal Occupation or Employment and Five-Year Employment History

Terrence R. Curtin

    42  

Treasurer and Chief Financial Officer since Purchaser was formed, Mr. Curtin has been Executive Vice President and Chief Financial Officer of Tyco Electronics since October 2006 and he served on the Tyco Electronics Board prior to the separation. Mr. Curtin previously served as Vice President and Corporate Controller since 2001. Prior to joining Tyco Electronics, Mr. Curtin worked for Arthur Andersen LLP.

Thomas J. Lynch

   
55
 

President and Chief Executive Officer since Purchaser was formed, Mr. Lynch serves on Tyco Electronics' Board of Directors and has been Chief Executive Officer of Tyco Electronics since January 2006 and was previously President of Tyco Engineered Products and Services since joining Tyco International in September 2004. Prior to joining Tyco International, Mr. Lynch was at Motorola where he was Executive Vice President and President and Chief Executive Officer, Personal Communications Sector from August 2002 to September 2004; Executive Vice President and President, Integrated Electronic Systems Sector from January 2001 to August 2002; Senior Vice President and General Manager, Satellite & Broadcast Network Systems, Broadband Communications Sector from February 2000 to January 2001; and Senior Vice President and General Manager, Satellite & Broadcast Network Systems, General Instrument Corporation from May 1998 to February 2000. Mr. Lynch holds a bachelor of science degree in commerce from Rider University. Mr. Lynch is a Director of Thermo Fisher Scientific Inc.

Eric J. Resch*

   
53
 

Mr. Resch has been Senior Vice President and Chief Tax Officer of Tyco Electronics since its separation from Tyco International in June 2007 and he served on the Tyco Electronics Board prior to the separation. He was Vice President, Tax Reporting of Tyco International from 2003 until June 2007. Prior to joining Tyco International, Mr. Resch was Director, Tax Reporting for United Technologies Corporation from 2001 to 2003.

54


        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 to the Depositary at one of the addresses set forth below:

The Depositary for the Offer is:

Mellon Investor Services LLC

By Mail:

  By Overnight Courier:   By Hand:

Mellon Investor Services LLC

  Mellon Investor Services LLC   Mellon Investor Services LLC

Attn: Corporate Action Dept.,
P.O. Box 3301

  Attn: Corporate Actions Dept.,
27th Floor
  Attn: Corporate Actions Dept.,
27th Floor

South Hackensack, New Jersey 07606

  480 Washington Blvd.
Jersey City, New Jersey
07310
  480 Washington Blvd.
Jersey City, New Jersey
07310

 

By Facsimile:

   

  (For Eligible Institutions Only)    

  (201) 680-4626    

 

Confirm Facsimile Transmission:

   

  (By: Telephone Only)    

  (201) 680-4860    

        If you have questions or need additional copies of this Offer to Purchase and the Letter of Transmittal, you can call the Information Agent or the Dealer Manager at their respective addresses and telephone numbers set forth below. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer.

The Information Agent for the Offer is:

Innisfree M&A Incorporated

501 Madison Avenue
New York, New York 10022
(Call) Toll Free: (888) 750-5834

The Dealer Manager for the Offer is:

Barclays Capital Inc.

745 Seventh Avenue, 3rd Floor
New York, New York 10019
Attention: Equity Corporate Services
(Call) Toll Free: (888) 610-5877




QuickLinks

IMPORTANT
TABLE OF CONTENTS
SUMMARY TERM SHEET
INTRODUCTION
THE OFFER
Tyco Electronics Minnesota, Inc.
DIRECTORS AND EXECUTIVE OFFICERS OF TYCO ELECTRONICS
DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER
EX-99.(A)(2) 3 a2199448zex-99_a2.htm EXHIBIT 99.(A)(2)
QuickLinks -- Click here to rapidly navigate through this document


Exhibit (a)(2)

        LETTER OF TRANSMITTAL

To Tender Shares of Common Stock

(including the associated preferred stock purchase rights)

of

ADC Telecommunications, Inc.

Pursuant to the Offer to Purchase

Dated July 26, 2010

of

Tyco Electronics Minnesota, Inc.

An Indirect Wholly Owned Subsidiary of

Tyco Electronics Ltd.

 
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, AUGUST 23, 2010, UNLESS THE OFFER IS EXTENDED. 

The Depositary for the Offer is:

MELLON INVESTOR SERVICES LLC

By Mail:   By Overnight Courier:   By Hand:
BNY Mellon Shareowner Services
Attn: Corporate Action Dept.,
P.O. Box 3301
South Hackensack, New Jersey
07606
  BNY Mellon Shareowner Services
Attn: Corporate Actions Dept.,
27th Floor
480 Washington Blvd.
Jersey City, New Jersey 07310
  BNY Mellon Shareowner Services
Attn: Corporate Actions Dept.,
27th Floor
480 Washington Blvd.
Jersey City, New Jersey 07310

By Facsimile:
(For Eligible Institutions Only)
(201) 680-4626

Confirm Facsimile Transmission:
(By Telephone Only)
(201) 680-4860

        DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS TO A FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.

        THIS LETTER OF TRANSMITTAL MAY NOT BE USED TO TENDER SHARES HELD IN THE ADC TELECOMMUNICATIONS, INC. 401(K) PLAN. INSTEAD, YOU MUST USE THE SEPARATE INSTRUCTIONS IN THE "NOTICE TO PARTICIPANTS IN THE ADC TELECOMMUNICATIONS, INC. RETIREMENT SAVINGS PLAN" SENT TO PARTICIPANTS IN THAT PLAN.


 
   
   
   
   

 

DESCRIPTION OF SHARES TENDERED

 
Name(s) and Address(es) of Registered Holder(s)
(Please fill in, if blank, exactly as name(s) appear(s)
on Share Certificate(s))
 
Shares Tendered
(Attach additional list if necessary)

 
       

Certificate
Number(s)*
  Total Number of Shares
Represented by
Certificate(s)*
 
Number of
Shares
Tendered**
       
 
       
 
       
 
       
 
       
 
        Total Shares        

 
  *   Need not be completed by shareholders 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.

 

        THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES OF THE OFFER TO PURCHASE AND THIS LETTER OF TRANSMITTAL MAY BE MADE TO OR OBTAINED FROM THE INFORMATION AGENT OR THE DEALER MANAGER AT THEIR RESPECTIVE ADDRESSES OR TELEPHONE NUMBERS SET FORTH BELOW.

        If the certificate(s) representing Shares (as defined below) to be tendered have been mutilated, lost, stolen or destroyed, shareholders should contact ADC Telecommunications, Inc.'s transfer agent, Computershare Trust Company, N.A., immediately by calling (800) 929-6782. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing such certificate(s) have been followed. See Instruction 9.

        You must sign this Letter of Transmittal in the appropriate space provided below, with signature guarantee if required, and complete the substitute W-9 set forth below, if required.

        The Offer (as defined below) is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares in any jurisdiction in which the making of the Offer or acceptance thereof would not be in compliance with the laws of such jurisdiction.

        This Letter of Transmittal is to be used 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 "Book-Entry Transfer Facility") pursuant to the procedures set forth in Section 3 of the Offer to Purchase.

        Holders of outstanding Shares, whose certificates for such Shares are not immediately available or who cannot deliver such certificates and all other required documents to the Depositary at or prior to the Expiration Time (as defined below) or who cannot complete the procedure for book-entry transfer on a timely basis, must tender their Shares according to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. See Instruction 2. Delivery of documents to the Book-Entry Transfer Facility does not constitute delivery to the Depositary.

2



NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY

o
CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:

        Name of Tendering Institution    
   
 

        Account Number    
   
 

        Transaction Code Number    
   
 
o
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 Shareholder(s)    
   
 

        Date of Execution of Notice of Guaranteed Delivery       , 2010
   
 
   

        Name of Institution which Guaranteed Delivery    
   
 

        If delivery is by book-entry transfer:    

        Name of Tendering Institution    
   
 

        Account Number    
   
 

        Transaction Code Number    
   
 

3


Ladies and Gentlemen:

        The undersigned hereby tenders to Tyco Electronics Minnesota, Inc., a Minnesota corporation ("Purchaser") and an indirect wholly owned subsidiary of Tyco Electronics Ltd. ("Tyco Electronics"), a Swiss corporation, the above-described shares of common stock, par value $0.20 per share (including the associated preferred stock purchase rights, the "Shares"), of ADC Telecommunications, Inc., a Minnesota corporation ("ADC"), pursuant to Purchaser's offer to purchase all outstanding Shares at $12.75 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 July 26, 2010, receipt of which is hereby acknowledged, and in this Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"). The Offer expires at 12:00 Midnight, New York City time, on Monday, August 23, 2010, unless extended by Purchaser as described in the Offer to Purchase (as extended, the "Expiration Time"). Purchaser reserves the right to transfer or assign, in whole or from time to time in part, to one or more of its affiliates the right to purchase Shares tendered pursuant to the Offer, but any such transfer or assignment will not relieve Purchaser of its obligations under the Offer or prejudice your rights to receive payment for Shares validly tendered and accepted for payment.

        Upon the terms and subject to the conditions of the Offer 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, Purchaser 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 July 26, 2010) 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 (i) 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 the "Book-Entry Transfer Facility", together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of the Purchaser, (ii) present such Shares (and all such other Shares or securities) for transfer on the books of ADC and (iii) 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 Thomas Lynch, Terrence Curtin, Mario Calastri and Harold G. Barksdale, in their respective capacities as officers of Purchaser, 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 discretion deem proper, with respect to all of the Shares tendered hereby which have been accepted for payment by the Purchaser prior to the time of any vote or other action (and any and all other Shares or other securities issued or issuable in respect thereof on or after July 26, 2010), at any meeting of shareholders of ADC (whether annual or special and whether or not an adjourned meeting), by written consent 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 Purchaser 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 securities), 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 to be effective).

        The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered herein (and any and all other Shares or other securities issued or issuable in respect thereof on or after July 26, 2010) and that when the same are accepted for payment by Purchaser, Purchaser will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claims. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby (and all such other Shares or securities).

        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.

4


        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 Purchaser upon the terms and subject to the conditions of the Offer. Without limiting the foregoing, if the price to be paid in the Offer is amended in accordance with the terms of the Agreement and Plan of Merger dated as of July 12, 2010, as amended, among ADC, Tyco Electronics and Purchaser pursuant to which the Offer is being made, the price to be paid to the undersigned will be the amended price notwithstanding the fact that a different price is stated in this Letter of Transmittal.

        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 (and, in the case of Shares tendered by book-entry transfer, by credit to the account at the Book-Entry Transfer Facility). Similarly, unless otherwise indicated under "Special Delivery Instructions," please mail the check for the purchase price of any Shares purchased and 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 Purchaser has no obligation, pursuant to the "Special Payment Instructions", to transfer any Shares from the name of the registered holder(s) thereof if Purchaser does not accept for payment any of the Shares so tendered.

5



    SPECIAL PAYMENT INSTRUCTIONS
    (See Instructions 6, 7 and 8)

                To be completed ONLY if the check for the purchase price of Shares purchased (less the amount of any federal income and backup withholding tax required to be withheld) is to be issued in the name of someone other than the undersigned.

    Issue to:

Name    

(Please Print)

Address

 

  


 

 

 

(Zip Code)

 

 

  

Taxpayer Identification Number



    SPECIAL DELIVERY INSTRUCTIONS
    (See Instructions 6, 7 and 8)

                To be completed ONLY if the check for the purchase price of Shares purchased (less the amount of any federal income and backup withholding tax required to be withheld) is 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 to:

Name    

(Please Print)

Address

 

  


 

 

  

(Zip Code)

6



    SIGN HERE
    (Please complete Substitute Form W-9 below)

                (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 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.)

   
 
     
   
Signature(s) of Shareholder(s)

Dated       , 2010
   
 
   

Name(s)    



(Please Print)

Capacity (full title)    

Address    

(Zip Code)

Area Code and Telephone Number    

Guarantee of Signature(s)
(If required; see Instructions 1 and 5)
(For use by Eligible Institutions only.
Place medallion guarantee in space below)

Name of Firm    

Address    


 

 

  

(Zip Code)

Authorized Signature    

Name    

(Please Print)

Area Code and Telephone Number    

Dated       , 2010
   
 
   

7



 
   
PAYER'S NAME:    

 
   
    Part I Taxpayer Identification No.—For All Accounts    
   
 
   



SUBSTITUTE
FORM W-9
Department of the Treasury
Internal Revenue Service
Payer's Request for Taxpayer
Identification No.



 



Enter your taxpayer identification number in the appropriate box. For most individuals and sole proprietors, this is your social security number. For other entities, it is your employer identification number. If awaiting a TIN, write "Applied For" in the space at the right and complete the Certificate of Awaiting Taxpayer Identification Number below. If you do not have a number, see "How to Obtain a TIN" in the enclosed Guidelines

Note: If the account is in more than one name, see the chart in the enclosed
Guidelines to determine what number to enter.



 



                                                          
Social Security Number

OR

                                                          
Employer Identification Number



 



Part II—For Payees Exempt From Backup Withholding, see enclosed Guidelines.

 
Check appropriate box:
o Individual/Sole Proprietor        o Corporation        o Partnership        o Limited liability company.        Enter tax classification (D = disregarded entity, C = corporation, P = partnership) >              o Other (specify)                                     
o Exempt from Backup Withholding

Part III Certification—Under penalties of perjury, I certify that:
(1)   The number shown on this form is my correct taxpayer identification number or I am waiting for a number to be issued to me;
(2)   I am not subject to backup withholding either 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; and
(3)   I am a U.S. person (including a U.S. resident alien).

Certification Instructions—You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return.

SIGNATURE     

  DATE       
  , 2010

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE
"APPLIED FOR" IN PART I OF THIS SUBSTITUTE FORM W-9


CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

            I certify under penalties of perjury that a Taxpayer Identification Number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that, notwithstanding the information I provided in Part III of the Substitute Form W-9 (and the fact that I have completed this Certificate of Awaiting Taxpayer Identification Number), 28% of all payments made to me pursuant to this Offer to Purchase shall be retained until I provide a Taxpayer Identification Number to the Payor and that, if I do not provide my Taxpayer Identification Number within sixty (60) days, such retained amounts shall be remitted to the IRS as backup withholding.

Signature     

  Date       
  , 2010

NOTE:
FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 28% ON ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

8



INSTRUCTIONS

Forming Part of the Terms and Conditions of the Offer

1.
Guarantee of Signatures.

        Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a financial institution (including most banks, savings and loan associations and brokerage houses) that is a member of a recognized Medallion Program approved by The Securities Transfer Association, Inc., including the Securities Transfer Agents Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the New York Stock Exchange, Inc. Medallion Signature Program (MSP) or any other "eligible guarantor institution" (as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended) (each, an "Eligible Institution"). Signatures on this Letter of Transmittal need not be guaranteed (i) if this Letter of Transmittal is signed by the registered holder(s) of the Shares (which term, for purposes of this document, shall include any participant in the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Shares) tendered herewith and such holder(s) have not completed the box entitled "Special Payment Instructions" on this Letter of Transmittal or (ii) if such Shares are tendered for the account of an Eligible Institution. 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 is utilized, if 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 the Book-Entry Transfer Facility of all Shares delivered electronically, as well as a properly completed and duly executed Letter of Transmittal, together with any required signature guarantees (or a manually signed facsimile thereof or, in the case of a book-entry transfer, an Agent's Message) and any other documents required by this Letter of Transmittal, 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 Time.

        Shareholders whose certificates for Shares are not immediately available or shareholders who cannot deliver their certificates and all other required documents to the Depositary or who cannot comply with the procedures for book-entry transfer by the Expiration Time may tender their Shares pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. Under the guaranteed delivery procedure:

              (i)  such tender must be made by or through an Eligible Institution;

             (ii)  a properly completed and duly executed Notice of Guaranteed Delivery substantially in the form provided by Purchaser with the Offer to Purchase must be received by the Depositary by the Expiration Time; and

            (iii)  the certificates for all physically delivered Shares, or a confirmation of a book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility of all Shares delivered electronically, as well as a properly completed and duly executed Letter of Transmittal with any required signature guarantee (or a manually signed facsimile thereof or, in the case of a book-entry delivery, an Agent's Message) and any other documents required by this Letter of Transmittal, must be received by the Depositary within three NASDAQ Stock Market trading days after the date of execution of such Notice of Guaranteed Delivery, all as provided in Section 3 of the Offer to Purchase.

        The method of delivery of Shares, this Letter of Transmittal and all other required documents is at the election and sole risk of the tendering shareholder. Shares will be deemed delivered only when actually received by the Depositary (including, in the case of a book-entry by Book-Entry Confirmation). If certificates for Shares are sent by mail, we recommend registered mail with return receipt requested, properly insured, in time to be received on or prior to the Expiration Time. In all cases, sufficient time should be allowed to ensure timely delivery.

        No alternative, conditional or contingent tenders will be accepted, and no fractional Shares will be purchased. By executing this Letter of Transmittal (or a manually signed facsimile thereof), the tendering shareholder waives any right to receive any notice of the acceptance for payment of the Shares.

9


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 signed schedule attached hereto.

4.
Partial Tenders (not applicable to shareholders who tender by book-entry transfer).

        If fewer than all of 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 issued and 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 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 accepted for payment 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, certificates 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 Purchaser of the authority of such person so to act must be submitted.

6.
Stock Transfer Taxes.

        Purchaser 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 accepted for payment are to be returned in the name of, any person other than the registered holder(s), or if a transfer tax is imposed for any reason other than the sale or transfer of Shares to the Purchaser pursuant to the Offer, then the amount of any stock transfer taxes (whether imposed on the registered holder(s), such other person or otherwise) will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted herewith.

7.
Special Payment and Delivery Instructions.

        If the check for the purchase price of any Shares purchased is to be issued in the name of a person other than the person(s) signing this Letter of Transmittal or if the check is 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.

10


8.
Substitute Form W-9.

        Under the U.S. federal income tax laws, unless certain certification requirements are met, the Depositary generally will be required to withhold at the applicable backup withholding rate (currently 28%) from any payments made to certain shareholders pursuant to the Offer. In order to avoid such backup withholding, each tendering shareholder, and, if applicable, each other payee, must provide the Depositary with such shareholder's or payee's correct taxpayer identification number and certify that such shareholder or payee is not subject to such backup withholding by completing the Substitute Form W-9 set forth above. In general, if a shareholder or payee is an individual, the taxpayer identification number is the social security number of such individual. If the shareholder or payee does not provide the Depositary with its correct taxpayer identification number, the shareholder or payee may be subject to a $50 penalty imposed by the Internal Revenue Service. Certain shareholders or payees (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order to satisfy the Depositary that a foreign individual qualifies as an exempt recipient, such shareholder or payee must submit to the Depositary a properly completed Internal Revenue Service Form W-8 (which the Depositary will provide upon request), signed under penalties of perjury, attesting to that individual's exempt status. Such Form W-8 can be obtained from the Depositary or the Internal Revenue Service (www.irs.gov/formspubs/index.html). For further information concerning backup withholding and instructions for completing the Substitute Form W-9 (including how to obtain a taxpayer identification number if you do not have one and how to complete the Substitute Form W-9 if Shares are held in more than one name), consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.

        Failure to complete the Substitute Form W-9 or Form W-8 will not, by itself, cause Shares to be deemed invalidly tendered, but may require the Depositary to withhold 28% of the amount of any payments made pursuant to the Offer. Backup withholding is not an additional U.S. federal income tax. Rather, the U.S. federal income tax liability of a person subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained provided that the required information is furnished to the Internal Revenue Service. Failure to complete and return the Substitute Form W-9 or Form W-8 may result in backup withholding of 28% 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.

9.
Mutilated, Lost, Stolen or Destroyed Certificates.

        If any certificate(s) representing Shares to be tendered have been mutilated, lost, stolen or destroyed, shareholders should contact ADC's transfer agent, Computershare Trust Company, N.A., immediately by calling (800) 929-6782. With respect to Shares represented by certificates, the shareholder will then be instructed as to the steps that must be taken in order to replace the certificate(s). This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, mutilated, destroyed or stolen certificate(s) have been followed.

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 Manager at their respective addresses or telephone numbers set forth below.

11.
Waiver of Conditions.

        Purchaser reserves the right to waive any of the specified conditions of the Offer in the case of any Shares tendered.

        IMPORTANT: This Letter of Transmittal (or a manually signed facsimile thereof) together with any 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 on or prior to the Expiration Time and either certificates for tendered Shares must be received by the Depositary or Shares must be delivered pursuant to the procedures for book-entry transfer, in each case on or prior to the Expiration Time, or the tendering shareholder must comply with the procedures for guaranteed delivery.

11



The Information Agent for the Offer is:

Innisfree M&A Incorporated

501 Madison Avenue
New York, New York 10022
Banks and brokers call collect: (212) 750-5833
All others call Toll-Free: (888) 750-5834

The Dealer Manager for the Offer is:

Barclays Capital Inc.

745 Seventh Avenue, 3rd Floor
New York, New York 10019
Attention: Equity Corporate Services
Call Toll-Free: (888) 610-5877


GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9

Guidelines for Determining the Proper Identification Number to Give the Payer—Social Security numbers have nine digits separated by two hyphens: i.e., 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e., 00-0000000. The table below will help determine the number to give the payer.

 
For this type of account:
  Give the
SOCIAL SECURITY
number of:

 
1.   An individual   The individual

2.

 

Two or more individuals (joint account)

 

The actual owner of the account or, if combined funds, the first individual on the account(1)

3.

 

Custodian account of a minor (Uniform Gift to Minors Act)

 

The minor(2)

4.

 

a.  The usual revocable savings trust (grantor is also trustee)

 

The grantor-trustee(1)

 

b.  So-called trust account that is not a legal or valid trust under state law

 

The actual owner(1)


5.

 

Sole proprietorship or single-owner LLC

 

The owner(3)
 
For this type of account:
  Give the EMPLOYER
IDENTIFICATION
number of:

 

6.

 

Disregarded entity not owned by an individual

 

The owner

7.

 

A valid trust, estate or pension trust

 

The legal entity(4)

8.

 

Corporate or LLC electing corporate status on Form 8832

 

The corporation

9.

 

Association, club, religious, charitable, educational or other tax-exempt organization

 

The organization

10.

 

Partnership or multi-member LLC

 

The partnership

11.

 

A broker or registered nominee

 

The broker or nominee

12.

 

Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district or prison) that receives agricultural program payments

 

The public entity

(1)
List first and circle the name of the person whose number you furnish. If only one person on a joint account has an SSN, that person's number must be furnished.

(2)
Circle the minor's name and furnish the minor's SSN.

(3)
You must show your individual name and you may also enter your business or "doing business as" name on the second name line. You may use either your SSN or EIN (if you have one). If you are a sole proprietor, the IRS encourages you to use your SSN.

(4)
List first and circle the name of the legal trust, estate or pension trust. (Do not furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)

Note: If no name is circled when there is more than one name listed, 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 ("IRS") and apply for a number. These forms can also be obtained from the IRS's website (http://irs.gov/formspubs/index.html).

Payees Exempt from Backup Withholding

Payees specifically exempted from backup withholding on all payments include the following:

    1.
    An organization exempt from tax under section 501(a) of the Internal Revenue Code of 1986, as amended (the "Code"), an individual retirement plan or a custodial account under section 403(b)(7) if the account satisfies the requirements of section 401(f)(2).

    2.
    The United States or any of its agencies or instrumentalities.

    3.
    A state, the District of Columbia, a possession of the United States or any of their subdivisions or instrumentalities.

    4.
    A foreign government, a political subdivision of a foreign government or any of their agencies or instrumentalities.

    5.
    An international organization or any of their agencies or instrumentalities.

Other payees that may be exempt from backup withholding include:

    6.
    A corporation.

    7.
    A foreign central bank of issue.

    8.
    A dealer in securities or commodities required to register in the United States, the District of Columbia or a possession of the United States.

    9.
    A futures commission merchant registered with the Commodity Futures Trading Commission.

    10.
    A real estate investment trust.

    11.
    An entity registered at all times during the tax year under the Investment Company Act of 1940.

    12.
    A common trust fund operated by a bank under section 584(a) of the Code.

    13.
    A financial institution.

    14.
    A middleman known in the investment community as a nominee or custodian.

    15.
    A trust exempt from tax under section 664 or described in section 4947 of the Code.

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 of the Code.

    Payments to partnerships not engaged in a trade or business in the United States and that have at least one non-resident alien partner.

    Payments of patronage dividends not paid in money.

    Payments made by certain foreign organizations.

The chart below shows two of the types of payments that may be exempt from backup withholding. The chart applies to the exempt recipients listed above, 1 through 15.


 

IF the payment is for ...
  THEN the payment is exempt for ...

 
Interest and dividend payments   All exempt recipients except for 9


 

Broker transactions

 

Exempt recipients 1 through 13; also, a person who regularly acts as a broker and who is registered under the Investment Advisers Act of 1940


 

Exempt payees should file the Substitute Form W-9 to avoid possible erroneous backup withholding. FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM IN PART II, SIGN AND DATE THE FORM, AND RETURN IT TO THE PAYER. Foreign payees who are not subject to backup withholding should complete the appropriate IRS Form W-8 and return it to the payer.

Privacy Act Notice

Section 6109 of the Code requires most recipients of dividend, interest or other payments to give their correct taxpayer identification numbers to payers who must report the payments to the IRS. The IRS uses the numbers for identification purposes and to help verify the accuracy of tax returns. It may also provide this information to the Department of Justice for civil and criminal litigation, and to cities, states, the District of Columbia and U.S. possessions to carry out their tax laws. It may also disclose this information to other countries under a tax treaty, to federal and state agencies to enforce federal nontax criminal laws, and to federal law enforcement and intelligence agencies to combat terrorism.

Payees must provide payers with their taxpayer identification numbers whether or not they are required to file tax returns. Payers must generally withhold 28% of taxable interest, dividend and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply.

Penalties

(1) Penalty for Failure to Furnish Taxpayer Identification Number—If you fail to furnish your correct taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.

(2) Civil Penalty for False Information With Respect to Withholding—If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500.

(3) Criminal Penalty for Falsifying Information—Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE.




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NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY
INSTRUCTIONS Forming Part of the Terms and Conditions of the Offer
The Information Agent for the Offer is: Innisfree M&A Incorporated 501 Madison Avenue New York, New York 10022 Banks and brokers call collect: (212) 750-5833 All others call Toll-Free: (888) 750-5834 The Dealer Manager for the Offer is: Barclays Capital Inc. 745 Seventh Avenue, 3rd Floor New York, New York 10019 Attention: Equity Corporate Services Call Toll-Free: (888) 610-5877
EX-99.(A)(3) 4 a2199448zex-99_a3.htm EXHIBIT 99.(A)(3)

Exhibit (a)(3)

NOTICE OF GUARANTEED DELIVERY

To Tender Shares of Common Stock
(including the associated preferred stock purchase rights)
of

ADC Telecommunications, Inc.

Pursuant to the Offer to Purchase
Dated July 26, 2010
of

Tyco Electronics Minnesota, Inc.

An Indirect Wholly Owned Subsidiary of

Tyco Electronics Ltd.

        This form, or a substantially equivalent form, must be used to accept the Offer (as defined below) if the certificates for shares of common stock, par value $0.20 per share, of ADC Telecommunications, Inc. (including the associated preferred stock purchase rights) and any other documents required by the Letter of Transmittal cannot be delivered to the Depositary by Monday, August 23, 2010 (or if the Offer is extended to a later date, such later date). Such form may be delivered by hand, facsimile transmission or mail to the Depositary. See Section 3 of the Offer to Purchase.

        The Depositary for the Offer is:

        MELLON INVESTOR SERVICES, LLC

By Mail:   By Overnight Courier:   By Hand:
BNY Mellon Shareowner Services
Attn: Corporate Action Dept.,
P.O. Box 3301
South Hackensack, New Jersey 07606
  BNY Mellon Shareowner Services
Attn: Corporate Actions Dept.,
27th Floor
480 Washington Blvd.
Jersey City, New Jersey 07310
  BNY Mellon Shareowner Services
Attn: Corporate Actions Dept.,
27th Floor
480 Washington Blvd.
Jersey City, New Jersey 07310

 

 

By Facsimile:
(For Eligible Institutions Only)
(201) 680-4626

 

 

 

 

Confirm Facsimile Transmission:
(By Telephone Only)
(201) 680-4860

 

 

        DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OR FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE, WILL 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. Do not send share certificates with this notice. Share certificates should be sent with your Letter of Transmittal.


Ladies and Gentlemen:

        The undersigned hereby tenders to Tyco Electronics Minnesota, Inc., a Minnesota corporation ("Purchaser") and an indirect wholly owned subsidiary of Tyco Electronics Ltd., a Swiss corporation, upon the terms and subject to the conditions set forth in the Offer to Purchase dated July 26, 2010 and the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"), receipt of which is hereby acknowledged,                        shares of Common Stock, par value $0.20 per share (together with the associated preferred stock purchase rights, the "Shares"), of ADC Telecommunications, Inc., a Minnesota corporation, pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.

Certificate Numbers (if available)   SIGN HERE


 

 


Signature(s)


 

 


(Name(s)) (Please Print)

 

 


(Addresses)

If delivery will be by book-entry transfer:

 

 

Name of Tendering Institution

 



(Zip Code)


 

 

 

 

 


(Area Code and Telephone Number)

Account Number                                                          

 

 

2


GUARANTEE
(Not to be used for signature guarantee)

        The undersigned, a firm which is a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of a recognized Medallion Program approved by The Securities Transfer Association Inc., including the Securities Transfer Agents Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the New York Stock Exchange Inc. Medallion Signature Program (MSP) or any other "Eligible Guarantor Institution" (as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended), guarantees (i) that the above named person(s) "own(s)" the Shares tendered hereby within the meaning of Rule 14e-4 under the Securities Exchange Act of 1934, (ii) that such tender of Shares complies with Rule 14e-4 and (iii) to deliver to the Depositary the Shares tendered hereby, together with a properly completed and duly executed Letter(s) of Transmittal (or facsimile(s) thereof) and certificates for the Shares to be tendered or an Agent's Message (as defined in the Offer to Purchase) in the case of a book-entry delivery, and any other required documents, all within three NASDAQ Stock Market trading days of the date hereof.

   
(Name of Firm)
   

 

 


(Address)

 

 

 

 


(Zip Code)

 

 

 

 


(Authorized Signature)

 

 

 

 


(Name)

 

 

 

 


(Area Code and Telephone Number)

 

 

Dated:                                    , 2010.

        DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE.
CERTIFICATES FOR SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.

3



EX-99.(A)(4) 5 a2199448zex-99_a4.htm EXHIBIT 99.(A)(4)
QuickLinks -- Click here to rapidly navigate through this document

Exhibit (a)(4)


Offer to Purchase for Cash

All Outstanding Shares of Common Stock
(including the associated preferred stock purchase rights)
of

        ADC Telecommunications, Inc.
at
$12.75 Net Per Share
by
Tyco Electronics Minnesota, Inc.
An Indirect Wholly Owned Subsidiary of
Tyco Electronics Ltd.


THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, AUGUST 23, 2010, UNLESS THE OFFER IS EXTENDED.


                                  July 26, 2010

To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:

        We have been engaged by Tyco Electronics Minnesota, Inc., a Minnesota corporation ("Purchaser") and an indirect wholly owned subsidiary of Tyco Electronics Ltd., a Swiss Corporation ("Tyco Electronics"), to act as Dealer Manager in connection with Purchaser's offer to purchase all outstanding shares of common stock, par value $0.20 per share (together with the associated preferred stock purchase rights, the "Shares") of ADC Telecommunications, Inc., a Minnesota corporation ("ADC"), at a purchase price of $12.75 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 July 26, 2010 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer") enclosed herewith.

        Please furnish copies of the enclosed materials to those of your clients for whose accounts you hold Shares registered in your name or in the name of your nominee.

        Enclosed herewith for your information and forwarding to your clients are copies of the following documents:

    1.
    Offer to Purchase dated July 26, 2010.

    2.
    Letter of Transmittal, for your use in accepting the Offer and tendering Shares and for the information of your clients. Facsimile copies of the Letter of Transmittal may be used to tender Shares.

    3.
    Notice of Guaranteed Delivery to be used to accept the Offer if certificates for Shares and all other required documents cannot be delivered to Mellon Investor Services LLC (the "Depositary"), or if the procedures for book-entry transfer cannot be completed, by the Expiration Date.

    4.
    A letter that may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Offer.

    5.
    The letter to shareholders of ADC from Robert E. Switz, Chairman, President and Chief Executive Officer, accompanied by ADC's Solicitation/Recommendation Statement on Schedule 14D-9.

    6.
    Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 providing information relating to federal income tax backup withholding.

    7.
    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 EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, AUGUST 23, 2010, UNLESS THE OFFER IS EXTENDED.

        The Offer is being made pursuant to an Agreement and Plan of Merger dated as of July 12, 2010, as amended (the "Merger Agreement"), among ADC, Tyco Electronics and Purchaser. The Merger Agreement provides, among other things, that as soon as possible after consummation of the Offer, Purchaser will merge with and into ADC (the "Merger"), with ADC continuing as the surviving corporation and an indirect wholly owned subsidiary of Tyco Electronics. At the effective time of the Merger, each outstanding Share (other than any Shares in respect of which dissenters' rights are validly exercised under the Minnesota Business Corporation Act (the "MBCA") and any Shares held by ADC, Tyco Electronics or any subsidiary of ADC or Tyco Electronics (including Purchaser)) will be converted into the right to receive the price per Share paid in the Offer, without interest. No dissenters' rights are available to holders of Shares in connection with the Offer. The Merger Agreement is more fully described in Section 13 of the Offer to Purchase.

        The Board of Directors of ADC (the "ADC Board") has unanimously (i) determined that the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Offer and the Merger, are advisable and in the best interests of ADC's shareholders and (ii) approved and adopted the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Offer and the Merger, in accordance with the requirements of the MBCA. The ADC Board recommends that ADC's shareholders accept the Offer and tender their Shares in the Offer. ADC has been advised that all of its directors and executive officers intend to tender all of their Shares pursuant to the Offer.

        The Offer is conditioned upon, among other things, (i) there being validly tendered in accordance with the terms of the Offer and not withdrawn, prior to the expiration of the Offer, a number of Shares that, together with the Shares then-owned by Tyco Electronics and/or Purchaser, represents a majority of the total number of Shares outstanding on a fully diluted basis and (ii) expiration or termination of the applicable waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, and the regulations promulgated thereunder and Article 4(5) of the European Union Council Regulation (EEC) No. 139/2004. The Offer is also subject to the other conditions described in the Offer to Purchase. There is no financing condition to the Offer.

        Purchaser will not pay any fees or commissions to any broker, dealer or other person (other than Barclays Capital Inc. (the "Dealer Manager"), Innisfree M&A Incorporated (the "Information Agent") and the Depositary as described in the Offer to Purchase) for soliciting tenders of Shares pursuant to the Offer. Purchaser will, however, upon request, reimburse brokers, dealers, commercial banks and trust companies for customary mailing and handling costs incurred by them in forwarding the enclosed materials to their customers.

        Purchaser will pay all stock transfer taxes applicable to its purchase of Shares pursuant to the Offer, subject to Instruction 6 of the Letter of Transmittal.

        In order to take advantage of the Offer, a duly executed and properly completed Letter of Transmittal (or a manually signed facsimile thereof), or an Agent's Message (as defined in the Offer to Purchase) in connection with a book-entry transfer of Shares, and any other required documents, should be sent to the Depositary, and certificates representing the tendered Shares should be delivered or such Shares should be tendered by book-entry transfer, all in accordance with the instructions contained in the Letter of Transmittal and in the Offer to Purchase.

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        If holders of Shares wish to tender, but it is impracticable for them to forward their certificates or other required documents or to complete the procedures for delivery by book-entry transfer prior to the expiration of the Offer, a tender may be effected by following the guaranteed delivery procedures described in Section 3 of the Offer to Purchase.

        Any inquiries you may have with respect to the Offer should be addressed to, and additional copies of the enclosed materials may be obtained from, the Information Agent or the undersigned at the addresses and telephone numbers set forth on the back cover of the Offer to Purchase.

 
   

  Very truly yours,

 

BARCLAYS CAPITAL INC.

        NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU THE AGENT OF TYCO ELECTRONICS, PURCHASER, THE DEALER MANAGER, THE INFORMATION AGENT OR THE DEPOSITARY, OR ANY AFFILIATE OF ANY OF THEM OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.

3




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Offer to Purchase for Cash
All Outstanding Shares of Common Stock (including the associated preferred stock purchase rights) of
EX-99.(A)(5) 6 a2199448zex-99_a5.htm EXHIBIT 99.(A)(5)

Exhibit (a)(5)

Offer to Purchase for Cash

All Outstanding Shares of Common Stock
(including the associated preferred stock purchase rights)
of

ADC Telecommunications, Inc.
at
$12.75 Net Per Share
Pursuant to the Offer to Purchase
Dated July 26, 2010
by
Tyco Electronics Minnesota, Inc.
An Indirect Wholly Owned Subsidiary of
Tyco Electronics Ltd.


THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, AUGUST 23, 2010, UNLESS THE OFFER IS EXTENDED.


To Our Clients:

        Enclosed for your consideration are the Offer to Purchase dated July 26, 2010 (the "Offer to Purchase") and the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer") in connection with the offer by Tyco Electronics Minnesota, Inc., a Minnesota corporation ("Purchaser") and an indirect wholly owned subsidiary of Tyco Electronics Ltd., a Swiss corporation ("Tyco Electronics") to purchase for cash all outstanding shares of common stock, par value $0.20 per share (together with the associated preferred stock purchase rights, the "Shares"), of ADC Telecommunications, Inc., a Minnesota corporation ("ADC"). Also enclosed is a letter to shareholders of ADC from Robert E. Switz, Chairman, President and Chief Executive Officer, accompanied by ADC's Solicitation/Recommendation Statement on Schedule 14D-9.

        We are the holder of record of Shares held for your account. A tender of such Shares can be made only by us as the holder of record and pursuant to your instructions. The enclosed Letter of Transmittal is furnished to you for your information only and cannot be used by you to tender Shares held by us for your account.

        We request instructions as to whether you wish us to tender any or all of the Shares held by us for your account, upon the terms and subject to the conditions set forth in the Offer to Purchase and the Letter of Transmittal.

        Your attention is directed to the following:

    1.
    The Offer price is $12.75 per Share, net to you in cash, without interest.

    2.
    The Offer is being made for all outstanding Shares.

    3.
    The Offer is being made pursuant to an Agreement and Plan of Merger dated as of July 12, 2010, as amended (the "Merger Agreement"), among ADC, Tyco Electronics and Purchaser. The Merger Agreement provides, among other things, that as soon as possible after consummation of the Offer, Purchaser will merge with and into ADC (the "Merger"), with ADC continuing as the surviving corporation and an indirect wholly owned subsidiary of Tyco Electronics. At the effective time of the Merger, each outstanding Share (other than any Shares in respect of which dissenters' rights are validly exercised under the Minnesota Business Corporation Act (the "MBCA") and any Shares held by ADC, Tyco Electronics or any subsidiary of ADC or Tyco Electronics (including Purchaser)) will be converted into the

      right to receive the price per Share paid in the Offer, without interest. No dissenters' rights are available to holders of Shares in connection with the Offer. The Merger Agreement is more fully described in Section 13 of the Offer to Purchase.

    4.
    The Board of Directors of ADC (the "ADC Board") has unanimously (i) determined that the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Offer and the Merger, are advisable and in the best interests of ADC's shareholders and (ii) approved and adopted the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Offer and the Merger, in accordance with the requirements of the MBCA. The ADC Board recommends that ADC's shareholders accept the Offer and tender their Shares in the Offer. ADC has been advised that all of its directors and executive officers intend to tender all of their Shares pursuant to the Offer.

    5.
    The Offer and withdrawal rights expire at 12:00 Midnight, New York City time, on Monday, August 23, 2010, unless the Offer is extended by Purchaser (as extended, the "Expiration Date").

    6.
    The Offer is conditioned upon, among other things, (i) there being validly tendered in accordance with the terms of the Offer and not withdrawn, prior to the expiration of the Offer, a number of Shares that, together with the Shares then-owned by Tyco Electronics and/or Purchaser, represents a majority of the total number of Shares outstanding on a fully diluted basis and (ii) expiration or termination of the applicable waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, and the regulations promulgated thereunder and Article 4(5) of the European Union Council Regulation (EEC) No. 139/2004. The Offer is also subject to the other conditions described in the Offer to Purchase. There is no financing condition to the Offer.

    7.
    Any stock transfer taxes applicable to the sale of Shares to the Purchaser pursuant to the Offer will be paid by the Purchaser, except as otherwise set forth in Instruction 6 of the Letter of Transmittal. However, federal income tax backup withholding at a current rate of 28% may be required, unless the required taxpayer identification information is provided and certain certification requirements are met, or unless an exemption is established. See Instruction 8 of the Letter of Transmittal.

        If you wish to have us tender any or all of your Shares, please complete, sign, detach and return the instruction form below. An envelope to return your instructions to us is enclosed. If you authorize tender of your Shares, all such Shares will be tendered unless otherwise specified on the instruction form. Your instructions should be forwarded to us in ample time to permit us to submit a tender on your behalf by the Expiration Date.

        The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares in any jurisdiction in which the making of the Offer or acceptance thereof would not be in compliance with the laws of such jurisdiction.

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Instructions Form with Respect to
Offer to Purchase for Cash

All Outstanding Shares of Common Stock
(including the associated preferred stock purchase rights)
of
ADC Telecommunications, Inc.
at
$12.75 Net Per Share
Pursuant to the Offer to Purchase Dated July 26, 2010
by
Tyco Electronics Minnesota, Inc.
An Indirect Wholly Owned Subsidiary of
Tyco Electronics Ltd.

        The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase dated July 26, 2010 (the "Offer to Purchase"), and the related Letter of Transmittal, in connection with the offer by Tyco Electronics Minnesota, Inc., a Minnesota corporation and an indirect wholly owned subsidiary of Tyco Electronics Ltd., a Swiss corporation, to purchase for cash all outstanding shares of common stock, par value $0.20 per share (together with the associated preferred stock purchase rights, the "Shares"), of ADC Telecommunications, Inc., a Minnesota corporation, at a purchase price of $12.75 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase and the related Letter of Transmittal.

        This will instruct you to tender the number of Shares indicated below (or if no number is indicated below, all Shares) held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related Letter of Transmittal furnished to the undersigned.

Number of Shares to be Tendered:   SIGN HERE



 
Shares*
 


Signature(s)

Dated
 


 
, 2010
 


Name(s)
           


Address(es)
           


(Zip Code)
           


Area Code and Telephone Number
           


Taxpayer Identification or Social Security Number

*
Unless otherwise indicated, it will be assumed that all Shares held for the undersigned's account are to be tendered.


EX-99.(A)(6) 7 a2199448zex-99_a6.htm EXHIBIT 99.(A)(6)
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Exhibit (a)(6)

This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares (as defined below). The Offer (as defined below) is made solely by the Offer to Purchase dated July 26, 2010 and the related Letter of Transmittal and any amendments or supplements thereto. The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares in any jurisdiction in which the making of the Offer or acceptance thereof would not be in compliance with the laws of such jurisdiction. In those jurisdictions where the applicable laws require that the Offer be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of Purchaser (as defined below) by Barclays Capital Inc. or one or more registered brokers or dealers licensed under the laws of such jurisdiction.

Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(including the associated preferred stock purchase rights)
of
ADC Telecommunications, Inc.
at
$12.75 Net Per Share
Pursuant to the Offer to Purchase Dated July 26, 2010
by
Tyco Electronics Minnesota, Inc.
An Indirect Wholly Owned Subsidiary of
Tyco Electronics Ltd.

        Tyco Electronics Minnesota, Inc., a Minnesota corporation ("Purchaser") and an indirect wholly owned subsidiary of Tyco Electronics Ltd., a Swiss corporation ("Tyco Electronics"), is offering to purchase all outstanding shares of common stock, par value $0.20 per share (together with the associated preferred stock purchase rights, the "Shares"), of ADC Telecommunications, Inc., a Minnesota corporation ("ADC"), at a purchase price of $12.75 per Share, net to the seller in cash, without interest and less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase dated July 26, 2010 (the "Offer to Purchase") and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"). Tendering shareholders whose Shares are registered in their names and who tender directly to Mellon Investor Services LLC (the "Depositary") will not be charged brokerage fees or commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase of Shares pursuant to the Offer. Tendering shareholders whose Shares are registered in the name of their broker, bank or other nominee should consult such nominee to determine if any fees may apply. Following the consummation of the Offer, and subject to the conditions described in the Offer to Purchase, Purchaser intends to effect the Merger described below.


THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, AUGUST 23, 2010, UNLESS THE OFFER IS EXTENDED.


        The Offer is conditioned upon, among other things, (i) there being validly tendered in accordance with the terms of the Offer and not withdrawn, prior to the expiration of the Offer, a number of Shares that, together with the Shares then-owned by Tyco Electronics and/or Purchaser, represents a majority of the total number of Shares outstanding on a fully diluted basis (the "Minimum Condition") and (ii) expiration or termination of the applicable waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, and the regulations promulgated thereunder and Article 4(5) of the European Union Council Regulation (EEC) No. 139/2004. The Offer is also subject to the other conditions described in the Offer to Purchase. There is no financing condition to the Offer.


        The Offer is being made pursuant to an Agreement and Plan of Merger dated as of July 12, 2010, as amended (the "Merger Agreement"), among ADC, Tyco Electronics and Purchaser. The Merger Agreement provides, among other things, that as soon as possible after consummation of the Offer, Purchaser will merge with and into ADC (the "Merger"), with ADC continuing as the surviving corporation and an indirect wholly owned subsidiary of Tyco Electronics. At the effective time of the Merger, each outstanding Share (other than any Shares in respect of which dissenters' rights are validly exercised under the Minnesota Business Corporation Act (the "MBCA") and any Shares held by ADC, Tyco Electronics or any subsidiary of ADC or Tyco Electronics (including Purchaser)) will be converted into the right to receive the price per Share paid in the Offer, without interest. No dissenters' rights are available to holders of Shares in connection with the Offer. The Merger Agreement is more fully described in Section 13 of the Offer to Purchase.

        The Board of Directors of ADC (the "ADC Board") has unanimously (i) determined that the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Offer and the Merger, are advisable and in the best interests of ADC's shareholders and (ii) approved and adopted the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Offer and the Merger, in accordance with the requirements of the MBCA. The ADC Board recommends that ADC's shareholders accept the Offer and tender their Shares in the Offer. ADC has been advised that all of its directors and executive officers intend to tender all of their Shares pursuant to 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), Purchaser will purchase, promptly after the expiration of the Offer, all Shares validly tendered and not withdrawn prior to 12:00 Midnight, New York City time, on Monday, August 23, 2010 (or any later time to which Purchaser, subject to the terms of the Merger Agreement, extends the period of time during which the Offer is open (the "Expiration Time")). If any condition to the Offer is not satisfied or waived at any scheduled Expiration Time, Purchaser must extend the Expiration Time for an additional period or periods until all of the conditions are satisfied or waived, but not beyond March 14, 2011; provided, however, that if all conditions of the Offer other than the Minimum Condition (and any conditions that are by their nature to be satisfied at the expiration of the Offer) have been satisfied or waived, Purchaser has the right, but not the obligation, to terminate the Offer 60 days after such conditions have been satisfied or waived. Notwithstanding the foregoing, under the terms of the Merger Agreement, Purchaser may not terminate or withdraw the Offer other than in connection with the termination of the Merger Agreement or as set forth in the immediately preceding proviso. During any extension of the Offer, all Shares previously tendered and not withdrawn will remain subject to the Offer and subject to your right to withdraw such Shares. In addition, pursuant to the terms of the Merger Agreement, Purchaser will extend the Offer for any period required by any rule, regulation, interpretation or position of the Securities and Exchange Commission or its staff or the NASDAQ Stock Market applicable to the Offer or for any period otherwise required by applicable law.

        In accordance with Rule 14d-11 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), subject to the restrictions in the Merger Agreement, Purchaser expressly reserves the right to provide, at its option, a subsequent offering period following the Expiration Time (a "Subsequent Offering Period"). If provided, a Subsequent Offering Period will be an additional period of time, following the expiration of the Offer and the purchase of Shares in the Offer, during which shareholders may tender any Shares not previously tendered in the Offer. If a Subsequent Offering Period is made available, (i) it will remain open for such period or periods as Purchaser will specify of at least three business days, (ii) Shares may be tendered in the same manner as was applicable to the Offer except that any Shares tendered may not be withdrawn, (iii) Purchaser will immediately accept and promptly pay for Shares as they are tendered and (iv) the price per Share will be the same as the Offer Price. Purchaser may extend any initial Subsequent Offering Period by any period or periods. Pursuant to Rule 14d-7(a)(2) under the Exchange Act, withdrawal rights do not apply to Shares

2



tendered during a Subsequent Offering Period. A Subsequent Offering Period, if one is provided, is not an extension of the Offer, which already would have been completed. For purposes of the Offer, a "business day" means any day other than a Saturday, Sunday or a U.S. federal holiday and consists of the time period from 12:01 a.m. through 12:00 Midnight, New York City time. If Purchaser elects to provide or extend a Subsequent Offering Period, Purchaser will make a public announcement of such Subsequent Offering Period or extension no later than 9:00 a.m., New York City time, on the next business day after the Expiration Time or the date of termination of the prior Subsequent Offering Period.

        Purchaser also reserves the right to waive any of the conditions to the Offer and to make any change in the terms of or conditions to the Offer, provided that ADC's consent is required for Purchaser to (i) waive or change the Minimum Condition, (ii) decrease the Offer Price, (iii) change the form of consideration payable in the Offer, (iv) decrease the number of Shares sought in the Offer, (v) extend or otherwise change the Expiration Time (except to the extent permitted or required by the Merger Agreement) or (vi) otherwise amend, modify or supplement the conditions to the Offer set forth in "Section 15—Conditions of the Offer" or any other term of the Offer in a manner that adversely affects, or would reasonably be expected to adversely affect, the holders of the Shares.

        In order to take advantage of the Offer, you must either (i) complete and sign the Letter of Transmittal in accordance with the instructions in the Letter of Transmittal, have your signature guaranteed (if required by Instruction 1 to the Letter of Transmittal), mail or deliver the Letter of Transmittal (or a facsimile copy) and any other required documents to Mellon Investor Services LLC, our Depositary, and either deliver the certificates for your Shares along with the Letter of Transmittal to the Depositary or tender your Shares pursuant to the procedures for book-entry transfer set forth in Section 3 of the Offer to Purchase or (ii) request your broker, dealer, commercial bank, trust company or other nominee to effect the transaction for you. If your Shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you must contact such broker, dealer, commercial bank, trust company or other nominee to tender your Shares. If you desire to tender Shares, and certificates evidencing your Shares are not immediately available, or if you cannot comply with the procedures for book-entry transfer described in the Offer to Purchase on a timely basis, or if you cannot deliver all required documents to the Depositary prior to the expiration of the Offer, you may tender your Shares by following the procedures for guaranteed delivery set forth in Section 3 of the Offer to Purchase.

        For purposes of the Offer, Purchaser will be deemed to have accepted for payment Shares tendered when and if Purchaser gives oral or written notice of Purchaser's acceptance to the Depositary. Purchaser will pay for Shares accepted for payment pursuant to the Offer by deposit of the purchase price therefor with the Depositary, which will act as agent for tendering shareholders for the purpose of receiving payments and transmitting such payments to tendering shareholders. Under no circumstances will Purchaser pay interest on the consideration paid for Shares pursuant to the Offer, regardless of any delay in making such payment.

        Except as otherwise provided in the Offer to Purchase, tenders of Shares made in the Offer are irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Time and, unless previously accepted for payment as provided herein, may also be withdrawn after September 23, 2010. For your withdrawal to be effective, a written, telegraphic or facsimile transmission notice of withdrawal with respect to the Shares must be timely received by the Depositary at one of its addresses set forth on the back cover of the Offer to Purchase, and the notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of Shares, if different from that of the person who tendered such Shares. If the Shares to be withdrawn have been delivered to the Depositary, a signed notice of withdrawal with (except in the case of Shares tendered by an Eligible

3


Institution (as defined in the Offer to Purchase)) signatures guaranteed by an Eligible Institution must be submitted before the release of such Shares. In addition, such notice must specify, in the case of Shares tendered by delivery of certificates, the serial numbers shown on the specific certificates evidencing the Shares to be withdrawn or, in the case of Shares tendered by book-entry transfer, the name and number of the account at the Book-Entry Transfer Facility (as defined in the Offer to Purchase) to be credited with the withdrawn Shares. Withdrawals may not be rescinded, and Shares withdrawn will thereafter be deemed not validly tendered. However, withdrawn Shares may be retendered at any time before the Expiration Time by again following the tender procedures described in the Offer to Purchase.

        The exchange of Shares for cash pursuant to the Offer, during a Subsequent Offering Period or pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes and may also be a taxable transaction under applicable state, local and other tax laws. All shareholders should consult with their own tax advisors as to the particular tax consequences of exchanging their Shares pursuant to the Offer, during a Subsequent Offering Period or pursuant to the Merger.

        The information required to be disclosed by paragraph (d)(1) of Rule 14d-6 of the General Rules and Regulations under the Exchange Act is contained in the Offer to Purchase and is incorporated herein by reference.

        ADC has provided to Purchaser its list of shareholders 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 will be mailed to record holders of Shares and will be furnished to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the shareholder list or, if applicable, who are listed as participants in a clearing agency's security position listing, for subsequent transmittal to beneficial owners of Shares.

        The Offer to Purchase and the related Letter of Transmittal contain important information that should be read carefully before any decision is made with respect to the Offer.

        Questions and requests for assistance and copies of the Offer to Purchase, the Letter of Transmittal and all other tender offer materials may be directed to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers set forth below and will be furnished promptly at Purchaser's expense. Neither Tyco Electronics nor Purchaser will pay any fees or commissions to any broker or dealer or any other person (other than to the Dealer Manager, the Information Agent and the Depositary) in connection with the solicitation of tenders of Shares pursuant to the Offer.


The Information Agent for the Offer is:

        Innisfree M&A Incorporated

501 Madison Avenue
New York, New York 10022

(Call Toll-Free: (888) 750-5834)

The Dealer Manager for the Offer is:

Barclays Capital Inc.

745 Seventh Avenue, 3rd Floor
New York, New York 10019
Attention: Equity Corporate Services

(Call Toll-Free: (888) 610-5877)

July 26, 2010




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EX-99.(A)(7) 8 a2199448zex-99_a7.htm EXHIBIT 99.(A)(7)
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Exhibit (a)(7)


NOTICE TO PARTICIPANTS IN THE
ADC TELECOMMUNICATIONS, INC.
RETIREMENT SAVINGS PLAN

July 26, 2010

Dear Plan Participant:


The Tender Offer

        As you may know, Tyco Electronics Minnesota, Inc., a Minnesota corporation ("Purchaser") and an indirect wholly owned subsidiary of Tyco Electronics Ltd., a Swiss corporation ("Parent"), announced on July 13, 2010, its intention to make an offer to purchase for cash all outstanding shares of common stock, par value $0.20 per share, including the associated preferred stock purchase rights ("Shares"), of ADC Telecommunications, Inc., a Minnesota corporation (the "Company"), at a price of $12.75 per Share (the "Offer Price"). If the Offer is completed, Parent shall pay the Offer Price net to the sellers in cash, without interest, upon the terms and subject to the conditions set forth in the enclosed Offer to Purchase dated July 26, 2010 (together with any amendments or supplements thereto, the "Offer to Purchase"), and the related Letter of Transmittal contained in the Schedule TO filed by Purchaser and Parent with the U.S. Securities and Exchange Commission (the "SEC") on July 26, 2010 (together with any amendments or supplements thereto, the "Letter of Transmittal," which, together with the Offer to Purchase, collectively constitute the "Offer"). Also enclosed is the Company's Solicitation/Recommendation Statement on Schedule 14D-9 filed by the Company with the SEC on July 26, 2010 (the "14D-9 Statement"), which sets forth, among other things, the recommendation by the Company's board of directors that the Company's shareowners tender their Shares in the Offer.

        The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of July 12, 2010, among Parent, Purchaser, and the Company, as amended by Amendment No. 1 to Agreement and Plan of Merger, dated July 24, 2010 (and as it may be further amended or supplemented from time to time, the "Merger Agreement"). The Merger Agreement provides, among other things, for the making of the Offer by Purchaser. It further provides that, upon the terms and subject to the conditions contained in the Merger Agreement, following completion of the Offer and the satisfaction or waiver of certain conditions, Purchaser will merge with and into the Company (the "Merger") and the Company will continue as the surviving corporation under the laws of the State of Minnesota (the "Surviving Corporation"), and the separate corporate existence of Purchaser will cease. In the Merger, Shares issued and outstanding immediately prior to the consummation of the Merger (other than (i) Shares owned by the Company, Parent or Purchaser, all of which will be cancelled, (ii) Shares owned by any other subsidiary of Parent or any subsidiary of the Company, all of which will be converted such that each subsidiary maintains its percentage ownership in the Surviving Corporation, and (iii) Shares held by shareowners who have properly exercised dissenters' rights under the Minnesota Business Corporation Act) will be converted into the right to receive the Offer Price in cash, without interest.


Your Prompt Response is Requested

        The Offer is being made for all outstanding Shares, including those Shares held by the ADC Telecommunications, Inc. Retirement Savings Plan (the "Plan"). As a participant in the Plan, if a portion of your account is invested in the ADC Stock Fund (the "Company Stock Fund"), your account holds units in a fund that is composed primarily of Shares, along with some cash or short-term cash equivalents. You are encouraged promptly to provide directions to Wells Fargo Shareowner Services, acting as the tabulation agent ("Tabulation Agent"), if you intend to tender all or some of the Shares allocated to your Plan account. Tabulation Agent will remit any tender instructions to Wells Fargo Bank, N.A. ("Wells Fargo"), the trustee of the Plan. By timely and properly instructing Tabulation Agent to cause Wells Fargo to "tender" the Shares allocated to your separate Plan account, you are instructing Wells Fargo to surrender those Shares for the Offer Price in connection with the Offer.


        If you would like to tender Shares allocated to your account under the Plan in the Offer, you must provide your instructions to Tabulation Agent by promptly and properly completing and returning the enclosed Tender Offer Instruction Form (the "Instruction Form") to Tabulation Agent. You may submit your written instructions by returning your completed, signed and dated Instruction Form in the enclosed postage-prepaid envelope or by mailing it to Wells Fargo Shareowner Services at Attention: Voluntary CA—Tender, 161 North Concord Exchange, So. St. Paul, MN 55075. If you do not send timely tender instructions to Tabulation Agent or your instructions are illegible, incomplete, or otherwise not in proper form, Tabulation Agent will treat this as an instruction NOT to tender. Do NOT use the Letter of Transmittal—your tender instructions will be accepted only if given in accordance with the Instruction Form.

        In order for Tabulation Agent to direct Wells Fargo in accordance with your instructions, your instructions to the Tabulation Agent must be received by the Tabulation Agent, in proper form, no later than 5:59 p.m., New York City time, Thursday, August 19, 2010 (the "Plan Deadline"). In the event Purchaser extends the expiration date for the Offer (currently 12:00 midnight, New York City time, at the end of Monday, August 23, 2010), the Plan Deadline will automatically be extended to 5:59 p.m., New York City time, on the date that is two business days prior to the new expiration date. Any extensions of the expiration date for the Offer will be publicly announced.


Important Note About the Company Stock Fund

        Please note, in order for Wells Fargo to have sufficient time to prepare administratively to respond to the Offer, you will be temporarily unable to make investments or other transfers in or out of the Company Stock Fund or request new loans or distributions from the Company Stock Fund. As a result, in general, you may not purchase, sell or otherwise acquire any Shares during this "blackout period." The blackout period is expected to start as soon as the Shares cease to be tradeable following the expiration date for the Offer (currently 12:00 midnight, New York City time, on Monday, August 23, 2010). The blackout period could end as soon as Wells Fargo receives proceeds from the tender of Shares (which is expected to occur promptly following the expiration date of the Offer). However, it may be necessary to extend the blackout period until completion of the Merger. The blackout period may be terminated or delayed in the event of an extension of the Offer.

        Whether or not you are planning retirement in the near future, we encourage you to carefully consider how this blackout period may affect your retirement planning, as well as your overall financial plan.

        During the blackout period, you will be unable to make investment or other transfers in or out of, or request distributions from, the Company Stock Fund. For this reason, it is very important that you review and consider the appropriateness of your current investments in the Company Stock Fund in light of your inability to direct or diversify those investments during the blackout period. For your long-term retirement security, you should give careful consideration to the importance of a well-balanced and diversified investment portfolio, taking into account all your assets, income and investments. You should be aware that there is a risk to holding substantial portions of your assets in the securities of any one company, as individual securities tend to have wider price swings, up and down, in short periods of time, than investments in diversified funds. This risk is present with respect to your current investments in the Company Stock Fund, as there can be no assurance that the Offer and the Merger will be successfully completed. Stocks that have wide price swings might have a large loss during the blackout period, and you would not be able to direct the sale of such stocks from your account during the blackout period.

        You can determine whether the blackout period has started or ended by contacting the Wells Fargo participant services line at 1-877-232-4015 Monday through Friday from 7:00 a.m. to 11:00 p.m. New York City time (ET).

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Enclosed For Your Review

        Enclosed for your review are the following materials about the Offer:

    1.
    the Offer to Purchase, dated July 26, 2010, which contains important details about the Offer;

    2.
    the Company's Solicitation/Recommendation Statement on Schedule 14D-9, dated July 26, 2010;

    3.
    a Letter of Transmittal (DO NOT MAIL TO TABULATION AGENT—FOR INFORMATIONAL PURPOSES ONLY);

    4.
    a Tender Offer Instruction Form; and

    5.
    a postage-paid reply envelope.

        The enclosed information relates only to Shares allocated to your Plan account. If you own other Shares outside of the Plan, you should receive separate mailings relating to those Shares.

        Please provide your Instruction Form to the Tabulation Agent. Submit your written instructions by promptly completing, signing and dating the enclosed Instruction Form and mailing it to Tabulation Agent in the enclosed postage paid reply envelope or to the physical delivery address on Page 2. If your Instruction Form directs Wells Fargo to tender some or all of the Shares credited to your account under the Plan, you may withdraw this instruction by submitting a new direction which will have the effect of revoking your prior instruction. Only your last instruction received by Tabulation Agent prior to the Plan Deadline will count for tabulation purposes. All new instructions must be received by Tabulation Agent on or before the Plan Deadline, which is 5:59 p.m., New York City time on Thursday, August 19, 2010.

        Please note, if your tender instructions are not proper and timely received on or before the Plan Deadline, Wells Fargo will NOT tender your Shares, unless required by law to do otherwise. If the Offer and the Merger are successfully completed, any Shares allocated to your Plan account that are not tendered in the Offer will be converted at the effective time of the Merger into the right to receive the Offer Price in cash, without interest, unless you properly exercise dissenters' rights under the Minnesota Business Corporation Act. Please refer to the 14D-9 Statement (enclosed herewith) and review the section therein entitled "Item 8. Additional Information—Dissenters' Rights" for detailed information regarding the exercise of dissenters' rights under the Minnesota Business Corporation Act.


Proceeds from Tender

        Wells Fargo will invest proceeds from the tender of the Shares credited to your account under the Plan in the Wells Fargo Money Market Fund. Once the blackout period has ended, you may redirect investment of the proceeds into other investment funds available under the Plan by 1-877-232-4015 or www.wellsfargo.com/myretireplan.


Your Decision is Confidential

        All instructions received by Tabulation Agent from individual participants will be held in confidence and will not be divulged to any person, including the Company, Parent, Purchaser or any of their respective directors, officers, employees or affiliates, except that Tabulation Agent will instruct Wells Fargo regarding the tender instructions received from individual participants.


Independent Fiduciary

        The Company, acting in its capacity as the Plan Sponsor, has retained and appointed an independent fiduciary, Independent Fiduciary Services, Inc. ("IFS"), to assist Wells Fargo with respect to the tender of the shares under the Plan. IFS will determine (i) whether adhering to the provision of

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the Plan stating that Wells Fargo shall follow proper instructions from participants and beneficiaries which have been timely received as to whether or not to tender the Shares pursuant to the Offer is in the interest of the participants and beneficiaries and not clearly imprudent under the Employee Retirement Income Security Act of 1974, as amended ("ERISA") and (ii) whether adhering to the provision of the Plan stating that Wells Fargo shall not tender the Shares for which it has not received timely participant and beneficiary instructions is in the interest of the participants and beneficiaries and not clearly imprudent under ERISA.

To the extent permitted by ERISA, the Shares will be tendered as follows:

    Wells Fargo will tender the Shares allocated to your Plan account in accordance with instructions that you provide, if timely and in proper form. This is known as a "pass through."

    If, by the Plan Deadline, you do not provide instructions to Tabulation Agent in proper form with respect to tendering Shares allocated to your Plan account, Wells Fargo will not tender your Shares.


For Additional Information

        If you have any questions about the Offer, please contact Innisfree M&A Incorporated, the information agent for the Offer, toll free, at (888) 750-5834 for assistance. Additionally, all tender offer materials that have been filed with the SEC are available online at www.sec.gov. You may also call the above number to request a new Instruction Form or for assistance in filling out the form.

Sincerely,

ADC Retirement Committee

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TENDER OFFER INSTRUCTION FORM
ADC TELECOMMUNICATIONS, INC. RETIREMENT SAVINGS PLAN

BEFORE COMPLETING THIS FORM, PLEASE CAREFULLY READ
THE ACCOMPANYING INFORMATION

        In response to the offer by Tyco Electronics Minnesota, Inc., a Minnesota corporation ("Purchaser") and an indirect wholly owned subsidiary of Tyco Electronics Ltd., a Swiss corporation ("Parent"), announced on July 13, 2010, to purchase for cash all outstanding shares of common stock, par value $0.20 per share, including the associated preferred stock purchase rights ("Shares"), of ADC Telecommunications, Inc., a Minnesota corporation, at a price of $12.75 per Share (the "Offer Price"), without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase dated July 26, 2010 (together with any amendments or supplements thereto, the "Offer to Purchase"), and the related Letter of Transmittal contained in the Schedule TO filed by Purchaser and Parent with the U.S. Securities and Exchange Commission on July 26, 2010 (together with any amendments or supplements thereto, the "Letter of Transmittal," which, together with the Offer to Purchase, collectively constitute the "Offer"), I hereby instruct Wells Fargo Bank, N.A. ("Wells Fargo") to tender or not to tender the Shares allocated to my account under the ADC Telecommunications, Inc. Retirement Savings Plan (the "Plan") in response to the Offer as follows (PLEASE CHECK ONE BOX AND COMPLETE THE REMAINDER OF FORM—If more than one box is checked below your election may be disregarded):

    o
    YES. I DIRECT WELLS FARGO TO TENDER ALL OF THE SHARES ALLOCATED TO MY PLAN ACCOUNT IN RESPONSE TO THE OFFER.

    o
    YES. I DIRECT WELLS FARGO TO TENDER A PORTION                (1%-99%, WHOLE PERCENTAGE ONLY) OF THE SHARES ALLOCATED TO MY PLAN ACCOUNT IN RESPONSE TO THE OFFER. If you fail to insert a (whole) percentage, your election will be treated as an election NOT to tender any of your Shares.

    o
    NO. I DIRECT WELLS FARGO NOT TO TENDER ANY OF THE SHARES ALLOCATED TO MY PLAN ACCOUNT IN RESPONSE TO THE OFFER.

        Submit this form to Wells Fargo Shareowner Services, as Tabulation Agent, any time before the deadline, 5:59 p.m., New York City time, Thursday, August 19, 2010. At any time you may change your instruction by submitting a new instruction. Only your last instruction will be counted.

        Tender Offer Instructions that are not timely received by Tabulation Agent, those received incomplete, illegible, or otherwise not in good order will be treated as an instruction not to tender Shares.

        Submit your written instructions by mailing this completed form promptly in the enclosed postage-paid envelope.

        YOUR INSTRUCTION MUST BE RECEIVED BY TABULATION AGENT NO LATER THAN 5:59 P.M., NEW YORK CITY TIME, THURSDAY, AUGUST 19, 2010 (OR, IN THE EVENT PURCHASER EXTENDS THE EXPIRATION DATE FOR THE OFFER, 5:59 P.M., NEW YORK CITY TIME ON THE DATE THAT IS TWO BUSINESS DAYS PRIOR TO SUCH EXTENDED EXPIRATION DATE), OR YOUR SHARES WILL NOT BE TENDERED.



Signature*

 


Date

* Sign as your name appears on Page 5 of "Tender Offer Instruction Form"

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QuickLinks

NOTICE TO PARTICIPANTS IN THE ADC TELECOMMUNICATIONS, INC. RETIREMENT SAVINGS PLAN
The Tender Offer
Your Prompt Response is Requested
Important Note About the Company Stock Fund
Enclosed For Your Review
Proceeds from Tender
Your Decision is Confidential
Independent Fiduciary
For Additional Information
TENDER OFFER INSTRUCTION FORM ADC TELECOMMUNICATIONS, INC. RETIREMENT SAVINGS PLAN BEFORE COMPLETING THIS FORM, PLEASE CAREFULLY READ THE ACCOMPANYING INFORMATION
EX-99.(A)(8) 9 a2199448zex-99_a8.htm EXHIBIT 99.(A)(8)

Exhibit (a)(8)

 

STATE OF MINNESOTA

 

DISTRICT COURT

 

 

 

COUNTY OF HENNEPIN

 

FOURTH JUDICIAL DISTRICT

 

 

 

 

 

CASE TYPE: Civil/Class Action

 

 

 

LAWRENCE BARONE, on behalf of himself and all others similarly situated,

 

Court File No.                               

 

 

 

Plaintiff,                            

 

 

 

vs.

 

COMPLAINT

 

 

 

ADC TELECOMMUNICATIONS, INC.,

ROBERT E. SWITZ, JAMES G. MATHEWS, WILLIAM R. SPIVEY, JOHN D. WUNSCH, JOHN J. BOYLE, III, LARRY W. WANGBERG, MICKEY P. FORET, LOIS M. MARTIN, JOHN E. REHFELD, KRISH A. PRAHBU, DAVID A. ROBERTS, TYCO ELECTRONICS LTD., and TYCO ELECTRONICS MINNESOTA, INC.,

 

BASED UPON SELF DEALING
AND BREACH OF FIDUCIARY
DUTY

 

 

 

Defendants.                       

 

 

 

SUMMARY OF THE ACTION

 

1.             This is a stockholder class action brought by plaintiff Lawrence Barone (“Plaintiff”) on behalf of holders of common stock of ADC Telecommunications, Inc. (“ADC” or the “Company”) against ADC, Tyco Electronics Ltd. (“Tyco”), and Tyco Electronics Minnesota, Inc. (“Tyco Merger Sub”), and certain of ADC’s officers and directors. This action arises out of the Individual Defendants’ (as defined herein) agreement to sell ADC to Tyco at an unfair price of $12.75 for each share of ADC common stock via an unfair process (the “Proposed Acquisition”). This action seeks to enjoin the Individual Defendants from further breaching their fiduciary duties in their pursuit of the Proposed Acquisition.

 

2.             In pursuing the unlawful plan to induce ADC’s shareholders to tender their shares in the Proposed Acquisition via an unfair and uninformed process, each of the defendants violated applicable law by directly breaching and/or aiding the other defendants’ breaches of their fiduciary duties of loyalty, due care, diligence, independence, good faith, and fair dealing.

 



 

3.             Over the past year, the Company’s stock price has been decimated by the global economic rescission. As the economy has rebounded, however, so have the Company and its stock value. In the Company’s first quarter of fiscal 2010, the Company handily beat Wall Street’s expectations and raised its net sales guidance that it had provided the market just over two months before. Knowing that the economy is recovering, Tyco recognized that it had an opportunity to cash in on ADC’s temporarily depressed stock price by acquiring the Company’s valuable assets before it felt the full effects of the economic turnaround.

 

4.             Devices like cell phones that increase data traffic will drive fiber optic sales, in turn, increasing the prospects of ADC. As the phone company networks switch to fiber optic cable, as opposed to copper, ADC stands in a strong position. Indeed, one analyst stated that he expects “earnings [to] grow 40% next year.” Despite being aware of ADC’s improving financial metrics, the Individual Defendants are selling the Company’s valuable assets for a price that does not maximize shareholder value and, apparently, without adequately shopping ADC.

 

5.             The market’s reaction to the news of the Proposed Acquisition demonstrates the strength of ADC’s outlook. Tyco’s stock jumped on the news that it would acquire ADC so cheaply, closing up approximately 2.5% on the date the Proposed Acquisition was announced. This is not surprising given that Tyco expects the Proposed Acquisition to be accretive by $0.14 per share in the first full year after closing.

 

6.             Tyco also stands to reap the benefits of ADC’s $863.4 million of net operating losses (“NOLs”). These NOLs do not expire until after fiscal 2021. As currently constituted, the Proposed Transaction is not priced to compensate ADC shareholders for the benefit that Tyco will receive from the Company’s NOLs.

 

7.             The Individual Defendants entered into numerous agreements meant to deter additional offers for the Company and deprive shareholders of their right to meaningfully evaluate and consider and, thereafter, either support or oppose the Proposed Acquisition. For example, the Company agreed that: (i) it will not solicit, initiate, or knowingly encourage any superior proposals from other parties; (ii) it would pay a termination fee of $38 million to Tyco if

 

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it accepted a superior unsolicited proposal, adding an additional $0.39 per share to the price tag for any successful third party bidder; and (iii) Tyco would have a “Top-Up Option” allowing it to acquire additional shares from the Company if it does not acquire via the tender the 90% required shares to complete the Proposed Acquisition via a short form merger.

 

8.             Because the Individual Defendants dominate and control the business and corporate affairs of ADC, there exists an imbalance and disparity of economic power between them and the public shareholders of ADC. Therefore, it is inherently unfair for the Individual Defendants to execute and pursue any Proposed Acquisition agreement under which they will reap disproportionate benefits to the exclusion of obtaining the best shareholder value reasonably available. Nonetheless, instead of attempting to negotiate a contract reflecting the best consideration available for the ADC shareholders who they are duty-bouhd to serve, the Individual Defendants disloyally placed their own interests first and tailored the terms and conditions of the Proposed Acquisition to meet their own personal needs and objectives. In short, the Proposed Acquisition is designed to unlawfully divest ADC’s public shareholders of the Company’s valuable assets for grossly inadequate consideration.

 

9.             To remedy the Individual defendants’ breaches of fiduciary duty and other misconduct, Plaintiff seeks, inter alia: (i) injunctive relief preventing consummation of the Proposed Acquisition unless and until the Company adopts and implements a procedure or process to obtain a transaction that provides the best possible terms for shareholders; (ii) a directive to the Individual Defendants to exercise their fiduciary duties to obtain a transaction which is in the best interests of ADC’s shareholders; and (iii) rescission of, to the extent already implemented, the A&PM or any of the terms thereof

 

JURISDICTION AND VENUE

 

10.                This Court has jurisdiction over each defendant named herein because each defendant is either a corporation that conducts business in and maintains operations in this County, or is an individual who has sufficient minimum contacts with Minnesota so as to render

 

3



 

the exercise of jurisdiction by the Minnesota courts permissible under traditional notions of fair play and substantial justice.

 

11.           Venue is proper in this Court because one or more of the defendants either resides in or maintains executive offices in this County, a substantial portion of the transactions and wrongs complained of herein, including the defendants’ primary participation in the wrongful acts detailed herein and aiding and abetting and conspiracy in violation of fiduciary duties owed to ADC occurred in this County, and defendants have received substantial compensation in this County by doing business here and engaging in numerous activities that had an effect in this County.

 

PARTIES

 

12.           Plaintiff is and has been a shareholder of ADC at all relevant times.

 

13.           Defendant ADC is a Minnesota corporation that provides broadband communications network infrastructure products and related services and offers comprehensive solutions that enable the delivery of high-speed Internet, data, video, and voice communications over wireline, wireless cable, enterprise, and broadcast networks. ADC’s products include fiber- optic, copper, and coaxial based frames, cabinets, cables, connectors, and cards, wireless capacity and coverage solutions, network access devices, and other physical infrastructure components. If the Proposed Acquisition is consummated, ADC will become a wholly owned subsidiary of Tyco. ADC’s principal executive offices are located at 13625 Technology Drive, Eden Prairie, Minnesota.

 

14.           Defendant Robert E. Switz (“Switz”) is ADC’s Chairman of the Board of Directors (“Board”) and has been since August 2008 and a director and has been since August 2003. Switz is also ADC’s President and Chief Executive Officer and has been since August 2003. Switz served in various other positions at ADC from January 1994 to August 2003, including as Chief Financial Officer; Executive Vice President; Senior Vice President; and President of ADC’s former Broadband Access and Transport Group.

 

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15.           Defendant James G. Mathews (“Mathews”) is ADC’s Chief Financial Officer and has been since April 2007. Mathews is also an ADC Vice President and has been since December 2005. Mathews was ADC’s Controller from December 2005 to April 2007.

 

16.           Defendant William R. Spivey is ADC’s Independent Lead Director and has been since February 2009 and a director and has been since September 2004.

 

17.           Defendant John D. Wunsch is an ADC director and has been since 1991.

 

18.           Defendant John J. Boyle, III (“Boyle”) is an ADC director and has been since November 1999. Boyle was an ADC Senior Vice President from October 1999 to April 2000.

 

19.           Defendant Larry W. Wangberg is an ADC director and has been since October 2001.

 

20.           Defendant Mickey P. Foret is an ADC director and has been since February 2003.

 

21.           Defendant Lois M. Martin is an ADC director and has been since March 2004.

 

22.           Defendant John E. Rehfeld is an ADC director and has been since September 2004.

 

23.           Defendant Krish A. Prabhu is an ADC director and has been since November 2008.

 

24.           Defendant David A. Roberts is an ADC director and has been since November 2008.

 

25.           Defendant Tyco is a Swiss corporation that provides engineered electronic components, network solutions, specialty products, and undersea telecommunication systems, with fiscal 2009 sales of US$10.3 billion to customers in more than 150 countries. Tyco designs, manufactures, and markets products for customers in various industries, including automotive; data communication systems and consumer electronics; telecommunications; aerospace, defense, and marine; medical; energy; and lighting. Tyco’s principal executive offices are located at Rheinstrasse 20, CH-8200 Schaffhausen, Switzerland.

 

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26.         Defendant Tyco Merger Sub is a Minnesota corporation and a wholly owned subsidiary of Tyco. Upon completion of the merger, Tyco Merger Sub will merge with and into ADC.

 

27.         The defendants named above in ¶¶14-24 are sometimes collectively referred to herein as the “Individual Defendants.”

 

INDIVIDUAL DEFENDANTS’ FIDUCIARY DUTIES

 

28.         Under Minnesota law, the directors and officers of a publicly traded corporation have fiduciary duties of loyalty, good faith, and care to shareholders. To diligently comply with these duties, neither the directors nor the officers may take any action that:

 

(a)           adversely affects the value provided to the corporation’s shareholders;

 

(b)           will discourage, inhibit, or deter alternative offers to purchase control of the corporation or its assets;

 

(c)           contractually prohibits themselves from complying with their fiduciary duties;

 

(d)           will otherwise adversely affect their duty to secure the best value reasonably available under the circumstances for the corporation’s shareholders; and/or

 

(e)           will provide the directors and/or officers with preferential treatment at the expense of, or separate from, the public shareholders.

 

29.         In accordance with their duties of loyalty and good faith, the Individual Defendants, as directors and/or officers of ADC, are obligated under Minnesota law to refrain from:

 

(a)           participating in any transaction where the directors’ or officers’ loyalties are divided;

 

(b)           participating in any transaction where the directors or officers receive, or are entitled to receive, a personal financial benefit not equally shared by the public shareholders of the corporation; and/or

 

6



 

 

(c)           unjustly enriching themselves at the expense or to the detriment of the public shareholders.

 

30.           Defendants, separately and together, in connection with the Proposed Acquisition, are knowingly or recklessly violating their fiduciary duties and aiding and abetting such breaches, including their duties of loyalty, good faith, and independence owed to Plaintiff and other public shareholders of ADC. Certain of the defendants stand on both sides of the transaction, are engaging in self-dealing, are obtaining for themselves personal benefits, including personal financial benefits not shared equally by Plaintiff or the Class (as defined herein). Certain ADC executives and directors are also retaining their prestigious and lucrative positions and compensation at the post-Proposed Acquisition company. Accordingly, the Proposed Acquisition will benefit the Individual Defendants in significant ways not shared with the Class members. As a result of the Individual Defendants’ self-dealing and divided loyalties, neither Plaintiff nor the Class will receive adequate or fair value for their ADC common stock in the Proposed Acquisition.

 

31.           Because the Individual Defendants are knowingly or recklessly breaching their duties of loyalty, good faith, and independence in connection with the Proposed Acquisition, the burden of proving the inherent or entire fairness of the Proposed Acquisition, including all aspects of its negotiation, structure, price, and terms, is placed upon defendants as a matter of law.

 

THE PROPOSED ACQUISITION

 

32.           On July 13, 2010, ADC and Tyco jointly issued the following press release announcing that the Individual Defendants had agreed to sell ADC to Tyco for $12.75 in cash per ADC share:

 

Tyco Electronics and ADC announced today a definitive agreement under which Tyco Electronics will acquire ADC for $12.75 per share in cash, or an enterprise value of approximately $1.25 billion. The transaction is expected to be accretive by approximately $0.14 per share in the first full year after closing excluding acquisition-related costs. It will position Tyco Electronics’ Network Solutions

 

7



 

segment as a leading global provider of broadband connectivity products to carrier and enterprise networks around the world.

 

Tom Lynch, Chief Executive Officer of Tyco Electronics, said, “This is a very exciting time for our company and ADC is a great fit as we continue to execute our strategy to create strong leadership positions in all of our connectivity businesses. Consumers and enterprises want access to high-speed video and data wherever they are, on whatever devices they are using—from smart phones to HD and 3-D televisions to computers with advanced video-conferencing capabilities. The combination of ADC and Tyco Electronics creates an industry leader, with the scope and geographic scale to help customers deliver needed capacity, from the core of the network all the way to the end user.”

 

Robert E. Switz, Chairman, President and CEO of ADC, said, “ADC has a strong heritage of providing innovative wired and wireless solutions that have enabled the expansion of advanced broadband networks worldwide. As part of Tyco Electronics, our organization’s ability to serve the world’s leading telecommunications services providers and enterprises will be strengthened significantly. I have great respect for Tyco Electronics and know that they share our commitment to meeting customers’ changing next generation network needs.”

 

The combined organization will offer a complete product portfolio across every major geographic market. It will also add ADC’s Distributed Antenna System (DAS) products, which will expand Tyco Electronics’ wireless connectivity portfolio to provide greater mobile coverage and capacity solutions to carrier and enterprise customers as demand for mobile data continues to expand. Additionally, Tyco Electronics will add ADC’s professional services organization in the US to its business.

 

“We expect ADC to be accretive to our earnings in the first year and to reach our target operating margin of 15 percent in the third year after the acquisition,” said Lynch.

 

The transaction is structured as a tender offer to be followed as soon as possible by a merger. The transaction is subject to customary closing conditions, including the tender of a majority of ADC shares and regulatory approvals, and is expected to close in the fourth calendar quarter 2010.

 

In conjunction with today’s announcement, Tyco Electronics reported preliminary results for the fiscal third quarter ended June 25, 2010. The company reported sales of $3.1 billion, an increase of 23 percent over the prior year quarter and up 4 percent sequentially. GAAP EPS were $0.72 in the quarter which included $0.02 per share of income related to other items net of restructuring charges. Adjusted EPS were $0.70 in the quarter. The company’s book-to-bill ratio was 1.06 for the quarter and 1.08 excluding Subsea Communications. The company will report complete results and provide further details on its fiscal third quarter before trading begins on July 22, 2010.

 

8



 

33.           On July 13, 2010, the Company filed a Form 8-K with the United States Securities and Exchange Commission (“SEC”), wherein it disclosed the A&PM. The announcement and filing reveal that the Proposed Acquisition is the product of a flawed sale process and, unless the offer price is increased, would be consummated at an unfair price.

 

34.           Under Section 7.04(a) of the A&PM, ADC is subject to a no-solicitation clause that prohibits the Company from seeking a superior offer for its shareholders. Section 7.04 states that:

 

Section 7.04. No Solicitation; Other Offers. (a) After the date hereof and prior to the earlier of the termination of this Agreement and the Acceptance Time, the Company and its Subsidiaries shall not (and the Company shall use its reasonable best efforts to cause its or any of its Subsidiaries’ officers or directors, investment bankers, attorneys, accountants, consultants or other agents or advisors (collectively, “Representatives”) not to), directly or indirectly, (i) solicit, initiate or knowingly take any action to facilitate or encourage the submission of any Acquisition Proposal, (ii) enter into or participate in any discussions or negotiations with, furnish any information relating to the Company or any of its Subsidiaries or afford access to the business, properties, assets, books or records of the Company or any of its Subsidiaries to, any Person with respect to inquiries regarding, or the making of, an Acquisition Proposal, (iii) fail to make, withdraw, modify or amend in a manner adverse to Parent the Company Board Recommendation (or recommend an Acquisition Proposal or knowingly take any action or make any statement inconsistent with the Company Board Recommendation) (any of the foregoing in this clause (iii), an “Adverse Recommendation Change”), (iv) grant any waiver or release under any standstill or similar agreement with respect to any class of equity securities of the Company or any of its Subsidiaries or under the Company Rights Agreement, (v) take any action to render the restrictions on a “control share acquisition” set forth in Section 302A.671 of the MBCA inapplicable to any transaction, (vi) approve any transaction under, or any Person becoming an “interested shareholder” under, Section 302A.673 of the MBCA or (vii) enter into any agreement in principle, letter of intent, term sheet, merger agreement, acquisition agreement, option agreement or other similar instrument relating to an Acquisition Proposal (other than a confidentiality agreement with a Person to whom the Company is permitted to provide information in accordance with Section 7.04(b)). It is agreed that any violation of the restrictions on the Company set forth in this Section by any Representative of the Company or any of its Subsidiaries shall be a breach of this Section by the Company.

 

35.           Though the A&PM ostensibly has a “fiduciary out” provision that allows the Company to negotiate with other bidders, this provision is actually illusory. In order for ADC to

 

9



 

negotiate with any other suitors, the potential acquirer would first have to make an unsolicited superior offer. Without access to nonpublic information, which the Company is prevented from offering under the A&PM prior to the receipt of an offer that the Company reasonably expects to lead to a superior deal, no other bidder will emerge to make such an offer.

 

36.           Furthermore, ADC is subject to another preclusive lock-up provision in Section 12.04 of the A&PM. Section 12.04 states that ADC is subject to a termination fee of $38 million payable to Tyco if the Company or Tyco terminates the A&PM. This provision is unfair to the Company’s shareholders and contrary to their interests because it deters and prevents the submission of higher proposals, especially in connection with the no solicitation clause in Section 7.04.

 

37.           The Individual Defendants are attempting to silence dissent among the Company’s shareholders by granting Tyco a “Top-Up Option” in Section 2.04 of the A&PM. The Top-Up Option allows Tyco to acquire all the unissued stock the Company is authorized to issue under its certificate of incorporation until Tyco acquires one share more than 90% of ADC’s outstanding stock. Once ADC reaches the 90% threshold, it will consummate a short-form merger, which will allow it to acquire ADC without a vote in favor of the Proposed Acquisition from the Company’s shareholders.

 

38.           The provisions above, which will serve to unreasonably deter and discourage superior offers from other interested parties, were agreed to by the Individual Defendants to help secure the personal benefits and unfair profits afforded to them through the Proposed Acquisition.

 

SELF-DEALING

 

39.           By reason of their positions with ADC, the Individual Defendants have access to non-public information concerning the financial condition and prospects of ADC. Thus, there exists an imbalance and disparity of knowledge and economic power between the Individual Defendants and the public shareholders of ADC. Therefore, it is inherently unfair for the Individual Defendants to execute and pursue any Proposed Acquisition agreement under which

 

10



 

they will reap disproportionate benefits to the exclusion of obtaining the best value for shareholders. Instead, the Individual Defendants disloyally placed their own interests first, and tailored the terms and conditions of the Proposed Acquisition to meet their own personal needs and objectives. Certain Individual Defendants are also receiving lucrative change-in-control benefits or prestigious positions at the post-Proposed Acquisition company.

 

40.                                 The Proposed Acquisition is wrongful, unfair, and harmful to ADC’s public stockholders, and represents an effort by the Individual Defendants to aggrandize their own financial position and interests at the expense of and to the detriment of the Class (as defined herein) members. Specifically, defendants are attempting to deny Plaintiff and the Class their shareholder rights through the sale of ADC via an unfair process. Accordingly, the Proposed Acquisition will benefit the Individual Defendants at the expense of ADC’s shareholders.

 

41.                                 In light of the foregoing, the Individual Defendants must, as their fiduciary obligations require:

 

·                                          Withdraw their consent to the Top-Up Option and allow the shareholders to tender their shares without being impeded by this deal protection device.

 

·                                          Withdraw their consent to Tyco’s acquisition of ADC and allow the shares to trade freely without impediments, including the $38 million termination fee;

 

·                                          Act independently so that the interests of ADC’s public stockholders will be protected;

 

·                                          Adequately ensure that no conflicts of interest exist between defendants’ own interests and their fiduciary obligation to maximize stockholder value or, if such conflicts exist, to ensure that all conflicts be resolved in the best interests of ADC’s public stockholders; and

 

·                                          Solicit competing bids to Tyco’s offer to ensure that the Company’s shareholders are receiving the maximum value for their shares.

 

42.                                 The Individual Defendants have also approved the Proposed Acquisition so that it transfers 100% of ADC’s revenues and profits to Tyco, thus, all of ADC’s operations will now accrue to the benefit of Tyco.

 

11


 

 

THE UNFAIR AND INADEQUATE PROCESS

 

43.           In order to meet their fiduciary duties, the Individual Defendants are obligated to explore transactions that will maximize shareholder value, and not structure a preferential deal for themselves. Due to the Individual Defendants’ eagerness to enter into a transaction with Tyco, they failed to implement a process to obtain the maximum price for ADC shareholders.

 

44.           As a result of defendants’ conduct, ADC’s public stockholders have been and will continue to be denied the fair process and arm’s-length negotiated terms to which they are entitled in a sale of their Company. The consideration reflected in the A&PM does not reflect the true inherent value of the Company that was available only to the Individual Defendants, as directors and officers of ADC, and Tyco at the time the Proposed Acquisition was announced. Indeed, the Individual Defendants ensured that ADC would be sold to one buyer and one buyer only by negotiating a no-solicitation clause that prevents ADC from soliciting higher offers, voting agreements, and a $38 million termination fee that will discourage any unsolicited offers.

 

CLASS ACTION ALLEGATIONS

 

45.           Plaintiff brings this action for himself and on behalf of all holders of ADC common stock which have been or will be harmed by the conduct described herein (the “Class”). Excluded from the Class are the defendants and any individual or entity affiliated with any defendant.

 

46.           This action is properly maintainable as a class action.

 

47.           The Class is so numerous that joinder of all members is impracticable. According to ADC’s SEC filings, there were more than over 97 million shares of ADC common stock outstanding as of July 9, 2010.

 

48.           There are questions of law and fact which are common to the Class and which predominate over questions affecting any individual Class member. The common questions include, inter alia, the following:

 

12



 

(a)           whether the Individual Defendants have breached their fiduciary duties of undivided loyalty, independence, or due care with respect to Plaintiff and the other members of the Class in connection with the Proposed Acquisition;

 

(b)           whether the Individual Defendants are engaging in self-dealing in connection with the Proposed Acquisition;

 

(c)           whether the Individual Defendants have breached any of their other fiduciary duties owed to Plaintiff and the other members of the Class in connection with the Proposed Acquisition, including the duties of good faith, diligence, and fair dealing;

 

(d)           whether ADC aided and abetted the Individual Defendants’ breaches of fiduciary duties;

 

(e)           whether Tyco and/or Tyco Merger Sub aided and abetted the Individual Defendants’ breaches of fiduciary duties; and

 

(f)            whether Plaintiff and the other members of the Class would suffer irreparable injury were the transactions complained of herein consummated.

 

49.           Plaintiff’s claims are typical of the claims of the other members of the Class and Plaintiff does not have any interests adverse to the Class.

 

50.           Plaintiff has retained competent counsel experienced in litigation of this nature and will fairly and adequately represent and protect the interests of the Class.

 

51.           The prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications with respect to individual members of the Class which would establish incompatible standards of conduct for the party opposing the Class.

 

52.           Plaintiff anticipates that there will be no difficulty in the management of this litigation. A class action is superior to other available methods for the fair and efficient adjudication of this controversy.

 

53.           Defendants have acted on grounds generally applicable to the Class with respect to the matters complained of herein, thereby making appropriate the relief sought herein with respect to the Class as a whole.

 

13



 

FIRST CAUSE OF ACTION

 

Claim for Breach of Fiduciary Duties Against the Individual Defendants

 

54.           Plaintiff incorporates by reference and realleges each and every allegation contained above as though fully set forth herein.

 

55.           The Individual Defendants have violated the fiduciary duties of care, loyalty, good faith, and independence owed to the public shareholders of ADC and have acted to put their personal interests ahead of the interests of ADC’s shareholders.

 

56.           By the acts, transactions, and courses of conduct alleged herein, defendants, individually and acting as a part of a common plan, are attempting to unfairly deprive Plaintiff and other members of the Class of the true value inherent in and arising from ADC.

 

57.           The Individual Defendants have violated their fiduciary duties by entering ADC into the Proposed Acquisition without regard to the effect of the Proposed Acquisition on ADC’s shareholders.

 

58.           As demonstrated by the allegations above, the Individual Defendants failed to exercise the care required, and breached their duties of loyalty, good faith, and independence owed to the shareholders of ADC because, among other reasons:

 

(a)           they failed to take steps to maximize the value of ADC to its public shareholders;

 

(b)           they failed to properly value ADC and its various assets and operations; and

 

(c)           they ignored or did not protect against the numerous conflicts of interest resulting from the directors’ own interrelationships or connection with the Proposed Acquisition.

 

59.          Because the Individual Defendants dominate and control the business and corporate affairs of ADC, and are in possession of or have access to private corporate information concerning ADC’s assets, business, and future prospects, there exists an imbalance and disparity of knowledge and economic power between them and the public shareholders of ADC which makes it inherently unfair for them to pursue and recommend any proposed

 

14



 

transaction wherein they will reap disproportionate benefits to the exclusion of maximizing shareholder value.

 

60.           By reason of the foregoing acts, practices, and course of conduct, the Individual Defendants have failed to exercise ordinary care and diligence in the exercise of their fiduciary obligations toward Plaintiff and the other members of the Class.

 

61.           The Individual Defendants are engaging in self-dealing, are not acting in good faith toward Plaintiff and the other members of the Class, and have breached and are breaching their fiduciary duties to the members of the Class.

 

62.           As a result of the Individual Defendants’ unlawful actions, Plaintiff and the other members of the Class will be irreparably harmed in that they will not receive their fair portion of the value of ADC’s assets and operations. Unless the Proposed Acquisition is enjoined by the Court, the Individual Defendants will continue to breach their fiduciary duties owed to Plaintiff and the members of the Class, will not engage in arm’s-length negotiations on the Proposed Acquisition terms, and may consummate the Proposed Acquisition, all to the irreparable harm of the members of the Class.

 

63.           Plaintiff and the members of the Class have no adequate remedy at law. Only through the exercise of this Court’s equitable powers can Plaintiff and the Class be fully protected from the immediate and irreparable injury which defendants’ actions threaten to inflict.

 

SECOND CAUSE OF ACTION

 

Claim for Aiding and Abetting Breaches of Fiduciary Duty Against ADC

 

64.           Plaintiff incorporates by reference and realleges each and every allegation contained above as though fully set forth herein.

 

65.           The Individual Defendants owed to Plaintiff and the members of the Class certain fiduciary duties as fully set out herein.

 

66.           By committing the acts alleged herein, the Individual Defendants breached their fiduciary duties owed to Plaintiff and the members of the Class.

 

15



 

67.           ADC colluded in or aided and abetted the Individual Defendants’ breaches of fiduciary duties, and was an active and knowing participant in the Individual Defendants’ and breaches of fiduciary duties owed to Plaintiff and the members of the Class.

 

68.           Plaintiff and the members of the Class shall be irreparably injured as a direct and proximate result of the aforementioned acts.

 

THIRD CAUSE OF ACTION

 

Claim for Aiding and Abetting Breaches of Fiduciary Duty Against

Tyco and Tyco Merger Sub

 

69.           Plaintiff incorporates by reference and realleges each and every allegation contained above as though fully set forth herein.

 

70.           The Individual Defendants owed to Plaintiff and the members of the Class certain fiduciary duties as fully set out herein.

 

71.           By committing the acts alleged herein, the Individual Defendants breached their fiduciary duties owed to Plaintiff and the members of the Class.

 

72.           Defendants Tyco and Tyco Merger Sub colluded in or aided and abetted the Individual Defendants’ breaches of fiduciary duties, and were active and knowing participants in the Individual Defendants’ breaches of fiduciary duties owed to Plaintiff and the members of the Class.

 

73.           Defendants Tyco and Tyco Merger Sub participated in, the breach of the fiduciary duties by the Individual Defendants for the purpose of advancing their own interests. Defendants Tyco and Tyco Merger Sub obtained and will obtain both direct and indirect benefits from colluding in or aiding and abetting the Individual Defendants’ breaches. Defendants Tyco and Tyco Merger Sub will benefit, inter alia, from the acquisition of the Company at an inadequate and unfair price if the Proposed Acquisition is consummated.

 

74.           Plaintiff and the members of the Class shall be irreparably injured as a direct and proximate result of the aforementioned acts.

 

16



 

PRAYER FOR RELIEF

 

WHEREFORE, Plaintiff demands injunctive relief, in his favor and in favor of the Class and against defendants as follows:

 

A.            Declaring that this action is properly maintainable as a class action;

 

B.            Declaring and decreeing that the A&PM was agreed to in breach of the fiduciary duties of the Individual Defendants and is therefore unlawful and unenforceable;

 

C.            Rescinding, to the extent already implemented, the A±

 

D.            Enjoining defendants, their agents, counsel, employees, and all persons acting in concert with them from consummating the Proposed Acquisition, unless and until the Company adopts and implements a procedure or process reasonably designed to provide the best possible value for shareholders;

 

E.             Directing the Individual Defendants to exercise their fiduciary duties to commence a sale process that is reasonably designed to secure the best possible consideration for ADC;

 

F.             Imposition of a constructive trust, in favor of Plaintiff and members of the Class, upon any benefits improperly received by defendants as a result of their wrongful conduct;

 

G.            Awarding Plaintiff the costs and disbursements of this action, including reasonable attorneys’ and experts’ fees; and

 

H.            Granting such other and further equitable relief as this Court may deem just and proper.

 

 

 

 

ANDERSON, HELGEN, DAVIS & NISSEN, LLC

 

 

 

 

 

 

 

 

Dated:

July 14, 2010

 

By

/s/ Henry M. Helgen

 

 

 

 

Henry M. Helgen, III (Atty. No.: 151075)

 

 

 

 

150 South 5th  Street, Sutie 3100

 

 

 

 

Minneapolis, MN 55402

 

 

 

 

Telephone: (612) 435-6363

 

 

 

 

Allorneys for Plaintiff

 

17



 

 

 

 

BRIAN J. ROBBINS

 

 

STEPHEN J. ODDO

 

 

REBECCA A. PETERSON

 

 

600 B Street, Suite 1900

 

 

San Diego, CA 92101

 

 

Telephone: (619) 525-3990

 

 

Facsimile: (619) 525-3991

 

 

 

 

 

Attorneys for Plaintiff

 

18


 


EX-99.(A)(9) 10 a2199448zex-99_a9.htm EXHIBIT 99.(A)(9)

Exhibit (a)(9)

 

STATE OF MINNESOTA

 

DISTRICT COURT

 

 

 

COUNTY OF HENNEPIN

 

FOURTH JUDICIAL DISTRICT

 

 

 

 

 

CASE TYPE: CIVIL

 

 

X

 

 

ROBERT FREEMAN, Individually and on

:

File Number

 

Behalf of All Others Similarly Situated and

:

 

 

Derivatively on Behalf of Nominal Defendant

:

Judge

 

ADC Telecommunications, Inc.,

:

 

 

 

:

SHAREHOLDER DERIVATIVE AND

 

Plaintiff,

:

CLASS ACTION COMPLAINT FOR

 

 

:

BREACH OF FIDUCIARY DUTIES WASTE

 

vs.

:

OF CORPORATE ASSETS, AND ABUSE

 

 

:

OF CONTROL

 

ROBERT E. SWITZ, WILLIAM R. SPIVEY,

:

 

 

PH.D., JOHN J. BOYLE, III, MICKEY P.

:

 

 

FORET, LOIS M. MARTIN, KRISH A.

:

JURY TRIAL DEMAND

 

PRABHU, PH. D, JOHN E. REHFELD,

 

 

 

DAVID A. ROBERTS, LARRY W.

:

 

 

WANGBERG, JOHN D. WUNSCH, TYCO

 

 

 

ELECTRONICS LTD. and TYCO

:

 

 

ELECTRONICS MINNESOTA, INC.,

:

 

 

 

:

 

 

Defendants,

:

 

 

 

:

 

 

and

:

 

 

 

:

 

 

ADC TELECOMMUNICATIONS INC.,

:

 

 

 

:

 

 

Nominal Defendant.

:

 

 

 

X

 

 

 



 

INTRODUCTION

 

1.                                       Plaintiff Robert Freeman, individually and on behalf of all others similarly situated, and derivatively in the right and for the benefit of ADC Telecommunications, Inc. (“ADC” or the “Company”) respectfully brings this direct class action for breach of fiduciary duties, waste of corporate assets and abuse of control, on behalf of the public shareholders of ADC and derivatively on behalf of ADC against the herein-named defendants.

 

2.                                       This is a stockholder derivative and class action brought by Plaintiff on behalf of the public holders of ADC common stock, and derivatively on behalf of ADC, seeking to enjoin certain actions of the Defendants in connection with the proposed acquisition (“Acquisition”) of ADC by Tyco Electronics Ltd. and Tyco Electronics Minnesota, Inc. (collectively “Tyco”). On July 13, 2010, ADC and Tyco jointly announced that the Company and Tyco had entered into a definitive merger agreement (“Agreement”), pursuant to which Tyco will commence a tender offer, likely to close in the fourth quarter of 2010, to purchase all of the outstanding shares of ADC common stock for $12.75 per share in cash, followed by a second-step merger. The enterprise value of the Acquisition is approximately $1.25 billion, according to Tyco and ADC. As described herein, the director defendants of ADC have breached their fiduciary duties, wasted corporate assets and abused their control of ADC in connection with the Acquisition by, among other things, failing to maximize shareholder value.

 

3.                                       Indeed, the Acquisition appears designed to simply provide Tyco with the ability to recognize the remarkable potential ADC has as a company, and to provide ADC insiders with steep and lucrative severance and change-of-control benefits, rather than allow ADC shareholders to enjoy the Company’s growth potential.

 

4.                                       In fact, in a PowerPoint presentation to Tyco’s shareholders attached to a Schedule TO-C filed by Tyco with the SEC on July 13, 2010, in connection with the Acquisition, Tyco

 

1



 

expressly acknowledges the exceptional growth potential of ADC — which is being stolen from ADC’s shareholders:

 

     Acquisition Will Be a Significant Contributor to TE Earnings Growth

 

·                                          Expected to be accretive to earnings by ~$0.14 per share in year 1. excluding acquisition-related costs

 

·                 Significant cost synergies

 

·                                          Expect ADC to achieve company target operating margin of 15% in year 3

 

·                                          Continue to maintain a strong balance sheet with resources to pursue additional strategic opportunities and return capital to shareholders

 

Tyco Electronics

Page 4

 

5.                                       Moreover, the tender offer is coercive because the Defendants have not provided sufficient information to ADC’s shareholders to enable them to make an informed decision about whether to tender their shares in connection with the tender offer and proposed Acquisition.

 

6.                                       The tender offer is likely to expire in the next few months. This action seeks equitable relief only.

 

7.                                       In short, the Acquisition is designed to unlawfully divest ADC’s public stockholders of their holdings and end ADC’s independent existence without providing ADC and its shareholders the maximized value to which they are entitled, and without all material facts concerning the

 

2



 

proposed Acquisition and the value of their shares. Defendants know that these assets will continue to produce substantial revenue and earnings.

 

PARTIES

 

8.                                       Plaintiff is and at all material times hereto has been a holder of ADC common stock.

 

9.                                       Defendant Robert E. Switz (“Switz”) is and at all material times hereto has been a Director of ADC. Switz has been a director of ADC since August 2003 and was appointed Chairman of the Board in August 2008. Switz has been President and Chief Executive Officer of ADC since August 2003. From January 1994 until August 2003, Switz served ADC as Chief Financial Officer as well as Executive Vice President and Senior Vice President. Switz also served as President of ADC’s former Broadband Access and Transport Group from November 2000 to April 2001. Switz is also a director of Broadcom Corporation, Micron Technology, Inc. and the Telecommunication Industry Association (TIA).

 

10.                                 Defendant William R. Spivey, Ph.D. (“Spivey”) is and at all material times hereto has been a Director of ADC. Spivey has been a director of ADC since September 2004. Spivey most recently served as President and Chief Executive Officer of Luminent, Inc., a fiber optics transmission products manufacturer, from July 2000 to November 2001. From 1997 to 2000, Spivey served as Network Products Group President for Lucent Technologies. He also served as Vice President of the Systems & Components Group at AT&T Corporation/Lucent Technologies from 1994 to 1997. Spivey also serves on the Boards of Directors of Novellus Systems, Inc., Raytheon Company, The Laird Group, PLC and Cascade Microtech, Inc.

 

11.                                 Defendant John J. Boyle, III (“Boyle”) is and at all material times hereto has been a Director of ADC. Boyle has been a director of ADC since November 1999. Boyle was appointed Chief Executive Officer of Arbor Networks, Inc., a company that researches next-generation cyber threats and develops solutions that prevent network attacks, in June 2005. Prior to joining Arbor

 

3



 

Networks, Boyle served as President and Chief Executive Officer of Equallogic, Inc., a company that develops networked storage by building intelligent storage solutions that extend the benefits of consolidated storage throughout the enterprise, from 2003 to 2004. From April 2000 to July 2003, Boyle served as Chief Executive Officer of Cogentric, Inc., a provider of solutions to enable decision makers to evaluate and enhance their Web-based capabilities. He served as Senior Vice President of ADC from October 1999 to April 2000 following the Company’s acquisition of Saville Systems PLC. Prior to joining ADC, Boyle served as President and Chief Executive Officer of Saville Systems PLC from August 1994 to October 1999 and as Saville’s Chairman of the Board from April 1998 to October 1999. Boyle is also a director of eFunds Corp.

 

12.                                 Defendant Mickey P. Foret (“Foret”) is and at all material times hereto has been a Director of ADC. Foret has been a director of ADC since February 2003. From September 1998 to September 2002, Foret served as Executive Vice President and Chief Financial Officer of Northwest Airlines, Inc. From September 1998 to September 2002, he also served as Chairman and Chief Executive Officer of Northwest Airlines Cargo Inc., a subsidiary of Northwest Airlines. From May 1998 to September 1998, Foret served as a Special Projects Officer of Northwest Airlines, Inc. Prior to that time he served as President and Chief Operating Officer of Atlas Air, Inc. from June 1996 to September 1997 and as Executive Vice President and Chief Financial Officer of Northwest Airlines, Inc. from September 1993 to May 1996. Foret previously held other senior management positions with various companies including Northwest Airlines, Continental Airlines Holdings, Inc. and KLH Computers, Inc. Foret is also a director of Delta Air Lines, Inc., URS Corporation and Nash Finch Company.

 

13.                                 Defendant Lois M. Martin (“Martin”) is and at all material times hereto has been a Director of ADC. Martin has been a director of ADC since March 2004. Martin has served as Senior Vice President and Chief Financial Officer for Capella Education Company, the publicly held

 

4



 

parent company of Capella University, an accredited on-line university since 2004. From 2002 to 2004, Martin served as Executive Vice President and Chief Financial Officer of World Data Products, Inc., a provider of server, storage, network and telecom solutions worldwide. From 1993 to 2001, Martin was employed by Deluxe Corporation during which time she held a number of positions, including Senior Vice President and Chief Financial Officer, Vice President and Corporate Controller, Vice President and Controller of Deluxe Financial Services Group, Vice President and Controller of Paper Payment Systems Division, Director of Accounting Services, and Director of Internal Audit. Prior to joining Deluxe Corporation, Martin served as International Controller for Carlson Companies, a privately held, international conglomerate. Martin is also a director of MTS Systems Corporation.

 

14.                                 Defendant Krish A. Prabhu, Ph.D. (“Prabhu”), is and at all material times hereto has been a Director of ADC. Prabhu has been a director of ADC since November 2008. Prabhu served as Chief Executive Officer and President of Tellabs from February 2004 until his retirement in February 2008. Prior to joining Tellabs, Prabhu held various engineering and management positions at Alcatel, including chief operating officer of Alcatel and chief executive officer of Alcatel USA. From November 2001 until February 2004,. Prabhu was a venture partner in Morgenthaler Ventures, a venture capital firm. Prabhu is also a director of Altera Corp. and Tekelec, Inc..

 

15.                                 Defendant John E. Rehfeld (“Rehfeld”) is and at all material times hereto has been a Director of ADC. Rehfeld has been a director of ADC since September 2004. Rehfeld has served as an adjunct professor for the Executive MBA program at Pepperdine University in California since 1998. Rehfeld most recently served as Chief Executive Officer of Spruce Technologies, Inc., a DVD authoring software company, during 2001. From 1997 to 2001, Rehfeld served as Chairman and Chief Executive Officer of ProShot Golf, Inc. He also served as President and Chief Executive Officer of Proxima Corporation from 1995 to 1997 and as President and Chief Executive Officer of

 

5



 

ETAK, Inc. from 1993 to 1995. Rehfeld is also a director of Enkeboll Design, Lantronix, Inc., Local.com Corporation and Overtone, Inc.

 

16.                                 Defendant David A. Roberts (“Roberts”) is and at all material times hereto has been a Director of ADC. Roberts has been a director of ADC since November 2008. Since June 2007, Roberts has served as Chairman of the Board, President and Chief Executive Officer of Carlisle Companies, a diversified global manufacturing company. Previously he served as Chairman (from April 2006 to June 2007) and President and Chief Executive Officer (from June 2001 to June 2007) of Graco Inc., a manufacturer of fluid handling systems and components used in vehicle lubrication, commercial and industrial settings. Roberts is also a director of Franklin Electric Co., Inc.

 

17.                                 Defendant Larry W. Wangberg (“Wangberg”) is and at all material times hereto has been a Director of ADC. Wangberg has been a director of ADC since October 2001. Wangberg served as Chief Executive Officer and Chairman of the Board of TechTV (formerly ZDTV, Inc.), a cable television network focused on technology information, news and entertainment, from August 1997 until his retirement from these positions in July 2002. Previously, Wangberg was Chief Executive Officer and Chairman of the Board of StarSight Telecast, Inc., an interactive navigation and program guide company, from February 1995 to August 1997. Wangberg is also a director of Autodesk, Inc. and Charter Communications, Inc., a company that recently emerged from bankruptcy.

 

18.                                 Defendant John D. Wunsch (“Wunsch”) is and at all material times hereto has been a Director of ADC. Wunsch has been a director of ADC since 1991. Wunsch served in executive positions with Harris Bank N. A. and Harris myCFO, Inc., which are subsidiaries of the Bank of Montreal, from March 2002 through September 2006. He was an independent consultant in the financial services industry from December 2001 to March 2002. He was President and Chief Executive Officer of Family Financial Strategies, Inc., a registered investment advisory company,

 

6



 

from 1997 to 2002. From 1990 to 1997, he served as President of Perrybell Investments, Inc., a registered investment advisory company.

 

19.                                 Defendant Tyco Electronics Ltd (“Tyco Electronics”) is a Swiss company that is a leading global provider of engineered electronic components, network solutions, specialty products and subsea telecommunication systems, with fiscal 2009 sales of $10.3 billion to customers in more than 150 countries. Tyco Electronics manufactures and markets products for customers in a broad array of industries including automotive; data communication systems and consumer electronics; telecommunications; aerospace, defense and marine; medical; energy; and lighting.

 

20.                                 Defendant Tyco Electronics Minnesota, Inc. (“Tyco Minnesota”) is a Minnesota corporation and a vehicle through which the Defendants seek to effectuate the merger.

 

21.                                 Nominal Defendant ADC is a Minnesota corporation, with its headquarters located at 13625 Technology Drive, Eden Prairie, MN 55344. ADC stock is publicly traded on the NASDAQ exchange under the ticker “ADCT.” ADC is a global provider of broadband communications network infrastructure products and related services, offering products and solutions that enable the delivery of high-speed Internet, data, video and voice communications over wireline, wireless, cable, enterprise and broadcast networks, including fiber-optic, copper and coaxial based frames, cabinets, cables, connectors and cards, wireless capacity and coverage solutions, network access devices and other physical infrastructure components. ADC’s products and services are deployed primarily by communications service providers and owners and operators of private enterprise networks. The Company has three business segments: Global Connectivity Solutions (Connectivity), Network Solutions and Professional Services. According to the Company’s quarterly report for the period ended April 2, 2010, filed with the SEC, there were nearly 97 million shares of ADC outstanding as of May 3, 2010.

 

7



 

22.                                 The Defendants named in ¶¶9-18 are sometimes collectively referred to herein as the “Individual Defendants” or the “Board.”

 

JURISDICTION AND VENUE

 

23.                                 Jurisdiction is proper in this District because Defendant ADC is headquartered in and regularly transacts business within Hennepin County, or Defendants have committed torts within Hennepin County, or solicit business in Hennepin County or should reasonably expect the acts to have consequences in Hennepin County and derive substantial revenue from interstate or international commerce.

 

24.                                 Venue is proper in this District because, inter alia, ADC’s principal place of business is in Hennepin County, and the Individual Defendants regularly conduct business in this jurisdiction. In addition, the acts and transactions complained of in this Complaint took place, in all or substantial part, in Hennepin County.

 

THE INDIVIDUAL DEFENDANTS’ FIDUCIARY DUTIES

 

25.                       Under applicable law, in any situation where the directors of a publicly traded corporation undertake a transaction that will result in either: (i) a change in corporate control; or (ii) a break up of the corporation’s assets, the directors have an affirmative fiduciary obligation to obtain the highest value reasonably available for the corporation’s shareholders, and if such transaction will result in a change of corporate control, the shareholders are entitled to receive a significant premium. To diligently comply with these duties, the directors and/or officers may not take any action that:

 

(a)                        adversely affects the value provided to the corporation’s shareholders;

 

(b)                       will discourage or inhibit alternative offers to purchase control of the corporation or its assets;

 

(c)                        contractually prohibits themselves from complying with their fiduciary duties;

 

8



 

(d)                                 will otherwise adversely affect their duty to search and secure the best value reasonably available under the circumstances for the corporation’s shareholders; and/or

 

(e)                                  will provide the directors and/or officers with preferential treatment at the expense of, or separate from, the public shareholders.

 

26.                       In accordance with their duties of loyalty and good faith, the Defendants, as directors and/or officers of ADC, are obligated under applicable law to refrain from:

 

(a)                        participating in any transaction where the directors’ or officers’ loyalties are divided;

 

(b)                       participating in any transaction where the directors or officers receive, or are entitled to receive, a personal financial benefit not equally shared by the public shareholders of the corporation; and/or

 

(c)                        unjustly enriching themselves at the expense or to the detriment of the public shareholders.

 

27.                       Defendants are also obliged to honor their duty of candor to ADC’s shareholders by, inter alia, providing all material information to the shareholders regarding a scenario in which they are asked to vote or tender their shares. This duty of candor ensures that shareholders have all information that will enable them to make informed, rational and intelligent decisions about whether to vote or tender their shares.

 

28.                       Plaintiff alleges herein that Defendants, separately and together, in connection with the Acquisition, are knowingly or recklessly violating their fiduciary duties, including their duties of loyalty, good faith, and independence owed to Plaintiff and other public shareholders of ADC. Defendants stand on both sides of the transaction, are engaging in self dealing, are obtaining for themselves personal benefits, including personal financial benefits not shared equally by Plaintiff or

 

9


 

 

the Class. As a result of Defendants’ self dealing and divided loyalties, neither Plaintiff nor the Class will receive adequate or fair value for their ADC common stock in the proposed Acquisition.

 

29.                                 Because Defendants are knowingly or recklessly breaching their duties of loyalty, good faith, candor and independence in connection with the Acquisition, the burden of proving the inherent or entire fairness of the Acquisition, including all aspects of its negotiation, structure, price and terms, is placed upon Defendants as a matter of law.

 

CLASS ACTION ALLEGATIONS

 

30.                                 Plaintiff brings this action individually and as a class action on behalf of all holders of ADC stock who are being and will be harmed by Defendants’ actions described below (the “Class”). Excluded from the Class are Defendants herein and any person, firm, trust, corporation, or other entity related to or affiliated with any Defendants.

 

31.                                 This action is properly maintainable as a class action under Minnesota Rule of Civil Procedure 23.

 

32.                                 The Class is so numerous that joinder of all members is impracticable. There are nearly 97 million shares of ADC’s common stock outstanding. These shares are held by hundreds, if not thousands, of beneficial holders.

 

33.                                 There are questions of law and fact which are common to the Class and which predominate over questions affecting any individual Class member. The common questions include, inter alia, the following:

 

(a)                                  whether the Individual Defendants have breached their fiduciary duties of undivided loyalty, independence or due care with respect to Plaintiff and the other members of the Class in connection with the Acquisition;

 

10



 

(b)                            whether the Individual Defendants have breached their fiduciary duty to secure and obtain the best price reasonable under the circumstances for the benefit of Plaintiff and the other members of the Class in connection with the Acquisition;

 

(c)                             whether the Individual Defendants have breached any of their other fiduciary duties to Plaintiff and the other members of the Class in connection with the Acquisition, including the duties of good faith, diligence, honesty and fair dealing;

 

(d)                            whether the Individual Defendants have breached their fiduciary duties of candor to Plaintiff and the other members of the Class in connection with the Acquisition by failing to disclose all material information upon which they are able to make an informed decision about whether to tender their shares;

 

(e)                             whether the Individual Defendants, in bad faith and for improper motives, have impeded or erected barriers to discourage other strategic alternatives including offers from interested parties for the Company or its assets;

 

(f)                               whether Plaintiff and the other members of the Class would be irreparably harmed were the transactions complained of herein consummated; and

 

(g)                            whether ADC and Tyco are aiding and abetting the wrongful acts of the Individual Defendants.

 

34.                                    Plaintiff’s claims are typical of the claims of the other members of the Class and Plaintiff does not have any interests adverse to the Class.

 

35.                                      Plaintiff is an adequate representative of the Class, has retained competent counsel experienced in litigation of this nature and will fairly and adequately protect the interests of the Class.

 

11



 

36.                                 The prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications with respect to individual members of the Class which would establish incompatible standards of conduct for the party opposing the Class.

 

37.                                 Plaintiff anticipates that there will be no difficulty in the management of this litigation. A class action is superior to other available methods for the fair and efficient adjudication of this controversy.

 

38.                                 Defendants have acted on grounds generally applicable to the Class with respect to the matters complained of herein, thereby making appropriate the relief sought herein with respect to the Class as a whole.

 

DERIVATIVE ALLEGATIONS

 

39.                                 Plaintiff brings Counts Nos. IV-VI, below, derivatively in the right of and for the benefit of ADC to redress injuries suffered and to be suffered by ADC as a direct result of the Individual Defendants’ breaches of fiduciary duty, corporate mismanagement, gross self-dealing, and abuse of control and conspiracy to abuse control.

 

40.                                 This is not a collusive action to confer jurisdiction in this Court which it would not otherwise have.

 

41.                                 Plaintiff will adequately and fairly represent the interests of ADC and its shareholders in enforcing and prosecuting their rights.

 

42.                                 This action is brought to remedy violations of applicable law.

 

43.                                 Plaintiff has not made a demand on the ADC Board of Directors prior to the filing of this Complaint. Plaintiff believes and alleges that a demand on the present Board of Directors of ADC to institute this action would be a futile, useless act and result in irreparable injury to the Company because the entire Board of Directors participated in the wrongs complained of herein as follows:

 

12



 

(a)                                  The Board of Directors accepted the Tyco acquisition proposal on the terms proposed;

 

(b)                                 The known principal wrongdoers and beneficiaries of the are in positions to, and do, dominate and control ADC’s Board of Directors. Thus, the Board of Directors could not, and cannot, exercise independent objective judgment in deciding whether to bring this action nor vigorously prosecute this action;

 

(c)                        The Board of Directors refused to take any action to rescind these actions despite their knowledge that such actions constitute a breach of their fiduciary duties;

 

(d)                       To bring this action for breach of fiduciary duties, abuse of control, and unjust enrichment, the members of ADC’s Board of Directors would have been required to sue themselves and/or their fellow directors and allies in the top ranks of the Company, with whom they are close personal friends and with whom they have entangling financial alliances, interests and dependencies. Suing themselves, their friends and their allies is not something the Individual Defendants would be willing to do, therefore, they would not be able to vigorously prosecute any such action;

 

(e)                        ADC’s Board of Directors, including each of the Individual Defendants herein, receive substantial salaries, bonuses, payments, benefits and other emoluments and perquisites by virtue of their membership on the Company’s Board of Directors and their control of ADC. Thus, they have benefitted from the wrongs alleged herein and have engaged therein to preserve their positions of control and the perquisites thereof, and are incapable of exercising independent objective judgment in deciding whether to bring this action. The Board members also have close personal and business ties with each other and consequently are interested parties and cannot, in good faith, exercise independent business judgment to determine whether to bring this action against themselves; and

 

13



 

(f)                                    Due to ADC’s directors’ and officers’ liability insurance coverage, if the directors caused ADC to sue themselves and the Company’s executive officers for the liability asserted herein, the directors and officers would be required to personally pay for the liability alleged herein. As a result, if these defendants were to sue themselves there would be no insurance protection for this derivative action. Thus, the defendants will not sue themselves because to do so would subject themselves and their colleagues and/or friends to million-dollar judgments payable from their individual assets alone.

 

44.                                 The meeting at which the actions described herein will be voted upon will take place within the next few weeks; accordingly, sending demand and waiting the statutory period for the ADC Board of Directors to respond to that demand would preclude any meaningful pre-vote relief, causing irreparable injury to ADC and its shareholders. Thus, Plaintiff has not made a demand on the Board which would have required Plaintiff to wait the statutory period for ADC’s Board of Directors to respond to the demand.

 

45.                                 Also, by the time the Board of Directors would consider a demand in the action, the shareholder meeting will have passed and Plaintiff, ADC and the Class will have suffered irreparable injury.

 

SUBSTANTIVE ALLEGATIONS

 

ADC’s Growth Potential Is Undeniable

 

46.                                 ADC’s second quarter 2010 financial results speak for themselves. On May 5, 2010, the Company announced, inter alia, the following highlights in a press release:

 

ADC Reports Second Quarter 2010 Financial Results

 

Strong margin expansion driven by operating efficiencies
and revenue growth

 

MINNEAPOLIS—(BUSINESS WIRE)—May 5, 2010—ADC (NASDAQ: ADCT) today announced unaudited results for its second quarter ended April 2, 2010.

 

14



 

“We are pleased with ADC’s strong financial performance in the second quarter, said Robert E. Switz, chairman, president and chief executive officer of ADC. “Our results are highlighted by another quarter of expanding margins and sequential revenue growth. We continue to experience the bottom-line benefits of our on-going cost reduction initiatives and the implementation of process and production improvements across our operations. Moving forward, ADC is well positioned to take further advantage of our operating leverage as we realize the revenue acceleration expected during the second half of our fiscal year.

 

“In addition to our second quarter revenue growth, we are seeing increased customer planning and proposal activity, indicating their intentions to renew next-generation network spending in significant ways. These investments, dedicated to deploying and upgrading FTTX and mobile networks, create growth opportunities for ADC’s high-performance fiber connectivity and wireless coverage and capacity solutions. Additionally, we expect to see continuing growth in the enterprise space where data center spending is rebounding, as well as in our professional services business which delivered another good quarter,” said Switz.

 

Second Quarter Fiscal 2010 Results

 

Due to a change in our fiscal year to September 30, ADC is comparing second quarter 2010 results announced today with the pro forma results for the prior year’s second quarter ended March 27, 2009 and the reported results for the first quarter of fiscal 2010 ended January 1, 2010.

 

·                                          ADC’s GAAP loss from continuing operations for the quarter was $12.5 million, or $0.13 per share. This GAAP loss includes certain charges and other items totaling $22.0 million. Excluding these items, the non-GAAP (adjusted) net earnings for the quarter were $9.5 million, or $0.10 per share. A reconciliation of GAAP to non-GAAP financial measures is provided later in this press release.

 

·                                          Net sales for the second quarter rose 6.8% to $274.0 million, compared to $256.6 million for the second quarter of fiscal 2009 and increased 3.2% compared to $265.6 million for the first quarter of 2010. The year-over-year and sequential increases reflect improving economic conditions in many regions of the world and customer spending trends.

 

·                                          Second quarter gross margin was 36.5 percent compared to a gross margin of 32.3 percent during the same quarter of last year and 34.7 percent in the previous quarter. This margin improvement was driven primarily by the company’s successful, ongoing efforts to increase efficiency across its operating cost structure, higher volume and a slightly favorable product mix.

 

·                                          Operating expenses were $91.7 million compared to $496.8 million during the 2009 second quarter and $96.2 million during the first quarter of 2010. Excluding impairment and restructuring charges, intangible amortization and certain other charges from each period, adjusted operating expenses were $81.8 million

 

15



 

compared to $78.1 million during the same quarter of last year and $82.0 million during the previous quarter.

 

·                                          ADC ended the second quarter with $619.3 million of liquidity, which includes cash and available-for-sale securities but excludes auction rate securities, restricted cash and borrowing capacity under the company’s credit facility. The company generated cash from operating activities from continuing operations of $4.8 million during the period. Details of ADC’s cash balance can be found in the data and statistics portion of this release.

 

·                                          Days sales outstanding increased 3.5 days from the previous quarter to approximately 61.7 days while inventory turns were slightly better at 5.7 times.

 

Third Quarter Fiscal 2010 Outlook

 

For its third quarter of fiscal 2010 ending July 2, 2010, ADC announces the following guidance:

 

·                                          Net sales are expected to be within a range of $290-$310 million.

 

·                                          GAAP diluted earnings per share are expected to be within a range of $.10 to $.20, which includes non-cash amortization expense of $0.05 per share and excludes potential non-cash charges or restructuring charges that the company cannot estimate at this time.

 

47.                                 These strong second quarter 2010 results came on the heels of similarly strong results for the first quarter of 2010. In a February 8, 2010 release, the Company described its first quarter 2010 successes as follows:

 

ADC Reports First Quarter 2010 Financial Results

 

EPS improvement driven by strong margins and cost savings actions

 

MINNEAPOLIS—(BUSINESS WIRE)—February 8, 2010—ADC (NASDAQ: ADCT) today announced unaudited results for its first quarter ended January 1, 2010.

 

“ADC’s strong first quarter results demonstrate the positive impact of our ongoing efforts to streamline operations,” said Robert E. Switz, chairman, president and chief executive officer of ADC. “We delivered very good gross margins, managed operating expenses effectively in the face of what remains a challenging CAPEX-spending environment, and bolstered our already strong liquidity position. Based on these results, we’re pleased with the continued improvements in our financial performance and expect to demonstrate further progress as we move through fiscal 2010.

 

“As we continue to realize the benefits of our improved operations, we expect to drive additional earnings power by maintaining our commitment to creating a more

 

16



 

effective and efficient organization,” added Switz. “We also are making strategic gains in the marketplace with our focus on the areas of greatest opportunity in fiber and wireless networks worldwide, exhibited in part by the strength of our business in China and a significant sequential increase in wireless sales in the first quarter.”

 

First Quarter Fiscal 2010 Results

 

Due to a change in our fiscal year to September 30, ADC is comparing first quarter 2010 results announced today with the pro forma results for the prior year’s first quarter ended December 26, 2008 and the pro forma results for the fourth quarter of fiscal 2009 ended September 30, 2009.

 

·                                          GAAP earnings from continuing operations were $3.6 million, or $0.04 per share. These GAAP earnings include non-GAAP items of $1.7 million. Excluding these items, the non-GAAP (adjusted) net earnings for the quarter were $1.9 million, or $0.02 per share. A reconciliation of GAAP to non-GAAP financial measures is provided later in this press release.

 

·                                          Net sales for first quarter totaled $265.6 million, compared to $299.7 million for the first quarter of fiscal 2009 and $291.2 million for the fourth quarter of 2009. The year-over-year decline reflects principally the impact of the global economic downturn, which was just beginning to impact the business at the same time last year. The sequential decrease is due primarily to expected seasonality and a decline in major carrier spending that the company referenced in its guidance at the end of the fourth quarter.

 

·                                          First quarter gross margin was 34.7 percent compared to adjusted gross margins of 29.5 percent during the same quarter of last year and 34.4 percent in the previous quarter. The year-over-year margin increase was driven by the company’s successful actions to increase efficiency across its operating cost structure, which offset the negative impact of lower revenue.

 

·                                          Operating expenses were $96.2 million compared to $98.8 million during the 2009 first quarter and $110.5 million during the 2009 fourth quarter. Excluding impairment and restructuring charges, intangible amortization and certain other charges from each period, adjusted operating expenses were $82.0 million compared to $78.1 million during the same quarter of last year and $78.6 million during the fourth quarter of the last fiscal year. As communicated in prior guidance, the operating expense increases are due primarily to higher stock-based compensation expense, which included a $4 million charge to reflect a change in assumptions. As a result of continuing cost actions and a return to normalized stock-based compensation levels, ADC expects to see lower adjusted operating expenses during the remainder of fiscal 2010.

 

·                                          ADC’s GAAP earnings from continuing operations included $14.2 million of expenses, or $0.14 per share, related to purchased intangible amortization, restructuring and impairment and certain other charges. In addition to these expenses, ADC recorded a one-time gain of $15.9 million or $0.16 per share related

 

17



 

to the sale of certain assets. Excluding these items, adjusted earnings per diluted share were $0.02. A reconciliation of GAAP to non-GAAP financial measures is provided later in this press release.

 

·                                          ADC ended the first quarter with $609.5 million of liquidity, which excludes auction rate securities and restricted cash. The company generated cash from operating activities from continuing operations of $16.0 million and free cash flow of $9.3 million in the first quarter. Details of ADC’s cash balance can be found in the data and statistics portion of this release.

 

·                                          Days sales outstanding improved from the previous quarter to approximately 58.1 days and inventory turns were slightly lower at 5.6 times.

 

·                                          During the first quarter, the company divested its GSM base station and switching business from the Network Solutions business unit and its RF Worx Signal Management product line from the Global Connectivity business unit. Both transactions reflected opportunities to divest non-core portfolios while not impacting ADC’s growth strategies. The GSM base station and switching business is reported as a discontinued operation and, as a result, prior periods have been restated to exclude the results of this business.

 

·                                          Financial performance of the Network Solutions business unit improved as revenue increased 17.2% from the previous quarter and 9.1% from last year’s first quarter. ADC is seeing a modest return to project spending related to in-building and outdoor microcellular wireless solutions by operators and enterprises worldwide.

 

Second Quarter Fiscal 2010 Outlook

 

For its second quarter of fiscal 2010 ending April 2, 2010, ADC announces the following guidance:

 

·                                          Net sales are expected to be within the range of $260-280 million.

 

·                                          GAAP diluted earnings per share are expected to be within the range of a loss of $.04 to earnings of $.06, which includes non-cash amortization expense of $0.05 per share and excludes potential non-cash charges or restructuring charges that the company cannot estimate at this time.

 

48.                                 ADC’s stock chart exemplifies the Company’s tangible rise to the range of share prices ADC’s stock holders have been experiencing lately, and before the announcement of the Acquisition:

 

18



 

 

The Proposed Acquisition of the Company

 

49.                                 All indications — including from ADC and Tyco — are that ADC’s value (and, thus, its share price) is steadily poised to continue climbing.

 

50.                                 Yet, Defendants want to give this Company away at a steal to Tyco.

 

51.                                 That is, on July 13, 2010, the Company — through the Individual Defendants — announced the Acquisition to the public via several SEC filings and a concomitant joint press release with Tyco which stated:

 

Tyco Electronics to Acquire ADC, Creating a World
Leader in Broadband Connectivity

 

SCHAFFHAUSEN, Switzerland and EDEN PRAIRIE, Minn., July 13, 2010 /PRNewswire via COMTEX News Network/ —

 

·                  Complementary Product Offerings Will Help Customers Deliver High-Speed Video and Data Communications

 

·                  Tyco Electronics Reports Preliminary Fiscal Third Quarter Results

 

·                  Sales of $3.1 Billion and Book-to-Bill Ratio of 1.06

 

19



 

·                  Diluted Earnings Per Share From Continuing Operations (GAAP EPS) of $0.72; Adjusted EPS of $0.70

 

Tyco Electronics (NYSE: TEL) and ADC (Nasdaq: ADCT) announced today a definitive agreement under which Tyco Electronics will acquire ADC for $12.75 per share in cash, or an enterprise value of approximately $1.25 billion. The transaction is expected to be accretive by approximately $0.14 per share in the first full year after closing excluding acquisition-related costs. It will position Tyco Electronics’ Network Solutions segment as a leading global provider of broadband connectivity products to carrier and enterprise networks around the world.

 

Tom Lynch, Chief Executive Officer of Tyco Electronics, said, “This is a very exciting time for our company and ADC is a great fit as we continue to execute our strategy to create strong leadership positions in all of our connectivity businesses. Consumers and enterprises want access to high-speed video and data wherever they are, on whatever devices they are using — from smart phones to HD and 3-D televisions to computers with advanced video-conferencing capabilities. The combination of ADC and Tyco Electronics creates an industry leader, with the scope and geographic scale to help customers deliver needed capacity, from the core of the network all the way to the end user.”

 

Robert E. Switz, Chairman, President and CEO of ADC, said, “ADC has a strong heritage of providing innovative wired and wireless solutions that have enabled the expansion of advanced broadband networks worldwide. As part of Tyco Electronics, our organization’s ability to serve the world’s leading telecommunications services providers and enterprises will be strengthened significantly. I have great respect for Tyco Electronics and know that they share our commitment to meeting customers’ changing next generation network needs.”

 

The combined organization will offer a complete product portfolio across every major geographic market. It will also add ADC’s Distributed Antenna System (DAS) products, which will expand Tyco Electronics’ wireless connectivity portfolio to provide greater mobile coverage and capacity solutions to carrier and enterprise customers as demand for mobile data continues to expand. Additionally, Tyco Electronics will add ADC’s professional services organization in the US to its business.

 

“We expect ADC to be accretive to our earnings in the first year and to reach our target operating margin of 15 percent in the third year after the acquisition,” said Lynch.

 

The transaction is structured as a tender offer to be followed as soon as possible by a merger. The transaction is subject to customary closing conditions, including the tender of a majority of ADC shares and regulatory approvals, and is expected to close in the fourth calendar quarter 2010.

 

In conjunction with today’s announcement, Tyco Electronics reported preliminary results for the fiscal third quarter ended June 25, 2010. The company reported sales

 

20



 

of $3.1 billion, an increase of 23 percent over the prior year quarter and up 4 percent sequentially. GAAP EPS were $0.72 in the quarter which included $0.02 per share of income related to other items net of restructuring charges. Adjusted EPS were $0.70 in the quarter. The company’s book-to-bill ratio was 1.06 for the quarter and 1.08 excluding Subsea Communications. The company will report complete results and provide further details on its fiscal third quarter before trading begins on July 22, 2010.

 

52.                                 Incredibly, not a single word was mentioned in the press release regarding the value of the Acquisition for ADC shareholders. This omission is stunning.

 

53.                                 Put simply, the Defendants are attempting to benefit from a temporary downturn in the markets and deprive ADC shareholders of the true value of their shares, as the Acquisition substantially undervalues ADC.

 

54.                                 Indeed, with over $500 million in cash and $1.1 billion in annual revenues, it is clear that the true value of ADC is well in excess of $12.75 per share.

 

55.                                 Moreover, after the announcement, Tyco was up 2.5%, or 64 cents, to close at $25.92, demonstrating that the market believes that Tyco is paying too little for ADC.

 

56.                                 In addition, the tender offer is coercive because of several material omissions from Defendants, which deprive ADC shareholders of the ability to make a voluntary tender of their shares in connection with the tender offer and proposed Acquisition.

 

57.                                 Specifically, Defendants have failed to disclose whether any committee of independent directors was formed to evaluate strategic alternatives for ADC, and, if not, the reasons why. This information is critically important to ADC shareholders because the Board is required to maximize shareholder value, not act in the best interests of Company management, who have substantial conflicts of interest, as demonstrated here from ADC’s latest Proxy statement:

 

21


 

 

Potential Payments Upon Certain Terminations, Death, Disability or Termination After
a Change in Control

 

 



Name

 



Description

 

Voluntary
Termination,
Disability or
Death

 

Without Cause
Termination

 

Retirement

 

Termination After
Change in Control

 

Robert E. Switz

 

Severance Amount

 

0

 

1,514,000

 

0

 

4,452,000

 

 

 

Bonus

 

0

 

0

 

0

 

695,711

 

 

 

Value of Accelerated Options(1)

 

0

 

0

 

0

 

1,488,740

 

 

 

Value of Accelerated RSUs(2)

 

0

 

0

 

1,250,875

 

1,876,500

 

 

 

Value of Accelerated PSUs(3)

 

0

 

0

 

583,742

 

2,917,599

 

 

 

Value of Benefits Continuation

 

0

 

3,870

 

0

 

3,870

 

 

 

Value of Outplacement Services

 

0

 

9,000

 

0

 

9,000

 

 

 

Excise Tax Gross Up Payment(4)

 

 

 

0

 

3,758,499

 

 

 

Total

 

0

 

1,526,870

 

1,834,617

 

15,289,919

 

James G. Mathews

 

Severance Amount

 

0

 

425,000

 

0

 

1,156,000

 

 

 

Bonus

 

49,110

 

49,110

 

49,110

 

218,265

 

 

 

Value of Accelerated Options(1)

 

0

 

0

 

0

 

523,500

 

 

 

Value of Accelerated RSUs(2)

 

0

 

0

 

0

 

115,357

 

 

 

Value of Accelerated PSUs(3)

 

0

 

0

 

0

 

254,767

 

 

 

Value of Benefits Continuation

 

0

 

2,018

 

0

 

2,018

 

 

 

Value of Outplacement Services

 

0

 

9,000

 

0

 

9,000

 

 

 

Excise Tax Gross Up Payment(4)

 

 

 

 

845,356

 

 

 

Total

 

49,110

 

485,128

 

49,110

 

3,124,283

 

Patrick D. O’Brien

 

Severance Amount

 

0

 

431,250

 

0

 

1,173,000

 

 

 

Bonus

 

52,622

 

52,622

 

52,622

 

221,568

 

 

 

Value of Accelerated Options(1)

 

 0

 

0

 

0

 

235,575

 

 

 

Value of Accelerated RSUs(2)

 

0

 

0

 

0

 

301,376

 

 

 

Value of Accelerated PSUs(3)

 

0

 

0

 

0

 

231,577

 

 

 

Value of Benefits Continuation

 

0

 

2,018

 

0

 

2,018

 

 

 

Value of Outplacement Services

 

0

 

 9,000

 

0

 

9,000

 

 

 

Excise Tax Gross Up Payment(4)

 

 

 

 

783,187

 

 

 

Total

 

52,622

 

494,890

 

$

 52,622

 

 2,957,301

 

Laura N. Owen

 

Severance Amount

 

0

 

363,750

 

0

 

902,100

 

 

 

Bonus

 

36,766

 

36,766

 

36,766

 

147,066

 

 

 

Value of Accelerated Options(1)

 

0

 

0

 

0

 

130,875

 

 

 

Value of Accelerated RSUs(2)

 

0

 

0

 

0

 

233,747

 

 

 

Value of Accelerated PSUs(3)

 

0

 

0

 

0

 

208,500

 

 

 

Value of Benefits Continuation

 

0

 

1,290

 

0

 

1,290

 

 

 

Value of Outplacement Services

 

0

 

9,000

 

0

 

9,000

 

 

 

Excise Tax Gross Up Payment(4)

 

 

 

 

565,932

 

 

 

Total

 

36,766

 

410,806

 

$

36,766

 

2,198,510

 

Richard B. Parran, Jr.

 

Severance Amount

 

 

 

368,750

 

0

 

914,500

 

 

 

Bonus

 

50,729

 

50,729

 

50,729

 

. 143,032

 

 

 

Value of Accelerated Options(1)

 

0

 

0

 

0

 

179,925

 

 

 

Value of Accelerated RSUs(2)

 

0

 

0

 

0

 

318,676

 

 

 

Value of Accelerated PSUs(3)

 

0

 

0

 

0

 

165,549

 

 

 

Value of Benefits Continuation

 

0

 

2,018

 

0

 

2,018

 

 

 

Value of Outplacement Services

 

0

 

9,000

 

0

 

9,000

 

 

 

Excise Tax Gross Up Payment(4)

 

 

 

 

633,160

 

 

 

Total

 

50,729

 

430,497

 

50,729

 

2,365,860

 

 

58.              Accordingly, without complete and adequate disclosure regarding this issue, among others, no ADC shareholder can make an intelligent, ration decision as whether to tender their shares or not.

 

59.              Likewise, the Agreement provides that ADC may be required to pay Tyco a termination fee of $38 million, including if it accepts a superior acquisition proposal. This penalty unduly binds ADC to the Agreement and hinders any competing, superior offers for the Company.

 

60.              Additionally, with the “no solicitation” provision in the Agreement, the Agreement further unduly binds the Company to the Acquisition and prevents the Individual Defendants from

 

22



 

maximizing shareholder value by prohibiting the Company from soliciting alternative business proposals. Inter alia, the so-called “no solicitation” provision provides:

 

Section 7.04. No Solicitation; Other Offers. (a) After the date hereof and prior to the earlier of the termination of this Agreement and the Acceptance Time, the Company and its Subsidiaries shall not (and the Company shall use its reasonable best efforts to cause its or any of its Subsidiaries’ officers or directors, investment bankers, attorneys, accountants, consultants or other agents or advisors (collectively, “Representatives”) not to), directly or indirectly, (i) solicit, initiate or knowingly take any action to facilitate or encourage the submission of any Acquisition Proposal, (ii) enter into or participate in any discussions or negotiations with, furnish any information relating to the Company or any of its Subsidiaries or afford access to the business, properties, assets, books or records of the Company or any of its Subsidiaries to, any Person with respect to inquiries regarding, or the making of, an Acquisition Proposal, (iii) fail to make, withdraw, modify or amend in a manner adverse to Parent the Company Board Recommendation (or recommend an Acquisition Proposal or knowingly take any action or make any statement inconsistent with the Company Board Recommendation) (any of the foregoing in this clause (iii), an “Adverse Recommendation Change”), (iv) grant any waiver or release under any standstill or similar agreement with respect to any class of equity securities of the Company or any of its Subsidiaries or under the Company Rights Agreement, (v) take any action to render the restrictions on a “control share acquisition” set forth in Section 302A.671 of the MBCA inapplicable to any transaction, (vi) approve any transaction under, or any Person becoming an “interested shareholder” under, Section 302A.673 of the MBCA or (vii) enter into any agreement in principle, letter of intent, term sheet, merger agreement, acquisition agreement, option agreement or other similar instrument relating to an Acquisition Proposal (other than a confidentiality agreement with a Person to whom the Company is permitted to provide information in accordance with Section 7.04(b)). It is agreed that any violation of the restrictions on the Company set forth in this Section by any Representative of the Company or any of its Subsidiaries shall be a breach of this Section by the Company.

 

CAUSES OF ACTION

 

COUNT I

 

On Behalf of Plaintiff and the Class Against All
INDIVIDUAL DEFENDANTS CLAIM FOR BREACH OF FIDUCIARY DUTIES

 

61.           Plaintiff repeats and realleges each allegation set forth herein.

 

62.           Defendants have knowingly and recklessly and in bad faith violated fiduciary duties of care, loyalty, good faith and independence owed to the public shareholders of ADC and have acted to put the interests of Tyco ahead of the interests of ADC’s shareholders.

 

23



 

63.           By the acts, transactions and courses of conduct alleged herein, Defendants, individually and acting as a part of a common plan, knowingly or recklessly and in bad faith are attempting to unfairly deprive Plaintiff and other members of the Class of the true value of their investment in ADC.

 

64.           As demonstrated by the allegations above, Defendants knowingly or recklessly failed to exercise the care required, and breached their duties of loyalty, good faith and independence owed to the shareholders of ADC because, among other reasons, they failed to:

 

·              fully inform themselves of the market value of ADC before entering into the Agreement;

 

·              act in the best interests of the public shareholders of ADC common stock;

 

·              maximize shareholder value;

 

·              obtain the best financial and other terms when the Company’s independent existence will be materially altered by the Acquisition; and

 

·              act in accordance with their fundamental duties of good faith, due care and loyalty.

 

65.              By reason of the foregoing acts, practices and course of conduct, Defendants have knowingly or recklessly and in bad faith failed to exercise ordinary care and diligence in the exercise of their fiduciary obligations toward Plaintiff and the other members of the Class.

 

66.              Unless enjoined by this Court, Defendants will continue to knowingly or recklessly and in bad faith breach their fiduciary duties owed to Plaintiff and the Class, and may consummate the proposed Acquisition which will exclude the Class from the maximized value they are entitled to all to the irreparable harm of the Class.

 

67.              As a result of Defendants’ unlawful actions, Plaintiff and the other members of the Class will be irreparably harmed in that they will not receive the real value of their equity ownership

 

24



 

of the Company. Unless the tender offer and proposed Acquisition are enjoined by the Court, Defendants will continue to knowingly or recklessly and in bad faith breach their fiduciary duties owed to Plaintiff and the members of the Class to the irreparable harm of the members of the Class.

 

68.           Plaintiff and the members of the Class have an inadequate remedy at law. Only through the exercise of this Court’s equitable powers can Plaintiff and the Class be fully protected from the immediate and irreparable injury which Defendants’ actions threaten to inflict.

 

69.           Plaintiff seeks to obtain a non-pecuniary benefit for the Class in the form of injunctive relief against the Individual Defendants. Plaintiff’s counsel are entitled to recover their reasonable attorneys’ fees and expenses as a result of the conference of a non-pecuniary benefit on behalf of the Class, and will seek an award of such fees and expenses at the appropriate time.

 

COUNT II

 

On Behalf of Plaintiff and the Class Against All
INDIVIDUAL DEFENDANTS CLAIM FOR BREACH OF DUTY OF CANDOR

 

70.           Plaintiff repeats and realleges each allegation set forth herein.

 

71.           The Individual Defendants were and are under a duty to make sure that ADC’s shareholders are provided full and complete disclosure concerning important matters which a reasonable stockholder would deem important under the circumstances.

 

72.           By the acts, transactions and courses of conduct alleged herein, defendants, individually and as part of a common plan and scheme or in breach of their fiduciary duties to plaintiff and the other members of the Class, are attempting unfairly to deprive plaintiff and other members of the Class of their ability to make an informed decision as to whether to tender their shares in connections with the tender offer and proposed Acquisition.

 

73.           ADC shareholders will, if the proposed Acquisition is consummated, be deprived of the opportunity to make an educated and informed decision concerning whether to tender their shares in favor of the Acquisition.

 

25



 

74.           By reason of the foregoing acts, practices and course of conduct, Defendants have acted in a willful, wanton and reckless manner in failing to exercise their fiduciary obligations toward Plaintiff and the other ADC public stockholders.

 

75.           As a result of the actions of Defendants, Plaintiff and the other members of the Class have been and will be damaged in that they have not and will not receive adequate and complete disclosure regarding the proposed Acquisition.

 

76.           Unless enjoined by this Court, Defendants will continue to breach their fiduciary duties owed to Plaintiff and the other members of the Class, and may consummate the proposed Acquisition and cause irreparable harm of the Class, as aforesaid.

 

77.           Plaintiff and the Class have no adequate remedy at law.

 

78.           Plaintiff seeks to obtain a non-pecuniary benefit for the Class in the form of injunctive relief against defendants. Plaintiff counsel are entitled to recover their reasonable attorneys’ fees and expenses as a result of the conference of a non-pecuniary benefit on behalf of the Class, and will seek an award of such fees and expenses at the appropriate time.

 

COUNT III

 

On Behalf of Plaintiff and the Class Against
TYCO FOR AIDING AND ABETTING THE INDIVIDUAL DEFENDANTS’
BREACH OF FIDUCIARY DUTIES

 

79.           Plaintiff repeats and realleges each allegation set forth herein.

 

80.           Defendant Tyco is sued herein as an aider and abettor of the breaches of fiduciary duties outlined above by the Individual Defendants, as members of the Board of ADC.

 

81.           The Individual Defendants breached their fiduciary duties of good faith, loyalty, and due care to the ADC shareholders by failing to:

 

·              fully inform themselves of the market value of ADC before entering into the Agreement;

 

26



 

·              act in the best interests of the public shareholders of ADC common stock;

 

·              maximize shareholder value;

 

·              obtain the best financial and other terms when the Company’s independent existence will be materially altered by the Acquisition; and

 

·              act in accordance with their fundamental duties of good faith, due care and loyalty.

 

82.           Such breaches of fiduciary duties could not and would not have occurred but for the conduct of Tyco, which, therefore, aided and abetted such breaches via entering into the Agreement with ADC.

 

83.           Tyco had knowledge that it was aiding and abetting the Individual Defendants’ breach of their fiduciary duties to the ADC shareholders.

 

84.           Tyco rendered substantial assistance to the Individual Defendants in their breach of their fiduciary duties to the ADC shareholders.

 

85.           As a result of Tyco’s conduct of aiding and abetting the Individual Defendants’ breaches of fiduciary duties, Plaintiff and the other members of the Class have been and will be damaged in that they have been and will be prevented from obtaining a fair price for their shares.

 

86.           As a result of the unlawful actions of Tyco, Plaintiff and the other members of the Class will be irreparably harmed in that they will not receive fair value for ADC’s assets and business, will be prevented from obtaining the real value of their equity ownership in the Company. Unless the actions of Tyco are enjoined by the Court, it will continue to aid and abet the Individual Defendants’ breach of their fiduciary duties owed to Plaintiff and the members of the Class, and will aid and abet a process that inhibits the maximization of shareholder value and the disclosure of material information.

 

87.           Plaintiff and the other members of the Class have no adequate remedy at law.

 

27



 

88.           Plaintiff seeks to obtain a non-pecuniary benefit for the Class in the form of injunctive relief against Tyco. Plaintiff’s counsel are entitled to recover their reasonable attorneys’ fees and expenses as a result of the conference of a non-pecuniary benefit on behalf of the Class, and will seek an award of such fees and expenses at the appropriate time.

 

COUNT IV

 

On Behalf of ADC Against
THE INDIVIDUAL DEFENDANTS FOR CORPORATE WASTE

 

89.           Plaintiff realleges each prior allegation above as though fully set forth herein.

 

90.           As explained above, the Individual Defendants’ conduct in connection with the Acquisition constitutes a waste of corporate assets.

 

91.           Specifically, by entering into the merger agreement with Tyco and expending needed funds from the Company’s coffers to consummate the Acquisition — rather than taking the appropriate steps to simply attempt to refinance the Company’s existing obligations to its lenders, the Individual Defendants are engaging in a gross waste of corporate assets to the substantial detriment of the Company.

 

92.           As a result of the Individual Defendants’ waste of ADC’s corporate assets, ADC has sustained and will continue to sustain irreparable harm and has no adequate remedy at law.

 

93.           Plaintiff seeks to obtain a non-pecuniary benefit for ADC in the form of injunctive relief against the Individual Defendants. Plaintiff’s counsel are entitled to recover their reasonable attorneys’ fees and expenses as a result of the conference of a non-pecuniary benefit on behalf of ADC, and will seek an award of such fees and expenses at the appropriate time.

 

COUNT V

 

On Behalf of ADC Against
THE INDIVIDUAL DEFENDANTS FOR ABUSE OF CONTROL

 

94.           Plaintiff realleges each prior allegation above as though fully set forth herein.

 

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95.           In direct contradiction of their fiduciary duties, the Individual Defendants have utilized their control over ADC to divert ADC’s valuable assets to the Tyco.

 

96.           Defendants’ conduct constituted and continues to constitute an abuse of their ability to control and influence ADC, conduct for which all defendants are legally responsible.

 

97.           By reason of the foregoing, ADC has been damaged and has sustained, and will continue to sustain, irreparable injury for which it has no adequate remedy at law.

 

98.           Plaintiff seeks to obtain a non-pecuniary benefit for ADC in the form of injunctive relief against the Individual Defendants. Plaintiff’s counsel are entitled to recover their reasonable attorneys’ fees and expenses as a result of the conference of a non-pecuniary benefit on behalf of ADC, and will seek an award of such fees and expenses at the appropriate time.

 

COUNT VI

 

On Behalf of ADC Against the
INDIVIDUAL DEFENDANTS FOR BREACH OF FIDUCIARY DUTY

 

99.           Plaintiff realleges each prior allegation above as though fully set forth herein.

 

100.         The Individual Defendants engaged in the aforesaid conduct without exercising the reasonable and ordinary care which directors and officers, as fiduciaries, owe to a corporation and its shareholders, and have thereby knowingly or recklessly breached and/or aided and abetted breaches of fiduciary duties to the corporation and/or its shareholders.

 

101.         As a result of the Individual Defendants’ breach of fiduciary duty, ADC has sustained and will continue to sustain irreparable harm and have no adequate remedy at law.

 

102.         Plaintiff seeks to obtain a non-pecuniary benefit for ADC in the form of injunctive relief against the Individual Defendants. Plaintiff’s counsel are entitled to recover their reasonable attorneys’ fees and expenses as a result of the conference of a non-pecuniary benefit on behalf of ADC, and will seek an award of such fees and expenses at the appropriate time.

 

JURY TRIAL DEMAND

 

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DATED: July 14, 2010

REINHARDT, WENDORF & BLANCHFIELD

 

GARRETT D. BLANCHFIELD, JR. (#209855)

 

 

 

/s/ Garrett D. Blanchfield

 

Garrett D. Blanchfield

 

 

 

E-1250 First National Bank Bldg.

 

332 Minnesota St.

 

St. Paul, MN 55101

 

Telephone: 651/287-2100

 

651/287-2103 (fax)

 

 

 

KENDALL LAW GROUP, LLP

 

JOE KENDALL

 

3232 McKinney, Suite 700

 

Dallas, TX 75204

 

Telephone: 214/744-3000

 

214/744-3015 (fax)

 

 

 

Attorneys for Plaintiff

 

ACKNOWLEDGEMENT

 

The undersigned hereby acknowledges that sanctions, including costs, disbursements and reasonable attorney fees may be awarded pursuant to Minn. Stat. § 549.211 to the party against whom the allegations in this pleading are asserted.

 

 

/s/ Garrett D. Blanchfield

 

GARRETT D. BLANCHFIELD

 

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EX-99.(A)(10) 11 a2199448zex-99_a10.htm EXHIBIT 99.(A)(10)

Exhibit (a)(10)

 

STATE OF MINNESOTA

DISTRICT COURT

 

 

COUNTY OF HENNEPIN

FOURTH JUDICIAL DISTRICT

 

 

 

CASE TYPE: Civil/Class Action

 

 

THOMAS HALLER, on behalf of himself and

Court File No.

 

all others similarly situated,

 

 

 

Plaintiff,

 

 

 

vs.

 

 

 

ADC TELECOMMUNICATIONS, INC.,

COMPLAINT

ROBERT E. SWITZ, JAMES G. MATHEWS,

 

WILLIAM R. SPIVEY, JOHN D. WUNSCH,

COMPLAINT BASED UPON

JOHN J. BOYLE, III, LARRY W. WANGBERG,

SELF-DEALING AND BREACH

MICKEY P. FORET, LOIS M. MARTIN,

OF DUTY

JOHN E. REHFELD, KRISH A. PRAHBU,

 

DAVID A. ROBERTS, TYCO ELECTRONICS LTD.,

 

and TYCO ELECTRONICS MINNESOTA, INC.,

 

 

 

Defendants.

 

 

SUMMARY OF THE ACTION

 

1.             This is a stockholder class action brought by plaintiff Thomas Haller (“Plaintiff”) on behalf of holders of common stock of ADC Telecommunications, Inc. (“ADC” or the “Company”) against ADC, Tyco Electronics Ltd. (“Tyco”), and Tyco Electronics Minnesota, Inc. (“Tyco Merger Sub”), and certain of ADC’s officers and directors. This action arises out of the Individual Defendants’ (as defined herein) agreement to sell ADC to Tyco at an unfair price of $12.75 for each share of ADC common stock via an unfair process (the “Proposed Acquisition”). This action seeks to enjoin the Individual Defendants from further breaching their fiduciary duties in their pursuit of the Proposed Acquisition.

 

2.             In pursuing the unlawful plan to induce ADC’s shareholders to tender their shares in the Proposed Acquisition via an unfair and uninformed process, each of the defendants violated applicable law by directly breaching and/or aiding the other defendants’ breaches of their fiduciary duties of loyalty, due care, diligence, independence, good faith, and fair dealing.

 



 

3.             Over the past year, the Company’s stock price has been decimated by the global economic rescission. As the economy has rebounded, however, so have the Company and its stock value. In the Company’s first quarter of fiscal 2010, the Company handily beat Wall Street’s expectations and raised its net sales guidance that it had provided the market just over two months before. Knowing that the economy is recovering, Tyco recognized that it had an opportunity to cash in on ADC’s temporarily depressed stock price by acquiring the Company’s valuable assets before it felt the full effects of the economic turnaround.

 

4.             Devices like cell phones that increase data traffic will drive fiber optic sales, in turn, increasing the prospects of ADC. As the phone company networks switch to fiber optic cable, as opposed to copper, ADC stands in a strong position. Indeed, one analyst stated that he expects “earnings [to] grow 40% next year.” Despite being aware of ADC’s improving financial metrics, the Individual Defendants are selling the Company’s valuable assets for a price that does not maximize shareholder value and, apparently, without adequately shopping ADC.

 

5.             The market’s reaction to the news of the Proposed Acquisition demonstrates the strength of ADC’s outlook. Tyco’s stock jumped on the news that it would acquire ADC so cheaply, closing up approximately 2.5% on the date the Proposed Acquisition was announced. This is not surprising given that Tyco expects the Proposed Acquisition to be accretive by $0.14 per share in the first full year after closing.

 

6.             Tyco also stands to reap the benefits of ADC’s $863.4 million of net operating losses (“NOLs”). These NOLs do not expire until after fiscal 2021. As currently constituted, the Proposed Transaction is not priced to compensate ADC shareholders for the benefit that Tyco will receive from the Company’s NOLs.

 

7.             The Individual Defendants entered into numerous agreements meant to deter additional offers for the Company and deprive shareholders of their right to meaningfully evaluate and consider and, thereafter, either support or oppose the Proposed Acquisition. For example, the Company agreed that: (i) it will not solicit, initiate, or knowingly encourage any superior proposals from other parties; (ii) it would pay a termination fee of $38 million to Tyco if

 

2



 

it accepted a superior unsolicited proposal, adding an additional $0.39 per share to the price tag for any successful third party bidder; and (iii) Tyco would have a “Top-Up Option” allowing it to acquire additional shares from the Company if it does not acquire via the tender the 90% required shares to complete the Proposed Acquisition via a short form merger.

 

8.             Because the Individual Defendants dominate and control the business and corporate affairs of ADC, there exists an imbalance and disparity of economic power between them and the public shareholders of ADC. Therefore, it is inherently unfair for the Individual Defendants to execute and pursue any Proposed Acquisition agreement under which they will reap disproportionate benefits to the exclusion of obtaining the best shareholder value reasonably available. Nonetheless, instead of attempting to negotiate a contract reflecting the best consideration available for the ADC shareholders who they are duty-bound to serve, the Individual Defendants disloyally placed their own interests first and tailored the terms and conditions of the Proposed Acquisition to meet their own personal needs and objectives. In short, the Proposed Acquisition is designed to unlawfully divest ADC’s public shareholders of the Company’s valuable assets for grossly inadequate consideration.

 

9.             To remedy the Individual defendants’ breaches of fiduciary duty and other misconduct, Plaintiff seeks, inter alia: (i) injunctive relief preventing consummation of the Proposed Acquisition unless and until the Company adopts and implements a procedure or process to obtain a transaction that provides the best possible terms for shareholders; (ii) a directive to the Individual Defendants to exercise their fiduciary duties to obtain a transaction which is in the best interests of ADC’s shareholders; and (iii) rescission of, to the extent already implemented, the A&PM or any of the terms thereof.

 

JURISDICTION AND VENUE

 

10.           This Court has jurisdiction over each defendant named herein because each defendant is either a corporation that conducts business in and maintains operations in this County, or is an individual who has sufficient minimum contacts with Minnesota so as to render

 

3



 

the exercise of jurisdiction by the Minnesota courts permissible under traditional notions of fair play and substantial justice.

 

11.           Venue is proper in this Court because one or more of the defendants either resides in or maintains executive offices in this County, a substantial portion of the transactions and wrongs complained of herein, including the defendants’ primary participation in the wrongful acts detailed herein and aiding and abetting and conspiracy in violation of fiduciary duties owed to ADC occurred in this County, and defendants have received substantial compensation in this County by doing business here and engaging in numerous activities that had an effect in this County.

 

PARTIES

 

12.           Plaintiff is and has been a shareholder of ADC at all relevant times.

 

13.           Defendant ADC is a Minnesota corporation that provides broadband communications network infrastructure products and related services and offers comprehensive solutions that enable the delivery of high-speed Internet, data, video, and voice communications over wireline, wireless cable, enterprise, and broadcast networks. ADC’s products include fiber-optic, copper, and coaxial based frames, cabinets, cables, connectors, and cards, wireless capacity and coverage solutions, network access devices, and other physical infrastructure components. If the Proposed Acquisition is consummated, ADC will become a wholly owned subsidiary of Tyco. ADC’s principal executive offices are located at 13625 Technology Drive, Eden Prairie, Minnesota.

 

14.           Defendant Robert E. Switz (“Switz”) is ADC’s Chairman of the Board of Directors (“Board”) and has been since August 2008 and a director and has been since August 2003. Switz is also ADC’s President and Chief Executive Officer and has been since August 2003. Switz served in various other positions at ADC from January 1994 to August 2003, including as Chief Financial Officer; Executive Vice President; Senior Vice President; and President of ADC’s former Broadband Access and Transport Group.

 

4



 

15.           Defendant James G. Mathews (“Mathews”) is ADC’s Chief Financial Officer and has been since April 2007. Mathews is also an ADC Vice President and has been since December 2005. Mathews was ADC’s Controller from December 2005 to April 2007.

 

16.           Defendant William R. Spivey is ADC’s Independent Lead Director and has been since February 2009 and a director and has been since September 2004.

 

17.           Defendant John D. Wunsch is an ADC director and has been since 1991.

 

18.           Defendant John J. Boyle, III (“Boyle”) is an ADC director and has been since November 1999. Boyle was an ADC Senior Vice President from October 1999 to April 2000.

 

19.           Defendant Larry W. Wangberg is an ADC director and has been since October 2001.

 

20.           Defendant Mickey P. Foret is an ADC director and has been since February 2003.

 

21.           Defendant Lois M. Martin is an ADC director and has been since March 2004.

 

22.           Defendant John E. Rehfeld is an ADC director and has been since September 2004.

 

23.           Defendant Krish A. Prabhu is an ADC director and has been since November 2008.

 

24.           Defendant David A. Roberts is an ADC director and has been since November 2008.

 

25.           Defendant Tyco is a Swiss corporation that provides engineered electronic components, network solutions, specialty products, and undersea telecommunication systems, with fiscal 2009 sales of US$10.3 billion to customers in more than 150 countries. Tyco designs, manufactures, and markets products for customers in various industries, including automotive; data communication systems and consumer electronics; telecommunications; aerospace, defense, and marine; medical; energy; and lighting. Tyco’s principal executive offices are located at Rheinstrasse 20, CH-8200 Schaffhausen, Switzerland.

 

5



 

26.           Defendant Tyco Merger Sub is a Minnesota corporation and a wholly owned subsidiary of Tyco. Upon completion of the merger, Tyco Merger Sub will merge with and into ADC.

 

27.           The defendants named above in ¶¶14-24 are sometimes collectively referred to herein as the “Individual Defendants.”

 

INDIVIDUAL DEFENDANTS’ FIDUCIARY DUTIES

 

28.           Under Minnesota law, the directors and officers of a publicly traded corporation have fiduciary duties of loyalty, good faith, and care to shareholders. To diligently comply with these duties, neither the directors nor the officers may take any action that:

 

(a)           adversely affects the value provided to the corporation’s shareholders;

 

(b)           will discourage, inhibit, or deter alternative offers to purchase control of the corporation or its assets;

 

(c)           contractually prohibits themselves from complying with their fiduciary duties;

 

(d)           will otherwise adversely affect their duty to secure the best value reasonably available under the circumstances for the corporation’s shareholders; and/or

 

(e)           will provide the directors and/or officers with preferential treatment at the expense of, or separate from, the public shareholders.

 

29.           In accordance with their duties of loyalty and good faith, the Individual Defendants, as directors and/or officers of ADC, are obligated under Minnesota law to refrain from:

 

(a)           participating in any transaction where the directors’ or officers’ loyalties are divided;

 

(b)           participating in any transaction where the directors or officers receive, or are entitled to receive, a personal financial benefit not equally shared by the public shareholders of the corporation; and/or

 

6



 

(c)           unjustly enriching themselves at the expense or to the detriment of the public shareholders.

 

30.           Defendants, separately and together, in connection with the Proposed Acquisition, are knowingly or recklessly violating their fiduciary duties and aiding and abetting such breaches, including their duties of loyalty, good faith, and independence owed to Plaintiff and other public shareholders of ADC. Certain of the defendants stand on both sides of the transaction, are engaging in self-dealing, are obtaining for themselves personal benefits, including personal financial benefits not shared equally by Plaintiff or the Class (as defined herein). Certain ADC executives and directors are also retaining their prestigious and lucrative positions and compensation at the post-Proposed Acquisition company. Accordingly, the Proposed Acquisition will benefit the Individual Defendants in significant ways not shared with the Class members. As a result of the Individual Defendants’ self-dealing and divided loyalties, neither Plaintiff nor the Class will receive adequate or fair value for their ADC common stock in the Proposed Acquisition.

 

31.           Because the Individual Defendants are knowingly or recklessly breaching their duties of loyalty, good faith, and independence in connection with the Proposed Acquisition, the burden of proving the inherent or entire fairness of the Proposed Acquisition, including all aspects of its negotiation, structure, price, and terms, is placed upon defendants as a matter of law.

 

THE PROPOSED ACQUISITION

 

32.           On July 13, 2010, ADC and Tyco jointly issued the following press release announcing that the Individual Defendants had agreed to sell ADC to Tyco for $12.75 in cash per ADC share:

 

Tyco Electronics and ADC announced today a definitive agreement under which Tyco Electronics will acquire ADC for $12.75 per share in cash, or an enterprise value of approximately $1.25 billion. The transaction is expected to be accretive by approximately $0.14 per share in the first full year after closing excluding acquisition-related costs. It will position Tyco Electronics’ Network Solutions

 

7



 

segment as a leading global provider of broadband connectivity products to carrier and enterprise networks around the world.

 

Tom Lynch, Chief Executive Officer of Tyco Electronics, said, “This is a very exciting time for our company and ADC is a great fit as we continue to execute our strategy to create strong leadership positions in all of our connectivity businesses. Consumers and enterprises want access to high-speed video and data wherever they are, on whatever devices they are using—from smart phones to HD and 3-D televisions to computers with advanced video-conferencing capabilities. The combination of ADC and Tyco Electronics creates an industry leader, with the scope and geographic scale to help customers deliver needed capacity, from the core of the network all the way to the end user.”

 

Robert E. Switz, Chairman, President and CEO of ADC, said, “ADC has a strong heritage of providing innovative wired and wireless solutions that have enabled the expansion of advanced broadband networks worldwide. As part of Tyco Electronics, our organization’s ability to serve the world’s leading telecommunications services providers and enterprises will be strengthened significantly. I have great respect for Tyco Electronics and know that they share our commitment to meeting customers’ changing next generation network needs.”

 

The combined organization will offer a complete product portfolio across every major geographic market. It will also add ADC’s Distributed Antenna System (DAS) products, which will expand Tyco Electronics’ wireless connectivity portfolio to provide greater mobile coverage and capacity solutions to carrier and enterprise customers as demand for mobile data continues to expand. Additionally, Tyco Electronics will add ADC’s professional services organization in the US to its business.

 

“We expect ADC to be accretive to our earnings in the first year and to reach our target operating margin of 15 percent in the third year after the acquisition,” said Lynch.

 

The transaction is structured as a tender offer to be followed as soon as possible by a merger. The transaction is subject to customary closing conditions, including the tender of a majority of ADC shares and regulatory approvals, and is expected to close in the fourth calendar quarter 2010.

 

In conjunction with today’s announcement, Tyco Electronics reported preliminary results for the fiscal third quarter ended June 25, 2010. The company reported sales of $3.1 billion, an increase of 23 percent over the prior year quarter and up 4 percent sequentially. GAAP EPS were $0.72 in the quarter which included $0.02 per share of income related to other items net of restructuring charges. Adjusted EPS were $0.70 in the quarter. The company’s book-to-bill ratio was 1.06 for the quarter and 1.08 excluding Subsea Communications. The company will report complete results and provide further details on its fiscal third quarter before trading begins on July 22, 2010.

 

8



 

33.           On July 13, 2010, the Company filed a Form 8-K with the United States Securities and Exchange Commission (“SEC”), wherein it disclosed the A&PM. The announcement and filing reveal that the Proposed Acquisition is the product of a flawed sale process and, unless the offer price is increased, would be consummated at an unfair price.

 

34.           Under Section 7.04(a) of the A&PM, ADC is subject to a no-solicitation clause that prohibits the Company from seeking a superior offer for its shareholders. Section 7.04 states that:

 

Section 7.04. No Solicitation; Other Offers. (a) After the date hereof and prior to the earlier of the termination of this Agreement and the Acceptance Time, the Company and its Subsidiaries shall not (and the Company shall use its reasonable best efforts to cause its or any of its Subsidiaries’ officers or directors, investment bankers, attorneys, accountants, consultants or other agents or advisors (collectively, “Representatives”) not to), directly or indirectly, (i) solicit, initiate or knowingly take any action to facilitate or encourage the submission of any Acquisition Proposal, (ii) enter into or participate in any discussions or negotiations with, furnish any information relating to the Company or any of its Subsidiaries or afford access to the business, properties, assets, books or records of the Company or any of its Subsidiaries to, any Person with respect to inquiries regarding, or the making of, an Acquisition Proposal, (iii) fail to make, withdraw, modify or amend in a manner adverse to Parent the Company Board Recommendation (or recommend an Acquisition Proposal or knowingly take any action or make any statement inconsistent with the Company Board Recommendation) (any of the foregoing in this clause (iii), an “Adverse Recommendation Change”), (iv) grant any waiver or release under any standstill or similar agreement with respect to any class of equity securities of the Company or any of its Subsidiaries or under the Company Rights Agreement, (v) take any action to render the restrictions on a “control share acquisition” set forth in Section 302A.671 of the MBCA inapplicable to any transaction, (vi) approve any transaction under, or any Person becoming an “interested shareholder” under, Section 302A.673 of the MBCA or (vii) enter into any agreement in principle, letter of intent, term sheet, merger agreement, acquisition agreement, option agreement or other similar instrument relating to an Acquisition Proposal (other than a confidentiality agreement with a Person to whom the Company is permitted to provide information in accordance with Section 7.04(b)). It is agreed that any violation of the restrictions on the Company set forth in this Section by any Representative of the Company or any of its Subsidiaries shall be a breach of this Section by the Company.

 

35.           Though the A&PM ostensibly has a “fiduciary out” provision that allows the Company to negotiate with other bidders, this provision is actually illusory. In order for ADC to

 

9



 

negotiate with any other suitors, the potential acquirer would first have to make an unsolicited superior offer. Without access to nonpublic information, which the Company is prevented from offering under the A&PM prior to the receipt of an offer that the Company reasonably expects to lead to a superior deal, no other bidder will emerge to make such an offer.

 

36.           Furthermore, ADC is subject to another preclusive lock-up provision in Section 12.04 of the A&PM. Section 12.04 states that ADC is subject to a termination fee of $38 million payable to Tyco if the Company or Tyco terminates the A&PM. This provision is unfair to the Company’s shareholders and contrary to their interests because it deters and prevents the submission of higher proposals, especially in connection with the no solicitation clause in Section 7.04.

 

37.           The Individual Defendants are attempting to silence dissent among the Company’s shareholders by granting Tyco a “Top-Up Option” in Section 2.04 of the A&PM. The Top-Up Option allows Tyco to acquire all the unissued stock the Company is authorized to issue under its certificate of incorporation until Tyco acquires one share more than 90% of ADC’s outstanding stock. Once ADC reaches the 90% threshold, it will consummate a short-form merger, which will allow it to acquire ADC without a vote in favor of the Proposed Acquisition from the Company’s shareholders.

 

38.           The provisions above, which will serve to unreasonably deter and discourage superior offers from other interested parties, were agreed to by the Individual Defendants to help secure the personal benefits and unfair profits afforded to them through the Proposed Acquisition.

 

SELF-DEALING

 

39.           By reason of their positions with ADC, the Individual Defendants have access to non-public information concerning the financial condition and prospects of ADC. Thus, there exists an imbalance and disparity of knowledge and economic power between the Individual Defendants and the public shareholders of ADC. Therefore, it is inherently unfair for the Individual Defendants to execute and pursue any Proposed Acquisition agreement under which

 

10



 

they will reap disproportionate benefits to the exclusion of obtaining the best value for shareholders. Instead, the Individual Defendants disloyally placed their own interests first, and tailored the terms and conditions of the Proposed Acquisition to meet their own personal needs and objectives. Certain Individual Defendants are also receiving lucrative change-in-control benefits or prestigious positions at the post-Proposed Acquisition company.

 

40.           The Proposed Acquisition is wrongful, unfair, and harmful to ADC’s public stockholders, and represents an effort by the Individual Defendants to aggrandize their own financial position and interests at the expense of and to the detriment of the Class (as defined herein) members. Specifically, defendants are attempting to deny Plaintiff and the Class their shareholder rights through the sale of ADC via an unfair process. Accordingly, the Proposed Acquisition will benefit the Individual Defendants at the expense of ADC’s shareholders.

 

41.           In light of the foregoing, the Individual Defendants must, as their fiduciary obligations require:

 

·                                          Withdraw their consent to the Top-Up Option and allow the shareholders to tender their shares without being impeded by this deal protection device.

 

·                                          Withdraw their consent to Tyco’s acquisition of ADC and allow the shares to trade freely without impediments, including the $38 million termination fee;

 

·                                          Act independently so that the interests of ADC’s public stockholders will be protected;

 

·                                          Adequately ensure that no conflicts of interest exist between defendants’ own interests and their fiduciary obligation to maximize stockholder value or, if such conflicts exist, to ensure that all conflicts be resolved in the best interests of ADC’s public stockholders; and

 

·                                          Solicit competing bids to Tyco’s offer to ensure that the Company’s shareholders are receiving the maximum value for their shares.

 

42.           The Individual Defendants have also approved the Proposed Acquisition so that it transfers 100% of ADC’s revenues and profits to Tyco, thus, all of ADC’s operations will now accrue to the benefit of Tyco.

 

11


 

THE UNFAIR AND INADEQUATE PROCESS

 

43.           In order to meet their fiduciary duties, the Individual Defendants are obligated to explore transactions that will maximize shareholder value, and not structure a preferential deal for themselves. Due to the Individual Defendants’ eagerness to enter into a transaction with Tyco, they failed to implement a process to obtain the maximum price for ADC shareholders.

 

44.           As a result of defendants’ conduct, ADC’s public stockholders have been and will continue to be denied the fair process and arm’s-length negotiated terms to which they are entitled in a sale of their Company. The consideration reflected in the A&PM does not reflect the true inherent value of the Company that was available only to the Individual Defendants, as directors and officers of ADC, and Tyco at the time the Proposed Acquisition was announced. Indeed, the Individual Defendants ensured that ADC would be sold to one buyer and one buyer only by negotiating a no-solicitation clause that prevents ADC from soliciting higher offers, voting agreements, and a $38 million termination fee that will discourage any unsolicited offers.

 

CLASS ACTION ALLEGATIONS

 

45.           Plaintiff brings this action for himself and on behalf of all holders of ADC common stock which have been or will be harmed by the conduct described herein (the “Class”). Excluded from the Class are the defendants and any individual or entity affiliated with any defendant.

 

46.           This action is properly maintainable as a class action.

 

47.           The Class is so numerous that joinder of all members is impracticable. According to ADC’s SEC filings, there were more than over 97 million shares of ADC common stock outstanding as of July 9, 2010.

 

48.           There are questions of law and fact which are common to the Class and which predominate over questions affecting any individual Class member. The common questions include, inter alia, the following:

 

12



 

(a)             whether the Individual Defendants have breached their fiduciary duties of undivided loyalty, independence, or due care with respect to Plaintiff and the other members of the Class in connection with the Proposed Acquisition;

 

(b)             whether the Individual Defendants are engaging in self-dealing in connection with the Proposed Acquisition;

 

(c)             whether the Individual Defendants have breached any of their other fiduciary duties owed to Plaintiff and the other members of the Class in connection with the Proposed Acquisition, including the duties of good faith, diligence, and fair dealing;

 

(d)           whether ADC aided and abetted the Individual Defendants’ breaches of fiduciary duties;

 

(e)           whether Tyco and/or Tyco Merger Sub aided and abetted the Individual Defendants’ breaches of fiduciary duties; and

 

(f)            whether Plaintiff and the other members of the Class would suffer irreparable injury were the transactions complained of herein consummated.

 

49.           Plaintiff’s claims are typical of the claims of the other members of the Class and Plaintiff does not have any interests adverse to the Class.

 

50.           Plaintiff has retained competent counsel experienced in litigation of this nature and will fairly and adequately represent and protect the interests of the Class.

 

51.           The prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications with respect to individual members of the Class which would establish incompatible standards of conduct for the party opposing the Class.

 

52.           Plaintiff anticipates that there will be no difficulty in the management of this litigation. A class action is superior to other available methods for the fair and efficient adjudication of this controversy.

 

53.           Defendants have acted on grounds generally applicable to the Class with respect to the matters complained of herein, thereby making appropriate the relief sought herein with respect to the Class as a whole.

 

13



 

FIRST CAUSE OF ACTION

 

Claim for Breach of Fiduciary Duties Against the Individual Defendants

 

54.           Plaintiff incorporates by reference and realleges each and every allegation contained above as though fully set forth herein.

 

55.           The Individual Defendants have violated the fiduciary duties of care, loyalty, good faith, and independence owed to the public shareholders of ADC and have acted to put their personal interests ahead of the interests of ADC’s shareholders.

 

56.           By the acts, transactions, and courses of conduct alleged herein, defendants, individually and acting as a part of a common plan, are attempting to unfairly deprive Plaintiff and other members of the Class of the true value inherent in and arising from ADC.

 

57.           The Individual Defendants have violated their fiduciary duties by entering ADC into the Proposed Acquisition without regard to the effect of the Proposed Acquisition on ADC’s shareholders.

 

58.           As demonstrated by the allegations above, the Individual Defendants failed to exercise the care required, and breached their duties of loyalty, good faith, and independence owed to the shareholders of ADC because, among other reasons:

 

(a)           they failed to take steps to maximize the value of ADC to its public shareholders;

 

(b)           they failed to properly value ADC and its various assets and operations; and

 

(c)           they ignored or did not protect against the numerous conflicts of interest resulting from the directors’ own interrelationships or connection with the Proposed Acquisition.

 

59.          Because the Individual Defendants dominate and control the business and corporate affairs of ADC, and are in possession of or have access to private corporate information concerning ADC’s assets, business, and future prospects, there exists an imbalance and disparity of knowledge and economic power between them and the public shareholders of ADC which makes it inherently unfair for them to pursue and recommend any proposed

 

14



 

transaction wherein they will reap disproportionate benefits to the exclusion of maximizing shareholder value.

 

60.           By reason of the foregoing acts, practices, and course of conduct, the Individual Defendants have failed to exercise ordinary care and diligence in the exercise of their fiduciary obligations toward Plaintiff and the other members of the Class.

 

61.           The Individual Defendants are engaging in self-dealing, are not acting in good faith toward Plaintiff and the other members of the Class, and have breached and are breaching their fiduciary duties to the members of the Class.

 

62.           As a result of the Individual Defendants’ unlawful actions, Plaintiff and the other members of the Class will be irreparably harmed in that they will not receive their fair portion of the value of ADC’s assets and operations. Unless the Proposed Acquisition is enjoined by the Court, the Individual Defendants will continue to breach their fiduciary duties owed to Plaintiff and the members of the Class, will not engage in arm’s-length negotiations on the Proposed Acquisition terms, and may consummate the Proposed Acquisition, all to the irreparable harm of the members of the Class.

 

63.           Plaintiff and the members of the Class have no adequate remedy at law. Only through the exercise of this Court’s equitable powers can Plaintiff and the Class be fully protected from the immediate and irreparable injury which defendants’ actions threaten to inflict.

 

SECOND CAUSE OF ACTION

 

Claim for Aiding and Abetting Breaches of Fiduciary Duty Against ADC

 

64.           Plaintiff incorporates by reference and realleges each and every allegation contained above as though fully set forth herein.

 

65.           The Individual Defendants owed to Plaintiff and the members of the Class certain fiduciary duties as fully set out herein.

 

66.           By committing the acts alleged herein, the Individual Defendants breached their fiduciary duties owed to Plaintiff and the members of the Class.

 

15



 

67.             ADC colluded in or aided and abetted the Individual Defendants’ breaches of fiduciary duties, and was an active and knowing participant in the Individual Defendants’ and breaches of fiduciary duties owed to Plaintiff and the members of the Class.

 

68.             Plaintiff and the members of the Class shall be irreparably injured as a direct and proximate result of the aforementioned acts.

 

THIRD CAUSE OF ACTION

 

Claim for Aiding and Abetting Breaches of Fiduciary Duty Against Tyco and Tyco Merger Sub

 

69.             Plaintiff incorporates by reference and realleges each and every allegation contained above as though fully set forth herein.

 

70.             The Individual Defendants owed to Plaintiff and the members of the Class certain fiduciary duties as fully set out herein.

 

71.             By committing the acts alleged herein, the Individual Defendants breached their fiduciary duties owed to Plaintiff and the members of the Class.

 

72.             Defendants Tyco and Tyco Merger Sub colluded in or aided and abetted the Individual Defendants’ breaches of fiduciary duties, and were active and knowing participants in the Individual Defendants’ breaches of fiduciary duties owed to Plaintiff and the members of the Class.

 

73.             Defendants Tyco and Tyco Merger Sub participated in the breach of the fiduciary duties by the Individual Defendants for the purpose of advancing their own interests. Defendants Tyco and Tyco Merger Sub obtained and will obtain both direct and indirect benefits from colluding in or aiding and abetting the Individual Defendants’ breaches. Defendants Tyco and Tyco Merger Sub will benefit, inter alia, from the acquisition of the Company at an inadequate and unfair price if the Proposed Acquisition is consummated.

 

74.             Plaintiff and the members of the Class shall be irreparably injured as a direct and proximate result of the aforementioned acts.

 

16



 

PRAYER FOR RELIEF

 

WHEREFORE, Plaintiff demands injunctive relief, in his favor and in favor of the Class and against defendants as follows:

 

A.            Declaring that this action is properly maintainable as a class action;

 

B.            Declaring and decreeing that the A&PM was agreed to in breach of the fiduciary duties of the Individual Defendants and is therefore unlawful and unenforceable;

 

C.            Rescinding, to the extent already implemented, the A±

 

D.            Enjoining defendants, their agents, counsel, employees, and all persons acting in concert with them from consummating the Proposed Acquisition, unless and until the Company adopts and implements a procedure or process reasonably designed to provide the best possible value for shareholders;

 

E.             Directing the Individual Defendants to exercise their fiduciary duties to commence a sale process that is reasonably designed to secure the best possible consideration for ADC;

 

F.             Imposition of a constructive trust, in favor of Plaintiff and members of the Class, upon any benefits improperly received by defendants as a result of their wrongful conduct;

 

G.            Awarding Plaintiff the costs and disbursements of this action, including reasonable attorneys’ and experts’ fees; and

 

H.            Granting such other and further equitable relief as this Court may deem just and proper.

 

 

 

 

ANDERSON, HELGEN, DAVIS & NISSEN, LLC

 

 

 

 

 

 

Dated:

July 14 ‘10

 

By

/s/ Henry M. Helgen

 

 

 

Henry M. Helgen, III (Atty. No.: 151075)

 

 

 

150 South 5th Street, Suite 3100

 

 

 

Minneapolis, MN 55402

 

 

 

Telephone: (612) 435-6363

 

 

 

Attorneys for Plaintiff

 

17



EX-99.(A)(11) 12 a2199448zex-99_a11.htm EXHIBIT 99.(A)(11)

Exhibit (a) (11)

 

STATE OF MINNESOTA

 

DISTRICT COURT

 

 

 

COUNTY OF HENNEPIN

 

FOURTH JUDICIAL DISTRICT

 

 

 

 

 

CASE TYPE: CIVIL

 

 

X

 

 

GUNTER JACOBIUS , Individually and on

:

File Number

Behalf of All Others Similarly Situated and

:

 

Derivatively on Behalf of Nominal Defendant

:

Judge

ADC Telecommunications, Inc.,

:

 

 

 

:

SHAREHOLDER DERIVATIVE AND

Plaintiff,

:

CLASS ACTION COMPLAINT FOR

 

:

BREACH OF FIDUCIARY DUTIES WASTE

vs.

:

OF CORPORATE ASSETS, AND ABUSE

 

:

OF CONTROL

 

ROBERT E. SWITZ, WILLIAM R. SPIVEY,

:

 

PH.D., JOHN J. BOYLE, III, MICKEY P.

:

 

FORET, LOIS M. MARTIN, KRISH A.

:

JURY TRIAL DEMAND

PRABHU, PH. D, JOHN E. REHFELD,

:

 

DAVID A. ROBERTS, LARRY W.

:

 

WANGBERG, JOHN D. WUNSCH, TYCO

:

 

ELECTRONICS LTD. and TYCO

:

 

ELECTRONICS MINNESOTA, INC.,

:

 

 

 

 

Defendants,

 

 

 

and

 

 

 

 

 

ADC TELECOMMUNICATIONS INC.,

 

 

 

 

 

Nominal Defendant.

 

 

 

X

 

 



 

INTRODUCTION

 

1.                Plaintiff Gunter Jacobius , individually and on behalf of all others similarly situated, and derivatively in the right and for the benefit of ADC Telecommuncations, Inc. (“ADC” or the “Company”) respectfully brings this direct class action for breach of fiduciary duties, waste of corporate assets and abuse of control, on behalf of the public shareholders of ADC and derivatively on behalf of ADC against the herein-named defendants.

 

2.               This is a stockholder derivative and class action brought by Plaintiff on behalf of the public holders of ADC common stock, and derivatively on behalf of ADC, seeking to enjoin certain actions of the Defendants in connection with the proposed acquisition (“Acquisition”) of ADC by Tyco Electronics Ltd. and Tyco Electronics Minnesota, Inc. (collectively “Tyco”). On July 13, 2010, ADC and Tyco jointly announced that the Company and Tyco had entered into a definitive merger agreement (“Agreement”), pursuant to which Tyco will commence a tender offer, likely to close in the fourth quarter of 2010, to purchase all of the outstanding shares of ADC common stock for $12.75 per share in cash, followed by a second-step merger. The enterprise value of the Acquisition is approximately $1.25 billion, according to Tyco and ADC. As described herein, the director defendants of ADC have breached their fiduciary duties, wasted corporate assets and abused their control of ADC in connection with the Acquisition by, among other things, failing to maximize shareholder value.

 

3.             Indeed, the Acquisition appears designed to simply provide Tyco with the ability to recognize the remarkable potential ADC has as a company, and to provide ADC insiders with steep and lucrative severance and change-of-control benefits, rather than allow ADC shareholders to enjoy the Company’s growth potential.

 

4.             In fact, in a PowerPoint presentation to Tyco’s shareholders attached to a Schedule TO-C filed by Tyco with the SEC on July 13, 2010, in connection with the Acquisition, Tyco

 

1



 

expressly acknowledges the exceptional growth potential of ADC — which is being stolen from ADC’s shareholders:

 

       Acquisition Will Be a Significant Contributor to TE Earnings Growth

 

·                  Expected to be accretive to earnings by ~$0. 14 per share in year 1 excluding acquisition-related costs

 

·      Significant cost synergies

 

·                  Expect ADC to achieve company target operating margin of 15% in year 3

 

·                  Continue to maintain a strong balance sheet with resources to pursue additional strategic opportunities and return capital to shareholders

 

Tyco Electronics

Page 4

 

5.             Moreover, the tender offer is coercive because the Defendants have not provided sufficient information to ADC’s shareholders to enable them to make an informed decision about whether to tender their shares in connection with the tender offer and proposed Acquisition.

 

6.             The tender offer is likely to expire in the next few months. This action seeks equitable relief only.

 

7.             In short, the Acquisition is designed to unlawfully divest ADC’s public stockholders of their holdings and end ADC’s independent existence without providing ADC and its shareholders the maximized value to which they are entitled, and without all material facts concerning the

 

2



 

proposed Acquisition and the value of their shares. Defendants know that these assets will continue to produce substantial revenue and earnings.

 

PARTIES

 

8.             Plaintiff is and at all material times hereto has been a holder of ADC common stock.

 

9.             Defendant Robert E. Switz (“Switz”) is and at all material times hereto has been a Director of ADC. Switz has been a director of ADC since August 2003 and was appointed Chairman of the Board in August 2008. Switz has been President and Chief Executive Officer of ADC since August 2003. From January 1994 until August 2003, Switz served ADC as Chief Financial Officer as well as Executive Vice President and Senior Vice President. Switz also served as President of ADC’s former Broadband Access and Transport Group from November 2000 to April 2001. Switz is also a director of Broadcom Corporation, Micron Technology, Inc. and the Telecommunication Industry Association (TIA).

 

10.           Defendant William R. Spivey, Ph.D. (“Spivey”) is and at all material times hereto has been a Director of ADC. Spivey has been a director of ADC since September 2004. Spivey most recently served as President and Chief Executive Officer of Luminent, Inc., a fiber optics transmission products manufacturer, from July 2000 to November 2001. From 1997 to 2000, Spivey served as Network Products Group President for Lucent Technologies. He also served as Vice President of the Systems & Components Group at AT&T Corporation/Lucent Technologies from 1994 to 1997. Spivey also serves on the Boards of Directors of Novellus Systems, Inc., Raytheon Company, The Laird Group, PLC and Cascade Microtech, Inc.

 

11.           Defendant John J. Boyle, III (“Boyle”) is and at all material times hereto has been a Director of ADC. Boyle has been a director of ADC since November 1999. Boyle was appointed Chief Executive Officer of Arbor Networks, Inc., a company that researches next-generation cyber threats and develops solutions that prevent network attacks, in June 2005. Prior to joining Arbor

 

3



 

Networks, Boyle served as President and Chief Executive Officer of Equallogic, Inc., a company that develops networked storage by building intelligent storage solutions that extend the benefits of consolidated storage throughout the enterprise, from 2003 to 2004. From April 2000 to July 2003, Boyle served as Chief Executive Officer of Cogentric, Inc., a provider of solutions to enable decision makers to evaluate and enhance their Web-based capabilities. He served as Senior Vice President of ADC from October 1999 to April 2000 following the Company’s acquisition of Saville Systems PLC. Prior to joining ADC, Boyle served as President and Chief Executive Officer of Saville Systems PLC from August 1994 to October 1999 and as Saville’s Chairman of the Board from April 1998 to October 1999. Boyle is also a director of eFunds Corp.

 

12.           Defendant Mickey P. Foret (“Foret”) is and at all material times hereto has been a Director of ADC. Foret has been a director of ADC since February 2003. From September 1998 to September 2002, Foret served as Executive Vice President and Chief Financial Officer of Northwest Airlines, Inc. From September 1998 to September 2002, he also served as Chairman and Chief Executive Officer of Northwest Airlines Cargo Inc., a subsidiary of Northwest Airlines. From May 1998 to September 1998, Foret served as a Special Projects Officer of Northwest Airlines, Inc. Prior to that time he served as President and Chief Operating Officer of Atlas Air, Inc. from June 1996 to September 1997 and as Executive Vice President and Chief Financial Officer of Northwest Airlines, Inc. from September 1993 to May 1996. Foret previously held other senior management positions with various companies including Northwest Airlines, Continental Airlines Holdings, Inc. and KLH Computers, Inc. Foret is also a director of Delta Air Lines, Inc., URS Corporation and Nash Finch Company.

 

13.           Defendant Lois M. Martin (“Martin”) is and at all material times hereto has been a Director of ADC. Martin has been a director of ADC since March 2004. Martin has served as Senior Vice President and Chief Financial Officer for Capella Education Company, the publicly held

 

4



 

parent company of Capella University, an accredited on-line university since 2004. From 2002 to 2004, Martin served as Executive Vice President and Chief Financial Officer of World Data Products, Inc., a provider of server, storage, network and telecom solutions worldwide. From 1993 to 2001, Martin was employed by Deluxe Corporation during which time she held a number of positions, including Senior Vice President and Chief Financial Officer, Vice President and Corporate Controller, Vice President and Controller of Deluxe Financial Services Group, Vice President and Controller of Paper Payment Systems Division, Director of Accounting Services, and Director of Internal Audit. Prior to joining Deluxe Corporation, Martin served as International Controller for Carlson Companies, a privately held, international conglomerate. Martin is also a director of MTS Systems Corporation.

 

14.           Defendant Krish A. Prabhu, Ph.D. (“Prabhu”), is and at all material times hereto has been a Director of ADC. Prabhu has been a director of ADC since November 2008. Prabhu served as Chief Executive Officer and President of Tellabs from February 2004 until his retirement in February 2008. Prior to joining Tellabs, Prabhu held various engineering and management positions at Alcatel, including chief operating officer of Alcatel and chief executive officer of Alcatel USA. From November 2001 until February 2004,. Prabhu was a venture partner in Morgenthaler Ventures, a venture capital firm. Prabhu is also a director of Altera Corp. and Tekelec, Inc..

 

15.           Defendant John E. Rehfeld (“Rehfeld”) is and at all material times hereto has been a Director of ADC. Rehfeld has been a director of ADC since September 2004. Rehfeld has served as an adjunct professor for the Executive MBA program at Pepperdine University in California since 1998. Rehfeld most recently served as Chief Executive Officer of Spruce Technologies, Inc., a DVD authoring software company, during 2001. From 1997 to 2001, Rehfeld served as Chairman and Chief Executive Officer of ProShot Golf, Inc. He also served as President and Chief Executive Officer of Proxima Corporation from 1995 to 1997 and as President and Chief Executive Officer of

 

5



 

ETAK, Inc. from 1993 to 1995. Rehfeld is also a director of Enkeboll Design, Lantronix, Inc., Local.com Corporation and Overtone, Inc.

 

16.           Defendant David A. Roberts (“Roberts”) is and at all material times hereto has been a Director of ADC. Roberts has been a director of ADC since November 2008. Since June 2007, Roberts has served as Chairman of the Board, President and Chief Executive Officer of Carlisle Companies, a diversified global manufacturing company. Previously he served as Chairman (from April 2006 to June 2007) and President and Chief Executive Officer (from June 2001 to June 2007) of Graco Inc., a manufacturer of fluid handling systems and components used in vehicle lubrication, commercial and industrial settings. Roberts is also a director of Franklin Electric Co., Inc.

 

17.           Defendant Larry W. Wangberg (“Wangberg”) is and at all material times hereto has been a Director of ADC. Wangberg has been a director of ADC since October 2001. Wangberg served as Chief Executive Officer and Chairman of the Board of TechTV (formerly ZDTV, Inc.), a cable television network focused on technology information, news and entertainment, from August 1997 until his retirement from these positions in July 2002. Previously, Wangberg was Chief Executive Officer and Chairman of the Board of StarSight Telecast, Inc., an interactive navigation and program guide company, from February 1995 to August 1997. Wangberg is also a director of Autodesk, Inc. and Charter Communications, Inc., a company that recently emerged from bankruptcy.

 

18.           Defendant John D. Wunsch (“Wunsch”) is and at all material times hereto has been a Director of ADC. Wunsch has been a director of ADC since 1991. Wunsch served in executive positions with Harris Bank N. A. and Harris myCFO, Inc., which are subsidiaries of the Bank of Montreal, from March 2002 through September 2006. He was an independent consultant in the financial services industry from December 2001 to March 2002. He was President and Chief Executive Officer of Family Financial Strategies, Inc., a registered investment advisory company,

 

6



 

from 1997 to 2002. From 1990 to 1997, he served as President of Perrybell Investments, Inc., a registered investment advisory company.

 

19.           Defendant Tyco Electronics Ltd (“Tyco Electronics”) is a Swiss company that is a leading global provider of engineered electronic components, network solutions, specialty products and subsea telecommunication systems, with fiscal 2009 sales of $10.3 billion to customers in more than 150 countries. Tyco Electronics manufactures and markets products for customers in a broad array of industries including automotive; data communication systems and consumer electronics; telecommunications; aerospace, defense and marine; medical; energy; and lighting.

 

20.           Defendant Tyco Electronics Minnesota, Inc. (“Tyco Minnesota”) is a Minnesota corporation and a vehicle through which the Defendants seek to effectuate the merger.

 

21.           Nominal Defendant ADC is a Minnesota corporation, with its headquarters located at 13625 Technology Drive, Eden Prairie, MN 55344. ADC stock is publicly traded on the NASDAQ exchange under the ticker “ADCT.” ADC is a global provider of broadband communications network infrastructure products and related services, offering products and solutions that enable the delivery of high-speed Internet, data, video and voice communications over wireline, wireless, cable, enterprise and broadcast networks, including fiber-optic, copper and coaxial based frames, cabinets, cables, connectors and cards, wireless capacity and coverage solutions, network access devices and other physical infrastructure components. ADC’s products and services are deployed primarily by communications service providers and owners and operators of private enterprise networks. The Company has three business segments: Global Connectivity Solutions (Connectivity), Network Solutions and Professional Services. According to the Company’s quarterly report for the period ended April 2, 2010, filed with the SEC, there were nearly 97 million shares of ADC outstanding as of May 3, 2010.

 

7


 

22.            The Defendants named in ¶¶9-18 are sometimes collectively referred to herein as the “Individual Defendants” or the “Board,”

 

JURISDICTION AND VENUE

 

23.            Jurisdiction is proper in this District because Defendant ADC is headquartered in and regularly transacts business within Hennepin County, or Defendants have committed torts within Hennepin County, or solicit business in Hennepin County or should reasonably expect the acts to have consequences in Hennepin County and derive substantial revenue from interstate or international commerce.

 

24.            Venue is proper in this District because, inter alia, ADC’s principal place of business is in Hennepin County, and the Individual Defendants regularly conduct business in this jurisdiction. In addition, the acts and transactions complained of in this Complaint took place, in all or substantial part, in Hennepin County.

 

THE INDIVIDUAL DEFENDANTS’ FIDUCIARY DUTIES

 

25.            Under applicable law, in any situation where the directors of a publicly traded corporation undertake a transaction that will result in either: (i) a change in corporate control; or (ii) a break up of the corporation’s assets, the directors have an affirmative fiduciary obligation to obtain the highest value reasonably available for the corporation’s shareholders, and if such transaction will result in a change of corporate control, the shareholders are entitled to receive a significant premium. To diligently comply with these duties, the directors and/or officers may not take any action that:

 

(a)           adversely affects the value provided to the corporation’s shareholders;

 

(b)           will discourage or inhibit alternative offers to purchase control of the corporation or its assets;

 

(c)           contractually prohibits themselves from complying with their fiduciary duties;

 

8



 

(d)           will otherwise adversely affect their duty to search and secure the best value reasonably available under the circumstances for the corporation’s shareholders; and/or

 

(e)           will provide the directors and/or officers with preferential treatment at the expense of, or separate from, the public shareholders.

 

26.            In accordance with their duties of loyalty and good faith, the Defendants, as directors and/or officers of ADC, are obligated under applicable law to refrain from:

 

(a)           participating in any transaction where the directors’ or officers’ loyalties are divided;

 

(b)           participating in any transaction where the directors or officers receive, or are entitled to receive, a personal financial benefit not equally shared by the public shareholders of the corporation; and/or

 

(c)           unjustly enriching themselves at the expense or to the detriment of the public shareholders.

 

27.            Defendants are also obliged to honor their duty of candor to ADC’s shareholders by, inter alia, providing all material information to the shareholders regarding a scenario in which they are asked to vote or tender their shares. This duty of candor ensures that shareholders have all information that will enable them to make informed, rational and intelligent decisions about whether to vote or tender their shares.

 

28.            Plaintiff alleges herein that Defendants, separately and together, in connection with the Acquisition, are knowingly or recklessly violating their fiduciary duties, including their duties of loyalty, good faith, and independence owed to Plaintiff and other public shareholders of ADC. Defendants stand on both sides of the transaction, are engaging in self dealing, are obtaining for themselves personal benefits, including personal financial benefits not shared equally by Plaintiff or

 

9



 

the Class. As a result of Defendants’ self dealing and divided loyalties, neither Plaintiff nor the Class will receive adequate or fair value for their ADC common stock in the proposed Acquisition.

 

29.             Because Defendants are knowingly or recklessly breaching their duties of loyalty, good faith, candor and independence in connection with the Acquisition, the burden of proving the inherent or entire fairness of the Acquisition, including all aspects of its negotiation, structure, price and terms, is placed upon Defendants as a matter of law.

 

CLASS ACTION ALLEGATIONS

 

30.           Plaintiff brings this action individually and as a class action on behalf of all holders of ADC stock who are being and will be harmed by Defendants’ actions described below (the “Class”). Excluded from the Class are Defendants herein and any person, firm, trust, corporation, or other entity related to or affiliated with any Defendants.

 

31.           This action is properly maintainable as a class action under Minnesota Rule of Civil Procedure 23.

 

32.           The Class is so numerous that joinder of all members is impracticable. There are nearly 97 million shares of ADC’s common stock outstanding. These shares are held by hundreds, if not thousands, of beneficial holders.

 

33.           There are questions of law and fact which are common to the Class and which predominate over questions affecting any individual Class member. The common questions include, inter alia, the following:

 

(a)           whether the Individual Defendants have breached their fiduciary duties of undivided loyalty, independence or due care with respect to Plaintiff and the other members of the Class in connection with the Acquisition;

 

10



 

(b)           whether the Individual Defendants have breached their fiduciary duty to secure and obtain the best price reasonable under the circumstances for the benefit of Plaintiff and the other members of the Class in connection with the Acquisition;

 

(c)           whether the Individual Defendants have breached any of their other fiduciary duties to Plaintiff and the other members of the Class in connection with the Acquisition, including the duties of good faith, diligence, honesty and fair dealing;

 

(d)           whether the Individual Defendants have breached their fiduciary duties of candor to Plaintiff and the other members of the Class in connection with the Acquisition by failing to disclose all material information upon which they are able to make an informed decision about whether to tender their shares;

 

(e)           whether the Individual Defendants, in bad faith and for improper motives, have impeded or erected barriers to discourage other strategic alternatives including offers from interested parties for the Company or its assets;

 

(f)            whether Plaintiff and the other members of the Class would be irreparably harmed were the transactions complained of herein consummated; and

 

(g)           whether ADC and Tyco are aiding and abetting the wrongful acts of the Individual Defendants.

 

34.           Plaintiff’s claims are typical of the claims of the other members of the Class and Plaintiff does not have any interests adverse to the Class.

 

35.           Plaintiff is an adequate representative of the Class, has retained competent counsel experienced in litigation of this nature and will fairly and adequately protect the interests of the Class.

 

11



 

36.           The prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications with respect to individual members of the Class which would establish incompatible standards of conduct for the party opposing the Class.

 

37.           Plaintiff anticipates that there will be no difficulty in the management of this litigation. A class action is superior to other available methods for the fair and efficient adjudication of this controversy.

 

38.           Defendants have acted on grounds generally applicable to the Class with respect to the matters complained of herein, thereby making appropriate the relief sought herein with respect to the Class as a whole.

 

DERIVATIVE ALLEGATIONS

 

39.           Plaintiff brings Counts Nos. IV-VI, below, derivatively in the right of and for the benefit of ADC to redress injuries suffered and to be suffered by ADC as a direct result of the Individual Defendants’ breaches of fiduciary duty, corporate mismanagement, gross self-dealing, and abuse of control and conspiracy to abuse control.

 

40.           This is not a collusive action to confer jurisdiction in this Court which it would not otherwise have.

 

41.           Plaintiff will adequately and fairly represent the interests of ADC and its shareholders in enforcing and prosecuting their rights.

 

42.           This action is brought to remedy violations of applicable law.

 

43.           Plaintiff has not made a demand on the ADC Board of Directors prior to the filing of this Complaint. Plaintiff believes and alleges that a demand on the present Board of Directors of ADC to institute this action would be a futile, useless act and result in irreparable injury to the Company because the entire Board of Directors participated in the wrongs complained of herein as follows:

 

12



 

(a)           The Board of Directors accepted the Tyco acquisition proposal on the terms proposed;

 

(b)           The known principal wrongdoers and beneficiaries of the are in positions to, and do, dominate and control ADC’s Board of Directors. Thus, the Board of Directors could not, and cannot, exercise independent objective judgment in deciding whether to bring this action nor vigorously prosecute this action;

 

(c)           The Board of Directors refused to take any action to rescind these actions despite their knowledge that such actions constitute a breach of their fiduciary duties;

 

(d)           To bring this action for breach of fiduciary duties, abuse of control, and unjust enrichment, the members of ADC’s Board of Directors would have been required to sue themselves and/or their fellow directors and allies in the top ranks of the Company, with whom they are close personal friends and with whom they have entangling financial alliances, interests and dependencies. Suing themselves, their friends and their allies is not something the Individual Defendants would be willing to do, therefore, they would not be able to vigorously prosecute any such action;

 

(e)           ADC’s Board of Directors, including each of the Individual Defendants herein, receive substantial salaries, bonuses, payments, benefits and other emoluments and perquisites by virtue of their membership on the Company’s Board of Directors and their control of ADC. Thus, they have benefitted from the wrongs alleged herein and have engaged therein to preserve their positions of control and the perquisites thereof, and are incapable of exercising independent objective judgment in deciding whether to bring this action. The Board members also have close personal and business ties with each other and consequently are interested parties and cannot, in good faith, exercise independent business judgment to determine whether to bring this action against themselves; and

 

13



 

(f)            Due to ADC’s directors’ and officers’ liability insurance coverage, if the directors caused ADC to sue themselves and the Company’s executive officers for the liability asserted herein, the directors and officers would be required to personally pay for the liability alleged herein. As a result, if these defendants were to sue themselves there would be no insurance protection for this derivative action. Thus, the defendants will not sue themselves because to do so would subject themselves and their colleagues and/or friends to million-dollar judgments payable from their individual assets alone.

 

44.           The meeting at which the actions described herein will be voted upon will take place within the next few weeks; accordingly, sending demand and waiting the statutory period for the ADC Board of Directors to respond to that demand would preclude any meaningful pre-vote relief, causing irreparable injury to ADC and its shareholders. Thus, Plaintiff has not made a demand on the Board which would have required Plaintiff to wait the statutory period for ADC’s Board of Directors to respond to the demand.

 

45.           Also, by the time the Board of Directors would consider a demand in the action, the shareholder meeting will have passed and Plaintiff, ADC and the Class will have suffered irreparable injury.

 

SUBSTANTIVE ALLEGATIONS

 

ADC’s Growth Potential Is Undeniable

 

46.           ADC’s second quarter 2010 financial results speak for themselves. On May 5, 2010, the Company announced, inter alia, the following highlights in a press release:

 

ADC Reports Second Quarter 2010 Financial Results

 

Strong margin expansion driven by operating efficiencies and revenue growth

 

MINNEAPOLIS—(BUSINESS WIRE)—May 5, 2010—ADC (NASDAQ: ADCT) today announced unaudited results for its second quarter ended April 2, 2010.

 

14


 

“We are pleased with ADC’s strong financial performance in the second quarter,” said Robert E. Switz, chairman, president and chief executive officer of ADC. “Our results are highlighted by another quarter of expanding margins and sequential revenue growth. We continue to experience the bottom-line benefits of our on-going cost reduction initiatives and the implementation of process and production improvements across our operations. Moving forward, ADC is well positioned to take further advantage of our operating leverage as we realize the revenue acceleration expected during the second half of our fiscal year.

 

“In addition to our second quarter revenue growth, we are seeing increased customer planning and proposal activity, indicating their intentions to renew next-generation network spending in significant ways. These investments, dedicated to deploying and upgrading FTTX and mobile networks, create growth opportunities for ADC’s high-performance fiber connectivity and wireless coverage and capacity solutions. Additionally, we expect to see continuing growth in the enterprise space where data center spending is rebounding, as well as in our professional services business which delivered another good quarter,” said Switz.

 

Second Quarter Fiscal 2010 Results

 

Due to a change in our fiscal year to September 30, ADC is comparing second quarter 2010 results announced today with the pro forma results for the prior year’s second quarter ended March 27, 2009 and the reported results for the first quarter of fiscal 2010 ended January 1, 2010.

 

·                 ADC’s GAAP loss from continuing operations for the quarter was $12.5 million, or $0.13 per share. This GAAP loss includes certain charges and other items totaling $22.0 million. Excluding these items, the non-GAAP (adjusted) net earnings for the quarter were $9.5 million, or $0.10 per share. A reconciliation of GAAP to non-GAAP financial measures is provided later in this press release.

 

·                 Net sales for the second quarter rose 6.8% to $274.0 million, compared to $256.6 million for the second quarter of fiscal 2009 and increased 3.2% compared to $265.6 million for the first quarter of 2010. The year-over-year and sequential increases reflect improving economic conditions in many regions of the world and customer spending trends.

 

·                 Second quarter gross margin was 36.5 percent compared to a gross margin of 32.3 percent during the same quarter of last year and 34.7 percent in the previous quarter. This margin improvement was driven primarily by the company’s successful, ongoing efforts to increase efficiency across its operating cost structure, higher volume and a slightly favorable product mix.

 

·                 Operating expenses were $91.7 million compared to $496.8 million during the 2009 second quarter and $96.2 million during the first quarter of 2010. Excluding impairment and restructuring charges, intangible amortization and certain other charges from each period, adjusted operating expenses were $81.8 million

 

15



 

compared to $78.1 million during the same quarter of last year and $82.0 million during the previous quarter.

 

·                 ADC ended the second quarter with $619.3 million of liquidity, which includes cash and available-for-sale securities but excludes auction rate securities, restricted cash and borrowing capacity under the company’s credit facility. The company generated cash from operating activities from continuing operations of $4.8 million during the period. Details of ADC’s cash balance can be found in the data and statistics portion of this release.

 

·                Days sales outstanding increased 3.5 days from the previous quarter to approximately 61.7 days while inventory turns were slightly better at 5.7 times.

 

Third Quarter Fiscal 2010 Outlook

 

For its third quarter of fiscal 2010 ending July 2, 2010, ADC announces the following guidance:

 

·                Net sales are expected to be within a range of $290-$310 million.

 

·                GAAP diluted earnings per share are expected to be within a range of $.10 to $.20, which includes non-cash amortization expense of $0.05 per share and excludes potential non-cash charges or restructuring charges that the company cannot estimate at this time.

 

47.           These strong second quarter 2010 results came on the heels of similarly strong results for the first quarter of 2010. In a February 8, 2010 release, the Company described its first quarter 2010 successes as follows:

 

ADC Reports First Quarter 2010 Financial Results

 

EPS improvement driven by strong margins and cost savings actions

 

MINNEAPOLIS—(BUSINESS WIRE)—February 8, 2010—ADC (NASDAQ:ADCT) today announced unaudited results for its first quarter ended January 1, 2010.

 

“ADC’s strong first quarter results demonstrate the positive impact of our ongoing efforts to streamline operations,” said Robert E. Switz, chairman, president and chief executive officer of ADC. “We delivered very good gross margins, managed operating expenses effectively in the face of what remains a challenging CAPEX-spending environment, and bolstered our already strong liquidity position. Based on these results, we’re pleased with the continued improvements in our financial performance and expect to demonstrate further progress as we move through fiscal 2010.

 

“As we continue to realize the benefits of our improved operations, we expect to drive additional earnings power by maintaining our commitment to creating a more

 

16



 

effective and efficient organization,” added Switz. “We also are making strategic gains in the marketplace with our focus on the areas of greatest opportunity in fiber and wireless networks worldwide, exhibited in part by the strength of our business in China and a significant sequential increase in wireless sales in the first quarter.”

 

First Quarter Fiscal 2010 Results

 

Due to a change in our fiscal year to September 30, ADC is comparing first quarter 2010 results announced today with the pro forma results for the prior year’s first quarter ended December 26, 2008 and the pro forma results for the fourth quarter of fiscal 2009 ended September 30, 2009.

 

·                GAAP earnings from continuing operations were $3.6 million, or $0.04 per share. These GAAP earnings include non-GAAP items of $1.7 million. Excluding these items, the non-GAAP (adjusted) net earnings for the quarter were $1.9 million, or $0.02 per share. A reconciliation of GAAP to non-GAAP financial measures is provided later in this press release.

 

·                Net sales for first quarter totaled $265.6 million, compared to $299.7 million for the first quarter of fiscal 2009 and $291.2 million for the fourth quarter of 2009. The year-over-year decline reflects principally the impact of the global economic downturn, which was just beginning to impact the business at the same time last year. The sequential decrease is due primarily to expected seasonality and a decline in major carrier spending that the company referenced in its guidance at the end of the fourth quarter.

 

·                First quarter gross margin was 34.7 percent compared to adjusted gross margins of 29.5 percent during the same quarter of last year and 34.4 percent in the previous quarter. The year-over-year margin increase was driven by the company’s successful actions to increase efficiency across its operating cost structure, which offset the negative impact of lower revenue.

 

·                Operating expenses were $96.2 million compared to $98.8 million during the 2009 first quarter and $110.5 million during the 2009 fourth quarter. Excluding impairment and restructuring charges, intangible amortization and certain other charges from each period, adjusted operating expenses were $82.0 million compared to $78.1 million during the same quarter of last year and $78.6 million during the fourth quarter of the last fiscal year. As communicated in prior guidance, the operating expense increases are due primarily to higher stock-based compensation expense, which included a $4 million charge to reflect a change in assumptions. As a result of continuing cost actions and a return to normalized stock-based compensation levels, ADC expects to see lower adjusted operating expenses during the remainder of fiscal 2010.

 

·                ADC’s GAAP earnings from continuing operations included $14.2 million of expenses, or $0.14 per share, related to purchased intangible amortization, restructuring and impairment and certain other charges. In addition to these expenses, ADC recorded a one-time gain of $15.9 million or $0.16 per share related

 

17



 

to the sale of certain assets. Excluding these items, adjusted earnings per diluted share were $0.02. A reconciliation of GAAP to non-GAAP financial measures is provided later in this press release.

 

·                ADC ended the first quarter with $609.5 million of liquidity, which excludes auction rate securities and restricted cash. The company generated cash from operating activities from continuing operations of $16.0 million and free cash flow of $9.3 million in the first quarter. Details of ADC’s cash balance can be found in the data and statistics portion of this release.

 

·                Days sales outstanding improved from the previous quarter to approximately 58.1 days and inventory turns were slightly lower at 5.6 times.

 

·                During the first quarter, the company divested its GSM base station and switching business from the Network Solutions business unit and its RF Worx Signal Management product line from the Global Connectivity business unit. Both transactions reflected opportunities to divest non-core portfolios while not impacting ADC’s growth strategies. The GSM base station and switching business is reported as a discontinued operation and, as a result, prior periods have been restated to exclude the results of this business.

 

·                Financial performance of the Network Solutions business unit improved as revenue increased 17.2% from the previous quarter and 9.1% from last year’s first quarter. ADC is seeing a modest return to project spending related to in-building and outdoor microcellular wireless solutions by operators and enterprises worldwide.

 

Second Quarter Fiscal 2010 Outlook

 

For its second quarter of fiscal 2010 ending April 2, 2010, ADC announces the following guidance:

 

·                Net sales are expected to be within the range of $260-280 million.

 

·                GAAP diluted earnings per share are expected to be within the range of a loss of $.04 to earnings of $.06, which includes non-cash amortization expense of $0.05 per share and excludes potential non-cash charges or restructuring charges that the company cannot estimate at this time.

 

48.           ADC’s stock chart exemplifies the Company’s tangible rise to the range of share prices ADC’s stock holders have been experiencing lately, and before the announcement of the Acquisition:

 

18



 

 

The Proposed Acquisition of the Company

 

49.             All indications — including from ADC and Tyco — are that ADC’s value (and, thus, its share price) is steadily poised to continue climbing.

 

50.             Yet, Defendants want to give this Company away at a steal to Tyco.

 

51.             That is, on July 13, 2010, the Company — through the Individual Defendants — announced the Acquisition to the public via several SEC filings and a concomitant joint press release with Tyco which stated:

 

Tyco Electronics to Acquire ADC, Creating a World
Leader in Broadband Connectivity

 

SCHAFFHAUSEN, Switzerland and EDEN PRAIRIE, Minn., July 13, 2010 /PRNewswire via COMTEX News Network/ –

 

·                       Complementary Product Offerings Will Help Customers Deliver High-Speed Video and Data Communications

 

·                       Tyco Electronics Reports Preliminary Fiscal Third Quarter Results

 

·       Sales of $3.1 Billion and Book-to-Bill Ratio of 1.06

 

19



 

·      Diluted Earnings Per Share From Continuing Operations (GAAP EPS) of $0.72; Adjusted EPS of $0.70

 

Tyco Electronics (NYSE: TEL) and ADC (Nasdaq: ADCT) announced today a definitive agreement under which Tyco Electronics will acquire ADC for $12.75 per share in cash, or an enterprise value of approximately $1.25 billion. The transaction is expected to be accretive by approximately $0.14 per share in the first full year after closing excluding acquisition-related costs. It will position Tyco Electronics’ Network Solutions segment as a leading global provider of broadband connectivity products to carrier and enterprise networks around the world.

 

Tom Lynch, Chief Executive Officer of Tyco Electronics, said, “This is a very exciting time for our company and ADC is a great fit as we continue to execute our strategy to create strong leadership positions in all of our connectivity businesses. Consumers and enterprises want access to high-speed video and data wherever they are, on whatever devices they are using — from smart phones to HD and 3-D televisions to computers with advanced video-conferencing capabilities. The combination of ADC and Tyco Electronics creates an industry leader, with the scope and geographic scale to help customers deliver needed capacity, from the core of the network all the way to the end user.”

 

Robert E. Switz, Chairman, President and CEO of ADC, said, “ADC has a strong heritage of providing innovative wired and wireless solutions that have enabled the expansion of advanced broadband networks worldwide. As part of Tyco Electronics, our organization’s ability to serve the world’s leading telecommunications services providers and enterprises will be strengthened significantly. I have great respect for Tyco Electronics and know that they share our commitment to meeting customers’ changing next generation network needs.”

 

The combined organization will offer a complete product portfolio across every major geographic market. It will also add ADC’s Distributed Antenna System (DAS) products, which will expand Tyco Electronics’ wireless connectivity portfolio to provide greater mobile coverage and capacity solutions to carrier and enterprise customers as demand for mobile data continues to expand. Additionally, Tyco Electronics will add ADC’s professional services organization in the US to its business.

 

“We expect ADC to be accretive to our earnings in the first year and to reach our target operating margin of 15 percent in the third year after the acquisition,” said Lynch.

 

The transaction is structured as a tender offer to be followed as soon as possible by a merger. The transaction is subject to customary closing conditions, including the tender of a majority of ADC shares and regulatory approvals, and is expected to close in the fourth calendar quarter 2010.

 

In conjunction with today’s announcement, Tyco Electronics reported preliminary results for the fiscal third quarter ended June 25, 2010. The company reported sales

 

20



 

of $3.1 billion, an increase of 23 percent over the prior year quarter and up 4 percent sequentially. GAAP EPS were $0.72 in the quarter which included $0.02 per share of income related to other items net of restructuring charges. Adjusted EPS were $0.70 in the quarter. The company’s book-to-bill ratio was 1.06 for the quarter and 1.08 excluding Subsea Communications. The company will report complete results and provide further details on its fiscal third quarter before trading begins on July 22, 2010.

 

52.             Incredibly, not a single word was mentioned in the press release regarding the value of the Acquisition for ADC shareholders. This omission is stunning.

 

53.             Put simply, the Defendants are attempting to benefit from a temporary downturn in the markets and deprive ADC shareholders of the true value of their shares, as the Acquisition substantially undervalues ADC.

 

54.             Indeed, with over $500 million in cash and $1.1 billion in annual revenues, it is clear that the true value of ADC is well in excess of $12.75 per share.

 

55.             Moreover, after the announcement, Tyco was up 2.5%, or 64 cents, to close at $25.92, demonstrating that the market believes that Tyco is paying too little for ADC.

 

56.             In addition, the tender offer is coercive because of several material omissions from Defendants, which deprive ADC shareholders of the ability to make a voluntary tender of their shares in connection with the tender offer and proposed Acquisition.

 

57.             Specifically, Defendants have failed to disclose whether any committee of independent directors was formed to evaluate strategic alternatives for ADC, and, if not, the reasons why. This information is critically important to ADC shareholders because the Board is required to maximize shareholder value, not act in the best interests of Company management, who have substantial conflicts of interest, as demonstrated here from ADC’s latest Proxy statement:

 

21


 

Potential Payments Upon Certain Terminations, Death, Disability or Termination After
a Change in Control

 

Name

 

Description

 

Voluntary
Termination,
Disability or
Death

 

Without Cause
Termination

 

Retirement

 

Termination After
Change in Control

 

Robert E. Switz

 

Severance Amount

 

0

 

1,514,000

 

0

 

4,452,000

 

 

 

Bonus

 

0

 

0

 

0

 

695,711

 

 

 

Value of Accelerated Options(1)

 

0

 

0

 

0

 

1,488,740

 

 

 

Value of Accelerated RSUs(2)

 

0

 

0

 

1,250,875

 

1,876,500

 

 

 

Value of Accelerated PSUs(3)

 

0

 

0

 

583,742

 

2,917,599

 

 

 

Value of Benefits Continuation

 

0

 

3,870

 

0

 

3,870

 

 

 

Value of Outplacement Services

 

0

 

9,000

 

0

 

9,000

 

 

 

Excise Tax Gross Up Payment(4)

 

 

 

0

 

3,758,499

 

 

 

Total

 

0

 

1,526,870

 

1,834,617

 

15,289,919

 

James G. Mathews

 

Severance Amount

 

0

 

425,000

 

0

 

1,156,000

 

 

 

Bonus

 

49,110

 

49,110

 

49,110

 

218,265

 

 

 

Value of Accelerated Options(1)

 

0

 

0

 

0

 

523,500

 

 

 

Value of Accelerated RSUs(2)

 

0

 

0

 

0

 

115,357

 

 

 

Value of Accelerated PSUs(3)

 

0

 

0

 

0

 

254,767

 

 

 

Value of Benefits Continuation

 

0

 

2,018

 

0

 

2,018

 

 

 

Value of Outplacement Services

 

0

 

9,000

 

0

 

9,000

 

 

 

Excise Tax Gross Up Payment(4)

 

 

 

 

845,356

 

 

 

Total

 

49,110

 

485,128

 

49,110

 

3,124,283

 

Patrick D. O’Brien

 

Severance Amount

 

0

 

431,250

 

0

 

1,173,000

 

 

 

Bonus

 

52,622

 

52,622

 

52,622

 

221,568

 

 

 

Value of Accelerated Options(1)

 

 0

 

0

 

0

 

235,575

 

 

 

Value of Accelerated RSUs(2)

 

0

 

0

 

0

 

301,376

 

 

 

Value of Accelerated PSUs(3)

 

0

 

0

 

0

 

231,577

 

 

 

Value of Benefits Continuation

 

0

 

2,018

 

0

 

2,018

 

 

 

Value of Outplacement Services

 

0

 

9,000

 

0

 

9,000

 

 

 

Excise Tax Gross Up Payments(4)

 

 

 

 

783,187

 

 

 

Total

 

52,622

 

494,890

 

$

52,622

 

2,957,301

 

Laura N. Owen

 

Severance Amount

 

0

 

363,750

 

0

 

902,100

 

 

 

Bonus

 

36,766

 

36,766

 

36,766

 

147,066

 

 

 

Value of Accelerated Options(1)

 

0

 

0

 

0

 

130,875

 

 

 

Value of Accelerated RSUs(2)

 

0

 

0

 

0

 

233,747

 

 

 

Value of Accelerated PSUs(3)

 

0

 

0

 

0

 

208,500

 

 

 

Value of Benefits Continuation

 

0

 

1,290

 

0

 

1,290

 

 

 

Value of Outplacement Services

 

0

 

9,000

 

0

 

9,000

 

 

 

Excise Tax Gross Up Payment(4)

 

 

 

 

565,932

 

 

 

Total

 

36,766

 

410,806

 

$

36,766

 

2,198,510

 

Richard B. Parran, Jr.

 

Severance Amount

 

 

 

368,750

 

0

 

914,500

 

 

 

Bonus

 

50,729

 

50,729

 

50,729

 

143,032

 

 

 

Value of Accelerated Options(1)

 

0

 

0

 

0

 

179,925

 

 

 

Value of Accelerated RSUs(2)

 

0

 

0

 

0

 

318,676

 

 

 

Value of Accelerated PSUs(3)

 

0

 

0

 

0

 

165,549

 

 

 

Value of Benefits Continuation

 

0

 

2,018

 

0

 

2,018

 

 

 

Value of Outplacement Services

 

0

 

9,000

 

0

 

9,000

 

 

 

Excise Tax Gross Up Payment(4)

 

 

 

 

633,160

 

 

 

Total

 

50,729

 

430,497

 

50,729

 

2,365,860

 

 

58.           Accordingly, without complete and adequate disclosure regarding this issue, among others, no ADC shareholder can make an intelligent, ration decision as whether to tender their shares or not.

 

59.           Likewise, the Agreement provides that ADC may be required to pay Tyco a termination fee of $38 million, including if it accepts a superior acquisition proposal. This penalty unduly binds ADC to the Agreement and hinders any competing, superior offers for the Company.

 

60.           Additionally, with the “no solicitation” provision in the Agreement, the Agreement further unduly binds the Company to the Acquisition and prevents the Individual Defendants from

 

22



 

maximizing shareholder value by prohibiting the Company from soliciting alternative business proposals. Inter alia, the so-called “no solicitation” provision provides:

 

Section 7.04.  No Solicitation: Other Offers.  (a) After the date hereof and prior to the earlier of the termination of this Agreement and the Acceptance Time, the Company and its Subsidiaries shall not (and the Company shall use its reasonable best efforts to cause its or any of its Subsidiaries’ officers or directors, investment bankers, attorneys, accountants, consultants or other agents or advisors (collectively, “Representatives”) not to), directly or indirectly, (i) solicit, initiate or knowingly take any action to facilitate or encourage the submission of any Acquisition Proposal, (ii) enter into or participate in any discussions or negotiations with, furnish any information relating to the Company or any of its Subsidiaries or afford access to the business, properties, assets, books or records of the Company or any of its Subsidiaries to, any Person with respect to inquiries regarding, or the making of, an Acquisition Proposal, (iii) fail to make, withdraw, modify or amend in a manner adverse to Parent the Company Board Recommendation (or recommend an Acquisition Proposal or knowingly take any action or make any statement inconsistent with the Company Board Recommendation) (any of the foregoing in this clause (iii), an “Adverse Recommendation Change”), (iv) grant any waiver or release under any standstill or similar agreement with respect to any class of equity securities of the Company or any of its Subsidiaries or under the Company Rights Agreement, (v) take any action to render the restrictions on a “control share acquisition” set forth in Section 302A.671 of the MBCA inapplicable to any transaction, (vi) approve any transaction under, or any Person becoming an “interested shareholder” under, Section 302A.673 of the MBCA or (vii) enter into any agreement in principle, letter of intent, term sheet, merger agreement, acquisition agreement, option agreement or other similar instrument relating to an Acquisition Proposal (other than a confidentiality agreement with a Person to whom the Company is permitted to provide information in accordance with Section 7.04(b)). It is agreed that any violation of the restrictions on the Company set forth in this Section by any Representative of the Company or any of its Subsidiaries shall be a breach of this Section by the Company.

 

CAUSES OF ACTION

 

COUNT I

 

On Behalf of Plaintiff and the Class Against All
INDIVIDUAL DEFENDANTS CLAIM FOR BREACH OF FIDUCIARY DUTIES

 

61.           Plaintiff repeats and realleges each allegation set forth herein.

 

62.           Defendants have knowingly and recklessly and in bad faith violated fiduciary duties of care, loyalty, good faith and independence owed to the public shareholders of ADC and have acted to put the interests of Tyco ahead of the interests of ADC’s shareholders.

 

23



 

63.           By the acts, transactions and courses of conduct alleged herein, Defendants, individually and acting as a part of a common plan, knowingly or recklessly and in bad faith are attempting to unfairly deprive Plaintiff and other members of the Class of the true value of their investment in ADC.

 

64.           As demonstrated by the allegations above, Defendants knowingly or recklessly failed to exercise the care required, and breached their duties of loyalty, good faith and independence owed to the shareholders of ADC because, among other reasons, they failed to:

 

·              fully inform themselves of the market value of ADC before entering into the Agreement;

 

·              act in the best interests of the public shareholders of ADC common stock;

 

·              maximize shareholder value;

 

·              obtain the best financial and other terms when the Company’s independent existence will be materially altered by the Acquisition; and

 

·              act in accordance with their fundamental duties of good faith, due care and loyalty.

 

65.           By reason of the foregoing acts, practices and course of conduct, Defendants have knowingly or recklessly and in bad faith failed to exercise ordinary care and diligence in the exercise of their fiduciary obligations toward Plaintiff and the other members of the Class.

 

66.           Unless enjoined by this Court, Defendants will continue to knowingly or recklessly and in bad faith breach their fiduciary duties owed to Plaintiff and the Class, and may consummate the proposed Acquisition which will exclude the Class from the maximized value they are entitled to all to the irreparable harm of the Class.

 

67.           As a result of Defendants’ unlawful actions, Plaintiff and the other members of the Class will be irreparably harmed in that they will not receive the real value of their equity ownership

 

24



 

of the Company. Unless the tender offer and proposed Acquisition are enjoined by the Court, Defendants will continue to knowingly or recklessly and in bad faith breach their fiduciary duties owed to Plaintiff and the members of the Class to the irreparable harm of the members of the Class.

 

68.           Plaintiff and the members of the Class have an inadequate remedy at law. Only through the exercise of this Court’s equitable powers can Plaintiff and the Class be fully protected from the immediate and irreparable injury which Defendants’ actions threaten to inflict.

 

69.           Plaintiff seeks to obtain a non-pecuniary benefit for the Class in the form of injunctive relief against the Individual Defendants. Plaintiff’s counsel are entitled to recover their reasonable attorneys’ fees and expenses as a result of the conference of a non-pecuniary benefit on behalf of the Class, and will seek an award of such fees and expenses at the appropriate time.

 

COUNT II

 

On Behalf of Plaintiff and the Class Against All
INDIVIDUAL DEFENDANTS CLAIM FOR BREACH OF DUTY OF CANDOR

 

70.           Plaintiff repeats and realleges each allegation set forth herein.

 

71.           The Individual Defendants were and are under a duty to make sure that ADC’s shareholders are provided full and complete disclosure concerning important matters which a reasonable stockholder would deem important under the circumstances.

 

72.           By the acts, transactions and courses of conduct alleged herein, defendants, individually and as part of a common plan and scheme or in breach of their fiduciary duties to plaintiff and the other members of the Class, are attempting unfairly to deprive plaintiff and other members of the Class of their ability to make an informed decision as to whether to tender their shares in connections with the tender offer and proposed Acquisition.

 

73.           ADC shareholders will, if the proposed Acquisition is consummated, be deprived of the opportunity to make an educated and informed decision concerning whether to tender their shares in favor of the Acquisition.

 

25



 

74.           By reason of the foregoing acts, practices and course of conduct, Defendants have acted in a willful, wanton and reckless manner in failing to exercise their fiduciary obligations toward Plaintiff and the other ADC public stockholders.

 

75.           As a result of the actions of Defendants, Plaintiff and the other members of the Class have been and will be damaged in that they have not and will not receive adequate and complete disclosure regarding the proposed Acquisition.

 

76.           Unless enjoined by this Court, Defendants will continue to breach their fiduciary duties owed to Plaintiff and the other members of the Class, and may consummate the proposed Acquisition and cause irreparable harm of the Class, as aforesaid.

 

77.           Plaintiff and the Class have no adequate remedy at law.

 

78.           Plaintiff seeks to obtain a non-pecuniary benefit for the Class in the form of injunctive relief against defendants. Plaintiff counsel are entitled to recover their reasonable attorneys’ fees and expenses as a result of the conference of a non-pecuniary benefit on behalf of the Class, and will seek an award of such fees and expenses at the appropriate time.

 

COUNT III

 

On Behalf of Plaintiff and the Class Against
TYCO FOR AIDING AND ABETTING THE INDIVIDUAL DEFENDANTS’
BREACH OF FIDUCIARY DUTIES

 

79.           Plaintiff repeats and realleges each allegation set forth herein.

 

80.           Defendant Tyco is sued herein as an aider and abettor of the breaches of fiduciary duties outlined above by the Individual Defendants, as members of the Board of ADC.

 

81.           The Individual Defendants breached their fiduciary duties of good faith, loyalty, and due care to the ADC shareholders by failing to:

 

·              fully inform themselves of the market value of ADC before entering into the Agreement;

 

26


 

 

·           act in the best interests of the public shareholders of ADC common stock;

 

·           maximize shareholder value;

 

·           obtain the best financial and other terms when the Company’s independent existence will be materially altered by the Acquisition; and

 

·           act in accordance with their fundamental duties of good faith, due care and loyalty.

 

82.                             Such breaches of fiduciary duties could not and would not have occurred but for the conduct of Tyco, which, therefore, aided and abetted such breaches via entering into the Agreement with ADC.

 

83.                             Tyco had knowledge that it was aiding and abetting the Individual Defendants’ breach of their fiduciary duties to the ADC shareholders.

 

84.                             Tyco rendered substantial assistance to the Individual Defendants in their breach of their fiduciary duties to the ADC shareholders.

 

85.                             As a result of Tyco’s conduct of aiding and abetting the Individual Defendants’ breaches of fiduciary duties, Plaintiff and the other members of the Class have been and will be damaged in that they have been and will be prevented from obtaining a fair price for their shares.

 

86.                             As a result of the unlawful actions of Tyco, Plaintiff and the other members of the Class will be irreparably harmed in that they will not receive fair value for ADC’s assets and business, will be prevented from obtaining the real value of their equity ownership in the Company. Unless the actions of Tyco are enjoined by the Court, it will continue to aid and abet the Individual Defendants’ breach of their fiduciary duties owed to Plaintiff and the members of the Class, and will aid and abet a process that inhibits the maximization of shareholder value and the disclosure of material information.

 

87.                             Plaintiff and the other members of the Class have no adequate remedy at law.

 

27



 

88.                                 Plaintiff seeks to obtain a non-pecuniary benefit for the Class in the form of injunctive relief against Tyco. Plaintiff’s counsel are entitled to recover their reasonable attorneys’ fees and expenses as a result of the conference of a non-pecuniary benefit on behalf of the Class, and will seek an award of such fees and expenses at the appropriate time.

 

COUNT IV

 

On Behalf of ADC Against
THE INDIVIDUAL DEFENDANTS FOR CORPORATE WASTE

 

89.                                 Plaintiff realleges each prior allegation above as though fully set forth herein.

 

90.                                 As explained above, the Individual Defendants’ conduct in connection with the Acquisition constitutes a waste of corporate assets.

 

91.                                 Specifically, by entering into the merger agreement with Tyco and expending needed funds from the Company’s coffers to consummate the Acquisition — rather than taking the appropriate steps to simply attempt to refinance the Company’s existing obligations to its lenders, the Individual Defendants are engaging in a gross waste of corporate assets to the substantial detriment of the Company.

 

92.                                 As a result of the Individual Defendants’ waste of ADC’s corporate assets, ADC has sustained and will continue to sustain irreparable harm and has no adequate remedy at law.

 

93.                                 Plaintiff seeks to obtain a non-pecuniary benefit for ADC in the form of injunctive relief against the Individual Defendants. Plaintiff’s counsel are entitled to recover their reasonable attorneys’ fees and expenses as a result of the conference of a non-pecuniary benefit on behalf of ADC, and will seek an award of such fees and expenses at the appropriate time.

 

COUNT V

 

On Behalf of ADC Against
THE INDIVIDUAL DEFENDANTS FOR ABUSE OF CONTROL

 

94.                                 Plaintiff realleges each prior allegation above as though fully set forth herein.

 

28



 

95.                                 In direct contradiction of their fiduciary duties, the Individual Defendants have utilized their control over ADC to divert ADC’s valuable assets to the Tyco.

 

96.                                 Defendants’ conduct constituted and continues to constitute an abuse of their ability to control and influence ADC, conduct for which all defendants are legally responsible.

 

97.                                 By reason of the foregoing, ADC has been damaged and has sustained, and will continue to sustain, irreparable injury for which it has no adequate remedy at law.

 

98.                                 Plaintiff seeks to obtain a non-pecuniary benefit for ADC in the form of injunctive relief against the Individual Defendants. Plaintiff’s counsel are entitled to recover their reasonable attorneys’ fees and expenses as a result of the conference of a non-pecuniary benefit on behalf of ADC, and will seek an award of such fees and expenses at the appropriate time.

 

COUNT VI

 

On Behalf of ADC Against the
INDIVIDUAL DEFENDANTS FOR BREACH OF FIDUCIARY DUTY

 

99.                                 Plaintiff realleges each prior allegation above as though fully set forth herein.

 

100.                           The Individual Defendants engaged in the aforesaid conduct without exercising the reasonable and ordinary care which directors and officers, as fiduciaries, owe to a corporation and its shareholders, and have thereby knowingly or recklessly breached and/or aided and abetted breaches of fiduciary duties to the corporation and/or its shareholders.

 

101.                           As a result of the Individual Defendants’ breach of fiduciary duty, ADC has sustained and will continue to sustain irreparable harm and have no adequate remedy at law.

 

102.                           Plaintiff seeks to obtain a non-pecuniary benefit for ADC in the form of injunctive relief against the Individual Defendants. Plaintiff’s counsel are entitled to recover their reasonable attorneys’ fees and expenses as a result of the conference of a non-pecuniary benefit on behalf of ADC, and will seek an award of such fees and expenses at the appropriate time.

 

29



 

JURY TRIAL DEMAND

 

STATE OF MINNESOTA

 

DISTRICT COURT

 

 

 

COUNTY OF HENNEPIN

 

FOURTH JUDICIAL DISTRICT

 

 

CASE TYPE: CONTRACT

 

CERTIFICATE OF REPRESENTATION AND PARTIES

 

** (ONLY THE INITIAL FILING ATTORNEY/PARTY NEEDS TO COMPLETE THIS FORM.)**

 

Date Case Filed:

 

File Number:

 

 

 

GUNTER JACOBIUS, Individually and

vs.

ROBERT E. SWITZ, WILLIAM R. SPIVEY,

on Behalf of All Others Similarly Situated

 

PH.D., JOHN J. BOYLE, III, MICKEY P.

and Derivatively on Behalf of

 

FORET, LOIS M. MARTIN, KRISH A.

Nominal Defendant

 

PRABHU, PH. D, JOHN E. REHFELD,

ADC Telecommunications, Inc.,

 

DAVID A. ROBERTS, LARRY W.

 

 

WANGBERG, JOHN D. WUNSCH,

Plaintiff,

 

 

TYCO ELECTRONICS LTD. and

 

 

TYCO ELECTRONICS MINNESOTA, INC.,

 

 

 

 

 

Defendants,

 

 

 

 

 

and

 

 

 

 

 

ADC TELECOMMUNICATIONS INC.,

 

 

 

 

 

Nominal Defendant.

 

Pursuant to Rule 104 of the General Rules of Practice for District Courts, this form must be completed and filed with the Court Administrator’s Office at the time the case is filed. The court administrator shall, upon receipt of the completed certificate, notify all parties or their lawyers of the date of filing the action and the file number assigned.

 

LIST ALL LAWYERS/PRO SE PARTIES INVOLVED IN THIS CASE.

 

LAWYERS FOR PLAINTIFF

LAWYER FOR DEFENDANTS

 

 

Garrett D. Blanchfield, Jr. #209855

Unknown

Reinhardt Wendorf & Blanchfield

 

332 Minnesota St.

DEFENDANTS

E-1250 First Natl Bank Building

 

St. Paul, Minnesota 55101

Tyco Electronics Minnesota, Inc.

(651) 287-2100

c/o CT Corporation System, Inc.

(651) 287-2103 Fax

100 South 1st Street, #1075

g.blanchfield@rwblawfirm.com

Minneapolis, MN 55402

 

 

 

Tyco Electronics LTD

 

Rheinstrasse 20

 

CH-8200 Schaffausen

 

Switzerland

 



 

 

Robert E. Switz

 

1740 Shadywood Road

 

Wayzata, MN 55391-9230

 

 

 

William R. Spivey

 

810 Mulberry Street

 

Loudon, TN 37774-1309

 

 

 

John J. Boyle

 

150 Clement Rd.

 

Rollinsford, NH 03869

 

 

 

Mickey P. Foret

 

7829 Brookhollow Blvd.

 

Frisco, TX 75034-7293

 

 

 

Lois M. Martin

 

2426 Smith Cove Road

 

Denver, NC 28037-7004

 

 

 

Krish A. Prabhu, PH.D

 

3101 Brenton Drive

 

Plano, TX 75025-5313

 

 

 

John E. Rehfeld

 

377 Bellaire St.

 

Del Mar, CA 92014-2206

 

 

 

David A. Roberts

 

3013 Kings Mannor Drive

 

Matthews, NC 28104

 

 

 

Larry W. Wangberg

 

110 Elk View Drive

 

Hailey, ID 83333-5143

 

 

 

John D. Wunsch

 

2132 Sorbus Way

 

Anchorage, AK 99508-4050

 

 

 

ADC Telecommunications

 

13625 Technology Drive

 

Eden Prairie MN 55344

 

Dated: July 14, 2010

/s/ Garrett D. Blanchfield, Jr.

 

Garrett D. Blanchfield, Jr.

 

Filing Lawyer for Plaintiff

 

2



EX-99.(A)(12) 13 a2199448zex-99_a12.htm EXHIBIT 99.(A)(12)

Exhibit (a)(12)

 

 

 

FILED PSL

 

 

 

 

 

10 JUL 15 AM 10:54

 

 

 

 

 

BY

 

DEPUTY

 

 

HENN CO. DISTRICT

 

 

COURT ADMINISTRATOR

 

STATE OF MINNESOTA

 

DISTRICT COURT

 

 

 

COUNTY OF HENNEPIN

 

FOURTH JUDICIAL DISTRICT

 

 

 

 

 

Case Type: Other Civi1

 

ASBESTOS WORKERS LOCAL UNION 42

:

 

PENSION FUND, Individually and On Behalf of

:

 

All Others Similarly Situated,

:

Court File No.

 

:

 

Plaintiff,

:

 

v.

:

 

 

:

 

ROBERT E. SWITZ, WILLIAM R. SPIVEY,

:

STOCKHOLDERS’

 

JOHN J. BOYLE, III, MICKEY P. FORET, LOIS

:

CLASS ACTION

 

M. MARTIN, KRISH A. PRABHU, JOHN E.

:

COMPLAINT

 

REHFELD, DAVID A. ROBERTS, LARRY W.

:

 

 

WANGBERG, JOHN D. WUNSCH and

:

 

 

ADC TELECOMMUNICATIONS, INC.,

:

JURY TRIAL DEMANDED

 

:

 

Defendants.

:

 

 

Plaintiff Asbestos Workers Local Union 42 Pension Fund (“Plaintiff”), by its attorneys, alleges upon information and belief, except as to paragraph 3, which Plaintiff alleges upon personal knowledge, as follows:

 

NATURE OF THE ACTION

 

1.             This is a shareholder class action brought by Plaintiff on behalf of public holders of ADC Telecommunications, Inc. (“ADC” or the “Company”) common stock asserting claims based on breaches of the ADC Board of Directors’ fiduciary duties in connection with the merger agreement entered into by ADC and Tyco Electronics, Ltd. (“Tyco”) on July 13, 2010, pursuant to which Tyco would acquire ADC at the inadequate and unfair price of $12.75 per share (hereafter, the “Proposed Buyout”). The Proposed Buyout would value ADC at roughly $1.25 billion. Plaintiff seeks to enjoin or, alternatively, rescind the Proposed Buyout in the event it is consummated.

 



 

2.             The consideration that Tyco would pay, as accepted by the ADC Board members, is unfair and inadequate because, among other things, the intrinsic value of ADC common stock is materially higher than the amount being offered to the public holders of ADC stock, giving due consideration to the Company’s recent performance and trading prices and because Tyco would achieve significant synergies from an acquisition of ADC, the value of which is not fully reflected in the merger price. The members of the ADC Board must, as their fiduciary duties require, act to maximize value for the stockholders in connection with a sale of the Company.

 

PARTIES

 

3.             Plaintiff owns and has owned common stock of ADC continuously since prior to the wrongs complained of herein.

 

4.             Defendant ADC is organized under the laws of the State of Minnesota, with its headquarters located at 13625 Technology Drive, Eden Prairie, MN 55344, in Hennepin County. The Company provides broadband communications network infrastructure products and related services worldwide. Its products enable the delivery of high-speed Internet data, video, and voice communications over wireline, wireless, cable, enterprise and broadcast networks. ADC sells its products through sales personnel, value-added resellers, distributors, manufacturer’s representatives, independent sales representatives, and public and private network providers. The Company was formerly known as Magnetic Controls Company and changed its name to ADC Telecommunications, Inc. in 1985. The Company’s common stock is listed on NASDAQ under the symbol “ADCT.”

 

2



 

5.             Defendant Robert E. Switz has served as a director of ADC since August 2003 and was appointed Chairman of the Board in 2008. Defendant Switz has been President and Chief Executive Officer since August 2003. From January 1994 until August 2003, he served as Chief Financial Officer as well as Executive Vice President and Senior Vice President. From November 2000 to April 2001, Defendant Switz served as President of ADC’s former Broadband Access and Transport Group.

 

6.             Defendant William R. Spivey has served as a director of ADC since September 2004. Defendant Spivey also serves as a member of the Compensation Committee and the Finance/Strategic Planning Committee.

 

7.             Defendant John J. Boyle, III has served as a director of ADC since November 1999. From October 1999 through April 2000, he served as Senior Vice President of ADC. Defendant Boyle serves as the Chair of the Finance/Strategic Planning Committee and as a member of the Governance Committee.

 

8.             Defendant Mickey P. Foret has served as a director of ADC since February 2003. Defendant Foret also serves as a member of the Audit Committee and the Finance/Strategic Planning Committee.

 

9.             Defendant Lois M. Martin has served as a director of ADC since March 2004. She serves as the Chair of the Audit Committee and is a member of the Governance Committee.

 

10.           Defendant Krish A. Prabhu has served as a director of ADC since November 2008. He is a member of the Audit Committee and of the Finance/Strategic Planning Committee.

 

3



 

11.           Defendant John E. Rehfeld has served as a director of ADC since September 2004. He is the Chair of the Compensation Committee and a member of the Audit Committee.

 

12.           Defendant David A. Roberts has served as a director of ADC since November 2008. He also serves as a member of the Compensation Committee and the Governance Committee.

 

13.           Defendant Larry W. Wangberg has served as a director of ADC since October 2001. He serves as the Chair of the Governance Committee and as a member of the Compensation Committee.

 

14.           Defendant John D. Wunsch has served as a director of ADC since 1991. He is a member of the Audit Committee and of the Compensation Committee.

 

15.           Defendants listed in ¶¶ 5 - 14 are hereafter referred to as the “Individual Defendants,” and, together with ADC, as “Defendants.” Each of the Individual Defendants is a member of the Company’s Board of Directors and, thus, each owes fiduciary duties of good faith, fair dealing, and loyalty to ADC’s shareholders.

 

CLASS ACTION ALLEGATIONS

 

16.           Plaintiff brings this action on its own behalf and as a class action, pursuant to Rule 23 of the Minnesota Rules of Civil Procedure, on behalf of all holders of ADC common stock who are being and will be harmed by Defendants’ actions described herein (the “Class”). Excluded from the Class are Defendants, Tyco and any person, firm, trust, corporation or other entity related to or affiliated with any Defendant or Tyco, including but not limited to officers and directors of ADC and Tyco.

 

17.           This action is properly maintainable as a class action.

 

4



 

18.           The Class is so numerous that joinder of all members is impracticable. As of May 3, 2010, the Company had approximately 97 million shares of common stock outstanding and a public float of 96.3 million shares, held by hundreds, if not thousands, of individuals and entities throughout the country.

 

19.           There are questions of law and fact which are common to the Class and which predominate over questions affecting any individual Class member. The common questions include the following:

 

a.   Whether the Proposed Buyout is unfair to the Class;

 

b.   Whether the Proposed Buyout inadequately values ADC;

 

c.   Whether the Individual Defendants have breached their fiduciary duties to Plaintiff and other public stockholders of ADC in connection with the Proposed Buyout; and

 

d.   Whether Plaintiff and the other members of the Class will be irreparably harmed by the wrongs complained of herein.

 

20.           Plaintiff is committed to prosecuting this action and has retained competent counsel experienced in litigation of this nature. Plaintiff’s claims are typical of the claims of the other members of the Class and Plaintiff has the same interests as the other members of the Class. Accordingly, Plaintiff will fairly and adequately represent the Class.

 

21.           The prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications with respect to individual members of the Class and establish incompatible standards of conduct for the party opposing the Class.

 

5


 

22.                                 Defendants have acted and are about to act on grounds generally applicable to, and causing injury to, the Class, thereby making appropriate final injunctive relief with respect to the Class as a whole.

 

SUBSTANTIVE ALLEGATIONS

 

A.                                    Company Background

 

23.                                 ADC provides the connections for wireline, wireless, cable, broadcast, and enterprise networks around the world. The Company has three business units: Global Connectivity Solutions; Network Solutions; and Professional Services. ADC products, including copper and fiber-optic cables and network access devices, enable the delivery of high-speed data. The Company’s innovative network infrastructure equipment and professional services enable high-speed Internet, data, video and voice services to residential, business and mobile subscribers. ADC has sales in more than 130 countries worldwide. The Company reported net sales of $997 million for its 2009 fiscal year, which was only 11 months long because of a change in reporting periods.

 

24.                                 Tyco is a leading global provider of engineered electronic components, network solutions, specialty products, and undersea telecommunication systems in the Americas, Europe, the Middle East, Africa, and Asia-Pacific, with fiscal 2009 sales of $10.3 billion. Tyco designs, manufactures and markets products for customers in a broad array of industries including automotive; data communication systems and consumer electronics; telecommunications; aerospace, defense and marine; medical; energy; and lighting. Tyco Electronics was founded in 1941 and is based in Schaffhausen, Switzerland. Tyco trades on the New York Stock Exchange under the symbol “TEL.”

 

25.                                 After hitting multi-year lows during the recent global economic downturn, shares of ADC have been steadily rising. In May 2010, the Company

 

6



 

reported a narrower loss for its fiscal second quarter and analysts upgraded the stock. CEO Defendant Switz stated “[w]e are pleased with ADC’s strong financial performance in the second quarter. Our results are highlighted by another quarter of expanding margins and sequential revenue growth. We continue to experience the bottom-line benefits of our on-going cost reduction initiatives and the implementation of process and production improvements across our operations. Moving forward, ADC is well positioned to take further advantage of our operating leverage as we realize the revenue acceleration expected during the second half of our fiscal year.” Defendant Switz further stated that “[i]n addition to our second quarter revenue growth, we are seeing increased customer planning and proposal activity, indicating their intentions to renew next-generation network spending in significant ways. These investments, dedicated to deploying and upgrading FTTX and mobile networks, create growth opportunities for ADC’s high-performance fiber connectivity and wireless coverage and capacity solutions. Additionally, we expect to see continuing growth in the enterprise space where data center spending is rebounding, as well as in our professional services business which delivered another good quarter.”

 

26.                                 Recognizing that ADC shares were at a multi-year low and the Company was poised to undergo significant growth, Tyco seized on the opportunity to acquire the Company at a low price, and the ADC Board acquiesced in shortchanging ADC’s public shareholders.

 

B.                                    Tyco Seeks to Acquire ADC

 

27.                                 On July 13, 2010, ADC and Tyco announced that the two companies had entered into a definitive merger agreement under which Tyco will acquire all

 

7



 

outstanding shares of ADC for $12.75 per share in cash, which equates to an enterprise value of approximately $1.25 billion. The Proposed Buyout will position Tyco’s Network Solutions segment as a leading global provider of broadband connectivity products to carrier and enterprise networks worldwide. The transaction is expected to be accretive to Tyco by approximately $0.14 per share in the first full year after closing excluding acquisition-related costs.

 

28.                                 The Proposed Buyout is structured as a tender offer to be followed as soon as possible by a merger. Tyco and ADC expect the tender offer to close in the fourth quarter of calendar year 2010. The parties have agreed that if, following completion of the tender offer, Tyco owns at least 90% of the ADC shares, the merger will be completed without a meeting of ADC’s shareowners pursuant to Minnesota’s “short-form” merger statute.

 

29.                                 As further described by an ADC spokesperson Defendant Switz is expected to remain with Tyco through part of the integration process and certain other members of ADC management are expected to join the Tyco executive team on a more permanent basis.

 

30.                                 If the Proposed Buyout is consummated, Tyco would achieve significant synergies, the value of which is not fully reflected in the merger price. A Jefferies & Co. analyst noted the Proposed Buyout “is driven by strategic positioning and cost synergies. Tyco believes the two companies’ product portfolios and differing regional focuses complement each other nicely. ADC’s strength in data center, switching center, and fiber products goes hand-in-hand with Tyco’s strength in outside plant products. Tyco believes the combination enables it to offer a more complete product suite better

 

8



 

positioned to exploit the deluge of consumer data consumption coming from smart phones, 3D televisions and video-conferencing.” The Jefferies analyst further noted that “[o]n the cost side, Tyco sees $100 million in total cost synergies (50% in first year), two-thirds of which would come in the form of opex reductions, and the rest from manufacturing efficiencies.”

 

31.                                 The combined company will offer a complete product portfolio across every major geographic market. It will also combine ADC’s Distributed Antenna System (DAS) products to expand Tyco’s wireless connectivity portfolio to provide greater mobile coverage and capacity solutions to carrier and enterprise customers as demand for mobile data continues to expand. Additionally, Tyco Electronics will add ADC’s professional services organization in the United States to its business. These benefits are not reflected in the merger price.

 

32.                                 Commenting on the Proposed Buyout, Tom Lynch, Tyco’s CEO, stated:

 

This is a very exciting time for our company and ADC is a great fit as we continue to execute our strategy to create strong leadership positions in all of our connectivity businesses. Consumers and enterprises want access to high-speed video and data wherever they are, on whatever devices they are using — from smart phones to HD and 3-D televisions to computers with advanced video-conferencing capabilities. The combination of ADC and Tyco Electronics creates an industry leader, with the scope and geographic scale to help customers deliver needed capacity, from the core of the network all the way to the end user.

 

* * *

 

We expect ADC to be accretive to our earnings in the first year and to reach our target operating margin of 15 percent in the third year after the acquisition. . ..

 

9



 

C.                                    The Proposed Buyout Is Unfair and Coercive to ADC Shareholders

 

33.                                 As proposed, the merger price represents a 44% premium over the closing price of ADC stock on the day before the Proposed Buyout was announced. However, notwithstanding that Tyco would be paying a 44% premium to the pre-buyout announcement price, as Longbow Research analyst Shawn Harrison noted, “ADC shares were at multi-year low.”

 

34.                                 More significantly, ADC’s intrinsic value is substantially greater than the $12.75 per share price being offered by Tyco. As Defendant Switz noted in May 2010, ADC is well positioned to take “further advantage of [ADC’s] operating leverage” and the Company expects “to see continued growth in the enterprise space.” The consideration offered in connection with the Proposed Buyout is therefore inadequate and undervalues ADC. Indeed, ADC stock was already up 43% this year and was clearly poised for significant further growth. The insufficiency of the proposed merger price is further supported by the rise in the price of Tyco stock immediately after the announcement of the Proposed Buyout. Additionally, ADC did not conduct an open and fair auction process for the Company. As a result, the ADC Board failed to maximize shareholder value.

 

35.                                 The merger agreement, dated July 12, 2010, also includes a combination of onerous and unreasonable deal protection devices that effectively preclude topping bids.

 

36.                                 Section 2.04 contains a “top up” option ensuring that Tyco will acquire the requisite 90% of shares outstanding to commence a short form merger.

 

10



 

37.                                 Section 7.04 contains a “no shop” provision that prohibits ADC from soliciting, initiating, or knowingly facilitating any inquiries or the making of any proposal or offer that may constitute or be expected to lead to an alternative acquisition proposal.

 

38.                                 Further, while ADC is not allowed to solicit or invite alternative proposals, under Section 7.04(a)(i) of the merger agreement ADC can only talk with and provide information to any third-party bidder if the ADC Board determines that it has received a “superior proposal” from that bidder. Even then, the third-party bidder would be required to enter into a confidentiality agreement “with terms no less favorable” than the terms contained in the confidentiality agreement between ADC and Tyco.

 

39.                                 The merger agreement is also unfair to ADC shareholders because it provides for a $38 million termination fee, or 3 percent of the overall deal value, in the event that ADC terminates the merger agreement under certain circumstances.

 

40.                                 In addition, ADC has a Rights Agreement (also known as a “Poison Pill”), as amended and restated as of May 9, 2007. The ADC Board has decided to render the Company’s existing Rights Agreement inapplicable to the proposed merger with Tyco. However, it could remain in place in the face of any alternative bid. This also serves to protect the Proposed Buyout.

 

41.                                 Because the Individual Defendants dominate and control the business and corporate affairs of ADC, and are in possession of private corporate information concerning ADC’s assets, business and future prospects, there exists an imbalance and disparity of knowledge and economic power between them and public shareholders of ADC which makes it inherently unfair for them to pursue any proposed transaction wherein they will reap disproportionate benefits to the exclusion of maximizing shareholder value. Defendants seek to take advantage of this disparity and to induce the

 

11



 

Class to relinquish their shares in the acquisition at an unfair price on the basis of incomplete or inadequate information.

 

42.                                 The Individual Defendants have violated fiduciary duties owed to ADC shareholders, causing damages for which Plaintiff seeks equitable relief or, as appropriate, compensation. The Individual Defendants have failed to take adequate measures to ensure that the interests of ADC’s shareholders are properly protected and have embarked on a process that avoids competitive bidding and unduly restricts ADC’s ability to consider and accept a competing bid.

 

43.                                 By the acts, transactions and courses of conduct alleged herein, Defendants, individually and acting as a part of a common plan, will unfairly deprive Plaintiff and other members of the Class of the true value of their ADC investment. Plaintiff and other members of the Class will suffer irreparable harm unless actions of Defendants are enjoined and a fair process is substituted.

 

44.                                 Unless enjoined by this Court, ADC may consummate the Proposed Buyout and thereby breach the fiduciary duties they owe to Plaintiff and the Class, since the Proposed Buyout would exclude the Class from its fair share of ADC’s valuable assets and businesses to the irreparable harm of the Class.

 

45.                                 Plaintiff and members of the Class have no adequate remedy at law. Only through the exercise of this Court’s equitable powers can Plaintiff and the Class be fully protected from immediate and irreparable injury which defendants’ actions threaten to inflict.

 

12


 

FIRST CAUSE OF ACTION

 

(Breach of Fiduciary Duties Against the Individual Defendants)

 

46.           Plaintiff repeats and re-alleges the preceding allegations as if fully set forth herein.

 

47.           By virtue of their positions as directors of ADC the Individual Defendants owe fiduciary duties of care and loyalty to ADC and its stockholders. This requires the Individual Defendants to consider all shareholder value maximizing transactions in good faith; and base material decisions on adequate information and deliberation consistent with their duties of loyalty and care.

 

48.           By engaging in the foregoing conduct, including approving the Proposed Buyout, the Individual Defendants have not taken adequate steps to protect the interests of the Company’s public shareholders and have breached their fiduciary duties of loyalty, care, and good faith by, among other things, failing to act in the interest of ADC’s stockholders.

 

49.           The unfairness of the terms of the Proposed Buyout is compounded by the gross disparity between the knowledge and information possessed by Defendants by virtue of their positions of control over ADC and that possessed by the Company’s public shareholders.

 

50.           Unless enjoined by this Court, the Individual Defendants will continue to breach their fiduciary duties to the detriment of ADC and its stockholders.

 

51.           By reason of the foregoing acts, practices and course of conduct, Defendants have failed to exercise ordinary care and diligence in the exercise of their fiduciary duties toward Plaintiff and other Class members.

 

13



 

52.           As a result of Defendants’ actions, Plaintiff and the Class have been harmed.

 

53.           Plaintiff and members of the Class have no adequate remedy at law. Only through the exercise of this Court’s equitable powers can Plaintiff and the Class be fully protected from immediate and irreparable injury which Defendants’ actions threaten to inflict.

 

SECOND CAUSE OF ACTION

 

(Aiding and Abetting Breaches of Fiduciary Duty Against the Company)

 

54.           Plaintiff repeats and re-alleges the preceding allegations as if fully set forth herein.

 

55.           The Company has aided and abetted the Individual Defendants in their breaches of fiduciary duty. The Company knew of the Individual Defendants’ breaches of fiduciary duty, and actively and knowingly have encouraged and participated in said breaches in order to obtain the substantial financial benefits that the Proposed Buyout would provide it at the expense of ADC’s stockholders.

 

56.           Plaintiff and the Class will be irreparably injured as a direct and proximate result of the aforementioned acts.

 

57.           Plaintiff and the members of the Class have no adequate remedy at law.

 

WHEREFORE, Plaintiff, on behalf of itself and other public shareholders of the ADC, prays for judgment and relief as follows:

 

A.            Ordering that this action may be maintained as a class action and certifying Plaintiff as the Class representative;

 

14



 

B.            Preliminarily and permanently enjoining Defendants and all persons acting in concert with them, from proceeding with, consummating, or closing the Proposed Buyout;

 

C.            Preliminarily and permanently enjoining Defendants from taking any further steps to frustrate any potential transaction that would maximize shareholder value, including renegotiation of the Proposed Buyout or an alternative transaction based on an open auction or market check, to obtain maximum value.

 

D.            Ordering the Individual Defendants to affirmatively fulfill their fiduciary duties to Plaintiff and the other members of the Class by acting to undertake an appropriate evaluation of alternatives to maximize value for ADC’s public stockholders;

 

E.             To the extent, if any, that the Proposed Buyout complained of is consummated prior to the entry of final judgment, rescinding the transaction and setting it aside and/or awarding damages to the Class;

 

F.             Declaring that the Individual Defendants’ conduct, in executing the merger agreement and agreeing to Tyco’s offer of an inadequate price, is a breach of the Individual Directors’ fiduciary duties of loyalty, care and good faith;

 

G.            Requiring the Individual Defendants to conduct a fair process to evaluate the Company’s value and any available value maximizing strategic alternatives;

 

H.            Directing Defendants, jointly and severally, to account to Plaintiff and the Class for all damages suffered and to be suffered by them as a result of the

 

15



 

wrongs complained of herein, including pre- and post-judgment interest at the statutory rate;

 

I.              Ordering the Individual Defendants to use the Rights Agreement and other machinery of the Company properly and consistent with their fiduciary duties to maximize value and not impede or abridge stockholder rights;

 

J.             Awarding Plaintiff the costs of this action, including reasonable allowance for Plaintiff’s attorneys’ and experts’ fees and expenses; and

 

K.            Granting such other and further relief as this Court may deem just and proper.

 

Dated: July 15, 2010

 

 

LOCKRIDGE GRINDEL NAUEN P.L.L.P

 

 

 

By:

/s/ Gregg M. Fishbein

 

Gregg M. Fishbein (No. 202009)

 

Karen H. Riebel (No. 219770)

 

100 Washington Avenue South, Suite 2200

 

Minneapolis, MN 55401-2159

 

Telephone: (612) 596-4044

 

Facsimile: (612) 339-0981

 

 

 

BARRACK, RODOS & BACINE

 

Jeffrey W. Golan

 

Julie B. Palley

 

3300 Two Commerce Square

 

2001 Market Street

 

Philadelphia, PA 19130

 

Telephone: (215) 963-0600

 

Facsimile: (215) 963-0838

 

 

 

COHEN, PLACITELLA & ROTH, PC

 

Stewart L. Cohen

 

Stuart J. Guber

 

Two Commerce Square, Suite 2900

 

2001 Market Street

 

Philadelphia, PA 19130

 

16



 

 

Telephone: (215) 567-3500

 

Facsimile: (215) 567-6019

 

 

 

Counsel for Plaintiff

 

Asbestos Workers Local Union 42

 

Pension Fund

 

17



 

ACKNOWLEDGMENT

 

The undersigned hereby acknowledges that costs, disbursements, and reasonable attorney and witness fees may be awarded pursuant to Minn. Stat. § 549.211. subd. 2 to the party against whom the allegations in this pleading are asserted.

 

Dated: July 15, 2010

 

 

/s/ Gregg M. Fishbein

 

Gregg M. Fishbein

 

18



EX-99.(A)(13) 14 a2199448zex-99_a13.htm EXHIBIT 99.(A)(13)

Exhibit (a)(13)

 

 

FILED PSL

 

 

 

 

 

10 JUL 15 PM 2:54

 

 

 

 

 

BY

 

DEPUTY

 

 

HENN. CO. DISTRICT

 

 

COURT ADMINISTRATOR

 

 

STATE OF MINNESOTA

 

JUDICIAL COURT

 

 

 

COUNTY OF HENNEPIN

 

FOURTH JUDICIAL DISTRICT

 

 

 

 

 

Case Type: Other Civil

 

JOEL GERBER, On behalf of Himself and All Others
Similarly Situated,

Court File No.          

 

 

Plaintiff,

 

 

VERIFIED CLASS ACTION

v.

COMPLAINT

 

 

ADC TELECOMMUNICATIONS, INC., TYCO
ELECTRONICS LTD., TYCO ELECTRONICS
MINNESOTA, INC., ROBERT E. SWITZ,
WILLIAM R. SPIVEY, JOHN J. BOYLE, III,
MICKEY P. FORET, LOIS M. MARTIN, KRISH A.
PRABHU, JOHN E. REHFELD, DAVID A.
ROBERTS, LARRY W. WANGBERG AND JOHN
D. WUNSCH,

 

 

 

Defendants.

 

 

Plaintiff Joel Gerber (“Plaintiff”), on behalf of himself and all other similarly situated, by his attorneys; alleges the following upon information and belief, expect as to those allegations pertaining to Plaintiff which are alleged upon personal knowledge.

 

NATURE OF THE ACTION

 

1.             This is a shareholder class action brought by Plaintiff on behalf of the holders of common stock of ADC Telecommunications, Inc. (“ADCT” or the “Company”) to enjoin breaches of fiduciary duty by the Company’s Board of Directors (the “Board”) for failing to maximize shareholder value in connection with the proposed transaction through which the Company will be acquired by Tyco Electronics, Ltd. (“Tyco”), for inadequate consideration (the “Proposed Transaction”).

 

2.             On July 12, 2010, ADCT entered into a definitive merger agreement to be

 



 

acquired by Tyco in a deal valued at approximately $1.25 billion (the “Merger Agreement”). Under the terms of the Merger Agreement, Tyco will acquire ADCT for $12.75 per share of ADCT common stock through a two-step merger consisting of an all-cash tender offer followed by a second-step merger.

 

3.             As described below, both the value to ADCT shareholders contemplated in the Proposed Transaction and the process by which Defendants propose to consummate the Proposed Transaction are fundamentally unfair to Plaintiff and the other public shareholders of the Company. Defendants’ conduct constitutes a breach of the Individual Defendants’ (as defined below) fiduciary duties owed to ADCT’s public shareholders and violations of applicable legal standards governing Defendants’ conduct.

 

4.             For these reasons and as set forth in detail herein, Plaintiff is seeking to enjoin Defendants from consummating the Proposed Transaction, or, in the event the Proposed Transaction is consummated, recover damages resulting from the Individual Defendants’ violations of their fiduciary duties of loyalty, good faith, due care and full and fair disclosure.

 

THE PARTIES

 

Plaintiff

 

5.             Plaintiff Joel Gerber has been a shareholder of ADCT since 2004 and currently owns 3,500 ADCT shares.

 

Defendants

 

6.             Defendant ADCT is a corporation organized and existing under the laws of the Sate of Minnesota, and maintains its principle place of business at 13625 Technology Drive, Eden Prairie, Minnesota. ADCT provides the connections for wireline, wireless, cable, broadcast, and enterprise networks around the world. The Company’s network infrastructure

 

2



 

equipment and professional services enable high-speed internet, data, video and voice services to residential business and mobile subscribers. ADCT’s common stock is traded on the NASDAQ Stock Market (NASDAQ) under the symbol “ADCT”.

 

7.             Defendant Robert E. Switz (“Switz”) serves as the Company’s Chairman of the Board of Directors (the “Board”), President and Chief Executive Officer. Switz has served as a member of the Company’s Board since August 2003, prior to which he served as ADCT’s CFO from approximately January 1994.

 

8.             Defendant William R. Spivey, Ph.D, (“Spivey”) has served as a member of the Company’s Board since September 2004.

 

9.             Defendant John J. Boyle, III (“Boyle”) has served as a member of the Company’s Board since November 1999.

 

10.           Defendant Mickey P. Foret (“Foret”) has served as a member of the Company’s Board since February 2003.

 

11.           Defendant Lois M. Martin (“Martin”) has served as a member of the Company’s Board since March 2004.

 

12.           Defendant Krish A. Prabhu, Ph.D, (“Prabhu”) has served as a member of the Company’s Board since November 2008.

 

13.           Defendant John E. Rehfeld (“Rehfeld”) has served as a member of the Company’s Board since September 2004.

 

14.           Defendant David A. Roberts (“Roberts”) has served as a member of the Company’s Board since November 2008.

 

15.           Defendant Larry W. Wangberg (“Wangberg”) has served as a member of the Company’s Board since October 2001.

 

3



 

16.           Defendant John D. Wunsch (“Wunsch”) has served as a member of the Company’s Board since 1991.

 

17.           Defendants Switz, Spivey, Boyle, Foret, Martin, Prabhu, Rehfeld, Roberts, Wangberg and Wunsch are collectively referred to herein as the “Individual Defendants”.

 

18.           Defendant Tyco, a Swiss corporation, is a global provider of engineered electronic components, network solutions, specialty products and subsea telecommunication systems. Tyco’s stock is listed on the New York Stock Exchange (the “NYSE”) under the symbol “TEL”.

 

19.           Defendant Tyco Electronics Minnesota, Inc. (“Tyco Minnesota”), a Minnesota corporation, is a wholly owned subsidiary of Tyco that was formed to facilitate the Proposed Transaction and will act as the purchaser in the second-step merger.

 

THE FIDUCIARY DUTIES OF THE INDIVIDUAL DEFENDANTS

 

20.           By reason of the Individual Defendants’ positions with the Company, as officers and/or directors, these Defendants are in a fiduciary relationship with Plaintiff and the other public shareholders of ADCT and owe Plaintiff and other members of the Class (defined below) fiduciary duties of good faith, fair dealing, loyalty and full and candid disclosure.

 

21.           By virtue of their positions as directors and/or officers of ADCT, the Individual Defendants, at all relevant times, had the power to control and influence, and did control and influence cause caused ADCT to engage in the practices complained of herein.

 

22.           Each of the Individual Defendants is required to act in good faith, in the best interests of the Company’s shareholders and with such care, including reasonable inquiry, as would be expected of an ordinarily prudent person. In a situation where the directors of a publicly traded company undertake a transaction that may result in a change in corporate control,

 

4



 

the directors must take all steps reasonably required to maximize the value shareholders will receive rather than use a change of control to benefit themselves, and to disclose all material information concerning the proposed change of control to enable the shareholders to make an informed voting decision. To diligently comply with this duty, the directors of a corporation may not take any action that:

 

(a)  adversely affects the value provided to the corporation’s shareholders;

 

(b)  contractually prohibits them from complying with or carrying out their fiduciary duties;

 

(c)  discourages or inhibits alternative offers to purchase control of the corporation or its assets; or

 

(d)  will otherwise adversely affect their duty to search for and secure the best value reasonably available under the circumstances for the corporation’s shareholders.

 

23.           Plaintiff alleges herein that the Individual Defendants, separately and together, in connection with the Proposed Transaction, violated duties owed to Plaintiff and the other public shareholders of ADCT, including their duties of care, loyalty and good faith.

 

CLASS ACTION ALLEGATIONS

 

24.           Plaintiff brings this action individually and as a class action on behalf of the holders of the common stock of the Company or their successors in interest, who have been and/or will be harmed as a result of the wrongful conduct alleged herein (the “Class”). Excluded from the Class are Defendants herein and any person, firm, trust, corporation, or other entity related to or affiliated with any of the Defendants.

 

25.           This action is properly maintainable as a class action.

 

26.           The Class is so numerous that joinder of all members is impracticable. As of July 13, 2010, there were over 96 million shares of ADCT common stock outstanding. Members of

 

5


 

 

the Class are scattered throughout the United States and are so numerous that it is impracticable to bring them all before this Court.

 

27.                                 There are questions of law and fact which are common to the Class, including:

 

a.               whether the Individual Defendants have fulfilled, and are capable of fulfilling, their fiduciary duties owed to Plaintiff and the Class;

 

b.              whether the Individual Defendants have engaged, and continue to engage, in a scheme to benefit themselves at the expense of ADCT shareholders in violation of their fiduciary duties;

 

c.               whether the Individual Defendants are acting in furtherance of their own self interest to the detriment of the Class;

 

d.              whether Defendants have disclosed, and will disclose, all material facts in connection with the Proposed Transaction; and

 

e.               whether Plaintiff and the other members of the Class will be irreparably damaged if Defendants are not enjoined from continuing the conduct described herein.

 

28.                                 Plaintiff is committed to prosecuting this action and has retained competent counsel experienced in litigation of this nature. Plaintiff’s claims are typical of the claims of the other members of the Class, and Plaintiff has the same interests as the other members of the Class. Accordingly, Plaintiff is an adequate representative of the Class and will fairly and adequately protect the interests of the Class.

 

29.                                 The prosecution of separate actions by individual members of the Class would create the risk of inconsistent or varying adjudications with respect to individual members of the Class that would establish incompatible standards of conduct for Defendants, or adjudications with respect to individual members of the Class which would, as a practical matter, be dispositive of the interests of the other members not parties to the adjudications or substantially

 

6



 

impair or impede their ability to protect their interests.

 

30.                                 Defendants have acted, or refused to act, on grounds generally applicable to, and causing injury to, the Class and, therefore, preliminary and final injunctive relief on behalf of the Class as a whole is appropriate.

 

SUBSTANTIVE ALLEGATIONS

 

31.                                 ADCT was incorporated in Minnesota in 1935 as Magnetic Controls Company and adopted its current name in 1985. The Company is a leading global provider of broadband communications network infrastructure products and related services. Its products and other equipment allow phone, cable and wireless companies to deliver high-speed internet, data, video and voice communications over wireline, wireless, cable, enterprise and broadcast networks. ADCT boasts sales in over 130 countries, and its clients include, among others, AT&T, Alcatel-Lucent, Bell Canada, Bloomberg, China Telecom, Citibank, Comcast, Cox, Deutsche Telekom, Ford, GlaxoSmithKline, HSBC, JPMorgan Chase, Mayo Clinic, Morgan Stanley, NBC, Optus, Qwest, Reliance Infocom (India), Sprint Nextel, T-Mobile, Telus, Venetian Resort Hotel, Verizon and Vodafone.

 

32.                                 In 2009, the Company’s net sales exceeded approximately $1 billion.(1) In its 2009 Annual Report (the “Annual Report”), ADCT touted its promising, global growth prospects. For example, the Annual Report noted that the increasing reliance on Mobile Internet and the use of smartphones — device sales and data usage for smartphones had more than doubled in the past year — presented growth opportunities for ADCT’s renowned in-building wireless solutions. Defendant Switz further touted the Company’s prospects:

 

ADC enters fiscal 2010 ready to emerge from the severely weakened

 


(1) This figure represents the results only for an 11-month period rather than a 12-year period, as the Board of Directors had recently approved a change in ADC’s fiscal year end from October 31 to September 30.

 

7



 

economic environment in a strong financial and competitive position. While much uncertainty remains around the macroeconomy and within our industry, ADC is confident in the long-term demand for our fiber-based and wireless broadband network infrastructure solutions, as well as our ability to take the actions necessary to improve our financial results and shareowner value.

 

33.                                 Indeed, ADCT subsequently reported strong second quarter results on May 5, 2010. Net sales for the second quarter rose 6.8% to $274 million, compared to $256.6 million for the second quarter of fiscal 2009 and increased 3.2% compared to $265.6 million for the first quarter of 2010. In addition, ADCT ended the second quarter with $619.3 million of liquidity, which included its cash and available-for-sale securities.

 

34.                                 In discussing the favorable second quarter 2010 results, Defendant Switz stated:

 

We are pleased with ADC’s strong financial performance in the second quarter. Our results are highlighted by another quarter of expanding margins and sequential revenue growth. We continue to experience the. bottom-line benefits of our on-going cost reduction initiatives and the implementation of process and production improvements across our operations. Moving forward, ADC is well positioned to take further advantage of our operating leverage as we realize the revenue acceleration expected during the second half of our fiscal year.

 

In addition to our second quarter revenue growth, we are seeing increased customer planning and proposal activity, indicating their intentions to renew next-generation network spending in significant ways. These investments, dedicated to deploying and upgrading FTTX and mobile networks, create growth opportunities for ADC’s high-performance fiber connectivity and wireless coverage and capacity solutions. Additionally, we expect to see continuing growth in the enterprise space where data center spending is rebounding, as well as in our professional services business which delivered another good quarter.

 

35.                                 On July 13, 2010, the Company announced that it had entered into the definitive Merger Agreement, to be acquired by Tyco in a transaction valued at approximately $1.25 billion. Specifically, the Merger Agreement was entered by and among the Company, Tyco and Tyco Minnesota. Under the terms of the agreement, Tyco will acquire ADCT for $12.75 per share of ADCT common stock through a two-step merger consisting of an all-cash tender offer

 

8



 

followed by a second-step merger.

 

36.                                 The Company’s Board unanimously approved the Merger Agreement and thereby breached their fiduciary duties, as explained herein.

 

37.                                 The terms of the Merger Agreement deter competing bids and prevent the ADCT Board from exercising their fiduciary duties to obtain the best available price for ADCT shareholders. The Merger Agreement erects defensive barriers to competing offers and function to substantially increase the likelihood that the Proposed Transaction will be consummated, leaving ADCT shareholders with no meaningful premium. For example, the Merger Agreement provides that upon termination, under certain circumstances, the Company will be required to pay Tyco a termination fee of $38 million (the “Termination Fee”).

 

38.                                 Additionally, the Merger Agreement contains a “no-shop” provision pursuant to which ADCT is prohibited from soliciting alternative bids for the Company — or even discussing a competing or alternative transaction — thus preventing ADCT directors from obtaining a market check which would be in the best interests of ADCT shareholders.(2)

 

39.                                 The Merger Agreement provides not only that ADCT must not actively solicit third party bids, but also restricts the ability of ADCT directors to consider an unsolicited bid. The Board must formally determine that an unsolicited bid constitutes a bona fide written superior acquisition proposal upon “considering the advice of a financial advisor of nationally recognized reputation and outside legal counsel.” Furthermore, the Merger Agreement requires the Company to notify Tyco of any unsolicited third party bid and provides Tyco the ability to “match” any third party bid. As a result of adopting the Termination Fee and the “no-shop”

 


(2) ADC may not: “directly or indirectly, (i) solicit, initiate or knowingly take any action to facilitate or encourage the submission of any Acquisition Proposal, [or] (ii) enter into or participate in any discussions or negotiations with, furnish any information relating to the Company .. . . or afford access to the business, properties, assets, books or records of the Company . . . to, any Person with respect to inquiries regarding, or the making of, an Acquisition Proposal. . . .” (Merger Agreement, Section 7.04).

 

9



 

provisions, Defendants have erected artificially high barriers preventing any other third party from coming forward to engage ADCT.

 

40.                                 Additionally, the Merger Agreement provides Tyco with an irrevocable right to purchase ADCT common shares from the Company after consummation of the tender offer for the same $12.75 per share consideration (the “Top Up Option”). There are few limitations on the amount of shares that the Company could be required to sell to Tyco. Thus, even if relatively few shares tender, this coercive Top Up Option enables Tyco to own 90% of ADCT shares following the tender offer, which would allow Tyco to effectuate its intended short-form merger with ADCT without a shareholder vote.

 

41.                                 In addition, over 88% of ADCT’s shares are held by institutional owners, thus a few shareholders can agree to sell the Company regardless of the will of ADCT’s public shareholders. Accordingly, the Proposed Transaction is wrongful, unfair and harmful to the Company’s public stockholders who will not receive their fair portion of the value of their equity ownership of the Company.

 

42.                                 Analysts have reacted negatively to the Proposed Transaction. For example, immediately after the Proposed Transaction was announced, three analysts (from Jefferies, CL King and UBS) downgraded ADCT.

 

43.                                 As ADCT’s recent financial results indicate, the Company is currently poised to achieve significant success in the future. This is especially true given the proliferation of electronic such as smartphones, 3D television and video conferencing that will increase the need for fiber-optic connectivity. Rather than permitting ADCT’s shares to trade freely and allowing its public shareholders to reap the benefits of the Company’s prospects, the Individual Defendants have agreed to a transaction that undervalues ADCT at a time when the Company’s stock price is trading below its inherent value worth and with it is poised to capitalize on its

 

10


 

positive and encouraging financial outlook.

 

44.           The Proposed Transaction comes at a time when the Company’s stock price is undervalued but its prospects for growth and increased revenue are substantially increasing as the economic recession is ending. ADCT’s insiders are well aware of the Company’s intrinsic value and that ADCT shares are significantly undervalued. Tyco recognized ADCT’s solid performance and potential for growth and determined to capitalize on the recent downturn in the Company’s stock price at the expense of ADCT’s public shareholders.

 

45.           The consideration offered to ADCT’s public stockholders in the Proposed Transaction is unfair and grossly inadequate because, among other things, the intrinsic value of ADCT’s common stock is materially in excess of the amount offered for those securities in the proposed acquisition given the Company’s prospects for future growth and earnings set forth above.

 

46.           Although the Individual Defendants are duty-bound to protect the interests of ADCT shareholders by obtaining the maximum value reasonably available in any sale or merger of the Company, Defendants entered into the Proposed Transaction at an inadequate price.

 

FIRST CAUSE OF ACTION

 

Claim for Breach of Fiduciary Duties Against the Individual Defendants

 

47.           Plaintiff repeats and re-alleges each allegation set forth herein.

 

48.           In approving the Proposed Transaction and adopting the Merger Agreement, the Individual Defendants have violated their fiduciary duties of care, loyalty, candor and good faith owed to public shareholders of ADCT.

 

49.           By the acts, transactions and courses of conduct alleged herein, Defendants, individually and acting as a part of a common plan, are attempting to unfairly deprive Plaintiff

 

11



 

and other members of the Class of the true value of their investment in ADCT.

 

50.           As demonstrated by the allegations above, the Individual Defendants failed to exercise the care required, and breached their duties of loyalty, good faith, candor and independence owed to the shareholders of ADCT because, among other reasons: they failed to take steps to maximize the value of ADCT to its public shareholders; failed to fully inform themselves of ADCT’s market value before taking, or agreeing to refrain from taking, action; and failed to obtain the best financial and other terms when the Company’s independent existence will be materially altered by the Proposed Transaction.

 

51.           As a result of the actions of Defendants, Plaintiff and the Class will suffer irreparable injury in that they have not and will not receive their fair portion of the value of ADCT’s assets and businesses and have been and will be prevented from obtaining a fair price for their common stock.

 

52.           Defendants are not acting in good faith toward Plaintiff and the other members of the Class, and have breached and are breaching their fiduciary duties to the members of the Class. Unless Defendants are enjoined by the Court, they will continue to breach their fiduciary duties owed to Plaintiff and the members of the Class, all to the irreparable harm of the members of the Class.

 

53.           Plaintiff and the members of the Class have no adequate remedy at law. Only through the exercise of this Court’s equitable powers can Plaintiff and the Class be fully protected from the immediate and irreparable injury which Defendants’ actions threaten to inflict.

 

12



 

SECOND CAUSE OF ACTION

 

On Behalf of Plaintiff and the Class
Against Tyco and Tyco Minnesota for Aiding and Abetting the
Individual Defendants’ Breach of Fiduciary Duties

 

54.           Plaintiff incorporates by reference and re-alleges each and every allegation contained above, as though fully set forth herein.

 

55.           Defendants Tyco and Tyco Minnesota have acted and are acting with knowledge of the fact that the Individual Defendants are in breach of their fiduciary duties to ADCT’s public shareholders, and have participated in such breaches of fiduciary duties.

 

56.           Tyco and Tyco Minnesota have knowingly aided and abetted the Individual Defendants’ wrongdoing alleged herein. In so doing, Tyco and Tyco Minnesota rendered substantial assistance in order to effectuate the Individual Defendants’ plan to consummate the Proposed Transaction in breach of their fiduciary duties.

 

57.           Plaintiff has no adequate remedy at law.

 

PRAYER FOR RELIEF

 

WHEREFORE, Plaintiff demands injunctive relief in his favor and in favor of the Class and against Defendants as follows:

 

A.            Declaring that this action is properly maintainable as a Class action and certifying Plaintiff as Class representative;

 

B.            Preliminarily and permanently enjoining Defendants and all persons acting in concert with them from consummating the Proposed Transaction, unless and until the Company adopts and implements a procedure or process to obtain a merger agreement providing the best

 

13



 

possible terms for shareholders;

 

C.            Rescinding, to the extent already implemented, the Proposed Transaction or any of the terms thereof, or granting Plaintiff and the Class rescissory damages;

 

D.            Directing the Defendants to account to Plaintiff and the Class for all damages suffered as a result of the wrongdoing complained of herein;

 

E.             Awarding Plaintiff the costs and disbursements of this action, including reasonable attorneys’ and experts’ fees; and

 

F.             Granting such other and further equitable relief as this Court may deem just and proper.

 

Dated: July 15, 2010

 

 

LOCKRIDGE GRINDAL NAUEN P.L.L.P.

 

 

 

By:

/s/ Gregg M. Fishbein

 

Gregg M. Fishbein (No. 202009)

 

Karen H. Riebel (No. 219770)

 

100 Washington Avenue South, Suite 2200

 

Minneapolis, MN 55401

 

Telephone: (612) 339-6900

 

Facsimile: (612) 339-0981

 

 

 

BRAGAR WEXLER EAGEL & SQUIRE, PC

 

Jeffrey H. Squire

 

Lawrence P. Eagel

 

885 Third Avenue, Suite 3040

 

New York, NY 10022

 

(212) 308-5858

 

 

 

GLANCY BINKOW & GOLDBERG LLP

 

Lionel Z. Glancy

 

Michael M. Goldberg

 

1801 Avenue of the Stars, Suite 311

 

Los Angeles, CA 90067

 

(310) 201-9150

 

 

 

Attorneys for Plaintiff

 

14



 

ACKNOWLEDGMENT

 

The undersigned hereby acknowledges that costs, disbursements, and reasonable attorney and witness fees may be awarded pursuant to Minn. Stat. § 549.211. subd. 2 to the party against whom the allegations in this pleading are asserted.

 

Dated: July 15, 2010

 

 

/s/ Gregg M. Fishbein

 

Gregg M. Fishbein

 

15


 


EX-99.(A)(14) 15 a2199448zex-99_a14.htm EXHIBIT 99.(A)(14)

Exhibit (a)(14)

 

STATE OF MINNESOTA

DISTRICT COURT

 

 

COUNTY OF HENNEPIN

FOURTH JUDICIAL DISTRICT

 

 

 

CASE TYPE: CIVIL

 

 

X

 

GARY NOVITSKY, Individually and on

:

File Number

 

 

Behalf of All Others Similarly Situated and

:

 

 

 

Derivatively on Behalf of Nominal  Defendant ADC

:

Judge

 

 

ADC Telecommunications, Inc.,

:

 

 

:

SHAREHOLDER DERIVATIVE AND

Plaintiff,

:

CLASS ACTION COMPLAINT FOR

 

:

BREACH OF FIDUCIARY DUTIES WASTE

vs.

:

OF CORPORATE ASSETS, AND ABUSE

 

:

OF CONTROL

ROBERT E. SWITZ, WILLIAM R. SPIVEY,

:

 

PH.D., JOHN J. BOYLE, III, MICKEY P.

:

 

FORET, LOIS M. MARTIN, KRISH A.

:

JURY TRIAL DEMAND

PRABHU, PH. D, JOHN E. REHFELD,

:

 

DAVID A. ROBERTS, LARRY W.

:

 

WANGBERG, JOHN D. WUNSCH, TYCO

:

 

ELECTRONICS LTD. and TYCO

:

 

ELECTRONICS MINNESOTA, INC.,

:

 

 

:

 

 Defendants,

:

 

 

:

 

and

:

 

 

:

 

ADC TELECOMMUNICATIONS INC.,

:

 

 

:

 

Nominal Defendant.

:

 

 

X

 

 



 

INTRODUCTION

 

1.                                       Plaintiff Gary Novitsky, individually and on behalf of all others similarly situated, and derivatively in the right and for the benefit of ADC Telecommunications, Inc. (“ADC” or the “Company”) respectfully brings this direct class action for breach of fiduciary duties, waste of corporate assets and abuse of control, on behalf of the public shareholders of ADC and derivatively on behalf of ADC against the herein-named defendants.

 

2.                                       This is a stockholder derivative and class action brought by Plaintiff on behalf of the public holders of ADC common stock, and derivatively on behalf of ADC, seeking to enjoin certain actions of the Defendants in connection with the proposed acquisition (“Acquisition”) of ADC by Tyco Electronics Ltd. and Tyco Electronics Minnesota, Inc. (collectively “Tyco”). On July 13, 2010, ADC and Tyco jointly announced that the Company and Tyco had entered into a definitive merger agreement (“Agreement”), pursuant to which Tyco will commence a tender offer, likely to close in the fourth quarter of 2010, to purchase all of the outstanding shares of ADC common stock for $12.75 per share in cash, followed by a second-step merger. The enterprise value of the Acquisition is approximately $1.25 billion, according to Tyco and ADC. As described herein, the director defendants of ADC have breached their fiduciary duties, wasted corporate assets and abused their control of ADC in connection with the Acquisition by, among other things, failing to maximize shareholder value.

 

3.                                       Indeed, the Acquisition appears designed to simply provide Tyco with the ability to recognize the remarkable potential ADC has as a company, and to provide ADC insiders with steep and lucrative severance and change-of-control benefits, rather than allow ADC shareholders to enjoy the Company’s growth potential.

 

4.                                       In fact, in a PowerPoint presentation to Tyco’s shareholders attached to a Schedule TO-C filed by Tyco with the SEC on July 13, 2010, in connection with the Acquisition, Tyco

 

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expressly acknowledges the exceptional growth potential of ADC — which is being stolen from ADC’s shareholders:

 

Acquisition Will Be a Significant Contributor to TE Earnings Growth

 

 

 

Expected to be accretive to earnings by ~$0.14 per share in year 1 excluding acquisition-related costs

 

·    Significant cost synergies

 

 

·

Expect ADC to achieve company target operating margin of 15% in year 3

 

 

·

Continue to maintain a strong balance sheet with resources to pursue additional strategic opportunities and return capital to shareholders

 

 

 Tyco Electronics

 

Page 4

 

5.                                       Moreover, the tender offer is coercive because the Defendants have not provided sufficient information to ADC’s shareholders to enable them to make an informed decision about whether to tender their shares in connection with the tender offer and proposed Acquisition.

 

6.                                       The tender offer is likely to expire in the next few months. This action seeks equitable relief only.

 

7.                                       In short, the Acquisition is designed to unlawfully divest ADC’s public stockholders of their holdings and end ADC’s independent existence without providing ADC and its shareholders the maximized value to which they are entitled, and without all material facts concerning the

 

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proposed Acquisition and the value of their shares. Defendants know that these assets will continue to produce substantial revenue and earnings.

 

PARTIES

 

8.                                       Plaintiff is and at all material times hereto has been a holder of ADC common stock.

 

9.                                       Defendant Robert E. Switz (“Switz”) is and at all material times hereto has been a Director of ADC. Switz has been a director of ADC since August 2003 and was appointed Chairman of the Board in August 2008. Switz has been President and Chief Executive Officer of ADC since August 2003. From January 1994 until August 2003, Switz served ADC as Chief Financial Officer as well as Executive Vice President and Senior Vice President. Switz also served as President of ADC’s former Broadband Access and Transport Group from November 2000 to April 2001. Switz is also a director of Broadcom Corporation, Micron Technology, Inc. and the Telecommunication Industry Association (TIA).

 

10.                                 Defendant William R. Spivey, Ph.D. (“Spivey”) is and at all material times hereto has been a Director of ADC. Spivey has been a director of ADC since September 2004. Spivey most recently served as President and Chief Executive Officer of Luminent, Inc., a fiber optics transmission products manufacturer, from July 2000 to November 2001. From 1997 to 2000, Spivey served as Network Products Group President for Lucent Technologies. He also served as Vice President of the Systems & Components Group at AT&T Corporation/Lucent Technologies from 1994 to 1997. Spivey also serves on the Boards of Directors of Novellus Systems, Inc., Raytheon Company, The Laird Group, PLC and Cascade Microtech, Inc.

 

11.                                 Defendant John J. Boyle, III (“Boyle”) is and at all material times hereto has been a Director of ADC. Boyle has been a director of ADC since November 1999. Boyle was appointed Chief Executive Officer of Arbor Networks, Inc., a company that researches next-generation cyber threats and develops solutions that prevent network attacks, in June 2005. Prior to joining Arbor

 

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Networks, Boyle served as President and Chief Executive Officer of Equallogic, Inc., a company that develops networked storage by building intelligent storage solutions that extend the benefits of consolidated storage throughout the enterprise, from 2003 to 2004. From April 2000 to July 2003, Boyle served as Chief Executive Officer of Cogentric, Inc., a provider of solutions to enable decision makers to evaluate and enhance their Web-based capabilities. He served as Senior Vice President of ADC from October 1999 to April 2000 following the Company’s acquisition of Saville Systems PLC. Prior to joining ADC, Boyle served as President and Chief Executive Officer of Saville Systems PLC from August 1994 to October 1999 and as Saville’s Chairman of the Board from April 1998 to October 1999. Boyle is also a director of eFunds Corp.

 

12.                                 Defendant Mickey P. Foret (“Foret”) is and at all material times hereto has been a Director of ADC. Foret has been a director of ADC since February 2003. From September 1998 to September 2002, Foret served as Executive Vice President and Chief Financial Officer of Northwest Airlines, Inc. From September 1998 to September 2002, he also served as Chairman and Chief Executive Officer of Northwest Airlines Cargo Inc., a subsidiary of Northwest Airlines. From May 1998 to September 1998, Foret served as a Special Projects Officer of Northwest Airlines, Inc. Prior to that time he served as President and Chief Operating Officer of Atlas Air, Inc. from June 1996 to September 1997 and as Executive Vice President and Chief Financial Officer of Northwest Airlines, Inc. from September 1993 to May 1996. Foret previously held other senior management positions with various companies including Northwest Airlines, Continental Airlines Holdings, Inc. and KLH Computers, Inc. Foret is also a director of Delta Air Lines, Inc., URS Corporation and Nash Finch Company.

 

13.                                 Defendant Lois M. Martin (“Martin”) is and at all material times hereto has been a Director of ADC. Martin has been a director of ADC since March 2004. Martin has served as Senior Vice President and Chief Financial Officer for Capella Education Company, the publicly held

 

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parent company of Capella University, an accredited on-line university since 2004. From 2002 to 2004, Martin served as Executive Vice President and Chief Financial Officer of World Data Products, Inc., a provider of server, storage, network and telecom solutions worldwide. From 1993 to 2001, Martin was employed by Deluxe Corporation during which time she held a number of positions, including Senior Vice President and Chief Financial Officer, Vice President and Corporate Controller, Vice President and Controller of Deluxe Financial Services Group, Vice President and Controller of Paper Payment Systems Division, Director of Accounting Services, and Director of Internal Audit. Prior to joining Deluxe Corporation, Martin served as International Controller for Carlson Companies, a privately held, international conglomerate. Martin is also a director of MTS Systems Corporation.

 

14.                                 Defendant Krish A. Prabhu, Ph.D. (“Prabhu”), is and at all material times hereto has been a Director of ADC. Prabhu has been a director of ADC since November 2008. Prabhu served as Chief Executive Officer and President of Tellabs from February 2004 until his retirement in February 2008. Prior to joining Tellabs, Prabhu held various engineering and management positions at Alcatel, including chief operating officer of Alcatel and chief executive officer of Alcatel USA. From November 2001 until February 2004,. Prabhu was a venture partner in Morgenthaler Ventures, a venture capital firm. Prabhu is also a director of Altera Corp. and Tekelec, Inc..

 

15.                                 Defendant John E. Rehfeld (“Rehfeld”) is and at all material times hereto has been a Director of ADC. Rehfeld has been a director of ADC since September 2004. Rehfeld has served as an adjunct professor for the Executive MBA program at Pepperdine University in California since 1998. Rehfeld most recently served as Chief Executive Officer of Spruce Technologies, Inc., a DVD authoring software company, during 2001. From 1997 to 2001, Rehfeld served as Chairman and Chief Executive Officer of ProShot Golf, Inc. He also served as President and Chief Executive Officer of Proxima Corporation from 1995 to 1997 and as President and Chief Executive Officer of

 

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ETAK, Inc. from 1993 to 1995. Rehfeld is also a director of Enkeboll Design, Lantronix, Inc., Local.com Corporation and Overtone, Inc.

 

16.                                 Defendant David A. Roberts (“Roberts”) is and at all material times hereto has been a Director of ADC. Roberts has been a director of ADC since November 2008. Since June 2007, Roberts has served as Chairman of the Board, President and Chief Executive Officer of Carlisle Companies, a diversified global manufacturing company. Previously he served as Chairman (from April 2006 to June 2007) and President and Chief Executive Officer (from June 2001 to June 2007) of Graco Inc., a manufacturer of fluid handling systems and components used in vehicle lubrication, commercial and industrial settings. Roberts is also a director of Franklin Electric Co., Inc.

 

17.                                 Defendant Larry W. Wangberg (“Wangberg”) is and at all material times hereto has been a Director of ADC. Wangberg has been a director of ADC since October 2001. Wangberg served as Chief Executive Officer and Chairman of the Board of TechTV (formerly ZDTV, Inc.), a cable television network focused on technology information, news and entertainment, from August 1997 until his retirement from these positions in July 2002. Previously, Wangberg was Chief Executive Officer and Chairman of the Board of StarSight Telecast, Inc., an interactive navigation and program guide company, from February 1995 to August 1997. Wangberg is also a director of Autodesk, Inc. and Charter Communications, Inc., a company that recently emerged from bankruptcy.

 

18.                                 Defendant John D. Wunsch (“Wunsch”) is and at all material times hereto has been a Director of ADC. Wunsch has been a director of ADC since 1991. Wunsch served in executive positions with Harris Bank N. A. and Harris myCFO, Inc., which are subsidiaries of the Bank of Montreal, from March 2002 through September 2006. He was an independent consultant in the financial services industry from December 2001 to March 2002. He was President and Chief Executive Officer of Family Financial Strategies, Inc., a registered investment advisory company,

 

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from 1997 to 2002. From 1990 to 1997, he served as President of Perrybell Investments, Inc., a registered investment advisory company.

 

19.                                 Defendant Tyco Electronics Ltd (“Tyco Electronics”) is a Swiss company that is a leading global provider of engineered electronic components, network solutions, specialty products and subsea telecommunication systems, with fiscal 2009 sales of $10.3 billion to customers in more than 150 countries. Tyco Electronics manufactures and markets products for customers in a broad array of industries including automotive; data communication systems and consumer electronics; telecommunications; aerospace, defense and marine; medical; energy; and lighting.

 

20.                                 Defendant Tyco Electronics Minnesota, Inc. (“Tyco Minnesota”) is a Minnesota corporation and a vehicle through which the Defendants seek to effectuate the merger.

 

21.                                 Nominal Defendant ADC is a Minnesota corporation, with its headquarters located at 13625 Technology Drive, Eden Prairie, MN 55344. ADC stock is publicly traded on the NASDAQ exchange under the ticker “ADCT.” ADC is a global provider of broadband communications network infrastructure products and related services, offering products and solutions that enable the delivery of high-speed Internet, data, video and voice communications over wireline, wireless, cable, enterprise and broadcast networks, including fiber-optic, copper and coaxial based frames, cabinets, cables, connectors and cards, wireless capacity and coverage solutions, network access devices and other physical infrastructure components. ADC’s products and services are deployed primarily by communications service providers and owners and operators of private enterprise networks. The Company has three business segments: Global Connectivity Solutions (Connectivity), Network Solutions and Professional Services. According to the Company’s quarterly report for the period ended April 2, 2010, filed with the SEC, there were nearly 97 million shares of ADC outstanding as of May 3, 2010.

 

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22.                                 The Defendants named in ¶¶9- l 8 are sometimes collectively referred to herein as the “Individual Defendants” or the “Board.”

 

JURISDICTION AND VENUE

 

23.                                 Jurisdiction is proper in this District because Defendant ADC is headquartered in and regularly transacts business within Hennepin County, or Defendants have committed torts within Hennepin County, or solicit business in Hennepin County or should reasonably expect the acts to have consequences in Hennepin County and derive substantial revenue from interstate or international commerce.

 

24.                                 Venue is proper in this District because, inter alia, ADC’s principal place of business is in Hennepin County, and the Individual Defendants regularly conduct business in this jurisdiction. In addition, the acts and transactions complained of in this Complaint took place, in all or substantial part, in Hennepin County.

 

THE INDIVIDUAL DEFENDANTS’ FIDUCIARY DUTIES

 

25.                                 Under applicable law, in any situation where the directors of a publicly traded corporation undertake a transaction that will result in either: (i) a change in corporate control; or (ii) a break up of the corporation’s assets, the directors have an affirmative fiduciary obligation to obtain the highest value reasonably available for the corporation’s shareholders, and if such transaction will result in a change of corporate control, the shareholders are entitled to receive a significant premium. To diligently comply with these duties, the directors and/or officers may not take any action that:

 

(a)                                  adversely affects the value provided to the corporation’s shareholders;

 

(b)                                 will discourage or inhibit alternative offers to purchase control of the corporation or its assets;

 

(c)                                  contractually prohibits themselves from complying with their fiduciary duties;

 

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(d)                                 will otherwise adversely affect their duty to search and secure the best value reasonably available under the circumstances for the corporation’s shareholders; and/or

 

(e)                                  will provide the directors and/or officers with preferential treatment at the expense of, or separate from, the public shareholders.

 

26.                                 In accordance with their duties of loyalty and good faith, the Defendants, as directors and/or officers of ADC, are obligated under applicable law to refrain from:

 

(a)                                  participating in any transaction where the directors’ or officers’ loyalties are divided;

 

(b)                                 participating in any transaction where the directors or officers receive, or are entitled to receive, a personal financial benefit not equally shared by the public shareholders of the corporation; and/or

 

(c)                                  unjustly enriching themselves at the expense or to the detriment of the public shareholders.

 

27.                                 Defendants are also obliged to honor their duty of candor to ADC’s shareholders by, inter alia, providing all material information to the shareholders regarding a scenario in which they are asked to vote or tender their shares. This duty of candor ensures that shareholders have all information that will enable them to make informed, rational and intelligent decisions about whether to vote or tender their shares.

 

28.                                 Plaintiff alleges herein that Defendants, separately and together, in connection with the Acquisition, are knowingly or recklessly violating their fiduciary duties, including their duties of loyalty, good faith, and independence owed to Plaintiff and other public shareholders of ADC. Defendants stand on both sides of the transaction, are engaging in self dealing, are obtaining for themselves personal benefits, including personal financial benefits not shared equally by Plaintiff or

 

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the Class. As a result of Defendants’ self dealing and divided loyalties, neither Plaintiff nor the Class will receive adequate or fair value for their ADC common stock in the proposed Acquisition.

 

29.                                 Because Defendants are knowingly or recklessly breaching their duties of loyalty, good faith, candor and independence in connection with the Acquisition, the burden of proving the inherent or entire fairness of the Acquisition, including all aspects of its negotiation, structure, price and terms, is placed upon Defendants as a matter of law.

 

CLASS ACTION ALLEGATIONS

 

30.                                 Plaintiff brings this action individually and as a class action on behalf of all holders of ADC stock who are being and will be harmed by Defendants’ actions described below (the “Class”). Excluded from the Class are Defendants herein and any person, firm, trust, corporation, or other entity related to or affiliated with any Defendants.

 

31.                                 This action is properly maintainable as a class action under Minnesota Rule of Civil Procedure 23.

 

32.                                 The Class is so numerous that joinder of all members is impracticable. There are nearly 97 million shares of ADC’s common stock outstanding. These shares are held by hundreds, if not thousands, of beneficial holders.

 

33.                                 There are questions of law and fact which are common to the Class and which predominate over questions affecting any individual Class member. The common questions include, inter alia, the following:

 

(a)                                  whether the Individual Defendants have breached their fiduciary duties of undivided loyalty, independence or due care with respect to Plaintiff and the other members of the Class in connection with the Acquisition;

 

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(b)                                 whether the Individual Defendants have breached their fiduciary duty to secure and obtain the best price reasonable under the circumstances for the benefit of Plaintiff and the other members of the Class in connection with the Acquisition;

 

(c)                                  whether the Individual Defendants have breached any of their other fiduciary duties to Plaintiff and the other members of the Class in connection with the Acquisition, including the duties of good faith, diligence, honesty and fair dealing;

 

(d)                                 whether the Individual Defendants have breached their fiduciary duties of candor to Plaintiff and the other members of the Class in connection with the Acquisition by failing to disclose all material information upon which they are able to make an informed decision about whether to tender their shares;

 

(e)                                  whether the Individual Defendants, in bad faith and for improper motives, have impeded or erected barriers to discourage other strategic alternatives including offers from interested parties for the Company or its assets;

 

(f)                                    whether Plaintiff and the other members of the Class would be irreparably harmed were the transactions complained of herein consummated; and

 

(g)                                 whether ADC and Tyco are aiding and abetting the wrongful acts of the Individual Defendants.

 

34.                                 Plaintiff’s claims are typical of the claims of the other members of the Class and Plaintiff does not have any interests adverse to the Class.

 

35.                                 Plaintiff is an adequate representative of the Class, has retained competent counsel experienced in litigation of this nature and will fairly and adequately protect the interests of the Class.

 

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36.                                 The prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications with respect to individual members of the Class which would establish incompatible standards of conduct for the party opposing the Class.

 

37.                                 Plaintiff anticipates that there will be no difficulty in the management of this litigation. A class action is superior to other available methods for the fair and efficient adjudication of this controversy.

 

38.                                 Defendants have acted on grounds generally applicable to the Class with respect to the matters complained of herein, thereby making appropriate the relief sought herein with respect to the Class as a whole.

 

DERIVATIVE ALLEGATIONS

 

39.                                 Plaintiff brings Counts Nos. IV-VI, below, derivatively in the right of and for the benefit of ADC to redress injuries suffered and to be suffered by ADC as a direct result of the Individual Defendants’ breaches of fiduciary duty, corporate mismanagement, gross self-dealing, and abuse of control and conspiracy to abuse control.

 

40.                                 This is not a collusive action to confer jurisdiction in this Court which it would not otherwise have.

 

41.                                 Plaintiff will adequately and fairly represent the interests of ADC and its shareholders in enforcing and prosecuting their rights.

 

42.                                 This action is brought to remedy violations of applicable law.

 

43.                                 Plaintiff has not made a demand on the ADC Board of Directors prior to the filing of this Complaint. Plaintiff believes and alleges that a demand on the present Board of Directors of ADC to institute this action would be a futile, useless act and result in irreparable injury to the Company because the entire Board of Directors participated in the wrongs complained of herein as follows:

 

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(a)                                  The Board of Directors accepted the Tyco acquisition proposal on the terms proposed;

 

(b)                                 The known principal wrongdoers and beneficiaries of the are in positions to, and do, dominate and control ADC’s Board of Directors. Thus, the Board of Directors could not, and cannot, exercise independent objective judgment in deciding whether to bring this action nor vigorously prosecute this action;

 

(c)                                  The Board of Directors refused to take any action to rescind these actions despite their knowledge that such actions constitute a breach of their fiduciary duties;

 

(d)                                 To bring this action for breach of fiduciary duties, abuse of control, and unjust enrichment, the members of ADC’s Board of Directors would have been required to sue themselves and/or their fellow directors and allies in the top ranks of the Company, with whom they are close personal friends and with whom they have entangling financial alliances, interests and dependencies. Suing themselves, their friends and their allies is not something the Individual Defendants would be willing to do, therefore, they would not be able to vigorously prosecute any such action;

 

(e)                                  ADC’s Board of Directors, including each of the Individual Defendants herein, receive substantial salaries, bonuses, payments, benefits and other emoluments and perquisites by virtue of their membership on the Company’s Board of Directors and their control of ADC. Thus, they have benefitted from the wrongs alleged herein and have engaged therein to preserve their positions of control and the perquisites thereof, and are incapable of exercising independent objective judgment in deciding whether to bring this action. The Board members also have close personal and business ties with each other and consequently are interested parties and cannot, in good faith, exercise independent business judgment to determine whether to bring this action against themselves; and

 

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(f)                                    Due to ADC’s directors’ and officers’ liability insurance coverage, if the directors caused ADC to sue themselves and the Company’s executive officers for the liability asserted herein, the directors and officers would be required to personally pay for the liability alleged herein. As a result, if these defendants were to sue themselves there would be no insurance protection for this derivative action. Thus, the defendants will not sue themselves because to do so would subject themselves and their colleagues and/or friends to million-dollar judgments payable from their individual assets alone.

 

44.                                 The meeting at which the actions described herein will be voted upon will take place within the next few weeks; accordingly, sending demand and waiting the statutory period for the ADC Board of Directors to respond to that demand would preclude any meaningful pre-vote relief, causing irreparable injury to ADC and its shareholders. Thus, Plaintiff has not made a demand on the Board which would have required Plaintiff to wait the statutory period for ADC’s Board of Directors to respond to the demand.

 

45.                                 Also, by the time the Board of Directors would consider a demand in the action, the shareholder meeting will have passed and Plaintiff, ADC and the Class will have suffered irreparable injury.

 

SUBSTANTIVE ALLEGATIONS

 

ADC’s Growth Potential Is Undeniable

 

46.                                 ADC’s second quarter 2010 financial results speak for themselves. On May 5, 2010, the Company announced, inter alia, the following highlights in a press release:

 

ADC Reports Second Quarter 2010 Financial Results

 

Strong margin expansion driven by operating efficiencies
and revenue growth

 

MINNEAPOLIS—(BUSINESS WIRE)—May 5, 2010—ADC (NASDAQ: ADCT) today announced unaudited results for its second quarter ended April 2, 2010.

 

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“We are pleased with ADC’s strong financial performance in the second quarter,” said Robert E. Switz, chairman, president and chief executive officer of ADC. “Our results are highlighted by another quarter of expanding margins and sequential revenue growth. We continue to experience the bottom-line benefits of our on-going cost reduction initiatives and the implementation of process and production improvements across our operations. Moving forward, ADC is well positioned to take further advantage of our operating leverage as we realize the revenue acceleration expected during the second half of our fiscal year.

 

“In addition to our second quarter revenue growth, we are seeing increased customer planning and proposal activity, indicating their intentions to renew next-generation network spending in significant ways. These investments, dedicated to deploying and upgrading FTTX and mobile networks, create growth opportunities for ADC’s high-performance fiber connectivity and wireless coverage and capacity solutions. Additionally, we expect to see continuing growth in the enterprise space where data center spending is rebounding, as well as in our professional services business which delivered another good quarter,” said Switz.

 

Second Quarter Fiscal 2010 Results

 

Due to a change in our fiscal year to September 30, ADC is comparing second quarter 2010 results announced today with the pro forma results for the prior year’s second quarter ended March 27, 2009 and the reported results for the first quarter of fiscal 2010 ended January 1, 2010.

 

·                                          ADC’s GAAP loss from continuing operations for the quarter was $12.5 million, or $0.13 per share. This GAAP loss includes certain charges and other items totaling $22.0 million. Excluding these items, the non-GAAP (adjusted) net earnings for the quarter were $9.5 million, or $0.10 per share. A reconciliation of GAAP to non-GAAP financial measures is provided later in this press release.

 

·                                          Net sales for the second quarter rose 6.8% to $274.0 million, compared to $256.6 million for the second quarter of fiscal 2009 and increased 3.2% compared to $265.6 million for the first quarter of 2010. The year-over-year and sequential increases reflect improving economic conditions in many regions of the world and customer spending trends.

 

·                                          Second quarter gross margin was 36.5 percent compared to a gross margin of 32.3 percent during the same quarter of last year and 34.7 percent in the previous quarter. This margin improvement was driven primarily by the company’s successful, ongoing efforts to increase efficiency across its operating cost structure, higher volume and a slightly favorable product mix.

 

·                                          Operating expenses were $91.7 million compared to $496.8 million during the 2009 second quarter and $96.2 million during the first quarter of 2010. Excluding impairment and restructuring charges, intangible amortization and certain other charges from each period, adjusted operating expenses were $81.8 million

 

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compared to $78.1 million during the same quarter of last year and $82.0 million during the previous quarter.

 

·                                          ADC ended the second quarter with $619.3 million of liquidity, which includes cash and available-for-sale securities but excludes auction rate securities, restricted cash and borrowing capacity under the company’s credit facility. The company generated cash from operating activities from continuing operations of $4.8 million during the period. Details of ADC’s cash balance can be found in the data and statistics portion of this release.

 

·                                          Days sales outstanding increased 3.5 days from the previous quarter to approximately 61.7 days while inventory turns were slightly better at 5.7 times.

 

Third Quarter Fiscal 2010 Outlook

 

For its third quarter of fiscal 2010 ending July 2, 2010, ADC announces the following guidance:

 

·                                          Net sales are expected to be within a range of $290-$310 million.

 

·                                          GAAP diluted earnings per share are expected to be within a range of $.10 to $.20, which includes non-cash amortization expense of $0.05 per share and excludes potential non-cash charges or restructuring charges that the company cannot estimate at this time.

 

47.                                 These strong second quarter 2010 results came on the heels of similarly strong results for the first quarter of 2010. In a February 8, 2010 release, the Company described its first quarter 2010 successes as follows:

 

ADC Reports First Quarter 2010 Financial Results

 

EPS improvement driven by strong margins and cost savings actions

 

MINNEAPOLIS—(BUSINESS WIRE)—February 8, 2010—ADC (NASDAQ: ADCT) today announced unaudited results for its first quarter ended January 1, 2010.

 

“ADC’s strong first quarter results demonstrate the positive impact of our ongoing efforts to streamline operations,” said Robert E. Switz, chairman, president and chief executive officer of ADC. “We delivered very good gross margins, managed operating expenses effectively in the face of what remains a challenging CAPEX-spending environment, and bolstered our already strong liquidity position. Based on these results, we’re pleased with the continued improvements in our financial performance and expect to demonstrate further progress as we move through fiscal 2010.

 

“As we continue to realize the benefits of our improved operations, we expect to drive additional earnings power by maintaining our commitment to creating a more

 

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effective and efficient organization,” added Switz. “We also are making strategic gains in the marketplace with our focus on the areas of greatest opportunity in fiber and wireless networks worldwide, exhibited in part by the strength of our business in China and a significant sequential increase in wireless sales in the first quarter.”

 

First Quarter Fiscal 2010 Results

 

Due to a change in our fiscal year to September 30, ADC is comparing first quarter 2010 results announced today with the pro forma results for the prior year’s first quarter ended December 26, 2008 and the pro forma results for the fourth quarter of fiscal 2009 ended September 30, 2009.

 

·                                          GAAP earnings from continuing operations were $3.6 million, or $0.04 per share. These GAAP earnings include non-GAAP items of $1.7 million. Excluding these items, the non-GAAP (adjusted) net earnings for the quarter were $1.9 million, or $0.02 per share. A reconciliation of GAAP to non-GAAP financial measures is provided later in this press release.

 

·                                          Net sales for first quarter totaled $265.6 million, compared to $299.7 million for the first quarter of fiscal 2009 and $291.2 million for the fourth quarter of 2009. The year-over-year decline reflects principally the impact of the global economic downturn, which was just beginning to impact the business at the same time last year. The sequential decrease is due primarily to expected seasonality and a decline in major carrier spending that the company referenced in its guidance at the end of the fourth quarter.

 

·                                          First quarter gross margin was 34.7 percent compared to adjusted gross margins of 29.5 percent during the same quarter of last year and 34.4 percent in the previous quarter. The year-over-year margin increase was driven by the company’s successful actions to increase efficiency across its operating cost structure, which offset the negative impact of lower revenue.

 

·                                          Operating expenses were $96.2 million compared to $98.8 million during the 2009 first quarter and $110.5 million during the 2009 fourth quarter. Excluding impairment and restructuring charges, intangible amortization and certain other charges from each period, adjusted operating expenses were $82.0 million compared to $78.1 million during the same quarter of last year and $78.6 million during the fourth quarter of the last fiscal year. As communicated in prior guidance, the operating expense increases are due primarily to higher stock-based compensation expense, which included a $4 million charge to reflect a change in assumptions. As a result of continuing cost actions and a return to normalized stock-based compensation levels, ADC expects to see lower adjusted operating expenses during the remainder of fiscal 2010.

 

·                                          ADC’s GAAP earnings from continuing operations included $14.2 million of expenses, or $0.14 per share, related to purchased intangible amortization, restructuring and impairment and certain other charges. In addition to these expenses, ADC recorded a one-time gain of $15.9 million or $0.16 per share related

 

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to the sale of certain assets. Excluding these items, adjusted earnings per diluted share were $0.02. A reconciliation of GAAP to non-GAAP financial measures is provided later in this press release.

 

·                                          ADC ended the first quarter with $609.5 million of liquidity, which excludes auction rate securities and restricted cash. The company generated cash from operating activities from continuing operations of $16.0 million and free cash flow of $9.3 million in the first quarter. Details of ADC’s cash balance can be found in the data and statistics portion of this release.

 

·                                          Days sales outstanding improved from the previous quarter to approximately 58.1 days and inventory turns were slightly lower at 5.6 times.

 

·                                          During the first quarter, the company divested its GSM base station and switching business from the Network Solutions business unit and its RF Worx Signal Management product line from the Global Connectivity business unit. Both transactions reflected opportunities to divest non-core portfolios while not impacting ADC’s growth strategies. The GSM base station and switching business is reported as a discontinued operation and, as a result, prior periods have been restated to exclude the results of this business.

 

·                                          Financial performance of the Network Solutions business unit improved as revenue increased 17.2% from the previous quarter and 9.1% from last year’s first quarter. ADC is seeing a modest return to project spending related to in-building and outdoor microcellular wireless solutions by operators and enterprises worldwide.

 

Second Quarter Fiscal 2010 Outlook

 

For its second quarter of fiscal 2010 ending April 2, 2010, ADC announces the following guidance:

 

·                                          Net sales are expected to be within the range of $260-280 million.

 

·                                          GAAP diluted earnings per share are expected to be within the range of a loss of $.04 to earnings of $.06, which includes non-cash amortization expense of $0.05 per share and excludes potential non-cash charges or restructuring charges that the company cannot estimate at this time.

 

48.                                 ADC’s stock chart exemplifies the Company’s tangible rise to the range of share prices ADC’s stock holders have been experiencing lately, and before the announcement of the Acquisition:

 

18


 

 

The Proposed Acquisition of the Company

 

49.                                 All indications — including from ADC and Tyco — are that ADC’s value (and, thus, its share price) is steadily poised to continue climbing.

 

50.                                 Yet, Defendants want to give this Company away at a steal to Tyco.

 

51.                                 That is, on July 13, 2010, the Company — through the Individual Defendants — announced the Acquisition to the public via several SEC filings and a concomitant joint press release with Tyco which stated:

 

Tyco Electronics to Acquire ADC, Creating a World
Leader in Broadband Connectivity

 

SCHAFFHAUSEN, Switzerland and EDEN PRAIRIE, Minn., July 13, 2010 /PRNewswire via COMTEX News Network/ —

 

·                  Complementary Product Offerings Will Help Customers Deliver High-Speed Video and Data Communications

 

·                  Tyco Electronics Reports Preliminary Fiscal Third Quarter Results

 

·                  Sales of $3.1 Billion and Book-to-Bill Ratio of 1.06

 

19



 

·                  Diluted Earnings Per Share From Continuing Operations (GAAP EPS) of $0.72; Adjusted EPS of $0.70

 

Tyco Electronics (NYSE: TEL) and ADC (Nasdaq: ADCT) announced today a definitive agreement under which Tyco Electronics will acquire ADC for $12.75 per share in cash, or an enterprise value of approximately $1.25 billion. The transaction is expected to be accretive by approximately $0.14 per share in the first full year after closing excluding acquisition-related costs. It will position Tyco Electronics’ Network Solutions segment as a leading global provider of broadband connectivity products to carrier and enterprise networks around the world.

 

Tom Lynch, Chief Executive Officer of Tyco Electronics, said, “This is a very exciting time for our company and ADC is a great fit as we continue to execute our strategy to create strong leadership positions in all of our connectivity businesses. Consumers and enterprises want access to high-speed video and data wherever they are, on whatever devices they are using — from smart phones to HD and 3-D televisions to computers with advanced video-conferencing capabilities. The combination of ADC and Tyco Electronics creates an industry leader, with the scope and geographic scale to help customers deliver needed capacity, from the core of the network all the way to the end user.”

 

Robert E. Switz, Chairman, President and CEO of ADC, said, “ADC has a strong heritage of providing innovative wired and wireless solutions that have enabled the expansion of advanced broadband networks worldwide. As part of Tyco Electronics, our organization’s ability to serve the world’s leading telecommunications services providers and enterprises will be strengthened significantly. I have great respect for Tyco Electronics and know that they share our commitment to meeting customers’ changing next generation network needs.”

 

The combined organization will offer a complete product portfolio across every major geographic market. It will also add ADC’s Distributed Antenna System (DAS) products, which will expand Tyco Electronics’ wireless connectivity portfolio to provide greater mobile coverage and capacity solutions to carrier and enterprise customers as demand for mobile data continues to expand. Additionally, Tyco Electronics will add ADC’s professional services organization in the US to its business.

 

“We expect ADC to be accretive to our earnings in the first year and to reach our target operating margin of 15 percent in the third year after the acquisition,” said Lynch.

 

The transaction is structured as a tender offer to be followed as soon as possible by a merger. The transaction is subject to customary closing conditions, including the tender of a majority of ADC shares and regulatory approvals, and is expected to close in the fourth calendar quarter 2010.

 

In conjunction with today’s announcement, Tyco Electronics reported preliminary results for the fiscal third quarter ended June 25, 2010. The company reported sales

 

20



 

of $3.1 billion, an increase of 23 percent over the prior year quarter and up 4 percent sequentially. GAAP EPS were $0.72 in the quarter which included $0.02 per share of income related to other items net of restructuring charges. Adjusted EPS were $0.70 in the quarter. The company’s book-to-bill ratio was 1.06 for the quarter and 1.08 excluding Subsea Communications. The company will report complete results and provide further details on its fiscal third quarter before trading begins on July 22, 2010.

 

52.                                 Incredibly, not a single word was mentioned in the press release regarding the value of the Acquisition for ADC shareholders. This omission is stunning.

 

53.                                 Put simply, the Defendants are attempting to benefit from a temporary downturn in the markets and deprive ADC shareholders of the true value of their shares, as the Acquisition substantially undervalues ADC.

 

54.                                 Indeed, with over $500 million in cash and $1.1 billion in annual revenues, it is clear that the true value of ADC is well in excess of $12.75 per share.

 

55.                                 Moreover, after the announcement, Tyco was up 2.5%, or 64 cents, to close at $25.92, demonstrating that the market believes that Tyco is paying too little for ADC.

 

56.                                 In addition, the tender offer is coercive because of several material omissions from Defendants, which deprive ADC shareholders of the ability to make a voluntary tender of their shares in connection with the tender offer and proposed Acquisition.

 

57.                                 Specifically, Defendants have failed to disclose whether any committee of independent directors was formed to evaluate strategic alternatives for ADC, and, if not, the reasons why. This information is critically important to ADC shareholders because the Board is required to maximize shareholder value, not act in the best interests of Company management, who have substantial conflicts of interest, as demonstrated here from ADC’s latest Proxy statement:

 

21



 

Potential Payments Upon Certain Terminations, Death, Disability or Termination After
a Change in Control

 

Name

 

Description

 

Voluntary
Termination,
Disability or
Death

 

Without Cause
Termination

 

Retirement

 

Termination After
Change in Control

 

Robert E. Switz

 

Severance Amount

 

0

 

1,514,000

 

0

 

4,452,000

 

 

 

Bonus

 

0

 

0

 

0

 

695,711

 

 

 

Value of Accelerated Options(1)

 

0

 

0

 

0

 

1,486,740

 

 

 

Value of Accelerated RSUs(2)

 

0

 

0

 

1,250,875

 

1,876,500

 

 

 

Value of Accelerated PSUs(3)

 

0

 

0

 

583,742

 

2,917,599

 

 

 

Value of Benefits Continuation

 

0

 

3,870

 

0

 

3,870

 

 

 

Value of Outplacement Services

 

0

 

9,000

 

0

 

9,000

 

 

 

Excise Tax Gross Up Payment(4)

 

 

 

0

 

3,758,499

 

 

 

Total

 

0

 

1,526 870

 

1.834.617

 

15,289,919

 

James G. Mathews

 

Severance Amount

 

0

 

425.000

 

0

 

1,156,000

 

 

 

Bonus

 

49,110

 

49,110

 

49,110

 

218,265

 

 

 

Value of Accelerated Options(1)

 

0

 

0

 

0

 

523,500

 

 

 

Value of Accelerated RSUs(2)

 

0

 

0

 

0

 

115,357

 

 

 

Value of Accelerated PSUs(3)

 

0

 

0

 

0

 

254,767

 

 

 

Value of Benefits Continuation

 

0

 

2.018

 

0

 

2,018

 

 

 

Value of Outplacement Services

 

0

 

9.000

 

0

 

9,000

 

 

 

Excise Tax Gross Up Payment(4)

 

 

 

 

845,356

 

 

 

Total

 

49,110

 

485.128

 

49,110

 

3.124,283

 

Patrick D. O’Brien

 

Severance Amount

 

0

 

431,250

 

0

 

1,173,000

 

 

 

Bonus

 

52,622

 

52,622

 

52,622

 

221,568

 

 

 

Value of Accelerated Option(1)

 

0

 

0

 

0

 

235,575

 

 

 

Value of Accelerated RSUs(2)

 

0

 

0

 

0

 

301,376

 

 

 

Value of Accelerated PSUs(3)

 

0

 

0

 

0

 

231,577

 

 

 

Value of Benefits Continuation

 

0

 

2,018

 

0

 

2,018

 

 

 

Value of Outplacement Services

 

0

 

9,000

 

0

 

9,000

 

 

 

Excise Tax Gross Up Payment(4)

 

 

 

 

783,187

 

 

 

Total

 

52,622

 

494,890

 

$

52,622

 

2,957,301

 

Laura N. Owen

 

Severance Amount

 

0

 

363,750

 

0

 

902,100

 

 

 

Bonus

 

36,766

 

36.766

 

36,766

 

147,066

 

 

 

Value of Accelerated Options(1)

 

0

 

0

 

0

 

130,875

 

 

 

Value of Accelerated RSUs(2)

 

0

 

0

 

0

 

233,747

 

 

 

Value of Accelerated PSUs(3)

 

0

 

0

 

0

 

208,500

 

 

 

Value of Benefits Continuation

 

0

 

1.290

 

0

 

1,290

 

 

 

Value of Outplacement Services

 

0

 

9,000

 

0

 

9,000

 

 

 

Excise Tax Gross Up Payment(4)

 

 

 

 

565,932

 

 

 

Total

 

36,766

 

410.806

 

$

36,766

 

2,198,510

 

Richard B. Parran, Jr.

 

Severance Amount

 

 

 

368,750

 

0

 

914,500

 

 

 

Bonus

 

50,729

 

50,729

 

50,729

 

143,032

 

 

 

Value of Accelerated Options(1)

 

0

 

0

 

0

 

179,925

 

 

 

Value of Accelerated RSUs(2)

 

0

 

0

 

0

 

318,676

 

 

 

Value of Accelerated PSUs(3)

 

0

 

0

 

0

 

165,549

 

 

 

Value of Benefits Continuation

 

0

 

2,018

 

0

 

2,018

 

 

 

Value of Outplacement Services

 

0

 

9,000

 

0

 

9,000

 

 

 

Excise Tax Gross Up Payment(4)

 

 

 

 

633,160

 

 

 

Total

 

50,729

 

430,497

 

50,729

 

2,365,860

 

 

58.                                 Accordingly, without complete and adequate disclosure regarding this issue, among others, no ADC shareholder can make an intelligent, ration decision as whether to tender their shares or not.

 

59.                                 Likewise, the Agreement provides that ADC may be required to pay Tyco a termination fee of $38 million, including if it accepts a superior acquisition proposal. This penalty unduly binds ADC to the Agreement and hinders any competing, superior offers for the Company.

 

60.                                 Additionally, with the “no solicitation” provision in the Agreement, the Agreement further unduly binds the Company to the Acquisition and prevents the Individual Defendants from

 

22



 

maximizing shareholder value by prohibiting the Company from soliciting alternative business proposals. Inter alia, the so-called “no solicitation” provision provides:

 

Section 7.04. No Solicitation; Other Offers. (a) After the date hereof and prior to the earlier of the termination of this Agreement and the Acceptance Time, the Company and its Subsidiaries shall not (and the Company shall use its reasonable best efforts to cause its or any of its Subsidiaries’ officers or directors, investment bankers, attorneys, accountants, consultants or other agents or advisors (collectively, “Representatives”) not to), directly or indirectly, (i) solicit, initiate or knowingly take any action to facilitate or encourage the submission of any Acquisition Proposal, (ii) enter into or participate in any discussions or negotiations with, furnish any information relating to the Company or any of its Subsidiaries or afford access to the business, properties, assets, books or records of the Company or any of its Subsidiaries to, any Person with respect to inquiries regarding, or the making of, an Acquisition Proposal, (iii) fail to make, withdraw, modify or amend in a manner adverse to Parent the Company Board Recommendation (or recommend an Acquisition Proposal or knowingly take any action or make any statement inconsistent with the Company Board Recommendation) (any of the foregoing in this clause (iii), an “Adverse Recommendation Change”), (iv) grant any waiver or release under any standstill or similar agreement with respect to any class of equity securities of the Company or any of its Subsidiaries or under the Company Rights Agreement, (v) take any action to render the restrictions on a “control share acquisition” set forth in Section 302 A.671 of the MBCA inapplicable to any transaction, (vi) approve any transaction under, or any Person becoming an “interested shareholder” under, Section 302A.673 of the MBCA or (vii) enter into any agreement in principle, letter of intent, term sheet, merger agreement, acquisition agreement, option agreement or other similar instrument relating to an Acquisition Proposal (other than a confidentiality agreement with a Person to whom the Company is permitted to provide information in accordance with Section 7.04(b)). It is agreed that any violation of the restrictions on the Company set forth in this Section by any Representative of the Company or any of its Subsidiaries shall be a breach of this Section by the Company.

 

CAUSES OF ACTION

 

COUNT I

 

On Behalf of Plaintiff and the Class Against All
INDIVIDUAL DEFENDANTS CLAIM FOR BREACH OF FIDUCIARY DUTIES

 

61.                                 Plaintiff repeats and realleges each allegation set forth herein.

 

62.                                 Defendants have knowingly and recklessly and in bad faith violated fiduciary duties of care, loyalty, good faith and independence owed to the public shareholders of ADC and have acted to put the interests of Tyco ahead of the interests of ADC’s shareholders.

 

23



 

63.                                 By the acts, transactions and courses of conduct alleged herein, Defendants, individually and acting as a part of a common plan, knowingly or recklessly and in bad faith are attempting to unfairly deprive Plaintiff and other members of the Class of the true value of their investment in ADC.

 

64.                                 As demonstrated by the allegations above, Defendants knowingly or recklessly failed to exercise the care required, and breached their duties of loyalty, good faith and independence owed to the shareholders of ADC because, among other reasons, they failed to:

 

·                                          fully inform themselves of the market value of ADC before entering into the Agreement;

 

·                                          act in the best interests of the public shareholders of ADC common stock;

 

·                                          maximize shareholder value;

 

·                                          obtain the best financial and other terms when the Company’s independent existence will be materially altered by the Acquisition; and

 

·                                          act in accordance with their fundamental duties of good faith, due care and loyalty.

 

65.                                 By reason of the foregoing acts, practices and course of conduct, Defendants have knowingly or recklessly and in bad faith failed to exercise ordinary care and diligence in the exercise of their fiduciary obligations toward Plaintiff and the other members of the Class.

 

66.                                 Unless enjoined by this Court, Defendants will continue to knowingly or recklessly and in bad faith breach their fiduciary duties owed to Plaintiff and the Class, and may consummate the proposed Acquisition which will exclude the Class from the maximized value they are entitled to all to the irreparable harm of the Class.

 

67.                                 As a result of Defendants’ unlawful actions, Plaintiff and the other members of the Class will be irreparably harmed in that they will not receive the real value of their equity ownership

 

24



 

of the Company. Unless the tender offer and proposed Acquisition are enjoined by the Court, Defendants will continue to knowingly or recklessly and in bad faith breach their fiduciary duties owed to Plaintiff and the members of the Class to the irreparable harm of the members of the Class.

 

68.                                 Plaintiff and the members of the Class have an inadequate remedy at law. Only through the exercise of this Court’s equitable powers can Plaintiff and the Class be fully protected from the immediate and irreparable injury which Defendants’ actions threaten to inflict.

 

69.                                 Plaintiff seeks to obtain a non-pecuniary benefit for the Class in the form of injunctive relief against the Individual Defendants. Plaintiff’s counsel are entitled to recover their reasonable attorneys’ fees and expenses as a result of the conference of a non-pecuniary benefit on behalf of the Class, and will seek an award of such fees and expenses at the appropriate time.

 

COUNT II

 

On Behalf of Plaintiff and the Class Against All
INDIVIDUAL DEFENDANTS CLAIM FOR BREACH OF DUTY OF CANDOR

 

70.                                 Plaintiff repeats and realleges each allegation set forth herein.

 

71.                                 The Individual Defendants were and are under a duty to make sure that ADC’s shareholders are provided full and complete disclosure concerning important matters which a reasonable stockholder would deem important under the circumstances.

 

72.                                 By the acts, transactions and courses of conduct alleged herein, defendants, individually and as part of a common plan and scheme or in breach of their fiduciary duties to plaintiff and the other members of the Class, are attempting unfairly to deprive plaintiff and other members of the Class of their ability to make an informed decision as to whether to tender their shares in connections with the tender offer and proposed Acquisition.

 

73.                                 ADC shareholders will, if the proposed Acquisition is consummated, be deprived of the opportunity to make an educated and informed decision concerning whether to tender their shares in favor of the Acquisition.

 

25


 

 

74.                                 By reason of the foregoing acts, practices and course of conduct, Defendants have acted in a willful, wanton and reckless manner in failing to exercise their fiduciary obligations toward Plaintiff and the other ADC public stockholders.

 

75.                                 As a result of the actions of Defendants, Plaintiff and the other members of the Class have been and will be damaged in that they have not and will not receive adequate and complete disclosure regarding the proposed Acquisition.

 

76.                                 Unless enjoined by this Court, Defendants will continue to breach their fiduciary duties owed to Plaintiff and the other members of the Class, and may consummate the proposed Acquisition and cause irreparable harm of the Class, as aforesaid.

 

77.                                 Plaintiff and the Class have no adequate remedy at law.

 

78.                                 Plaintiff seeks to obtain a non-pecuniary benefit for the Class in the form of injunctive relief against defendants. Plaintiff counsel are entitled to recover their reasonable attorneys’ fees and expenses as a result of the conference of a non-pecuniary benefit on behalf of the Class, and will seek an award of such fees and expenses at the appropriate time.

 

COUNT III

 

On Behalf of Plaintiff and the Class Against
TYCO FOR AIDING AND ABETTING THE INDIVIDUAL DEFENDANTS’
BREACH OF FIDUCIARY DUTIES

 

79.                                 Plaintiff repeats and realleges each allegation set forth herein.

 

80.                                 Defendant Tyco is sued herein as an aider and abettor of the breaches of fiduciary duties outlined above by the Individual Defendants, as members of the Board of ADC.

 

81.                                 The Individual Defendants breached their fiduciary duties of good faith, loyalty, and due care to the ADC shareholders by failing to:

 

·                                          fully inform themselves of the market value of ADC before entering into the Agreement;

 

26



 

·                                          act in the best interests of the public shareholders of ADC common stock;

 

·                                          maximize shareholder value;

 

·                                          obtain the best financial and other terms when the Company’s independent existence will be materially altered by the Acquisition; and

 

·                                          act in accordance with their fundamental duties of good faith, due care and loyalty.

 

82.                                 Such breaches of fiduciary duties could not and would not have occurred but for the conduct of Tyco, which, therefore, aided and abetted such breaches via entering into the Agreement with ADC.

 

83.                                 Tyco had knowledge that it was aiding and abetting the Individual Defendants’ breach of their fiduciary duties to the ADC shareholders.

 

84.                                 Tyco rendered substantial assistance to the Individual Defendants in their breach of their fiduciary duties to the ADC shareholders.

 

85.                                 As a result of Tyco’s conduct of aiding and abetting the Individual Defendants’ breaches of fiduciary duties, Plaintiff and the other members of the Class have been and will be damaged in that they have been and will be prevented from obtaining a fair price for their shares.

 

86.                                 As a result of the unlawful actions of Tyco, Plaintiff and the other members of the Class will be irreparably harmed in that they will not receive fair value for ADC’s assets and business, will be prevented from obtaining the real value of their equity ownership in the Company. Unless the actions of Tyco are enjoined by the Court, it will continue to aid and abet the Individual Defendants’ breach of their fiduciary duties owed to Plaintiff and the members of the Class, and will aid and abet a process that inhibits the maximization of shareholder value and the disclosure of material information.

 

87.                                 Plaintiff and the other members of the Class have no adequate remedy at law.

 

27



 

88.                                 Plaintiff seeks to obtain a non-pecuniary benefit for the Class in the form of injunctive relief against Tyco. Plaintiff’s counsel are entitled to recover their reasonable attorneys’ fees and expenses as a result of the conference of a non-pecuniary benefit on behalf of the Class, and will seek an award of such fees and expenses at the appropriate time.

 

COUNT IV

 

On Behalf of ADC Against
THE INDIVIDUAL DEFENDANTS FOR CORPORATE WASTE

 

89.                                 Plaintiff realleges each prior allegation above as though fully set forth herein.

 

90.                                 As explained above, the Individual Defendants’ conduct in connection with the Acquisition constitutes a waste of corporate assets.

 

91.                                 Specifically, by entering into the merger agreement with Tyco and expending needed funds from the Company’s coffers to consummate the Acquisition — rather than taking the appropriate steps to simply attempt to refinance the Company’s existing obligations to its lenders, the Individual Defendants are engaging in a gross waste of corporate assets to the substantial detriment of the Company.

 

92.                                 As a result of the Individual Defendants’ waste of ADC’s corporate assets, ADC has sustained and will continue to sustain irreparable harm and has no adequate remedy at law.

 

93.                                 Plaintiff seeks to obtain a non-pecuniary benefit for ADC in the form of injunctive relief against the Individual Defendants. Plaintiff’s counsel are entitled to recover their reasonable attorneys’ fees and expenses as a result of the conference of a non-pecuniary benefit on behalf of ADC, and will seek an award of such fees and expenses at the appropriate time.

 

COUNT V

 

On Behalf of ADC Against
THE INDIVIDUAL DEFENDANTS FOR ABUSE OF CONTROL

 

94.                                 Plaintiff realleges each prior allegation above as though fully set forth herein.

 

28



 

95.                                 In direct contradiction of their fiduciary duties, the Individual Defendants have utilized their control over ADC to divert ADC’s valuable assets to the Tyco.

 

96.                                 Defendants’ conduct constituted and continues to constitute an abuse of their ability to control and influence ADC, conduct for which all defendants are legally responsible.

 

97.                                 By reason of the foregoing, ADC has been damaged and has sustained, and will continue to sustain, irreparable injury for which it has no adequate remedy at law.

 

98.                                 Plaintiff seeks to obtain a non-pecuniary benefit for ADC in the form of injunctive relief against the Individual Defendants. Plaintiff’s counsel are entitled to recover their reasonable attorneys’ fees and expenses as a result of the conference of a non-pecuniary benefit on behalf of ADC, and will seek an award of such fees and expenses at the appropriate time.

 

COUNT VI

 

On Behalf of ADC Against the
INDIVIDUAL DEFENDANTS FOR BREACH OF FIDUCIARY DUTY

 

99.                                 Plaintiff realleges each prior allegation above as though fully set forth herein.

 

100.                           The Individual Defendants engaged in the aforesaid conduct without exercising the reasonable and ordinary care which directors and officers, as fiduciaries, owe to a corporation and its shareholders, and have thereby knowingly or recklessly breached and/or aided and abetted breaches of fiduciary duties to the corporation and/or its shareholders.

 

101.                           As a result of the Individual Defendants’ breach of fiduciary duty, ADC has sustained and will continue to sustain irreparable harm and have no adequate remedy at law.

 

102.                           Plaintiff seeks to obtain a non-pecuniary benefit for ADC in the form of injunctive relief against the Individual Defendants. Plaintiff’s counsel are entitled to recover their reasonable attorneys’ fees and expenses as a result of the conference of a non-pecuniary benefit on behalf of ADC, and will seek an award of such fees and expenses at the appropriate time.

 

29



 

JURY TRIAL DEMAND

 

The Plaintiff hereby demands trial by jury on all issues so triable

 

PRAYER FOR RELIEF

 

WHEREFORE, Plaintiff demands injunctive relief, in his favor, in favor of the Class, and/or in favor of ADC and against Defendants as follows:

 

A.                                   Declaring that this action is properly maintainable as a class action;

 

B.                                     Directing the Defendants to repay all damages, losses, attorneys’ fees, appraisal fees, loss of profits or other expenses incurred by ADC by virtue of the complained of conduct;

 

C.                                     Declaring and decreeing that the Agreement was entered into in breach of the fiduciary duties of Defendants and is therefore unlawful and unenforceable;

 

D.                                    Enjoining Defendants, their agents, counsel, employees and all persons acting in concert with them from finalizing the tender offer and consummating the Acquisition, unless and until the Company adopts and implements a procedure or process to i) obtain the highest possible value for shareholders, and ii) provide all material disclosures to shareholders with which they are able to make informed decisions about whether to tender their shares in connection with the tender offer and Acquisition;

 

E.                                      Directing the Individual Defendants to exercise their fiduciary duties to obtain a transaction which is in the best interests of ADC and ADC’s shareholders until the process for the sale or auction of the Company is completed and the highest possible value is obtained;

 

F.                                      Rescinding, to the extent already implemented, the Agreement or any of the terms thereof;

 

G.                                     Awarding Plaintiff the costs and disbursements of this action, including reasonable attorneys’ and experts’ fees; and

 

H.                                    Granting such other and further equitable relief as this Court may deem just and proper.

 

30



 

DATED: July 15, 2010

REINHARDT, WENDORF & BLANCHFIELD

 

GARRETT D. BLANCHFIELD, JR. (#209855)

 

BRANT D. PENNEY (#0316878)

 

 

 

/s/ Brant D. Penney

 

Brant D. Penney

 

 

 

E-1250 First National Bank Bldg.

 

332 Minnesota St.

 

St. Paul, MN 55101

 

Telephone: 651/287-2100

 

651/287-2103 (fax)

 

 

 

RYAN & MANISKAS, LLP

 

RICHARD A. MANISKAS

 

KATHARINE M. RYAN

 

995 Old Eagle School Road, Suite 311

 

Wayne, PA 19087

 

Telephone: 484/588-5516

 

484/450-2582 (fax)

 

 

 

Attorneys for Plaintiff

 

 

ACKNOWLEDGEMENT

 

The undersigned hereby acknowledges that sanctions, including costs, disbursements and reasonable attorney fees may be awarded pursuant to Minn. Stat. § 549.211 to the party against whom the allegations in this pleading are asserted.

 

 

/s/ Brant D. Penney

 

BRANT D. PENNEY

 

31



EX-99.(A)(15) 16 a2199448zex-99_a15.htm EXHIBIT 99.(A)(15)

Exhibit (a)(15)

 

 

 

FILED PSL

 

 

 

 

 

2010 JUL 16 PM 1:49

 

 

 

 

 

BY

 

DEPUTY

 

 

HENN CO. DISTRICT

 

 

COURT ADMINISTRATOR

 

STATE OF MINNESOTA

 

DISTRICT COURT

 

 

 

COUNTY OF HENNEPIN

 

FOURTH JUDICIAL DISTRICT

 

 

 

 

 

CASE TYPE: OTHER CIVIL

 

MICHAEL PARTANSKY, Individually and on behalf of all others similarly situated,

 

Court File No.

 

 

 

Plaintiff,

 

CLASS ACTION COMPLAINT

vs.

 

 

 

 

 

ADC TELECOMMUNICATIONS, INC.,

 

JURY TRIAL DEMANDED

ROBERT E. SWITZ, WILLIAM R. SPIVEY, JOHN J. BOYLE III, MICKEY P. FORET, LOIS M. MARTIN, KRISH A. PRABHU, JOHN E. REHFELD, DAVID A. ROBERTS, LARRY W. WANGBERG, and JOHN D. WUNSCH,

 

 

 

 

 

 

 

 

Defendants.

 

 

 

Plaintiff, Michael Partansky, by his attorneys, alleges upon information and belief, except for his own acts, which are alleged on knowledge, as follows:

 

INTRODUCTION

 

1.             Plaintiff brings this action on behalf of the public stockholders ADC Telecommunications, Inc. (“ADC” or the “Company”) against Defendants, ADC and its Board of Directors (the “Board”) seeking equitable relief for their breaches of fiduciary duty and other violations of state law arising out of their attempt to sell the Company to Tyco Electronics, Ltd (“Tyco”). Under the terms of the merger agreement, Tyco will pay ADC shareholders $12.75 in cash for each share of ADC common stock owned in a transaction valued at approximately $1.25 billion.

 



 

JURISDICTION AND VENUE

 

2.             This court has jurisdiction over this action as Defendant ADC is incorporated in the State of Minnesota and maintains its headquarters in the State.

 

3.             Venue is proper in this District because many of the acts and practices complained of herein occurred in substantial part in this District. In addition, ADC maintains its headquarters in this District.

 

PARTIES

 

4.             Plaintiff, Michael Partansky, is a resident of California. Mr. Partansky is and has been at all relevant times the owner of 5,000 shares of ADC common stock.

 

5.             Defendant ADC is a Minnesota corporation headquartered at 13625 Technology Drive, Eden Prairie, Minnesota 55344. ADC provides broadband communications network infrastructure products and related services worldwide. Its products enable the delivery of high-speed Internet, data, video, and voice communications over wireline, wireless, cable, enterprise, and broadcast networks. The Company also offers professional services consisting of systems integration services for broadband, multiservice communications over wireline, wireless, cable, and enterprise networks. It serves local telephone companies, long-distance carriers, wireless service providers, cable television operators and broadcasters; business customers and governmental agencies; and communications equipment vendors. ADC sells its products through sales personnel, value-added resellers, distributors, manufacturers, representatives, independent sales representatives, and public and private network providers. The Company was formerly known as Magnetic Controls Company and changed its name to ADC Telecommunications, Inc. in 1985.

 

2



 

6.             Defendant Robert E. Switz (“Switz”) has served Chairman of the Board of Directors since August 2008 and President and Chief Executive Officer for ADC since August 2003.

 

7.             Defendant William R. Spivey (“Spivey”) has served as a director of ADC since September 2004.

 

8.             Defendant John J. Boyle, III (“Boyle”) has served as a director of ADC since November 1999.

 

9.             Defendant Mickey P. Foret (“Foret”) has served as a director of ADC since February 2003.

 

10.           Defendant Lois M. Martin (“Martin”) has served as a director of ADC since March 2004.

 

11.           Defendant Krish A. Prabhu (“Prabhu”) has served as a director of ADC since November 2008.

 

12.           Defendant John E. Rehfeld (“Rehfeld”) has served as a director of ADC since September 2004.

 

13.           Defendant David A. Roberts (“Roberts’) has served as a director of ADC since November 2008.

 

14.           Defendant Larry W. Wangberg (“Wangberg”) has served as a director of ADC since October 2001.

 

15.           Defendant John D. Wunsch (“Wunsch”) has served as a director of ADC since 1991.

 

16.           Defendants referenced in ¶¶ 6 through 15 are collectively referred to as “Individual Defendants” and/or the “ADC Board.” The Individual Defendants as officers

 

3



 

and/or directors of ADC, have a fiduciary relationship with Plaintiff and other public shareholders of ADC and owe them the highest obligations of good faith, fair dealing, loyalty and due care.

 

INDIVIDUAL DEFENDANTS’ FIDUCIARY DUTIES

 

17.           By reason of Individual Defendants’ positions with the Company as officers and/or directors, they are in a fiduciary relationship with Plaintiffs and the other public shareholders of ADC and owe them, as well as the Company, a duty of highest good faith, fair dealing, loyalty and full, candid and adequate disclosure.

 

18.           Where the officers and/or Directors of a publicly traded corporation undertake a transaction that will result in either: (i) a change in corporate control; (ii) a breakup of the corporation’s assets; or (iii) sale of the corporation, the Directors have an affirmative fiduciary obligation to obtain the highest value reasonably available for the corporation’s shareholders. If such transaction will result in a change of corporate control, the shareholders are entitled to receive a significant premium. To diligently comply with their fiduciary duties, the directors and/or officers may not take any action that:

 

a.     adversely affects the value provided to the corporation’s shareholders;

 

b.     favors themselves or will discourage or inhibit alternative offers to purchase control of the corporation or its assets;

 

c.     contractually prohibits them from complying with their fiduciary duties;

 

d.     will otherwise adversely affect their duty to search and secure the best value reasonably available under the circumstances for the corporation’s shareholders; and/or

 

4



 

e.     will provide the directors and/or officers with preferential treatment at the expense of, or separate from, the public shareholders.

 

19.           In accordance with their duties of loyalty and good faith, the Individual Defendants, as directors and/or officers of ADC, are obligated to refrain from:

 

a.     participating in any transaction where the directors or officers’ loyalties are divided;

 

b.     participating in any transaction where the directors or officers receive, or are entitled to receive, a personal financial benefit not equally shared by the public shareholders of the corporation; and/or

 

c.     unjustly enriching themselves at the expense or to the detriment of the public shareholders.

 

20.           In a cash deal that results in a change of control, the directors bear the burden of establishing that they took all reasonable steps to maximize shareholder value before agreeing to the proposed transaction. The Individual Defendants here have not established that they have maximized shareholder value and indeed it appears that the Proposed Transaction undervalues ADC.

 

21.           Plaintiff alleges herein that the Individual Defendants, separately and together, in connection with the Proposed Transaction are knowingly or recklessly violating their fiduciary duties, including their duties of loyalty, good faith and independence owed to Plaintiffs and other public shareholders of ADC.

 

5



 

CLASS ACTION ALLEGATIONS

 

22.           Plaintiffs bring this action pursuant to Minn. R. Civ. P. 23.01 on their own behalf and as a class action on behalf of all owners of ADC common stock and their successors in interest, except Defendants and their affiliates (the “Class”).

 

23.           This action is properly maintainable as a class action for the following reasons:

 

a.     the Class is so numerous that joinder of all members is impracticable. As of May 3, 2010, ADC had approximately 97 million shares issued and outstanding;

 

b.     questions of law and fact are common to the Class, including, inter alia, the following:

 

i.      Have the Individual Defendants breached their fiduciary duties owed to Plaintiffs and the others members of the Class;

 

ii.     Are the Individual Defendants, in connection with the Proposed Transaction, pursuing a course of conduct that is in violation of their fiduciary duties;

 

iii.    Is the Class entitled to injunctive relief or damages as a result of Defendants’ wrongful conduct.

 

c.     Plaintiff is committed to prosecuting this action and has retained competent counsel experienced in litigation of this nature;

 

d.     Plaintiffs claims are typical of those of the other members of the Class;

 

e.     Plaintiff has no interests that are adverse to the Class;

 

6


 

f.                 the prosecution of separate actions by individual members of the Class would create the risk of inconsistent or varying adjudications for individual members of the Class and of establishing incompatible standards of conduct for Defendants;

 

g.              conflicting adjudications for individual members of the Class might as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests.

 

SUBSTANTIVE ALLEGATIONS

 

The Company’s Positive Financial Results and Prospects

 

24.           ADC achieved very positive results for its second quarter ended April 2, 2010. Net sales for the second quarter rose 6.8%, to $274.0 million, compared to $256.6 million for the second quarter of fiscal 2009, and increased 3.2% compared to $265.6 million for the first quarter of 2010. Second quarter gross margin was 36.5% compared to a gross margin of 32.3% during the same quarter of last year and 34.7% in the previous quarter. The Company indicated that this margin improvement was driven primarily by the company’s successful, ongoing efforts to increase efficiency across its operating cost structure, higher volume and a slightly favorable product mix.

 

25.           Commenting on the Company’s second quarter results, Defendant Switz stated that:

 

We are pleased with ADC’s strong financial performance in the second quarter... Our results are highlighted by another quarter of expanding margins and sequential revenue growth. We continue to experience the bottom-line benefits of our on-going cost reduction initiatives and the implementation of process and production improvements across our operations. Moving forward, ADC is well positioned to take further

 

7



 

advantage of our operating leverage as we realize the revenue acceleration expected during the second half of our fiscal year.

 

In addition to our second quarter revenue growth, we are seeing increased customer planning and proposal activity, indicating their intentions to renew next-generation network spending in significant ways. These investments, dedicated to deploying and upgrading FTTX and mobile networks, create growth opportunities for ADC’s high-performance fiber connectivity and wireless coverage and capacity solutions. Additionally, we expect to see continuing growth in the enterprise space where data center spending is rebounding, as well as in our professional services business which delivered another good quarter.

 

26.                In its second quarter earnings release, the Company also predicted to shareholders that net sales would increase considerably and that GAAP diluted earnings per share would be in a range of $.10 to $.20.

 

27.                The Company also had a strong first quarter of 2010. Announcing the results for its first quartered ended January 1, 2010, the Company touted GAAP earnings from continuing operations of $3.6 million, or $0.04 per share. First quarter gross margin was 34.7% compared to adjusted gross margins of 29.5% during the same quarter of last year and 34.4% in the previous quarter.

 

28.                Commenting on the Company’s first quarter results, Defendant Switz stated:

 

ADC’s strong first quarter results demonstrate the positive impact of our ongoing efforts to streamline operations... We delivered very good gross margins, managed operating expenses effectively in the face of what remains a challenging CAPEX-spending environment, and bolstered our already strong liquidity position. Based on these results, we’re pleased with the continued improvements in our financial performance and expect to demonstrate further progress as we move through fiscal 2010.

 

As we continue to realize the benefits of our improved operations, we expect to drive additional earnings power by maintaining our commitment to creating a more effective and efficient organization... We also are making strategic gains in the marketplace with our focus on the areas of greatest opportunity in fiber and wireless networks worldwide, exhibited

 

8



 

in part by the strength of our business in China and a significant sequential increase in wireless sales in the first quarter.

 

The Merger Agreement

 

29.                Despite the positive forecasts, recent growth and successful streamlining efforts, on July 13, 2010, ADC announced that it had entered into a definitive merger agreement with Tyco. Under the terms of the Proposed Transaction, Tyco will acquire ADC by paying $12.75 per share in cash for each share of ADC common stock.

 

30.                It is essential to note that the ADC has continued to perform well and has continued to grow in spite of the global recession. Clearly, ADC’s value as an ongoing business is greater than the consideration to be paid in the Proposed Transaction. This is highlighted by the fact that at least one analyst has set a target price for ADC of $13 per share. As such, the Proposed Transaction is inadequate to ADC’s shareholders and represents a significant discount to the Company’s actual and intrinsic value.

 

The Defendants’ Conflicts of Interest

 

31.                A majority of the director defendants have clear and material conflicts of interest and are acting that appears to serve their own interests at the expense of the Company’s public shareholders. For example, certain non-employee directors hold stock options which will be exercisable and cashed out upon consummation of the merger.

 

32.                Specifically, according to the Company’s Definitive Proxy Statement filed on December 15, 2009, Defendant Boyle holds 50,723 stock options; Defendant Foret holds 20,564 stock options; Defendant Martin holds 16,696 stock options; Mr. Rehfeld holds 16,696 stock options; Defendant Spivey holds 16,696 stock options; Defendant Wangberg holds 34,945 stock options; and Defendant Wunsch holds 31,408 stock options.

 

9



 

33.                Based on the aforementioned, it is clear that a majority of the ADC Board suffers from debilitating conflicts of interest in considering the merger and will receive disproportionate benefits from its consummation compared to the public shareholders.

 

The Preclusive Deal Protection Devices

 

34.                The Proposed Transaction is fraught with onerous and preclusive deal protection devices that operate conjunctively to make the Proposed Transaction a fait d’accompli and ensure that no competing offers will emerge for the Company.

 

35.                By way of example, §7.04 of the Merger Agreement includes a “no solicitation” provision barring the Board and any Company personnel from seeking out any other strategic alternatives. Despite the fact that they have locked up the Company and bound it to not solicit alternative bids, the Merger Agreement provides other ways that guarantee the only suitor will be Tyco.

 

36.                Pursuant to §7.04(a) of the Merger Agreement, should an unsolicited bidder arrive on the scene, the Company must notify Tyco of the bidder’s offer. Thereafter, should the Board determine that the unsolicited offer is superior, ADC must notify Tyco of the offer within 24 hours and give Tyco the identity of the party making the superior offer. This provision thus makes it essentially impossible for any other bids to emerge, and actively suppresses shareholder value by ensuring that shareholder value not only has not been maximized, but can never be maximized.

 

37.                In addition, the Merger Agreement provides that a termination fee of $38 million must be paid to Tyco if the Company decides to pursue said other offer, thereby essentially requiring that the alternate bidder agree to pay a naked premium for the right to provide the shareholders with a superior offer.

 

10



 

38.                Ultimately, the preclusive deal protection provisions illegally restrain the Company’s ability to engage in negotiations with any third party regarding a proposal to acquire all or a significant interest in the Company. The circumstances under which the Board may respond to an unsolicited written bona fide proposal for an alternative acquisition that constitutes or would reasonably be expected to constitute a superior proposal are too narrowly circumscribed to provide an effective “fiduciary out” under the circumstances. Likewise, these provisions also foreclose any likely alternate bidder from providing the needed market check of Tyco’s inadequate offer price.

 

39.                Accordingly, Plaintiff seeks injunctive and other equitable relief to prevent the irreparable injury that Company shareholders will continue to suffer absent judicial intervention.

 

CLAIM FOR RELIEF

 

COUNT I
Breach of Fiduciary Duty
(Against All Individual Defendants)

 

40.                Plaintiff repeats all previous allegations as if set forth in full herein.

 

41.                As members of the Board, the Individual Defendants stand in a fiduciary relationship to Plaintiff and the other public stockholders of the Company and owe them the highest fiduciary obligations of good faith, loyalty and care.

 

42.                As discussed herein, the Board has breached their fiduciary duties to ADC shareholders by failing to maximize shareholder value. Further, Defendants have failed to establish that they have taken all reasonable steps to maximize shareholder value.

 

11



 

43.                As Directors of ADC, the Individual Defendants stand in a fiduciary relationship to Plaintiff and the other public stockholders of the Company and owe them the highest fiduciary obligations of loyalty and care.

 

44.                As a result of the Individual Defendants’ breaches of their fiduciary duties, Plaintiff and the Class will suffer irreparable injury in that they have not and will not receive their fair portion of the value of ADC’s assets.

 

45.                Unless enjoined by this Court, the Individual Defendants will continue to breach their fiduciary duties owed to Plaintiff and the Class, and may consummate the Proposed Transaction, to the irreparable harm of the Class.

 

46.                Plaintiff and the Class have no adequate remedy at law.

 

WHEREFORE, Plaintiff demands judgment against Defendants jointly and severally, as follows:

 

(A)          declaring this action to be a class action and certifying Plaintiff as Class Representative and his counsel as Class counsel;

 

(B)           enjoining, preliminarily and permanently, the Proposed Transaction until Defendants have cured their breaches of fiduciary duty;.

 

(C)           in the event that the transaction is consummated prior to the entry of this Court’s final judgment, rescinding it or awarding Plaintiff and the Class rescissory damages;

 

(D)          directing that Defendants account to Plaintiff and the other members of the Class for all damages caused by them and account for all profits and any special benefits obtained as a result of their breaches of their fiduciary duties;

 

12



 

(E)           awarding Plaintiff the costs of this action, including a reasonable allowance for the fees and expenses of Plaintiff’s attorneys and experts; and

 

(F)           granting Plaintiff and the other members of the Class such further relief as the Court deems just and proper.

 

JURY DEMAND

 

Plaintiff demands a trial by jury.

 

 

 

LOCKRIDGE GRINDAL NAUEN P.L.L.P.

 

 

 

 

 

By:

/s/ Karen H. Riebel

 

Gregg M. Fishbein (No. 202009)

 

Karen H. Riebel (No. 219770)

 

100 Washington Avenue South, Suite 2200

Minneapolis, MN 55401-2159

 

Telephone: (612) 339-6900

 

Facsimile: (612) 339-0981

 

 

 

FINKELSTEIN THOMPSON LLP

 

Donald J. Enright

 

Elizabeth K. Tripodi

 

1050 30th Street, NW

 

Washington, DC 20007

 

Telephone: 202.337.8000

 

Facsimile: 202.337.8090

 

 

 

Attorneys for Plaintiff

 

13



 

ACKNOWLEDGMENT

 

The undersigned hereby acknowledges that costs, disbursements, and reasonable attorney and witness fees may be awarded pursuant to Minn. Stat. § 549.211. subd. 2 to the party against whom the allegations in this pleading are asserted.

 

Dated: July 16, 2010

 

 

 

 

/s/ Karen H. Riebel

 

Karen H. Riebel

 

14



EX-99.(A)(16) 17 a2199448zex-99_a16.htm EXHIBIT 99.(A)(16)

Exhibit (a)(16)

 

STATE OF MINNESOTA

 

IN DISTRICT COURT

 

 

 

COUNTY OF HENNEPIN

 

FOURTH JUDICIAL DISTRICT

 

 

 

BRAD BJORKLUND and KARL A. LACHER, individually and on behalf of all others similarly situated,

 

Court File No.                               

 

 

 

Plaintiff,

 

CLASS ACTION COMPLAINT

 

 

 

v.

 

 

 

 

 

ROBERT SWITZ, WILLIAM SPIVEY, JOHN WUNSCH, JOHN BOYLE, LARRY WANGBERG, MICKEY FORET, JOHN REHFELD, LOIS MARTIN, KRISH PRABHU, DAVID ROBERTS, and ADC TELECOMMUNICATIONS, INC.,

 

 

 

 

 

Defendants.

 

 

 

Plaintiffs, by their attorneys, allege upon information and belief, except for their own acts, which are alleged on knowledge, as follows:

 

1.                                       Plaintiffs bring this action on behalf of the public stockholders of ADC Telecommunications, Inc. (“ADC” or the “Company”) against ADC and its Board of Directors seeking equitable relief for their breaches of fiduciary duty and other violations of state law arising out of a proposed transaction in which Tyco Electronics Ltd. and Tyco Electronics Minnesota, Inc. (collectively “Tyco”) seek to acquire all of the outstanding shares of ADC through a cash tender offer by means of an unfair process and for an unfair price of $12.75 for each share of ADC common stock (the “Proposed Transaction”). The Proposed Transaction is valued at approximately $1.25 billion.

 



 

PARTIES

 

2.                                       Plaintiffs are, and have been at all relevant times, the owner of shares of common stock of ADC.

 

3.                                       ADC is a corporation organized and existing under the laws of the State of Minnesota. It maintains its principal corporate offices at 13625 Technology Drive, Eden Prairie, Minnesota 55344, and provides broadband communications network infrastructure products and related services worldwide.

 

4.                                       Defendant Robert Switz (“Switz”) has been the President, Chief Executive Officer, and a director of the Company since 2003 and Chairman of the Board of the Company since 2008.

 

5.                                       Defendant William Spivey (“Spivey”) has been a director of the Company since 2009.

 

6.                                       Defendant John Wunsch (“Wunsch”) has been a director of the Company since 1991.

 

7.                                       Defendant John Boyle (“Boyle”) has been a director of the Company since 1999.

 

8.                                       Defendant Larry Wangberg (“Wangberg”) has been a director of the Company since 2001.

 

9.                                       Defendant Mickey Foret (“Foret”) has been a director of the Company since 2003.

 

10.                                 Defendant John Rehfeld (“Rehfeld”) has been a director of the Company since 2004.

 

11.                                 Defendant Lois Martin (“Martin”) has been a director of the Company since 2004.

 

2



 

12.                                 Defendant Krish Prabhu (“Prabhu”) has been a director of the Company since 2008.

 

13.                                 Defendant David Roberts (“Roberts”) has been a director of the Company since 2008.

 

14.                                 Defendants referenced in ¶¶ 4 through 13 are collectively referred to as Individual Defendants and/or the ADC Board. The Individual Defendants as officers and/or directors of ADC, have a fiduciary relationship with Plaintiffs and other public shareholders of ADC and owe them the highest obligations of good faith, fair dealing, loyalty and due care.

 

THE INDIVIDUAL DEFENDANTS’ BREACHES OF FIDUCIARY DUTY

 

15.                                 By reason of Individual Defendants’ positions with the Company as officers and/or directors, they are in a fiduciary relationship with Plaintiffs and the other public shareholders of ADC and owe them, as well as the Company, a duty of highest good faith, fair dealing, loyalty and full, candid and adequate disclosure, as well as a duty to maximize shareholder value.

 

16.                                 Where the officers and/or directors of a publicly traded corporation undertake a transaction that will result in either: (i) a change in corporate control; (ii) a break up of the corporation’s assets; or (iii) sale of the corporation, the Directors have an affirmative fiduciary obligation to obtain the highest value reasonably available for the corporation’s shareholders, and if such transaction will result in a change of corporate control, the shareholders are entitled to receive a significant premium. To diligently comply with their fiduciary duties, the Individual Defendants may not take any action that:

 

(a)                                  adversely affects the value provided to the corporation’s shareholders;

 

3



 

(b)                                 favors themselves or will discourage or inhibit alternative offers to purchase control of the corporation or its assets;

 

(c)                                  contractually prohibits them from complying with their fiduciary duties;

 

(d)                                 will otherwise adversely affect their duty to search and secure the best value reasonably available under the circumstances for the corporation’s shareholders; and/or

 

(e)                                  will provide the Individual Defendants with preferential treatment at the expense of, or separate from, the public shareholders.

 

17.                                 In accordance with their duties of loyalty and good faith, the Individual Defendants are obligated to refrain from:

 

(a)                                  participating in any transaction where the Individual Defendants’ loyalties are divided;

 

(b)                                 participating in any transaction where the Individual Defendants receive, or are entitled to receive, a personal financial benefit not equally shared by the public shareholders of the corporation; and/or

 

(c)                                  unjustly enriching themselves at the expense or to the detriment of the public shareholders.

 

18.                                 Plaintiffs allege herein that the Individual Defendants, separately and together, in connection with the Proposed Transaction are knowingly or recklessly violating their fiduciary duties, including their duties of loyalty and good faith owed to Plaintiffs and other public shareholders of ADC, or are aiding and abetting others in violating those duties.

 

CONSPIRACY, AIDING AND ABETTING AND CONCERTED ACTION

 

19.                                 In committing the wrongful acts alleged herein, each of the Defendants has pursued, or joined in the pursuit of, a common course of conduct, and acted in concert with and conspired with one another, in furtherance of their common plan or design. In addition to the

 

4



 

wrongful conduct herein alleged as giving rise to primary liability, the Defendants further aided and abetted and/or assisted each other in breach of their respective duties as herein alleged.

 

20.                                 During all relevant times hereto, the Defendants, and each of them, initiated a course of conduct which was designed to and did: (i) permit Tyco to attempt to eliminate the public shareholders’ equity interest in ADC pursuant to a defective sales process, and (ii) permit Tyco to buy the Company for an unfair price. In furtherance of this plan, conspiracy and course of conduct, Defendants, and each of them, took the actions as set forth herein.

 

21.                                 Each of the Defendants herein aided and abetted and rendered substantial assistance in the wrongs complained of herein. In taking such actions, as particularized herein, to substantially assist the commission of the wrongdoing complained of, each Defendant acted with knowledge of the primary wrongdoing, substantially assisted the accomplishment of that wrongdoing, and was aware of his or her overall contribution to, and furtherance of, the wrongdoing. The Defendants’ acts of aiding and abetting included, inter alia, the acts each of them are alleged to have committed in furtherance of the conspiracy, common enterprise and common course of conduct complained of herein.

 

CLASS ACTION ALLEGATIONS

 

22.                                 Plaintiffs bring this action on its own behalf and as a class action on behalf of all owners of ADC common stock and their successors in interest, except Defendants and their affiliates (the “Class”).

 

23.                                 This action is properly maintainable as a class action for the following reasons:

 

(a)                                  the Class is so numerous that joinder of all members is impracticable. As of July 14, 2010, ADC had approximately 96.99 million shares outstanding.

 

5



 

(b)                                 questions of law and fact are common to the Class, including, inter alia, the following:

 

(i)                                     Whether the Individual Defendants breached their fiduciary duties owed by them to Plaintiffs and the others members of the Class;

 

(ii)                                  Whether the Individual Defendants, in connection with the Proposed Transaction of ADC by Tyco, are pursuing a course of conduct that does not maximize ADC’s value in violation of their fiduciary duties;

 

(iii)                               Whether ADC aided and abetted the Individual Defendants’ breaches of fiduciary duty; and

 

(iv)                              Whether the Class is entitled to injunctive relief or damages as a result of Defendants’ wrongful conduct.

 

(c)                                  Plaintiffs are committed to prosecuting this action and have retained competent counsel experienced in litigation of this nature.

 

(d)                                 Plaintiffs’ claims are typical of those of the other members of the Class.

 

(e)                                  Plaintiffs have no interests that are adverse to the Class.

 

(f)                                    The prosecution of separate actions by individual members of the Class would create the risk of inconsistent or varying adjudications for individual members of the Class and of establishing incompatible standards of conduct for Defendants.

 

(g)                                 Conflicting adjudications for individual members of the Class might as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests.

 

6



 

SUBSTANTIVE ALLEGATIONS

 

Company Background, its Recent Strong Performance, and its Poise for Growth

 

24.                                 ADC is a leading global provider of broadband communications network infrastructure products and related services. The Company’s products offer comprehensive solutions that enable the delivery of high-speed Internet, data, video and voice communications over wireline, wireless, cable, enterprise and broadcast networks. These products include fiber-optic, copper and coaxial based frames, cabinets, cables, connectors and cards, wireless capacity and coverage solutions, network access devices and other physical infrastructure components. ADC has customers in more than 130 countries and has annual sales of approximately $1.15 billion.

 

25.                                 As stated in one article issued by Motley Fool, dated February 16, 2010, this Company “is positioned very well for the boom in wireless technology. With sales all over the world, this company will benefit from broadband and wireless infrastructure development for years to come.” For example, the Company has recently seen substantial growth in China due to Chinese government investment in the country’s 3G network. During the Company’s 11-month fiscal 2009, the Company’s revenues in China increased 74.7% as compared to fiscal 2008.

 

26.                                 On February 8, 2010, the Company announced its financial results for the first quarter ending January 1, 2010. In the press release announcing the results, Defendant Switz commented on the Company’s strong quarter, stating:

 

ADC’s strong first quarter results demonstrate the positive impact of our ongoing efforts to streamline operations... We delivered very good gross margins, managed operating expenses effectively in the face of what remains a challenging CAPEX-spending

 

7



 

environment, and bolstered our already strong liquidity position. Based on these results, we’re pleased with the continued improvements in our financial performance and expect to demonstrate further progress as we move through fiscal 2010. As we continue to realize the benefits of our improved operations, we expect to drive additional earnings power by maintaining our commitment to creating a more effective and efficient organization... We also are making strategic gains in the marketplace with our focus on the areas of greatest opportunity in fiber and wireless networks worldwide, exhibited in part by the strength of our business in China and a significant sequential increase in wireless sales in the first quarter.

 

27.                                 On May 5, 2010, ADC announced its results for the second quarter ending April 2, 2010. Among the financial highlights, the Company reported that net sales for the quarter rose 6.8% to $274.0 million, compared to $256.6 million for the second quarter of fiscal 2009 and increased 3.2% compared to $265.6 million for the first quarter of 2010. The Company reported second quarter gross margin of 36.5 percent compared to a gross margin of 32.3 percent during the same quarter of last year and 34.7 percent in the previous quarter. This margin improvement was driven primarily by the company’s successful, ongoing efforts to increase efficiency across its operating cost structure, higher volume and a slightly favorable product mix.

 

28.                                 In the press release announcing the results, Defendant Switz commented on the Company’s outstanding quarter, stating:

 

We are pleased with ADC’s strong financial performance in the second quarter... Our results are highlighted by another quarter of expanding margins and sequential revenue growth. We continue to experience the bottom-line benefits of our on-going cost reduction initiatives and the implementation of process and production improvements across our operations. Moving forward, ADC is well positioned to take further advantage of our operating leverage as we realize the revenue acceleration expected during the second half of our fiscal year. In addition to our second quarter revenue growth, we are seeing increased customer planning and proposal activity, indicating their intentions to renew next-generation network spending in

 

8


 

 

significant ways. These investments, dedicated to deploying and upgrading FTTX and mobile networks, create growth opportunities for ADC’s high-performance fiber connectivity and wireless coverage and capacity solutions. Additionally, we expect to see continuing growth in the enterprise space where data center spending is rebounding, as well as in our professional services business which delivered another good quarter.

 

(Emphasis added).

 

29.                                 As stated in an article on Businessweek.com commenting on the Proposed Transaction, Swift “has said [ADC] will report sales growth in the second half of this year as phone companies invest in a new generation of network technology and add capacity to wireless networks.”

 

The Proposed Transaction is Unfair

 

30.                                 Despite its promise and poise for growth, the Company agreed to enter into the Proposed Transaction. In a press release dated July 13, 2010, the Company announced that it had entered into a merger agreement with Tyco, stating:

 

SCHAFFHAUSEN, Switzerland, and EDEN PRAIRIE, MN — July 13, 2010 — Tyco Electronics (NYSE: TEL) and ADC (NASDAQ: ADCT) announced today a definitive agreement under which Tyco Electronics will acquire ADC for $12.75 per share in cash, or an enterprise value of approximately $1.25 billion. The transaction is expected to be accretive by approximately $0.14 per share in the first full year after closing excluding acquisition-related costs. It will position Tyco Electronics’ Network Solutions segment as a leading global provider of broadband connectivity products to carrier and enterprise networks around the world.

 

Tom Lynch, Chief Executive Officer of Tyco Electronics, said, “This is a very exciting time for our company and ADC is a great fit as we continue to execute our strategy to create strong leadership positions in all of our connectivity businesses. Consumers and enterprises want access to high-speed video and data wherever they are, on whatever devices they are using—from smart phones to HD and 3-D televisions to computers with advanced video-conferencing capabilities. The combination of

 

9



 

ADC and Tyco Electronics creates an industry leader, with the scope and geographic scale to help customers deliver needed capacity, from the core of the network all the way to the end user.”

 

* * *

 

The transaction is structured as a tender offer to be followed as soon as possible by a merger. The transaction is subject to customary closing conditions, including the tender of a majority of ADC shares and regulatory approvals, and is expected to close in the fourth calendar quarter 2010.

 

31.                                 One analyst on Dailyfinance.com, in an article dated July 13, 2010, notes that the Proposed Transaction “price tag is still well below the levels of a couple years ago, when ADC’s stock was trading over $17.”

 

32.                                 In the same article, the analyst describes how ADC has successfully combated the recession, and is now poised for growth. As stated in the article,

 

[T]o deal with the recession, ADC took major steps to lower operating costs. Some of the moves included a workforce reduction, facility consolidation and the relocation of resources into lower cost locations. But now it looks like the market environment is starting to improve, with strength in all the segments for ADC. More importantly, the long-term looks promising as the appetite for broadband continues to grow.

 

(Emphasis added).

 

33.                                 The Dailyfinance.com analyst concluded that the deal “will certainly be a nice fit in Tyco’s network solution business, which has massive scale, with about $10 billion in revenues.”

 

34.                                 Further, at least one Wall Street analyst had a price target of $13.00 per share before the Proposed Transaction was announced.

 

35.                                 Tom Lynch (“Lynch”), Tyco’s CEO was ecstatic about the great deal Tyco was getting. As stated by Lynch in an ADC town hall webcast given on July 14, 2010:

 

10



 

We are excited about the product line, we are really excited about the wireless, the DAS business you are building. We think this is an incredible, incredibly high growth potential area in telecom and we have no capability there. And frankly, it’s not the kind of capability you can just decide to go out, and even if we said, ‘Here’s 100 engineers, go build a system,’— because you know it doesn’t work that way. It takes this collective know-how of how systems work and everything else. And so we felt this was a strategic, a really strategic hole for our business. So we are really excited about that as well.

 

36.                                 Given the Company’s recent performance and future prospects, the consideration shareholders are to receive is inadequate. ADC shareholders are being cashed out at the unfairly low price of $12.75 per share, which doesn’t adequately take into account the tremendous growth potential for ADC. Accordingly, Tyco is picking up ADC at the most opportune time, at a time when ADC is poised for growth and its stock price is trading at a huge discount to its intrinsic value.

 

The Preclusive Deal Protection Devices

 

37.                                 In addition, on July 13, 2010, the Company filed a Form 8-K with the United States Securities and Exchange Commission (“SEC”) wherein it disclosed the operating Agreement and Plan of Merger for the Proposed Transaction (the “Merger Agreement”). As part of the Merger Agreement, Defendants agreed to certain onerous and preclusive deal protection devices that operate conjunctively to make the Proposed Transaction a fait accompli and ensure that no competing offers will emerge for the Company.

 

38.                                 By way of example, §7.04 of the Merger Agreement includes a “no solicitation” provision barring the Board and any Company personnel from attempting to procure a price in excess of the amount offered by Tyco. This section also demands that the Company terminate any and all prior or on-going discussions with other potential suitors. Despite the fact that they

 

11



 

have locked up the Company and bound it to not solicit alternative bids, the Merger Agreement provides other ways that guarantee the only suitor will be Tyco.

 

39.                                 Pursuant to §7.04 of the Merger Agreement, should an unsolicited bidder arrive on the scene, the Company must notify Tyco of the bidder’s offer. Thereafter, should the Board determine that the unsolicited offer is superior, Tyco is granted three business days to amend the terms of the Merger Agreement to make a counter-offer that only needs to be at least as favorable to the Company’s shareholders as the unsolicited offer. Tyco is able to match the unsolicited offer because it is granted unfettered access to the unsolicited offer, in its entirety, eliminating any leverage that the Company has in receiving the unsolicited offer.

 

40.                                 In other words, the Merger Agreement gives Tyco access to any rival bidder’s information and allows Tyco a free right to top any superior offer. Accordingly, no rival bidder is likely to emerge and act as a stalking horse for Tyco, because the Merger Agreement unfairly assures that any “auction” will favor Tyco and piggy-back upon the due diligence of the foreclosed second bidder.

 

41.                                 In addition, the Merger Agreement provides that a termination fee of $38,000,000 must be paid to Tyco by ADC if the Company decides to pursue said other offer, thereby essentially requiring that the alternate bidder agree to pay a naked premium for the right to provide the shareholders with a superior offer.

 

42.                                 Finally, Tyco is also the beneficiary of a “Top-Up” provision that ensures that Tyco gains the shares necessary to effectuate a short-form merger. Pursuant to the Merger Agreement, if Tyco receives 90% of the shares outstanding through its tender offer, it can effect a short-form merger. In the event Tyco fails to acquire the 90% required, the Merger Agreement also contains a “Top-Up” provision that grants Tyco an option to purchase additional shares from

 

12



 

the Company in order to reach the 90% threshold required to effectuate a short-form merger. The “Top-Up” provision essentially renders the tender offer a fait accompli and eliminates the possibility that any alternate bidder can mount a serious challenge to Tyco’s first-in position.

 

43.                                 Ultimately, these preclusive deal protection provisions illegally restrain the Company’s ability to solicit or engage in negotiations with any third party regarding a proposal to acquire all or a significant interest in the Company. The circumstances under which the Board may respond to an unsolicited written bona fide proposal for an alternative acquisition that constitutes or would reasonably be expected to constitute a superior proposal are too narrowly circumscribed to provide an effective “fiduciary out” under the circumstances. Likewise, these provisions, coupled with the “Top-Up” provision, also foreclose any likely alternate bidder from providing the needed market check of Tyco’s inadequate offer price.

 

44.                                 Accordingly, Plaintiffs seek injunctive and other equitable relief to prevent the irreparable injury that Company shareholders will continue to suffer absent judicial intervention.

 

CLAIM FOR RELIEF

 

COUNT I
Breach of Fiduciary Duty — Failure to Maximize Shareholder Value
(Against All Individual Defendants)

 

45.                                 Plaintiffs repeat all previous allegations as if set forth in full herein.

 

46.                                 As Directors of ADC, the Individual Defendants stand in a fiduciary relationship with Plaintiffs and the other public stockholders of the Company and owe them the highest fiduciary obligations of loyalty and care. The Individual Defendants’ recommendation of the Proposed Transaction will result in change of control of the Company which imposes heightened fiduciary responsibilities to maximize ADC’s value for the benefit of the stockholders and requires enhanced scrutiny by the Court.

 

13



 

47.                                 As discussed herein, the Individual Defendants have breached their fiduciary duties to ADC shareholders by failing to engage in an honest and fair sale process.

 

48.                                 As a result of the Individual Defendants’ breaches of their fiduciary duties, Plaintiffs and the Class will suffer irreparable injury in that they have not and will not receive their fair portion of the value of ADC’s assets and will be prevented from benefiting from a value-maximizing transaction.

 

49.                                 Unless enjoined by this Court, the Individual Defendants will continue to breach their fiduciary duties owed to Plaintiffs and the Class, and may consummate the Proposed Transaction, to the detriment of the Class and causing plaintiffs to suffer irreparable harm.

 

50.                                 Plaintiffs and the Class have no adequate remedy at law.

 

COUNT II
Aiding and Abetting
(Against ADC)

 

51.                                 Plaintiffs repeat all previous allegations as if set forth in full herein.

 

52.                                 As alleged in more detail above, ADC is well aware that the Individual Defendants have not sought to obtain the best available transaction for the Company’s public shareholders. Defendant ADC aided and abetted the Individual Defendants’ breaches of fiduciary duties.

 

53.                                 As a result, Plaintiffs and the Class members are being harmed.

 

54.                                 Plaintiffs and the Class have no adequate remedy at law.

 

WHEREFORE, Plaintiffs demand judgment against Defendants jointly and severally, as follows:

 

(A)                                            declaring this action to be a class action and certifying Plaintiffs as the Class representatives and their counsel as Class counsel;

 

14



 

(B)                                              enjoining, preliminarily and permanently, the Proposed Transaction;

 

(C)                                              in the event that the transaction is consummated prior to the entry of this Court’s final judgment, rescinding it or awarding Plaintiffs and the Class rescissory damages;

 

(D)                                             directing that Defendants account to Plaintiffs and the other members of the Class for all damages caused by them and account for all profits and any special benefits obtained as a result of their breaches of their fiduciary duties;

 

(E)                                               awarding Plaintiffs the costs of this action, including a reasonable allowance for the fees and expenses of Plaintiffs’ attorneys and experts; and

 

(F)                                               granting Plaintiffs and the other members of the Class such further relief as the Court deems just and proper.

 

ACKNOWLEDGMENT

 

Plaintiffs, Brad Bjorklund and Karl A. Lacher individually and on behalf of all others similarly situated, hereby acknowledge that sanctions may be imposed under the circumstances set forth in Minn. Stat. § 549.211.

 

Dated: July 20, 2010

 

BASSFORD REMELE, P. A.

 

 

 

 

 

 

 

By:

/s/ David E. Camarotto

 

 

David E. Camarotto (No. 307208)

 

 

33 South Sixth Street, Suite 3800

 

 

Minneapolis, MN 55402

 

 

Tel: (612) 333-3000; Fax: (612) 746-1218

 

 

dcamarotto@bassford.com

 

 

 

 

 

 

 

 

Liaison Counsel

 

 

LEVI & KORSINSKY, LLP

 

 

Joseph Levi, (to be admitted pro hac vice)

 

 

Shannon L. Hopkins, (to be admitted pro hac vice)

 

 

30 Broad Street, 15th Floor

 

 

New York, NY 10004

 

 

Tel (212) 363-7500; Fax (212) 363-7171

 

 

 

 

 

Counsel for Plaintiffs

 

15


 


EX-99.(A)(17) 18 a2199448zex-99_a17.htm EXHIBIT 99.(A)(17)

Exhibit (a)(17)

 

 

 

FILED PSL

 

 

 

 

 

10 JUL 23 AM 11:19

 

 

 

 

 

BY

 

DEPUTY

 

 

HENN CO. DISTRICT

 

 

COURT ADMINISTRATOR

 

STATE OF MINNESOTA

 

JUDICIAL COURT

 

 

 

COUNTY OF HENNEPIN

 

FOURTH JUDICIAL DISTRICT

 

 

 

 

 

Case Type: Other Civil

 

JACK BORROR and PAT BORROR, Individually and On Behalf Of All Others Similarly Situated,

 

Court File No.

 

 

 

Plaintiffs,

 

 

 

 

VERIFIED CLASS

v.

 

ACTION COMPLAINT

 

 

 

ADC TELECOMMUNICATIONS, INC., JOHN J. BOYLE III, WILLIAM R. SPIVEY, ROBERT E. SWITZ, LARRY W. WANGBERG, LOIS M. MARTIN, KRISH A. PRABHU, JOHN E. REHFELD, DAVID A. ROBERTS, MICKEY P. FORET, JOHN D. WUNSCH, TYCO ELECTRONICS LTD., TYCO ELECTRONICS MINNESOTA, INC.,

 

 

 

 

 

Defendants.

 

 

 

VERIFIED CLASS ACTION COMPLAINT

 

Plaintiffs Jack Borror and Pat Borror (“Plaintiffs”), by their undersigned attorneys, allege upon knowledge as to their own acts and upon information and belief as to all other matters, based upon the investigation made by and through their attorneys, which investigation included, inter alia, reviewing Securities Exchange Commission (“SEC”) filings, press releases, analyst reports, news articles and other materials, as follows:

 

NATURE OF THE ACTION

 

1.                                       Plaintiffs bring this action individually and as a class action on behalf of all persons, other than defendants, who own the securities of ADC Telecommunications, Inc.

 



 

(“ADC” of the “Company”) and who are similarly situated, for injunctive relief against consummation of a proposed merger (the “Proposed Merger”) by and among ADC, Tyco Electronics Ltd. (“Tyco”), and Tyco Electronics Minnesota, Inc. (“Tyco Minnesota”), a wholly-owned subsidiary of Tyco.

 

2.                                       Pursuant to the agreement and plan of merger dated as of July 12, 2010 (the “Merger Agreement”), Tyco Minnesota has agreed to commence a tender offer no later than 10 business days following the execution of the Merger Agreement to purchase all outstanding shares of ADC common stock at a purchase price of $12.75 per share in cash, in a transaction valued at approximately $1.25 billion. Should the Proposed Merger be consummated, Tyco Minnesota will merge with and into ADC and the newly merged entity will become a wholly-owned subsidiary of Tyco. Although Defendants have not set a specific closing date for the Proposed Merger, they expect the Proposed Merger close sometime during the upcoming fall season.

 

3.                                       Plaintiffs’ claims arise from the terms of the Proposed Merger and the defendants’ acts, as more particularly alleged herein, constitute a breach of the Director Defendants’ (as defined below) fiduciary duties owed to ADC’s public stockholders, and a violation of applicable legal standards governing defendants herein.

 

4.                                       As described below, both the value to ADC shareholders contemplated in the Proposed Merger and the process by which Defendants propose to consummate the Proposed Merger are fundamentally unfair to Plaintiffs and the other public shareholders of ADC. Defendants’ conduct constitutes a breach of the Director Defendants’ (as defined below) fiduciary duties owed to ADC’s public shareholders and violations of applicable legal standards governing Defendants’ conduct.

 

2



 

5.                                       For these reasons and as set forth in detail herein, Plaintiffs are seeking to enjoin Defendants from consummating the Proposed Merger, or, in the event the Proposed Merger is consummated, recover damages resulting from the Director Defendants’ violations of their fiduciary duties of loyalty, good faith, due care and full and fair disclosure.

 

THE PARTIES

 

6.                                       Plaintiffs have jointly owned ADC common stock since 2008 and currently own approximately 4,000 shares of ADC common stock.

 

7.                                       Defendant ADC is a Minnesota corporation with its principal headquarters located at 13625 Technology Dr., Eden Prairie, Minnesota 55344. ADC provides broadband communications network infrastructure products and related services worldwide. Its products enable the delivery of high-speed Internet, data, video, and voice communications over wireline, wireless, cable, enterprise, and broadcast networks.

 

8.                                       Defendant Robert E. Switz (“Switz”) has served as a director of ADC since August 2003 and as Chairman of the Board since August 2008. Defendant Switz has also served as President and Chief Executive Officer of ADC since August 2003. Between January 1994 and August 2003, Defendant Switz also served as Chief Financial Officer and as Executive Vice President and Senior Vice President of ADC. Moreover, Defendant Switz served as President of ADC’s former Broadband Access and Transport Group from November 2000 to April 2001.

 

9.                                       Defendant John J. Boyle III (“Boyle”) has served as a director of ADC since November 2009.

 

10.                                 Defendant William R. Spivey (“Spivey”) has served as a director of ADC since September 2004.

 

11.                                 Defendant Larry W. Wangberg (“Wangberg”) has served as a director of ADC

 

3



 

since October 2001.

 

12.                                 Defendant Lois M. Martin (“Martin”) has served as a director of ADC since March 2004.

 

13.                                 Defendant Krish A. Prabhu (“Prabhu”) has served as a director of ADC since November 2008.

 

14.                                 Defendant John E. Rehfeld (“Rehfeld”) has served as a director of ADC since September 2004.

 

15.                                 Defendant David A. Roberts (“Roberts”) has served as a director of ADC since November 2008.

 

16.                                 Defendant Mickey P. Foret (“Foret”) has served as a director of ADC since February 2003.

 

17.                                 Defendant John D. Wunsch (“Wunsch”) has served as a director of ADC since 1991.

 

18.                                 Defendants Boyle, Spivey, Wangberg, Martin, Prabhu, Rehfeld, Roberts, Foret, and Wunsch are hereinafter referred to collectively as the “Director Defendants.”

 

19.                                 Defendant Tyco is a Swiss corporation based in Schaffhausen, Switzerland. Tyco provides engineered electronic components, network solutions, specialty products, and undersea telecommunication systems. Tyco sells its products in the Americas, Europe/the Middle East/Africa, and the Asia-Pacific.

 

20.                                 Defendant Tyco Minnesota is the wholly-owned subsidiary of Tyco that was formed to facilitate consummation of the Proposed Merger, pursuant to the terms of the Merger Agreement.

 

THE FIDUCIARY DUTIES OF THE DIRECTOR DEFENDANTS

 

21.                                 By reason of the Director Defendants’ positions with the Company, as officers

 

4



 

and/or directors, these Defendants are in a fiduciary relationship with Plaintiffs and the other public shareholders of ADC and owe Plaintiffs and other members of the Class (defined below) fiduciary duties of good faith, fair dealing, loyalty and full and candid disclosure.

 

22.                                 By virtue of their positions as directors and/or officers of ADC, the Director Defendants, at all relevant times, had the power to control and influence, and did control and influence cause caused ADC to engage in the practices complained of herein.

 

23.                                 Each of the Director Defendants is required to act in good faith, in the best interests of the Company’s shareholders and with such care, including reasonable inquiry, as would be expected of an ordinarily prudent person. In a situation where the directors of a publicly traded company undertake a transaction that may result in a change in corporate control, the directors must take all steps reasonably required to maximize the value shareholders will receive rather than use a change of control to benefit themselves, and to disclose all material information concerning the proposed change of control to enable the shareholders to make a fully informed voting decision. To diligently comply with this duty, the directors of a corporation may not take any action that:

 

(a)          adversely affects the value provided to the corporation’s shareholders;

 

(b)         contractually prohibits them from complying with or carrying out their fiduciary duties;

 

(c)          discourages or inhibits alternative offers to purchase control of the corporation or its assets; or

 

(d)         will otherwise adversely affect their duty to search for and secure the best value reasonably available under the circumstances for the corporation’s shareholders.

 

24.                                 Plaintiffs allege herein that the Director Defendants, separately and together, in connection with the Proposed Merger, violated duties owed to Plaintiffs and the other public

 

5



 

shareholders of ADC, including their duties of care, loyalty and good faith.

 

CLASS ACTION ALLEGATIONS

 

25.                                 Plaintiffs bring this action individually and as a class action on behalf of the holders of the common stock of the Company or their successors in interest, who have been and/or will be harmed as a result of the wrongful conduct alleged herein (the “Class”). Excluded from the Class are Defendants herein and any person, firm, trust, corporation, or other entity related to or affiliated with any of the Defendants.

 

26.                                 This action is properly maintainable as a class action.

 

27.                                 The Class is so numerous that joinder of all members is impracticable. As of July 13, 2010, there were over 96 million shares of ADC common stock outstanding. Members of the Class are scattered throughout the United States and are so numerous that it is impracticable to bring them all before this Court.

 

28.                                 There are questions of law and fact which are common to the Class, including:

 

a.               whether the Director Defendants have fulfilled, and are capable of fulfilling, their fiduciary duties owed to Plaintiffs and the Class;

 

b.              whether the Director Defendants have engaged, and continue to engage, in a scheme to benefit themselves at the expense of ADC shareholders in violation of their fiduciary duties;

 

c.               whether the Director Defendants are acting in furtherance of their own self interest to the detriment of the Class;

 

d.              whether Defendants have disclosed, and will disclose, all material facts in connection with the Proposed Merger; and

 

e.               whether Plaintiffs and the other members of the Class will be irreparably damaged if Defendants are not enjoined from continuing the conduct described herein.

 

6



 

29.                                 Plaintiffs are committed to prosecuting this action and have retained competent counsel experienced in litigation of this nature. Plaintiffs’ claims are typical of the claims of the other members of the Class, and Plaintiffs have the same interests as the other members of the Class. Accordingly, Plaintiffs are adequate representatives of the Class and will fairly and adequately protect the interests of the Class.

 

30.                                 The prosecution of separate actions by individual members of the Class would create the risk of inconsistent or varying adjudications with respect to individual members of the Class that would establish incompatible standards of conduct for Defendants, or adjudications with respect to individual members of the Class which would, as a practical matter, be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests.

 

31.                                 Defendants have acted, or refused to act, on grounds generally applicable to, and causing injury to, the Class and, therefore, preliminary and final injunctive relief on behalf of the Class as a whole is appropriate.

 

SUBSTANTIVE ALLEGATIONS

 

32.                                 ADC was incorporated in Minnesota in 1935 as Magnetic Controls Company and adopted its current name in 1985. The Company is a leading global provider of broadband communications network infrastructure products and related services. Its products and other equipment allow phone, cable and wireless companies to deliver high-speed internet, data, video and voice communications over wireline, wireless, cable, enterprise and broadcast networks. ADC boasts sales in over 130 countries, and its clients include, among others, AT&T, Alcatel-Lucent, Bell Canada, Bloomberg, China Telecom, Citibank, Comcast, Cox, Deutsche Telekom, Ford, GlaxoSmithKline, HSBC, JPMorgan Chase, Mayo Clinic, Morgan Stanley, NBC, Optus, Qwest, Reliance Infocom (India), Sprint Nextel, T-Mobile, Telus, Venetian Resort Hotel,

 

7



 

Verizon and Vodafone.

 

33.                                      In 2009, the Company’s net sales exceeded approximately $1 billion.(1) In its 2009 Annual Report (the “Annual Report”), ADC touted its promising, global growth prospects. For example, the Annual Report noted that the increasing reliance on Mobile Internet and the use of smartphones — device sales and data usage for smartphones had more than doubled in the past year — presented growth opportunities for ADC’s renowned in-building wireless solutions. Defendant Switz further touted the Company’s prospects:

 

ADC enters fiscal 2010 ready to emerge from the severely weakened economic environment in a strong financial and competitive position. While much uncertainty remains around the macroeconomy and within our industry, ADC is confident in the long-term demand for our fiber-based and wireless broadband network infrastructure solutions, as well as our ability to take the actions necessary to improve our financial results and shareowner value.

 

34.                                 Indeed, ADC subsequently reported strong second quarter results on May 5, 2010. Net sales for the second quarter rose 6.8% to $274 million, compared to $256.6 million for the second quarter of fiscal 2009 and increased 3.2% compared to $265.6 million for the first quarter of 2010. In addition, ADC ended the second quarter with $619.3 million of liquidity, which included its cash and available-for-sale securities.

 

35.                                      In discussing the favorable second quarter 2010 results, defendant Switz stated:

 

We are pleased with ADC’s strong financial performance in the second quarter. Our results are highlighted by another quarter of expanding margins and sequential revenue growth. We continue to experience the bottom-line benefits of our on-going cost reduction initiatives and the implementation of process and production improvements across our operations. Moving forward, ADC is well positioned to take further advantage of our operating leverage as we realize the revenue acceleration expected during the second half of our fiscal year.

 


(1) This figure represents the results only for an 11-month period rather than a 12-year period, as the Board of Directors had recently approved a change in ADC’s fiscal year end from October 31 to September 30.

 

8


 

In addition to our second quarter revenue growth, we are seeing increased customer planning and proposal activity, indicating their intentions to renew next-generation network spending in significant ways. These investments, dedicated to deploying and upgrading FTTX and mobile networks, create growth opportunities for ADC’s high-performance fiber connectivity and wireless coverage and capacity solutions. Additionally, we expect to see continuing growth in the enterprise space where data center spending is rebounding, as well as in our professional services business which delivered another good quarter.

 

36.           On July 13, 2010, the Company announced that it had entered into the definitive Merger Agreement, to be acquired by Tyco in a transaction valued at approximately $1.25 billion. Specifically, the Merger Agreement was entered by and among the Company, Tyco and Tyco Minnesota. Under the terms of the agreement, Tyco will acquire ADC for $12.75 per share of ADC common stock through a two-step merger consisting of an all-cash tender offer followed by a second-step merger.

 

37.           The Company’s Board unanimously approved the Merger Agreement and thereby breached their fiduciary duties, as explained herein.

 

38.           The terms of the Merger Agreement deter competing bids and prevent the ADC Board from exercising their fiduciary duties to obtain the best available price for ADC shareholders. The Merger Agreement erects defensive barriers to competing offers and function to substantially increase the likelihood that the Proposed Merger will be consummated, leaving ADC shareholders with no meaningful premium. For example, the Merger Agreement provides that upon termination, under certain circumstances, the Company will be required to pay Tyco a termination fee of $38 million (the “Termination Fee”).

 

39.           Additionally, the Merger Agreement contains a “no-shop” provision pursuant to which ADC is prohibited from soliciting alternative bids for the Company — or even discussing a competing or alternative transaction — thus preventing ADC directors from obtaining a market

 

9



 

check which would be in the best interests of ADC shareholders.(2)

 

40.           The Merger Agreement provides not only that ADC must not actively solicit third party bids, but also restricts the ability of ADC directors to consider an unsolicited bid. The Board must formally determine that an unsolicited bid constitutes a bona fide written superior acquisition proposal upon “considering the advice of a financial advisor of nationally recognized reputation and outside legal counsel.” Furthermore, the Merger Agreement requires the Company to notify Tyco of any unsolicited third party bid and provides Tyco the ability to “match” any third party bid. As a result of adopting the Termination Fee and the “no-shop” provisions, Defendants have erected artificially high barriers preventing any other third party from coming forward to engage ADC.

 

41.           Additionally, the Merger Agreement provides Tyco with an irrevocable right to purchase ADC common shares from the Company after consummation of the tender offer for the same $12.75 per share consideration (the “Top Up Option”). There are few limitations on the amount of shares that the Company could be required to sell to Tyco. Thus, even if relatively few shares tender, this coercive Top Up Option enables Tyco to own 90% of ADC shares following the tender offer, which would allow Tyco to effectuate its intended short-form merger with ADC without a shareholder vote.

 

42.           In addition, over 88% of ADC’s shares are held by institutional owners, thus a few shareholders can agree to sell the Company regardless of the will of ADC’s public shareholders. Accordingly, the Proposed Merger is wrongful, unfair and harmful to the Company’s public stockholders who will not receive their fair portion of the value of their equity

 


(2) ADC may not: “directly or indirectly, (i) solicit, initiate or knowingly take any action to facilitate or encourage the submission of any Acquisition Proposal, [or] (ii) enter into or participate in any discussions or negotiations with, furnish any information relating to the Company ... or afford access to the business, properties, assets, books or records of the Company ... to, any Person with respect to inquiries regarding, or the making of, an Acquisition Proposal....” (Merger Agreement, Section 7.04).

 

10



 

ownership of the Company.

 

43.           Analysts have reacted negatively to the Proposed Merger. For example, immediately after the Proposed Merger was announced, three analysts (from Jefferies, CL King and UBS) downgraded ADC.

 

44.           As ADC’s recent financial results indicate, the Company is currently poised to achieve significant success in the future. This is especially true given the proliferation of electronic such as smartphones, 3D television and video conferencing that will increase the need for fiber-optic connectivity. Rather than permitting ADC’s shares to trade freely and allowing its public shareholders to reap the benefits of the Company’s prospects, the Director Defendants have agreed to a transaction that undervalues ADC at a time when the Company’s stock price is trading below its inherent value worth and with it is poised to capitalize on its positive and encouraging financial outlook.

 

45.           The Proposed Merger comes at a time when the Company’s stock price is undervalued but its prospects for growth and increased revenue are substantially increasing as the economic recession is ending. ADC’s insiders are well aware of the Company’s intrinsic value and that ADC shares are significantly undervalued. Tyco recognized ADC’s solid performance and potential for growth and determined to capitalize on the recent downturn in the Company’s stock price at the expense of ADC’s public shareholders.

 

46.           The consideration offered to ADC’s public stockholders in the Proposed Merger is unfair and grossly inadequate because, among other things, the intrinsic value of ADC’s common stock is materially in excess of the amount offered for those securities in the proposed acquisition given the Company’s prospects for future growth and earnings set forth above.

 

47.           Although the Director Defendants are duty-bound to protect the interests of ADC shareholders by obtaining the maximum value reasonably available in any sale or merger of the

 

11



 

Company, Defendants entered into the Proposed Merger at an inadequate price.

 

FIRST CAUSE OF ACTION

 

Claim for Breach of Fiduciary Duties Against the Director Defendants

 

48.           Plaintiffs repeat and re-allege each allegation set forth herein.

 

49.           In approving the Proposed Merger and adopting the Merger Agreement, the Director Defendants have violated their fiduciary duties of care, loyalty, candor and good faith owed to public shareholders of ADC.

 

50.           By the acts, transactions and courses of conduct alleged herein, Defendants, individually and acting as a part of a common plan, are attempting to unfairly deprive Plaintiffs and other members of the Class of the true value of their investment in ADC.

 

51.           As demonstrated by the allegations above, the Director Defendants failed to exercise the care required, and breached their duties of loyalty, good faith, candor and independence owed to the shareholders of ADC because, among other reasons: they failed to take steps to maximize the value of ADC to its public shareholders; failed to fully inform themselves of ADC’s market value before taking, or agreeing to refrain from taking, action; and failed to obtain the best financial and other terms when the Company’s independent existence will be materially altered by the Proposed Merger.

 

52.           As a result of the actions of Defendants, Plaintiffs and the Class will suffer irreparable injury in that they have not and will not receive their fair portion of the value of ADC’s assets and businesses and have been and will be prevented from obtaining a fair price for their common stock.

 

53.           Defendants are not acting in good faith toward Plaintiffs and the other members of the Class, and have breached and are breaching their fiduciary duties to the members of the

 

12



 

Class. Unless Defendants are enjoined by the Court, they will continue to breach their fiduciary duties owed to Plaintiffs and the members of the Class, all to the irreparable harm of the members of the Class.

 

54.           Plaintiffs and the members of the Class have no adequate remedy at law. Only through the exercise of this Court’s equitable powers can Plaintiffs and the Class be fully protected from the immediate and irreparable injury which Defendants’ actions threaten to inflict.

 

SECOND CAUSE OF ACTION

 

On Behalf of Plaintiffs and the Class
Against Tyco and Tyco Minnesota for Aiding and Abetting the
Director Defendants’ Breach of Fiduciary Duties

 

55.           Plaintiffs incorporate by reference and re-allege each and every allegation contained above, as though fully set forth herein.

 

56.           Defendants Tyco and Tyco Minnesota have acted and are acting with knowledge of the fact that the Director Defendants are in breach of their fiduciary duties to ADC’s public shareholders, and have participated in such breaches of fiduciary duties.

 

57.           Tyco and Tyco Minnesota have knowingly aided and abetted the Director Defendants’ wrongdoing alleged herein. In so doing, Tyco and Tyco Minnesota rendered substantial assistance in order to effectuate the Director Defendants’ plan to consummate the Proposed Merger in breach of their fiduciary duties.

 

58.           Plaintiffs have no adequate remedy at law.

 

PRAYER FOR RELIEF

 

WHEREFORE, Plaintiffs demand injunctive relief in his favor and in favor of the Class and against Defendants as follows:

 

13



 

A.            Declaring that this action is properly maintainable as a Class action and certifying Plaintiffs as Class representatives;

 

B.            Preliminarily and permanently enjoining Defendants and all persons acting in concert with them from consummating the Proposed Merger, unless and until the Company adopts and implements a procedure or process to obtain a merger agreement providing the best possible terms for shareholders;

 

C.            Rescinding, to the extent already implemented, the Proposed Merger or any of the terms thereof, or granting Plaintiffs and the Class rescissory damages;

 

D.            Directing the Defendants to account to Plaintiffs and the Class for all damages suffered as a result of the wrongdoing complained of herein;

 

E.             Awarding Plaintiffs the costs and disbursements of this action, including reasonable attorneys’ and experts’ fees; and

 

F.             Granting such other and further equitable relief as this Court may deem just and proper.

 

Dated:    July 23, 2010

 

 

LOCKRIDGE GRINDEL NAUEN P.L.L.P

 

 

 

 

 

By:

/s/ Gregg M. Fishbein

 

Gregg M. Fishbein (No. 202009)
Karen H. Riebel (No. 219770)
100 Washington Avenue South, Suite 2200
Minneapolis, MN 55401-2159
Telephone: (612) 596-4044
Facsimile: (612) 339-0981

 

 

 

HARWOOD FEFFER LLP
Robert I. Harwood
488 Madison Avenue, 8th Floor
New York, New York 10022
Telephone: (212) 935-7400
Facsimile: (212) 753-3630

 

14



 

ACKNOWLEDGMENT

 

The undersigned hereby acknowledges that costs, disbursements, and reasonable attorney and witness fees may be awarded pursuant to Minn. Stat. § 549.211. subd. 2 to the party against whom the allegations in this pleading are asserted.

 

Dated:  July 23, 2010

 

 

By:

/s/ Gregg M. Fishbein

 

 

Gregg M. Fishbein

 

15



EX-99.(D)(2) 19 a2199448zex-99_d2.htm EXHIBIT 99.(D)(2)

Exhibit (d)(2)

 

AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER

 

This Amendment No. 1 to Agreement and Plan of Merger (“Amendment No. 1”), dated as of July 24, 2010, is among ADC Telecommunications, Inc., a Minnesota corporation (the “Company”), Tyco Electronics Ltd., a Swiss corporation (“Parent”), and Tyco Electronics Minnesota, Inc., a Minnesota corporation and an indirect wholly owned subsidiary of Parent (“Merger Subsidiary”).

 

WHEREAS, on July 12, 2010, the Company, Parent and Merger Subsidiary entered into an Agreement and Plan of Merger (the “Agreement”, the terms of which are incorporated herein by reference and made a part hereof); and

 

WHEREAS, the Company, Parent and Merger Subsidiary deem it advisable and in their best interest to amend the Agreement as set forth herein.

 

NOW, THEREFORE, in consideration of the premises and mutual agreements herein set forth, and intending to be legally bound hereby, the parties hereto agree that the Agreement shall be and hereby is amended as follows:

 

1.             Defined Terms.  Terms defined in the Agreement and used and not otherwise defined herein shall have the meanings given to them in the Agreement.

 

2.             Amendment of Section 5.05(a).  Section 5.05(a) of the Agreement is hereby amended and restated in its entirety as follows:

 

“Section 5.05         Capitalization.  (a) The authorized capital stock of the Company consists of 10,000,000 shares of preferred stock, no par value per share, and 342,857,142 shares of Company Common Stock.  As of the close of business on July 9, 2010: (i) no shares of preferred stock, no par value per share, were issued and outstanding, (ii) 97,026,865 shares of Company Common Stock were issued and outstanding, (iii) 7,650,866 shares of Company Common Stock were subject to issuance pursuant to outstanding Company Stock Options (of which Company Stock Options to purchase an aggregate of 5,147,515 shares of Company Common Stock were exercisable), (iv) 2,296,524 shares of Company Common Stock were subject to issuance pursuant to outstanding restricted stock units issued under the Company Stock Plans, (v) 610,241 shares of Company Common Stock were subject to issuance pursuant to outstanding performance stock units issued under the Company Stock Plans, and (vi) 1,731,221 shares of Company Common Stock were subject to issuance pursuant to outstanding restricted stock unit rights issued under the Company Stock Plans (the items in clauses (iv) through (vi) being referred to collectively as the “Stock Plan Awards”).  As of the close of business on July 9, 2010:  (i) 7,119,718 shares of Company Common Stock were reserved and available for issuance upon conversion of the Company 2013 Notes; (ii) 8,332,560 shares of Company Common Stock were reserved and available for issuance upon conversion of the Company 2015 Notes; (iii) 7,882,155 shares of Company Common Stock were reserved and available for issuance upon conversion of the Company 2017 Notes;

 



 

(iv) 2,000,000 shares of the Company’s preferred stock were designated as Series A Junior Participating Preferred Stock, par value $0.0001 per share, and were reserved for issuance upon the exercise of the Company Rights issued pursuant to the Company Rights Agreement and (v) one Company Right was outstanding for each outstanding Share.  All outstanding shares of capital stock of the Company have been, and all shares that may be issued pursuant to any employee stock option or other compensation plan or arrangement will be, when issued in accordance with the respective terms thereof, duly authorized and validly issued, fully paid and nonassessable and free of preemptive rights.  Section 5.05 of the Company Disclosure Schedule contains a list, complete and correct as of July 9, 2010, of (i) all outstanding Company Stock Options, including the date of grant, exercise price, number of Shares subject thereto and the extent to which such Company Stock Options are vested and (ii) the maximum aggregate intrinsic value that would be payable to all holders of cash settled compensatory awards based on or relating to Company Common Stock assuming completion of the transactions contemplated in this Agreement.”

 

3.             Amendment of Schedule 5.05 of the Company Disclosure Schedule.  Concurrently with the execution of this Amendment No. 1, the Company is delivering an amendment to the Company Disclosure Schedule.  Parent and Merger Subsidiary acknowledge receipt of the amendment to the Company Disclosure Schedule.  The term “Company Disclosure Schedule” as used in the Agreement shall be deemed to refer to the Company Disclosure Schedule as amended by the amendment referred to in the immediately preceding sentence.

 

4.             Agreement as Amended.  The term “Agreement” as used in the Agreement shall be deemed to refer to the Agreement as amended hereby.  It is expressly understood and agreed that except as provided above, all terms, conditions and provisions contained in the Agreement shall remain in full force and effect without any further change or modification whatsoever.

 

5.             Governing Law.  This Amendment No. 1 shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules of such state.

 

6.             Counterparts.  This Amendment No. 1 may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

 

[The remainder of this page has been intentionally left blank; the next
page is the signature page.]

 



 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be duly executed by their respective authorized officers as of the date set forth on the cover page of this Amendment No. 1.

 

 

ADC TELECOMMUNICATIONS, INC.

 

 

 

 

 

 

 

By:

/s/ Robert E. Switz

 

 

Robert E. Switz

 

 

Chairman, President and Chief Executive Officer

 

 

 

 

TYCO ELECTRONICS LTD.

 

 

 

 

 

 

 

By:

/s/ Terrence R. Curtin

 

 

Terrence Curtin

 

 

Chief Financial Officer

 

 

 

 

TYCO ELECTRONICS MINNESOTA, INC.

 

 

 

 

 

 

 

By:

/s/ Terrence R. Curtin

 

 

Terrence Curtin

 

 

Chief Financial Officer

 



EX-99.(D)(3) 20 a2199448zex-99_d3.htm EXHIBIT 99.(D)(3)

Exhibit (d)(3)

 

CONFIDENTIALITY AGREEMENT

 

This CONFIDENTIALITY AGREEMENT, dated March 26, 2010 (the “Agreement”), by and between ADC Telecommunications, Inc., a Minnesota corporation (“ADC), and Tyco Electronics Ltd., a corporation organized under the laws of Switzerland (“Tyco Electronics”). ADC and Tyco Electronics are sometimes referred to herein individually, as a “Party,” and, collectively, as the “Parties.”

 

WHEREAS, the Parties have expressed a desire to engage in exploratory discussions with respect to a possible transaction or business relationship involving some or all of their respective telecommunications businesses, including the possibility of a business combination (the “Possible Transaction”);

 

WHEREAS, the Parties may exchange certain information that would help each of them evaluate the Possible Transaction, and such information may include disclosure of certain sensitive nonpublic information of each Party; and

 

WHEREAS, the Parties desire that the exchange of such information be subject to the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Parties agree as follows:

 

1.             Certain Definitions

 

(a)          “Confidential Information” means confidential, proprietary, non-public or otherwise sensitive information of a Party and its affiliates including, without limitation, strategic plans, business plans and opportunities, trade secrets, pricing, supplier and customer information and other technical information furnished in written, oral or electronic form. “Confidential Information” will not, however, include any information that: (i) is, at the time it is provided by the Disclosing Party, a part of the public domain, (ii) thereafter becomes a part of the public domain, other than through the act or omission of the Receiving Party in breach of the Agreement; (iii) is lawfully in the possession of the Receiving Party prior to its being provided by the Disclosing Party; (iv) is lawfully disclosed to the Receiving Party by a third Party that to the knowledge of the Receiving Party after reasonable inquiry does not have an obligation of confidentiality to the Disclosing Party; or (v) is independently developed by the Receiving Party.

 

(b)         “Disclosing Party” means the Party providing its Confidential Information (whether directly, or through its Representatives) to the other Party or its Representatives.

 

(c)          “Receiving Party” means the Party and its affiliates (and their respective Representatives) receiving the Disclosing Party’s Confidential Information.

 



 

(d)         Representatives means a Party’s, and its affiliates’, directors, officers, employees, agents and advisors (including, without limitation, attorneys, accountants, consultants, bankers and financial advisors).

 

2.             Use, Disclosure and Ownership of Confidential Information

 

(a)          The Receiving Party and its Representatives will use the Disclosing Party’s Confidential Information solely for the purpose of evaluating, negotiating and advising with respect to the Possible Transaction. The Disclosing Party’s Confidential Information shall not be used by the Receiving Party for any other purpose. All such Confidential Information will be kept confidential by the Receiving Party and its Representatives and shall not be disclosed to any third Party (i.e., a person or entity that is not a Party or a Representative of a Party) without the Receiving Party’s prior written consent (which may be given or withheld in the discretion of the Disclosing Party) or as required by law or regulatory authority after compliance with Section 5.

 

(b)         Each Party understands and agrees that it shall be responsible to the Disclosing Party for any breach of this Agreement, including any unauthorized disclosure of the Receiving Party’s Confidential Information, by any of Disclosing Party’s Representatives.

 

(c)          Each Party understands and agrees that the Disclosing Party is and shall remain the exclusive owner of all of its Confidential Information and all patent, patent application, trademark, copyright, trade secret and other intellectual property rights therein. The Receiving Party understands and agrees that the Disclosing Party is not granting, either explicitly or by implication, any license to, or other conveyance of, any such rights to the Receiving Party under this Agreement.

 

3.             Confidentiality of Information and Discussions

 

(a)          Each Party, as a Receiving Party, will undertake the necessary and appropriate steps to ensure that the confidentiality and secrecy of the Confidential Information supplied by the Disclosing Party hereunder is maintained to the same extent as it would maintain its own confidential information of the same type. Each Party will designate an appropriate contact for the discussions contemplated by this agreement. All communications regarding the Possible Transaction and requests for additional information, requests for management meetings and discussions or questions regarding procedures will be submitted to the respective persons so designated in writing (including e-mail) by each Party.

 

(b)         The fact that the Parties may exchange Confidential Information and engage in discussions with respect to the Possible Transaction shall also be kept confidential. Each Party also agrees that, without the prior written consent of the other Party, such Party will not disclose to any person other than its Representatives that discussions or negotiations are taking place concerning the Possible Transaction or any of the terms, conditions, status or other facts with respect thereto. Notwithstanding the foregoing, a Party may make such disclosure if, in the opinion of such Party’s legal counsel, such

 

2



 

disclosure is necessary to avoid committing a violation of any law or applicable regulatory or stock exchange requirement. In such event, the Party proposing to make such disclosure shall to the extent legally permitted give advance notice to the other Party as far in advance as is reasonably practicable, and will, in good faith, consult with the other Party and consider the other Party’s suggestions concerning the nature, scope and manner of such required disclosure.

 

4.             Return of Confidential Information  Either Party may decide at any time to terminate further discussions with respect to the Possible Transaction. Confidential Information of the Disclosing Party disclosed in writing, and all copies thereof, except (i) one copy which may be retained by counsel for the Receiving Party for record purposes only and (ii) electronic copies retained as part of ordinary course computer system back-up processes, will be returned or destroyed by the Receiving Party, as soon as practicable after either Party’s communication in writing of its decision not to proceed with discussions concerning the Possible Transaction and in any event upon written notice by the Disclosing Party. Any analyses, compilations, studies or other documents prepared by the Receiving Party in whole or in part on the basis of the Disclosing Party’s Confidential Information will be destroyed by the Receiving Party upon return or destruction of the Disclosing Party’s Confidential Information. Any destruction pursuant to this Section 4 will be certified by the Receiving Party to the Disclosing Party in writing at the Disclosing Party’s request.

 

5.             Legal Process  In the event that the Receiving Party or any of its Representatives becomes legally compelled to disclose all or any portion of the Disclosing Party’s Confidential Information, the Receiving Party will to the extent legally permitted provide the disclosing Party with prompt notice thereof, so that the Disclosing Party may seek a protective order or other appropriate remedy. In the event that such protective order or other remedy is not obtained, the Receiving Party (or its Representatives) will furnish only that portion of the Disclosing Party’s Confidential Information that is legally required, and the Receiving Party will exercise its commercially reasonable efforts to obtain reliable assurance that confidential treatment will be afforded such portion of the Disclosing Party’s Confidential Information.

 

6.             Standstill  Tyco Electronics and ADC agree, that until the expiration of twelve months from the date of this Agreement (the “Standstill Period”), neither Tyco Electronics nor ADC shall: (a) acquire, agree to acquire or make any proposal to acquire, directly or indirectly, any securities or property (beneficial ownership thereof or any voting rights related thereto) of the other Party or any of its subsidiaries, (b) except at the specific written request of the other Party, propose to enter into, directly or indirectly, any merger or business combination involving the other Party or any of its subsidiaries or to purchase, directly or indirectly, a material portion of the assets of the other Party or any of its subsidiaries (which, for the avoidance of doubt, will not include ordinary course commercial transactions unrelated to a Possible Transaction), (c) make, or participate in, directly or indirectly, any “solicitation” of “proxies” (as such terms are used in the proxy rules of the U.S. Securities and Exchange Commission) to vote, or seek to advise or knowingly influence any person with respect to the voting of, any voting securities of the

 

3



 

other Party or any of its subsidiaries, (d) form, join or participate in a “group” (within the meaning of Section 13(d)(3) of the U.S. Securities Exchange Act of 1934) with respect to any voting securities of the other Party or any of its subsidiaries, (e) otherwise act, alone or in concert with others, to seek to control or knowingly influence the management or Board of Directors of the other Party, (f) disclose any intention, plan or arrangement inconsistent  with the foregoing or (g) advise, assist or knowingly encourage any other persons in connection with any of the foregoing. Tyco Electronics and ADC also agree, during the Standstill Period, not to (i) request the other Party (or its directors, officers, employees or agents), directly or indirectly, to amend or waive any provision of this Section 6 (including this sentence), (ii) request the other Party (or its directors, officers, employees or agents), directly or indirectly, to amend or waive any provision of the other Party’s shareholder rights plan, or (iii) knowingly take any action which might require the other Party to make a public announcement regarding the possibility of a business combination or merger or other event involving a change in control of the other Party. The provisions of this Section 6 shall terminate with respect to a Party upon the earliest to occur of (1) public announcement of the other Party’s entry into a definitive agreement with respect to a merger or business combination with a third party or other event involving a change in control of the other Party, (2) public announcement of the other Party’s entry into a definitive agreement with respect to a sale of all or substantially all of the other Party’s assets to a third party, (3) the other Party recommending a merger or business combination, change in control transaction or sale of all of substantially all assets to the other Party’s shareholders, (4) the other Party recommending that the other Party’s shareholders accept a tender offer made by a third party for any of its outstanding equity securities, and (5) the other Party amending or waiving any provision of the other Party’s shareholder rights plan in response to or in furtherance of any transaction proposed by a third party. During the Standstill Period, if a Party enters into discussions relating to a Potential Transaction with a third party involving a merger or business combination or other event involving a change of control or all or substantially all of the assets or securities of such Party: (i) such Party shall use commercially reasonable efforts to enter into an agreement with any such third party containing standstill provisions that, in the aggregate, are not materially less favorable to such Party than those set forth in this Section 6; and (ii) if such Party enters into or modifies the standstill provisions of an agreement with any such third party and such standstill provisions, in the aggregate, are materially less favorable to such Party than those set forth in this Section 6, including if such Party does not enter into any such standstill provisions, then, such Party shall promptly execute and deliver to the other Party an amendment to this Agreement which, if duly executed and delivered by the other Party, would provide the other Party with standstill provisions that are materially comparable to those provided to the third party in the standstill provisions of the agreement or amendment executed with such third party.

 

7.             Employee Non-Solicitation  Each Party agrees that, except as provided in a definitive agreement relating to a Possible Transaction, from the date hereof and for a period of six (6) months after the date of this Agreement, it will not hire or solicit for hire any Covered Employee of the other Party (other than persons who are no longer employees of the other Party at the time discussions with such employee are initiated); provided, however, that the foregoing restrictions on solicitation and employment shall not be

 

4



 

deemed to prohibit general advertisements or other similar general solicitations and resulting employment not targeted at any such employees. For purposes of this Agreement, the term “Covered Employee” shall mean any employee of the other Party (i) with whom it or its Representatives came into contact in connection with the investigation, evaluation or negotiation of the Possible Transaction contemplated herein; (ii) who, on the date of this Agreement, is a direct report to the Chief Executive Officer of the other Party; or (iii) who, on the date of this Agreement, is a direct report to a direct report to the Chief Executive Officer of the other Party. For purposes of determining compliance with this Section 7, at the written request by one Party, the other Party shall confirm whether an individual specifically identified by the requesting Party is one of the Covered Employees of such other Party.

 

8.             Remedies  The Parties acknowledge and agree that, because of the unique nature of the Confidential Information, the Disclosing Party could suffer irreparable harm in the event of a breach by the Receiving Party of any of its obligations under this Agreement, such that monetary damages may be inadequate to compensate the Disclosing Party for such a breach. The Receiving Party agrees that, under such circumstances, the Disclosing Party may be entitled to injunctive relief, in addition to any other appropriate relief at law or in equity to which the Disclosing Party may be entitled. In addition, because of the unique benefits resulting from the covenants contained therein, each of the Parties agrees that, in the event of a breach of any of Sections 6 or 7 hereof, the aggrieved Party shall be entitled to injunctive relief, in addition to any other appropriate relief at law or in equity to which such aggrieved Party may be entitled, and with respect to any such breach of Section 7 hereof, the other Party hereto waives any requirement for the securing or posting of any bond in connection with such remedy. In addition, the prevailing party in any action to enforce this Agreement shall be entitled to reimbursement of all costs and attorneys’ fees incurred in connection with such enforcement. Notwithstanding anything to the contrary contained herein, except in the case of intentional bad faith or willful misconduct, neither Party shall be liable to the other Party for incidental, consequential or punitive damages, losses or expenses arising hereunder.

 

9.             No Representation or Warranty Regarding Confidential Information  Neither Party hereto, nor any of its Representatives, makes any representation or warranty as to the accuracy or completeness of its Confidential Information; such representation or warranty shall only be made in a definitive transaction agreement entered into by the Parties. Neither Party hereto nor any of its Representatives shall have any liability resulting from the use of or reliance upon its Confidential Information by the other Party hereto, except as may be provided for in a definitive transaction agreement. The delivery of the Confidential Information shall not constitute an offer or result in any obligations or liabilities or behalf of either Party hereto with respect to any transaction involving the Possible Transaction except as otherwise provided herein.

 

10.          No Other Obligation  The exploratory discussions with respect to the Possible Transaction as contemplated by this Agreement are non-binding. Except for or with respect to the matters specifically agreed to in this Agreement which are expressly stated to be binding on the parties, neither Party to this Agreement shall be under any legal

 

5



 

obligation of any kind whatsoever with respect to the Possible Transaction unless and until a definitive transaction agreement has been executed and delivered by all Parties thereto. Each Party hereby waives any and all claims (including, without limitation, claims for breach of contract) relating to the Possible Transaction as a result of entering into this Agreement.

 

11.          Term  The obligations set forth in this agreement shall be binding on each of the Parties and their respective Representatives for a period of two years from the date hereof, notwithstanding the return or destruction of either Party’s Confidential Information or the termination of discussions regarding the Possible Transaction.

 

12.          Notice  Either Party hereto may, by a signed writing, give any consent or waive any compliance by the other Party with any of the provisions of this Agreement. All notices and other communications hereunder shall be in writing and shall be deemed given if personally delivered, telecopied (with confirmation) or mailed by registered or certified mail (return receipt requested) to the other Party at its address set forth below:

 

if to ADC:

 

 

 

ADC Telecommunications, Inc.

 

13625 Technology Drive

 

Eden Prairie, MN 55344

 

Attn: General Counsel

 

Facsimile: 952-917-0893

 

 

 

if to Tyco Electronics:

 

 

 

Tyco Electronics Ltd.

 

c/o Tyco Electronics Corporation

 

1050 Westlakes Drive

 

Berwyn, PA 19312

 

Attn: General Counsel

 

Facsimile: 610-893-9602

 

 

13.          Governing Law  This Agreement shall be governed by, and interpreted in accordance with, the laws of the State of Minnesota.

 

14.          Acknowledgement of Securities Laws  Each Party hereto acknowledges that the U.S. securities laws prohibit any person who has material, non-public information concerning the matters that are the subject of this Agreement from purchasing or selling securities of a company that may be a party to a transaction of a type contemplated by this Agreement or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities.

 

6



 

IN WITNESS WHEREOF, ADC and Tyco Electronics have caused this Agreement to be executed on the date first above written.

 

 

 

 

ADC Telecommunications, Inc.

 

 

 

 

 

 

 

 

By:

 

 

/s/ James G. Mathews

 

 

Name:

 

 

James G. Mathews

 

 

Title:

 

 

Vice President, Chief Financial Officer

 

 

 

 

 

 

 

 

Tyco Electronics Ltd.

 

 

 

 

 

 

 

 

By:

 

 

/s/ Terrence R. Curtin

 

 

Name:

 

 

EVP, CFO

 

 

Title:

 

 

Terrence R. Curtin

 


 


EX-99.(D)(4) 21 a2199448zex-99_d4.htm EXHIBIT 99.(D)(4)

Exhibit (d)(4)

 

CONFIDENTIAL

 

July 11, 2010

 

Robert E. Switz

Chairman, President and Chief Executive Officer

ADC Telecommunications, Inc.

P.O. Box 1101

Minneapolis, MN 55440-1101

 

Dear Bob:

 

We understand that, based the proposal that we delivered to you on July 9, 2010, including our mark-up of the proposed form of Agreement and Plan of Merger, and as modified by the discussions between us and our representatives on July 10-11, 2010 (including, without limitation, the increase in the price per share of our proposed all-cash transaction to $12.75) (the “Proposal”), ADC Telecommunications, Inc. (“ADC”) is prepared to proceed immediately with the final negotiation of the Agreement and Plan of Merger with Tyco Electronics Ltd. (“Tyco”), with the objective of executing a definitive agreement as quickly as possible.

 

In order for us to commit the resources necessary to do so, we require that ADC agree that (1) ADC will immediately cease, and cause will its advisors (including, without limitation, its investment bankers and attorneys) to cease, any and all discussions or negotiations, if any, currently being conducted with respect to any transactional alternative to the Proposal, (2) until 9:00 a.m., Eastern Time, on July 14, 2010, ADC will not, and will cause its advisors (including, without limitation, its investment bankers and attorneys) not to, directly or indirectly, solicit any proposal which constitutes, or reasonably may be expected to lead to, a transactional alternative to the Proposal and (3) during such period, ADC will not grant any waiver or release under any standstill agreement with respect to any class of equity securities or property of ADC.

 

The foregoing agreement does not obligate either of our companies to proceed with the proposed transaction described in the Proposal.

 

Please acknowledge your agreement with the foregoing by signing this letter below and returning it to me.

 

Sincerely,

 

 

 

/s/ Tom Lynch

 

Tom Lynch

 

Chief Executive Officer

 

Tyco Electronics Ltd.

 

 

 

 

 

Accepted and agreed:

 

 

 

 

 

ADC Telecommunications, Inc.

 

 

 

 

 

/s/ Robert E. Switz

 

Robert E. Switz

 

Chairman, President and Chief Executive Officer

 

 


 


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