-----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, GY15VEP85LxUBOC0G5yE/VT6fwbyF06mYvmMjfLgF/QQ/12pJeAIfvzPo25x4hgZ aRRrLd4tYkmIrGScOEJ0mA== 0000950123-99-006729.txt : 19990722 0000950123-99-006729.hdr.sgml : 19990722 ACCESSION NUMBER: 0000950123-99-006729 CONFORMED SUBMISSION TYPE: SC 14D1 PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 19990721 GROUP MEMBERS: LUCENT TECHNOLOGIES INC GROUP MEMBERS: SEATTLE ACQUISITION INC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SPECTRAN CORP CENTRAL INDEX KEY: 0000718487 STANDARD INDUSTRIAL CLASSIFICATION: GLASS, GLASSWARE, PRESSED OR BLOWN [3220] IRS NUMBER: 042729372 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1 SEC ACT: SEC FILE NUMBER: 005-34595 FILM NUMBER: 99668195 BUSINESS ADDRESS: STREET 1: 50 HALL ROAD CITY: STURBRIDGE STATE: MA ZIP: 01566 BUSINESS PHONE: 5083472261 MAIL ADDRESS: STREET 1: 50 HALL ROAD CITY: STURBRIDGE STATE: MA ZIP: 01566 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: LUCENT TECHNOLOGIES INC CENTRAL INDEX KEY: 0001006240 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 223408857 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 14D1 BUSINESS ADDRESS: STREET 1: 600 MOUNTAIN AVE CITY: MURRAY HILL STATE: NJ ZIP: 07974 BUSINESS PHONE: 9085828500 MAIL ADDRESS: STREET 1: 600 MOUNTAIN AVE CITY: MURRAY HILL STATE: NJ ZIP: 07974 FORMER COMPANY: FORMER CONFORMED NAME: NS MPG INC DATE OF NAME CHANGE: 19960124 SC 14D1 1 SCHEDULE 14D-1 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ SCHEDULE 14D-1 TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 ------------------------ SPECTRAN CORPORATION (NAME OF SUBJECT COMPANY) SEATTLE ACQUISITION INC. LUCENT TECHNOLOGIES INC. (BIDDERS) ------------------------ COMMON STOCK, PAR VALUE $.10 PER SHARE (TITLE OF CLASS OF SECURITIES) ------------------------ 847598109 (CUSIP NUMBER OF CLASS OF SECURITIES) ------------------------ PAMELA F. CRAVEN, ESQ. SEATTLE ACQUISITION INC. C/O LUCENT TECHNOLOGIES INC. 600 MOUNTAIN AVENUE MURRAY HILL, NEW JERSEY 07974 (908) 582-8500 (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSONS AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS) ------------------------ COPIES TO: IRVING L. ROTTER, ESQ. SIDLEY & AUSTIN 875 THIRD AVENUE NEW YORK, NEW YORK 10022 (212) 906-2000 ------------------------ CALCULATION OF FILING FEE
- --------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------- TRANSACTION VALUATION* AMOUNT OF FILING FEE - --------------------------------------------------------------------------------------------- $67,331,196 $13,466.24 - --------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------
* For purposes of calculating amount of filing fee only. The amount assumes the purchase of 7,481,244 shares of Common Stock, par value $.10 per share (collectively, the "Shares"), at a price per Share of $9.00 in cash. Such number of shares represents all the Shares outstanding, determined on a fully diluted basis. [ ] 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: None Filing Party: N/A Form or Registration No.: N/A Date Filed: N/A - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 SCHEDULE 14D-1 CUSIP NO. 847598109 - --------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS Seattle Acquisition Inc. - --------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - --------------------------------------------------------------------------- 3 SEC USE ONLY - --------------------------------------------------------------------------- 4 SOURCE OF FUNDS AF - --------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(e) or 2(f) [ ] - --------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - --------------------------------------------------------------------------- 7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 0 - --------------------------------------------------------------------------- 8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES [ ] - --------------------------------------------------------------------------- 9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) 0% - --------------------------------------------------------------------------- 10 TYPE OF REPORTING PERSON CO - ---------------------------------------------------------------------------
2 3 SCHEDULE 14D-1 CUSIP NO. 847598109 - --------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS Lucent Technologies Inc. - --------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - --------------------------------------------------------------------------- 3 SEC USE ONLY - --------------------------------------------------------------------------- 4 SOURCE OF FUNDS WC - --------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(e) or 2(f) [ ] - --------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - --------------------------------------------------------------------------- 7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 0 - --------------------------------------------------------------------------- 8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES [ ] - --------------------------------------------------------------------------- 9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) 0% - --------------------------------------------------------------------------- 10 TYPE OF REPORTING PERSON CO - ---------------------------------------------------------------------------
3 4 This Tender Offer Statement on Schedule 14D-1 relates to the offer by Seattle Acquisition Inc., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Lucent Technologies Inc., a Delaware corporation ("Parent"), to purchase all of the outstanding shares of common stock, par value $.10 per share (the "Shares"), of SpecTran Corporation, a Delaware corporation (the "Company"). ITEM 1. SECURITY AND SUBJECT COMPANY. (a) The name of the subject company is SpecTran Corporation, which has its principal executive offices at 50 Hall Road, Sturbridge, Massachusetts 01566. (b) This Schedule 14D-1 relates to the offer by the Purchaser to purchase all outstanding Shares at a price of $9.00 per Share, net to the seller in cash (the "Offer Price"), upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"), copies of which are attached hereto as Exhibits (a)(1) and (a)(2), respectively. Information concerning the number of outstanding Shares is set forth in the "Introduction" of the Offer to Purchase and is incorporated herein by reference. (c) Information concerning the principal market in which the Shares are traded and the high and low sales prices of Shares for each quarterly period during the past two years is set forth in Section 6 ("Price Range of the Shares; Dividends on the Shares") of the Offer to Purchase and is incorporated herein by reference. ITEM 2. IDENTITY AND BACKGROUND. (a)-(d) and (g) This Schedule 14D-1 is being filed by the Purchaser and Parent. Information concerning the principal business and the address of the principal offices of the Purchaser and Parent is set forth in Section 9 ("Certain Information Concerning the Purchaser and Parent") of the Offer to Purchase and is incorporated herein by reference. The names, business addresses, present principal occupations or employment, material occupations, positions, offices or employments during the last five years and citizenship of the directors and executive officers of the Purchaser and Parent are set forth in Schedule I to the Offer to Purchase and are incorporated herein by reference. (e) and (f) The information set forth in Section 9 ("Certain Information Concerning the Purchaser and Parent") of the Offer to Purchase is incorporated herein by reference. ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY. (a) and (b) The information set forth in Section 11 ("Contacts with the Company; Background of the Offer") and Section 12 ("Purpose of the Offer; The Merger Agreement") of the Offer to Purchase is incorporated herein by reference. ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a) and (b) The information set forth in Section 10 ("Source and Amount of Funds") of the Offer to Purchase is incorporated herein by reference. (c) Not applicable. ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER. (a)-(e) The information set forth in Section 12 ("Purpose of the Offer; The Merger Agreement") of the Offer to Purchase is incorporated herein by reference. (f) and (g) The information set forth in Section 7 ("Effect of the Offer on the Market for the Shares; Stock Quotation; Exchange Act Registration; Margin Regulations") of the Offer to Purchase is incorporated herein by reference. ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY. (a) and (b) The information set forth in the "Introduction," Section 9 ("Certain Information Concerning the Purchaser and Parent") and Section 12 ("Purpose of the Offer; The Merger Agreement") of the Offer to Purchase is incorporated herein by reference. 4 5 ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE SUBJECT COMPANY'S SECURITIES. The information set forth in the "Introduction," Section 9 ("Certain Information Concerning the Purchaser and Parent"), Section 11 ("Contacts with the Company; Background of the Offer") and Section 12 ("Purpose of the Offer; The Merger Agreement") of the Offer to Purchase is incorporated herein by reference. ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED. The information set forth in the "Introduction" and Section 16 ("Fees and Expenses") of the Offer to Purchase is incorporated herein by reference. ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS. Not applicable. ITEM 10. ADDITIONAL INFORMATION. (a) The information set forth in Section 12 ("Purpose of the Offer; The Merger Agreement") of the Offer to Purchase is incorporated herein by reference. (b) and (c) The information set forth in Section 15 ("Certain Legal Matters") of the Offer to Purchase is incorporated herein by reference. (d) The information set forth in Section 7 ("Effect of the Offer on the Market for the Shares; Stock Quotation; Exchange Act Registration; Margin Regulations") of the Offer to Purchase is incorporated herein by reference. (e) The information set forth in Section 15 ("Certain Legal Matters") of the Offer to Purchase is incorporated herein by reference. (f) The information set forth in the Offer to Purchase, the Letter of Transmittal and the Agreement of Merger, dated as of July 15, 1999, among the Purchaser, Parent and the Company, copies of which are attached hereto as Exhibits (a)(1), (a)(2) and (c)(1), respectively, is incorporated herein by reference. ITEM 11. MATERIAL TO BE FILED AS EXHIBITS. (a)(1) Offer to Purchase. (a)(2) Letter of Transmittal. (a)(3) Notice of Guaranteed Delivery. (a)(4) Letter to Brokers, Dealers, Banks, Trust Companies and Other Nominees. (a)(5) Letter to Clients for use by Brokers, Dealers, Banks, Trust Companies and Other Nominees. (a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(7) Form of Summary Advertisement, dated July 21, 1999. (a)(8) Text of Press Release, dated July 15, 1999, issued by Parent. (b) None. (c)(1) Agreement of Merger, dated as of July 15, 1999, among the Purchaser, Parent and the Company. (d) None. (e) Not applicable. (f) None.
5 6 SIGNATURES After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: July 21, 1999 SEATTLE ACQUISITION INC. By: /s/ PAMELA F. CRAVEN ------------------------------------ Name: Pamela F. Craven Title: Vice President LUCENT TECHNOLOGIES INC. By: /s/ PAMELA F. CRAVEN ------------------------------------ Name: Pamela F. Craven Title: Vice President-Law 6 7 EXHIBIT INDEX
EXHIBIT NUMBER EXHIBIT DESCRIPTION - ------- ------------------- (a)(1) Offer to Purchase (a)(2) Letter of Transmittal (a)(3) Notice of Guaranteed Delivery (a)(4) Letter to Brokers, Dealers, Banks, Trust Companies and Other Nominees (a)(5) Letter to Clients for use by Brokers, Dealers, Banks, Trust Companies and Other Nominees (a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 (a)(7) Form of Summary Advertisement, dated July 21, 1999 (a)(8) Text of Press Release, dated July 15, 1999, issued by Parent (b) None (c)(1) Agreement of Merger, dated as of July 15, 1999, among the Purchaser, Parent and the Company (d) None (e) Not applicable (f) None
7 EX-99.A.1 2 OFFER TO PURCHASE 1 OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF SPECTRAN CORPORATION AT $9.00 NET PER SHARE BY SEATTLE ACQUISITION INC. A WHOLLY OWNED SUBSIDIARY OF LUCENT TECHNOLOGIES INC. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, AUGUST 17, 1999, UNLESS EXTENDED. THE BOARD OF DIRECTORS OF SPECTRAN CORPORATION HAS UNANIMOUSLY APPROVED THE OFFER AND THE MERGER REFERRED TO HEREIN AND DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY, AND UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF SHARES THAT WOULD CONSTITUTE AT LEAST A MAJORITY OF THE OUTSTANDING SHARES (DETERMINED ON A FULLY DILUTED BASIS FOR ALL OUTSTANDING STOCK OPTIONS AND ANY OTHER RIGHTS TO ACQUIRE SHARES ON THE DATE OF PURCHASE) AND (2) ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE REGULATIONS THEREUNDER APPLICABLE TO THE PURCHASE OF SHARES PURSUANT TO THE OFFER HAVING EXPIRED OR BEEN TERMINATED. IMPORTANT If you wish to tender all or any portion of your Shares in SpecTran Corporation, you must do one of the following: - If you are the record holder of your Shares and hold certificates for your Shares, (a) complete and sign the Letter of Transmittal (or a facsimile copy) following the instructions in the Letter of Transmittal, (b) have your signature on the Letter of Transmittal guaranteed if required by Instruction 1 to the Letter of Transmittal, and (c) mail or deliver the Letter of Transmittal (or a facsimile copy), the certificates for your Shares and any other required documents to The Bank of New York - If you are the record holder of your Shares and delivery of the Shares is to be made by book-entry transfer, (a) transmit an agent's message (as described in Section 2 below) and any other required documents, to The Bank of New York and (b) deliver your Shares pursuant to the procedure for book-entry transfer set forth in Section 2 below - If your Shares are registered in the name of a broker, dealer, bank, trust company or other nominee, you must contact and request your broker, dealer, bank, trust company or other nominee to tender your Shares If you desire to tender your Shares and your certificates for your Shares are not immediately available or you cannot comply in a timely manner with the procedures for book-entry transfer, or you cannot deliver all the required documents to The Bank of New York prior to the expiration of the Offer, you may tender your Shares by following the procedure for guaranteed delivery described in Section 2. If you have any questions or if you need assistance or additional copies of this Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery, please call Morrow & Co. at its address and telephone number set forth on the back cover of this Offer to Purchase. ------------------------ The Information Agent for the Offer is: MORROW & CO., INC. 445 Park Avenue 5th Floor New York, NY 10022 July 21, 1999 2 TABLE OF CONTENTS
PAGE ---- Introduction..................................................... 1 1. Terms of the Offer.......................................... 2 2. Procedure for Tendering Shares.............................. 4 3. Withdrawal Rights........................................... 6 4. Acceptance for Payment and Payment for Shares............... 7 5. Certain Federal Income Tax Consequences..................... 8 6. Price Range of the Shares; Dividends on the Shares.......... 9 7. Effect of the Offer on the Market for the Shares; Stock Quotation; Exchange Act Registration; Margin Regulations.... 9 8. Certain Information Concerning the Company.................. 10 9. Certain Information Concerning the Purchaser and Parent..... 13 10. Source and Amount of Funds.................................. 14 11. Contacts with the Company; Background of the Offer.......... 14 12. Purpose of the Offer; The Merger Agreement.................. 17 13. Dividends and Distributions................................. 25 14. Certain Conditions of the Offer............................. 26 15. Certain Legal Matters....................................... 27 16. Fees and Expenses........................................... 29 17. Miscellaneous............................................... 29
Schedule I -- Directors and Executive Officers of Parent and the Purchaser i 3 TO THE HOLDERS OF COMMON STOCK OF SPECTRAN CORPORATION: INTRODUCTION Seattle Acquisition Inc., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Lucent Technologies Inc., a Delaware corporation ("Parent"), is offering to purchase all outstanding shares (the "Shares") of Common Stock, par value $.10 per share ("Common Stock"), of SpecTran Corporation, a Delaware corporation (the "Company"), at $9.00 per Share (the "Offer Price"), net to the seller, in cash, upon the terms and subject to the conditions set forth in this Offer to Purchase dated July 21, 1999 and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"). If you have Shares registered in your name that you tender directly, you will not be obligated to pay 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. If you hold your Shares through a broker or bank, you should consult with them to determine if there are any fees applicable to a tender of the Shares. The Purchaser will pay all fees and expenses of The Bank of New York, which is acting as the Depositary (the "Depositary") and Morrow & Co., Inc., which is acting as Information Agent (the "Information Agent"), incurred in connection with the Offer. See Section 16. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER AND THE MERGER (AS DEFINED BELOW) AND DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY, AND UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES. The Company has advised the Purchaser that Lazard Freres & Co. LLC ("Lazard") has delivered to the board of directors of the Company its written opinion to the effect that, as of the date of such opinion, the $9.00 in cash per Share to be received by the holders of Shares in the Offer and the Merger is fair to such holders from a financial point of view. That opinion is set forth in full as an exhibit to the Company's Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9"), which is being mailed to you with this Offer to Purchase. YOU ARE URGED TO, AND SHOULD, READ SUCH OPINION CAREFULLY IN ITS ENTIRETY. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED IN SECTION 1) THAT NUMBER OF SHARES THAT WOULD CONSTITUTE AT LEAST A MAJORITY OF THE OUTSTANDING SHARES (DETERMINED ON A FULLY DILUTED BASIS FOR ALL OUTSTANDING STOCK OPTIONS AND ANY OTHER RIGHTS TO ACQUIRE SHARES ON THE DATE OF PURCHASE) (THE "MINIMUM CONDITION") AND (2) ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE REGULATIONS THEREUNDER (THE "HSR ACT") APPLICABLE TO THE PURCHASE OF SHARES PURSUANT TO THE OFFER HAVING EXPIRED OR BEEN TERMINATED. THE PURCHASER RESERVES THE RIGHT (SUBJECT TO OBTAINING THE CONSENT OF THE COMPANY AND THE APPLICABLE RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION")), WHICH IT PRESENTLY HAS NO INTENTION OF EXERCISING, TO WAIVE OR REDUCE THE MINIMUM CONDITION AND TO ELECT TO PURCHASE, PURSUANT TO THE OFFER, LESS THAN THE NUMBER OF SHARES REQUIRED TO SATISFY THE MINIMUM CONDITION. SEE SECTIONS 1 AND 14. The Offer is being made pursuant to the Agreement of Merger, dated as of July 15, 1999 (the "Merger Agreement"), among Parent, the Purchaser and the Company, pursuant to which, following the consummation of the Offer and the satisfaction or waiver of certain conditions, the Purchaser will be merged with and into the Company, with the Company surviving the merger (as such, the "Surviving Corporation") as a wholly owned subsidiary of Parent (the "Merger"). In the Merger, each Share issued and outstanding immediately prior to the Merger (other than Shares (1) owned or held in treasury by the Company, (2) owned by Parent or the Purchaser, (3) remaining outstanding held by any subsidiary of the Company or Parent or (4) owned by stockholders, if any, who are entitled to and who properly exercise dissenters' rights 1 4 under Delaware law) will be converted into the right to receive in cash, without interest, the per Share price paid in the Offer (the "Merger Consideration"). See Section 12. The Merger is subject to a number of conditions, including approval by stockholders of the Company, if such approval is required by applicable law. If the Purchaser acquires 90% or more of the outstanding Shares pursuant to the Offer or otherwise, the Purchaser will effect the Merger pursuant to the short-form merger provisions of the Delaware General Corporation Law (the "DGCL"), without prior notice to, or any action by, any other stockholder of the Company. See Section 12. Once the Minimum Condition has been satisfied and the Purchaser accepts for payment Shares tendered pursuant to the Offer, the Purchaser will be able to elect a majority of the members of the Company's board of directors and to effect the Merger without the affirmative vote of any other stockholder of the Company. The Merger Agreement is more fully described in Section 12. Certain Federal income tax consequences of the sale of Shares pursuant to the Offer and the exchange of Shares for the Merger Consideration pursuant to the Merger are described in Section 5. 1. TERMS OF THE OFFER. Upon the terms and subject to the conditions of the Offer (including if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the Purchaser will accept for payment and pay for all Shares validly tendered prior to the Expiration Date and not theretofore withdrawn in accordance with Section 3. The term "Expiration Date" means 12:00 midnight, New York City time, on Tuesday, August 17, 1999, unless the Purchaser shall have extended the period of time during which the Offer is open, in which event the term "Expiration Date" shall mean the latest time and date at which the Offer, as so extended by the Purchaser, shall expire. Subject to the terms of the Merger Agreement (see Section 12) and the applicable rules and regulations of the Commission, the Purchaser expressly reserves the right, in its sole discretion, at any time and from time to time, and regardless of whether or not any of the events set forth in Section 14 hereof shall have occurred or shall have been determined by the Purchaser to have occurred, (1) to extend the period of time during which the Offer is open, and thereby delay acceptance for payment of and the payment for any Shares, by giving oral or written notice of such extension to the Depositary and (2) to amend the Offer in any other respect by giving oral or written notice of such amendment to the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT. If by 12:00 midnight, New York City time, on Tuesday, August 17, 1999 (or any other date or time then set as the Expiration Date), any or all conditions to the Offer have not been satisfied or waived, the Purchaser reserves the right (but shall not be obligated), subject to the terms and conditions contained in the Merger Agreement and to the applicable rules and regulations of the Commission, (1) to terminate the Offer and not accept for payment any Shares and return all tendered Shares to tendering stockholders, (2) to waive all the unsatisfied conditions (other than the Minimum Condition and the condition that any waiting period under the HSR Act shall have expired or been terminated) and, subject to complying with the terms of the Merger Agreement and the applicable rules and regulations of the Commission, accept for payment and pay for all Shares validly tendered prior to the Expiration Date and not theretofore withdrawn, (3) to extend the Offer and, subject to the right of stockholders to withdraw Shares until the Expiration Date, retain the Shares that have been tendered during the period or periods for which the Offer is extended or (4) to amend the Offer. There can be no assurance that the Purchaser will exercise its right to extend the Offer (other than as required by the Merger Agreement). Any extension, waiver, amendment or termination will be followed as promptly as practicable by public announcement. In the case of an extension, Rule 14e-l(d) under the Securities Exchange Act of 1934 (the "Exchange Act"), requires that the announcement be issued no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date in accordance with the public announcement requirements of Rule 14d-4(c) under the Exchange Act. Subject to applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act which require that any 2 5 material change in the information published, sent or given to stockholders in connection with the Offer be promptly disseminated to stockholders in a manner reasonably designed to inform stockholders of such change), and without limiting the manner in which the Purchaser may choose to make any public announcement, the Purchaser currently intends to make such public announcement by issuing a press release to the Dow Jones News Service and making any appropriate filing with the Commission. In the Merger Agreement, the Purchaser has agreed that it will not, without the prior consent of the Company, extend the Offer, except that, without the consent of the Company, the Purchaser may extend the Offer (1) if at the Expiration Date any of the conditions to the Purchaser's obligations to accept Shares for payment are not satisfied or waived, until such time as such conditions are satisfied or waived, (2) for any period required by any rule, regulation, interpretation or position of the Commission or the staff thereof applicable to the Offer or any period required by applicable law and (3) on one or more occasions for an aggregate period of not more than 10 business days beyond the latest expiration date that would otherwise be permitted under clause (1) or (2) of this sentence, if on such expiration date there shall not have been tendered at least 90% of the outstanding Shares. The Merger Agreement further provides that if all the conditions to the Offer are not satisfied on any scheduled expiration date of the Offer then, provided that all such conditions are reasonably capable of being satisfied, the Purchaser will extend the Offer from time to time until such conditions are satisfied or waived, provided that the Purchaser will not be required to extend the Offer beyond September 30, 1999. For purposes of the Offer, a "business day" means any day other than a Saturday, Sunday or a federal holiday and consists of the time period from 12:01 a.m. through 12:00 Midnight, New York City time. In addition, the Purchaser has agreed in the Merger Agreement that it will not, without the consent of the Company, (1) reduce the number of Shares subject to the Offer, (2) reduce the Offer Price, (3) amend or add to the Offer conditions any terms that are adverse to the holders of the Shares, (4) extend the Offer, except as provided in the preceding paragraph, (5) change the form of consideration payable in the Offer or (6) amend any other term of the Offer in any manner adverse to the holders of the Shares. If the Purchaser extends the Offer or if the Purchaser (whether before or after its acceptance for payment of Shares) is delayed in its acceptance for payment of or payment for Shares or it is unable to pay for Shares pursuant to the Offer for any reason, then, without prejudice to the Purchaser's rights under the Offer, the Depositary may retain tendered Shares on behalf of the Purchaser, and such Shares may not be withdrawn except to the extent tendering stockholders are entitled to withdrawal rights as described in Section 3. However, the ability of the Purchaser to delay the payment for Shares that the Purchaser has accepted for payment is limited by Rule 14e-1 under the Exchange Act, which requires that a bidder pay the consideration offered or return the securities deposited by or on behalf of holders of securities promptly after the termination or withdrawal of such bidder's offer. If the Purchaser makes a material change in the terms of the Offer or the information concerning the Offer or waives a material condition of the Offer (including, with the Company's consent, a waiver of the Minimum Condition), the Purchaser will disseminate additional tender offer materials and extend the Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-l under the Exchange Act. The minimum period during which an offer must remain open following material changes in the terms of the offer or information concerning the offer, other than a change in price or a change in the percentage of securities sought, will depend upon the facts and circumstances then existing, including the relative materiality of the changed terms or information. With respect to a change in price or a change in the percentage of securities sought, a minimum period of 10 business days is generally required to allow for adequate dissemination to stockholders. CONSUMMATION OF THE OFFER IS CONDITIONED UPON SATISFACTION OF THE MINIMUM CONDITION, THE EXPIRATION OR TERMINATION OF ALL WAITING PERIODS IMPOSED BY THE HSR ACT AND THE OTHER CONDITIONS SET FORTH IN SECTION 14. Subject to the terms and conditions contained in the Merger Agreement, the Purchaser reserves the right (but shall not be obligated) to waive any or all such conditions. The Company has provided the Purchaser with the Company's stockholder lists and security position listings for the purpose of disseminating the Offer to holders of the Shares. This Offer to Purchase, the related Letter of Transmittal and other relevant materials will be mailed by the Purchaser to record holders of Shares 3 6 and will be furnished by the Purchaser to brokers, dealers, banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder lists or, if applicable, who are listed as participants in a clearing agency's security position listing, for subsequent transmittal to beneficial owners of Shares. 2. PROCEDURE FOR TENDERING SHARES. VALID TENDER. For a stockholder to tender Shares validly pursuant to the Offer, either (1) a properly completed and duly executed Letter of Transmittal (or facsimile thereof), together with any required signature guarantees, or in the case of a book-entry transfer, an Agent's Message (as defined in the second succeeding paragraph), and any other documents required by the Letter of Transmittal, must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Date and either certificates for tendered Shares must be received by the Depositary at one of such addresses or such Shares must be delivered pursuant to the procedure for book-entry transfer set forth below (and a Book-Entry Confirmation (as defined in the next paragraph) received by the Depositary), in each case, prior to the Expiration Date, or (2) the tendering stockholder must comply with the guaranteed delivery procedure set forth below. The Depositary will establish an account with respect to the Shares at The Depository Trust Company (the "Book-Entry Transfer Facility") for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in the Book-Entry Transfer Facility's system may make book-entry delivery of Shares by causing the Book-Entry Transfer Facility to transfer such Shares into the Depositary's account in accordance with the Book-Entry Transfer Facility's procedures for such transfer. However, although delivery of Shares may be effected through book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees, or an Agent's Message, and any other required documents, must, in any case, be transmitted to, and received by, the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Date, or the tendering stockholder must comply with the guaranteed delivery procedure described below. The confirmation of a book-entry transfer of Shares into the Depositary's account at the Book-Entry Transfer Facility as described above is referred to herein as a "Book-Entry Confirmation." DELIVERY OF THE LETTER OF TRANSMITTAL OR ANY OTHER REQUIRED DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. The term "Agent's Message" means a message transmitted by the Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Purchaser may enforce such agreement against the participant. THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. SIGNATURE GUARANTEES. No signature guarantee is required on the Letter of Transmittal if (1) the Letter of Transmittal is signed by the registered holder (which term, for purposes of this Section, includes any participant in the Book-Entry Transfer Facility's system whose name appears on a security position listing as the owner of the Shares) of Shares tendered therewith unless such registered holder has completed either the box entitled "Special Delivery Instructions" or the box entitled "Special Payment Instructions" on the Letter of Transmittal or (2) such Shares are tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a participant in the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program (each of the foregoing being referred to as an "Eligible 4 7 Institution"). In all other cases, all signatures on the Letters of Transmittal must be guaranteed by an Eligible Institution. See Instructions 1 and 5 to the Letter of Transmittal. If the certificates for Shares are registered in the name of a person other than the signer of the Letter of Transmittal, or if payment is to be made or certificates for Shares not tendered or not accepted for payment are to be issued to a person other than the registered holder of the certificates surrendered, the tendered certificates must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name or names of the registered holders or owners appear on the certificates, with the signatures on the certificates or stock powers guaranteed as aforesaid. See Instruction 5 to the Letter of Transmittal. GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to the Offer and such stockholder's certificates for Shares are not immediately available or the procedures for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Depositary prior to the Expiration Date, such stockholder's tender may be effected if all the following conditions are met: (1) such tender is made by or through an Eligible Institution; (2) a properly completed and duly executed Notice of Guaranteed Delivery substantially in the form provided by the Purchaser is received by the Depositary, as provided below, prior to the Expiration Date; and (3) the certificates for all tendered Shares, in proper form for transfer (or a Book-Entry Confirmation with respect to such Shares), together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message, and any other documents required by the Letter of Transmittal, are received by the Depositary within three trading days after the date of execution of such Notice of Guaranteed Delivery. A "trading day" is any day on which the New York Stock Exchange, Inc. (the "NYSE") is open for business. The Notice of Guaranteed Delivery may be delivered by hand to the Depositary or transmitted by facsimile transmission or mail to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in such Notice of Guaranteed Delivery. Notwithstanding any other provision hereof, payment for Shares accepted for payment pursuant to the Offer will in all cases be made only after timely receipt by the Depositary of (1) certificates for (or a timely Book-Entry Confirmation with respect to) such Shares, (2) a Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message, and (3) any other documents required by the Letter of Transmittal. Accordingly, tendering stockholders may be paid at different times depending upon when certificates for Shares or Book-Entry Confirmations are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT. The valid tender of Shares pursuant to one of the procedures described above will constitute a binding agreement between the tendering stockholder and the Purchaser upon the terms and subject to the conditions of the Offer. APPOINTMENT. By executing a Letter of Transmittal, the tendering stockholder will irrevocably appoint designees of the Purchaser as such stockholder's attorneys-in-fact and proxies in the manner set forth in the Letter of Transmittal, each with full power of substitution, to the full extent of such stockholder's rights with respect to the Shares tendered by such stockholder and accepted for payment by the Purchaser and with respect to any and all other Shares or other securities or rights issued or issuable in respect of such Shares on or after July 15, 1999. All such proxies shall be considered coupled with an interest in the tendered Shares. Such appointment will be effective when, and only to the extent that, the Purchaser accepts for payment Shares tendered by such stockholder as provided herein. Upon such acceptance for payment, all prior powers of attorney, proxies and consents given by such stockholder with respect to such Shares or other securities or rights will, without further action, be revoked and no subsequent powers of attorney, proxies or consents may be given (and, if given, will not be deemed effective). The designees of the Purchaser will thereby be 5 8 empowered to exercise all voting rights with respect to such Shares or other securities or rights in respect of any annual, special or adjourned meeting of the Company's stockholders, or otherwise, and may execute any written consent, and may otherwise act as an attorney-in-fact and proxy concerning any matter as they in their sole discretion deem proper. The Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon the Purchaser's acceptance for payment of such Shares, the Purchaser must be able to exercise full voting rights with respect to such Shares and other securities or rights, including voting at any meeting of stockholders then scheduled. DETERMINATION OF VALIDITY. All questions as to the validity, form, eligibility (including time of receipt) and acceptance of any tender of Shares will be determined by the Purchaser, in its sole discretion, which determination will be final and binding. The Purchaser reserves the absolute right to reject any or all tenders determined by it not to be in proper form or the acceptance for payment of, or payment for, any Shares which acceptance or payment, in the opinion of the Purchaser's counsel, may be unlawful. The Purchaser also reserves the absolute right to waive any defect or irregularity in any tender with respect to any particular Shares, whether or not similar defects or irregularities are waived in the case of other Shares. No tender of Shares will be deemed to have been validly made until all defects or irregularities relating thereto have been cured or waived. None of the Purchaser, Parent, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in tenders or will incur any liability for failure to give any such notification. The 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. BACKUP FEDERAL INCOME TAX WITHHOLDING. IN ORDER TO AVOID "BACKUP WITHHOLDING" OF FEDERAL INCOME TAX ON PAYMENTS OF CASH PURSUANT TO THE OFFER, A STOCKHOLDER SURRENDERING SHARES IN THE OFFER MUST, UNLESS AN EXEMPTION APPLIES, PROVIDE THE DEPOSITARY WITH SUCH STOCKHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER ("TIN") ON A SUBSTITUTE FORM W-9 AND CERTIFY UNDER PENALTY OF PERJURY THAT SUCH TIN IS CORRECT AND THAT SUCH STOCKHOLDER IS NOT SUBJECT TO BACKUP WITHHOLDING. IF A STOCKHOLDER DOES NOT PROVIDE ITS CORRECT TIN OR FAILS TO PROVIDE THE CERTIFICATIONS DESCRIBED ABOVE, THE INTERNAL REVENUE SERVICE ("IRS") MAY IMPOSE A PENALTY ON SUCH STOCKHOLDER AND PAYMENT OF CASH TO SUCH STOCKHOLDER PURSUANT TO THE OFFER MAY BE SUBJECT TO BACKUP WITHHOLDING OF 31%. ALL STOCKHOLDERS SURRENDERING SHARES PURSUANT TO THE OFFER SHOULD COMPLETE AND SIGN THE MAIN SIGNATURE FORM AND THE SUBSTITUTE FORM W-9 INCLUDED AS PART OF THE LETTER OF TRANSMITTAL TO PROVIDE THE INFORMATION AND CERTIFICATION NECESSARY TO AVOID BACKUP WITHHOLDING (UNLESS AN APPLICABLE EXEMPTION EXISTS AND IS PROVEN IN A MANNER SATISFACTORY TO THE PURCHASER AND THE DEPOSITARY). CERTAIN STOCKHOLDERS (INCLUDING, AMONG OTHERS, ALL CORPORATIONS AND CERTAIN FOREIGN INDIVIDUALS AND ENTITIES) ARE NOT SUBJECT TO BACKUP WITHHOLDING. NONCORPORATE FOREIGN STOCKHOLDERS SHOULD COMPLETE AND SIGN THE MAIN SIGNATURE FORM AND A FORM W-8, CERTIFICATE OF FOREIGN STATUS, A COPY OF WHICH MAY BE OBTAINED FROM THE DEPOSITARY, IN ORDER TO AVOID BACKUP WITHHOLDING. SEE INSTRUCTION 9 TO THE LETTER OF TRANSMITTAL. 3. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section 3, tenders of Shares are irrevocable. Shares tendered pursuant to the Offer may be withdrawn pursuant to the procedures set forth below at any time prior to the Expiration Date and, unless theretofore accepted for payment and paid for by the Purchaser pursuant to the Offer, may also be withdrawn at any time after September 18, 1999. For a withdrawal to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase and must specify the name of the person having tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of the Shares to be withdrawn, if different from the name of the person who tendered the Shares. If certificates for Shares have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such certificates, the serial numbers shown on such certificates must be submitted to the Depositary and, unless such Shares have been tendered by an Eligible Institution, the signatures on the notice of withdrawal must be guaranteed by an Eligible Institution. If Shares have been tendered pursuant to the procedures for book-entry transfer set forth in Section 2, any notice of withdrawal must also specify the name and number of the account at the Book Entry Transfer Facility to be credited with the withdrawn Shares and must otherwise comply with the Book Entry Transfer Facility's 6 9 procedures. Withdrawals of tenders of Shares may not be rescinded, and any Shares properly withdrawn will thereafter be deemed not validly tendered for any purposes of the Offer. However, withdrawn Shares may be retendered by again following one of the procedures described in Section 2 at any time prior to the Expiration Date. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Purchaser, in its sole discretion, which determination will be final and binding. None of the Purchaser, Parent, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. 4. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the Purchaser will accept for payment and, promptly after the Expiration Date, will pay for all Shares validly tendered prior to the Expiration Date and not properly withdrawn in accordance with Section 3. Any determination concerning the satisfaction of such terms and conditions will be within the sole discretion of the Purchaser, and such determination will be final and binding on all tendering stockholders. See Sections 1 and 14. The Purchaser expressly reserves the right, in its sole discretion, to delay acceptance for payment of or payment for Shares in order to comply with any applicable law, including, without limitation, the HSR Act. Any such delays will be effected in compliance with Rule 14e-1(c) under the Exchange Act (relating to the Purchaser's obligation to pay for or return tendered Shares promptly after the termination or withdrawal of the Offer). Parent has filed a Notification and Report Form with respect to the Offer under the HSR Act. The waiting period under the HSR Act with respect to the Offer will expire at 11:59 p.m., New York City time, on the 15th calendar day after such filing, unless early termination of the waiting period is granted. In addition, the Antitrust Division of the Department of Justice (the "Antitrust Division") or the Federal Trade Commission (the "FTC") may extend the waiting period by requesting additional information or documentary material from Parent. If such a request is made, such waiting period will expire at 11:59 p.m., New York City time, on the 10th day after substantial compliance by Parent with such request. See Section 15 for additional information concerning the HSR Act and the applicability of the antitrust laws to the Offer. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (1) certificates for such Shares (or timely Book-Entry Confirmation of a transfer of such Shares as described in Section 2), (2) a Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees and (3) any other documents required by the Letter of Transmittal. The per Share consideration paid to any stockholder pursuant to the Offer will be the highest per Share consideration paid to any other stockholder pursuant to the Offer. For purposes of the Offer, the Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares properly tendered to the Purchaser and not withdrawn, if and when the Purchaser gives oral or written notice to the Depositary of the Purchaser's acceptance for payment of such Shares. Payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payment from the Purchaser and transmitting payment to tendering stockholders. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT. If the Purchaser is delayed in its acceptance for payment of or payment for Shares or is unable to accept for payment or pay for Shares pursuant to the Offer for any reason, then, without prejudice to the Purchaser's rights under the Offer (but subject to compliance with Rule 14e-1(c) under the Exchange Act, which requires that a tender offeror pay the consideration offered or return the tendered securities promptly after the termination or withdrawal of a tender offer), the Depositary may, nevertheless, on behalf of the Purchaser, retain tendered Shares. Any such Shares may not be withdrawn except to the extent tendering stockholders are entitled to exercise, and duly exercise, withdrawal rights as described in Section 3. 7 10 If any tendered Shares are not purchased pursuant to the Offer because of an invalid tender or otherwise, certificates for any such Shares will be returned, without expense to the tendering stockholder (or, in the case of Shares delivered by book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility pursuant to the procedure set forth in Section 2, such Shares will be credited to an account maintained at the Book-Entry Transfer Facility), as promptly as practicable after the expiration or termination of the Offer. The Purchaser reserves the right to transfer or assign, in whole or from time to time in part, to Parent, or to one or more direct or indirect wholly owned subsidiaries of Parent, the right to purchase Shares tendered pursuant to the Offer. Any such transfer or assignment will not relieve the Purchaser of its obligations under the Offer and will in no way prejudice the rights of tendering stockholders to receive payment for Shares validly tendered and accepted for payment pursuant to the Offer. 5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The receipt of cash pursuant to the Offer or the Merger will constitute a taxable transaction for Federal income tax purposes under the Internal Revenue Code of 1986, as amended (the "Code"), and may also constitute a taxable transaction under applicable state, local, foreign and other tax laws. As a result, a tendering stockholder will generally recognize gain or loss for Federal income tax purposes in an amount equal to the difference between the amount of cash received by the stockholder pursuant to the Offer or the Merger and such stockholder's aggregate adjusted tax basis in the Shares tendered and purchased pursuant to the Offer (or canceled pursuant to the Merger). Gain or loss will be calculated separately for each block of Shares tendered and purchased pursuant to the Offer (or canceled pursuant to the Merger). If tendered Shares are held by a tendering stockholder as capital assets, any gain or loss recognized by the tendering stockholder will constitute capital gain or loss, and will constitute long-term capital gain or loss if the tendering stockholder held the underlying Shares for more than 12 months as of the date of disposition. There are limits on the deductibility of capital losses. A stockholder (other than certain exempt stockholders including, among others, all corporations and certain foreign individuals) that tenders Shares may be subject to backup withholding at a rate of 31% unless the stockholder provides its correct TIN (or certifies that it is awaiting a TIN) and certifies as to no loss of exemption from backup withholding and otherwise complies with the applicable requirements of the backup withholding rules. A stockholder that does not furnish its correct TIN in the prescribed manner or that does not otherwise establish a basis for an exemption from backup withholding may be subject to a penalty imposed by the IRS, and the gross proceeds of the Offer or the Merger payable to such stockholder may be subject to backup withholding at a rate of 31%. Each stockholder should complete and sign the Substitute Form W-9 included as part of the Letter of Transmittal so as to provide the information and certification necessary to avoid backup withholding. If backup withholding applies to a stockholder, the Depositary is required to withhold 31% from payments to such stockholder. Backup withholding is not an additional tax. Rather, the amount of the backup withholding can be credited against the Federal income tax liability of the person subject to the backup withholding, provided that the required information is given to the IRS. If backup withholding results in an overpayment of tax, a refund can be obtained by the stockholder upon filing an income tax return. THE FOREGOING DISCUSSION MAY NOT BE APPLICABLE WITH RESPECT TO SHARES RECEIVED PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS COMPENSATION OR WITH RESPECT TO HOLDERS OF SHARES WHO ARE SUBJECT TO SPECIAL TAX TREATMENT UNDER THE CODE, SUCH AS NON-U.S. PERSONS, LIFE INSURANCE COMPANIES, TAX-EXEMPT ORGANIZATIONS AND FINANCIAL INSTITUTIONS, AND MAY NOT APPLY TO A HOLDER OF SHARES IN LIGHT OF SUCH PERSON'S INDIVIDUAL CIRCUMSTANCES. STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO THEM (INCLUDING THE APPLICATION AND EFFECT OF ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS) OF THE OFFER AND THE MERGER. 8 11 6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES. The Shares are traded on The Nasdaq National Market System under the symbol "SPTR." The following table sets forth, for each of the periods indicated, the high and low reported sale prices per Share, as reported by the Nasdaq National Market.
SHARES ------------- HIGH LOW ---- --- FISCAL YEAR ENDED DECEMBER 31, 1997 First Quarter............................................... $25 $12 5/8 Second Quarter.............................................. 21 11 1/4 Third Quarter............................................... 20 3/4 13 3/4 Fourth Quarter.............................................. 15 1/4 8 5/8 FISCAL YEAR ENDED DECEMBER 31, 1998 First Quarter............................................... $11 1/8 $ 6 7/8 Second Quarter.............................................. 10 1/4 6 15/16 Third Quarter............................................... 7 13/16 4 5/32 Fourth Quarter.............................................. 7 5/8 3 9/16 FISCAL YEAR ENDED DECEMBER 31, 1999 First Quarter............................................... $ 7 $ 3 1/4 Second Quarter.............................................. 12 7/8 3 1/2 Third Quarter (through July 20, 1999)....................... 12 8 5/8
On July 14, 1999, the last full day of trading before the public announcement of the execution of the Merger Agreement, the reported last sale price of the Shares on the Nasdaq National Market was $11 1/2 per Share. On July 20, 1999, the last full day of trading before the commencement of the Offer, the reported last sale price of the Shares on the Nasdaq National Market was $8 25/32 per Share. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. According to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998 (the "Form 10-K"), the Company has not paid cash dividends on Common Stock to date and does not plan to pay cash dividends to its stockholders in the foreseeable future. 7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK QUOTATION; EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS. The purchase of Shares pursuant to the Offer will reduce the number of holders of Shares and the number of Shares that might otherwise trade publicly and could adversely affect the liquidity and market value of the remaining Shares held by the public. MARKET FOR SHARES. Depending upon the number of Shares purchased pursuant to the Offer, the Shares may no longer meet the requirements of the National Association of Securities Dealers, Inc. (the "NASD") for continued inclusion in the Nasdaq National Market (the top tier market of The Nasdaq Stock Market). According to published guidelines for the Nasdaq National Market, the Shares might no longer be eligible for quotation on the Nasdaq National Market if, among other things, (1) either (a) the number of Shares publicly held was fewer than 750,000, there were fewer than 400 holders of round lots, the aggregate market value of publicly held Shares was less than $5,000,000, net tangible assets were less than $4,000,000 and there were fewer than two registered and active market makers for the Shares, or (b) the number of Shares publicly held was fewer than 1,100,000, there were fewer than 400 holders of round lots and the aggregate market value of publicly held Shares was less than $15,000,000, (2) either (a) the Company's market capitalization was less than $50,000,000 or (b) the total assets and total revenue of the Company for the most recently completed fiscal year or two of the last three most recently completed fiscal years was less than $50,000,000 or 9 12 (3) there were fewer than four registered and active market makers. If these standards are not met, the Shares might nevertheless continue to be included in The Nasdaq Stock Market with quotations published in the Nasdaq "additional list" or in one of the "local lists," but if the number of holders of the Shares were to fall below 300, or if the number of publicly held Shares were to fall below 100,000 or there were not at least two registered and active market makers for the Shares, the NASD's rules provide that the Shares would no longer be "qualified" for Nasdaq Stock Market reporting and The Nasdaq Stock Market would cease to provide any quotations. Shares held directly or indirectly by directors, officers or beneficial owners of more than 10% of the Shares are not considered as being publicly held for this purpose. According to the Company, as of July 14, 1999, there were approximately 650 holders of record of Shares (including one holder in "street name" representing approximately 5,240 stockholders) and 7,040,930 Shares were outstanding. If, as a result of the purchase of Shares pursuant to the Offer, the Shares no longer meet the requirements of the NASD for continued inclusion in The Nasdaq Stock Market or the Nasdaq National Market, as the case may be, the market for Shares could be adversely affected. If the Shares no longer meet the requirements of the NASD for quotation through any tier of The Nasdaq Stock Market, it is possible that the Shares would continue to trade in the over-the-counter market and that price quotations would be reported by other sources. The extent of the public market for the Shares and the availability of such quotations would depend, however, upon the number of holders of Shares remaining at such time, the interests in maintaining a market in Shares on the part of securities firms, the possible termination of registration of the Shares under the Exchange Act, as described below, and other factors. EXCHANGE ACT REGISTRATION. The Shares are currently registered under the Exchange Act. Registration of the Shares under the Exchange Act may be terminated upon application of the Company to the Commission if the Shares are neither listed on a national securities exchange nor held by 300 or more holders of record. Termination of registration of the Shares under the Exchange Act would substantially reduce the information required to be furnished by the Company to its stockholders and to the Commission and would make certain provisions of the Exchange Act no longer applicable to the Company, such as the shortswing profit recovery provisions of Section 16(b) of the Exchange Act, the requirement of furnishing a proxy statement pursuant to Section 14(a) of the Exchange Act in connection with stockholders' meetings and the related requirement of furnishing an annual report to stockholders and the requirements of Rule 13e-3 under the Exchange Act with respect to "going private" transactions. Furthermore, the ability of "affiliates" of the Company and persons holding "restricted securities" of the Company to dispose of such securities pursuant to Rule 144 or 144A promulgated under the Securities Act of 1933, may be impaired or eliminated. The Purchaser intends to seek to cause the Company to apply for termination of registration of the Shares under the Exchange Act as soon after the completion of the Offer as the requirements for such termination are met. If registration of the Shares is not terminated prior to the Merger, then the Shares will cease to be reported on The Nasdaq Stock Market and the registration of the Shares under the Exchange Act will be terminated following the consummation 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 the Shares. Depending upon factors similar to those described above regarding listing and market quotations, it is possible that, following the Offer, the Shares would no longer constitute "margin securities" for the purposes of the margin regulations of the Federal Reserve Board and therefore could no longer be used as collateral for loans made by brokers. If registration of Shares under the Exchange Act were terminated, the Shares would no longer be "margin securities." 8. CERTAIN INFORMATION CONCERNING THE COMPANY. The Company is a Delaware corporation with its principal executive offices at 50 Hall Road, Sturbridge, Massachusetts 01566. According to the Form 10-K, the Company operates through two wholly owned subsidiaries, 10 13 SpecTran Communication Fiber Technologies, Inc. ("SpecTran Communication") and SpecTran Specialty Optics Company ("SpecTran Specialty"). The Company, through its subsidiary SpecTran Communications, develops, manufactures and markets multimode and single-mode optical fiber for data communications and telecommunications applications and through its subsidiary SpecTran Specialty, develops, manufactures and markets specialty multimode and single-mode fiber and value-added fiber optic products for industrial, military/aerospace, communication and medical applications. Set forth below is certain selected consolidated financial information with respect to the Company and its subsidiaries excerpted or derived from the information contained in the Form 10-K or the Company's Form 10-Q for the quarter ended March 31, 1999. More comprehensive financial information is included in those reports and other documents filed by the Company with the Commission, and the following summary is qualified in its entirety by reference to those reports and such other documents and all the financial information (including any related notes) contained therein. Those reports and such other documents should be available for inspection and copies thereof should be obtainable in the manner set forth below under "Available Information." 11 14 SPECTRAN CORPORATION AND SUBSIDIARIES SELECTED CONSOLIDATED FINANCIAL INFORMATION (IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED YEAR ENDED MARCH 31, DECEMBER 31, ------------------ ------------------ 1999 1998 1998 1997 ------- ------- ------- ------- (UNAUDITED) STATEMENT OF INCOME DATA: Net sales......................................... $20,380 $15,112 $70,856 $62,057 Cost of sales..................................... 15,059 10,001 51,976 38,781 ------- ------- ------- ------- Gross profit.................................... 5,321 5,111 18,880 23,276 Selling and administrative expenses............... 3,082 3,134 13,818 13,966 Research and development costs.................... 755 1,176 5,493 3,289 ------- ------- ------- ------- Income (loss) from operations..................... 1,484 801 (431) 6,021 ------- ------- ------- ------- Other income (expense) Interest income................................. 28 114 224 1,372 Interest expense................................ (736) (124) (1,419) (747) Other net....................................... (12) 842 3,372 510 ------- ------- ------- ------- Other income (expense), net..................... (720) 832 2,177 1,090 ------- ------- ------- ------- Income before income taxes and equity in joint venture......................................... 764 1,633 1,746 7,111 Loss from joint venture........................... (382) (252) (974) (287) ------- ------- ------- ------- Income before income taxes........................ 382 1,381 772 6,842 Income tax expense................................ 149 517 249 1,982 ------- ------- ------- ------- Net income........................................ 233 864 523 4,842 ------- ------- ------- ------- Other comprehensive income (loss)................. -- (11) (11) (6) ------- ------- ------- ------- Comprehensive income.............................. $ 233 $ 853 $ 512 $ 4,826 ------- ------- ------- ------- Net earnings per common share Basic........................................... $ .03 $ .12 $ .07 $ .72 Diluted......................................... $ .03 $ .12 $ .07 $ 68
AT MARCH 31, AT DECEMBER 31, ------------ ------------------- 1999 1998 1997 ------------ -------- ------- (UNAUDITED) BALANCE SHEET DATA Total current assets...................................... $ 30,201 $ 26,106 $27,400 Investment in joint venture(1)............................ 2,857 3,239 4,213 Property, plant and equipment, net........................ 67,851 68,495 55,407 Total assets.............................................. 108,234 105,419 92,105 Long-term debt............................................ 31,800 30,800 24,000 Total stockholders' equity................................ 57,545 57,312 56,759
- --------------- (1) On June 30, 1999, the Company sold its interest in its joint venture with General Cable Corporation, General Photonics, LLC, to BICC General Cable Industries, Inc. for $2,367,200. General Photonics, LLC, which is a manufacturer of optical fiber cables, was formed by the Company and General Cable Corporation in 1996. 12 15 AVAILABLE INFORMATION. The Company is subject to the reporting requirements of the Exchange Act and, in accordance therewith, is required to file reports and other information with the Commission relating to its business, financial condition and other matters. Information as of particular dates concerning the Company's directors and officers, their remuneration, stock options granted to them, the principal holders of the Company's securities and any material interest of such persons in transactions with the Company is required to be disclosed in proxy statements distributed to the Company's stockholders and filed with the Commission. Such reports, proxy statements and other information should be available for inspection at the public reference facilities of the Commission located at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of the Commission located in the Northwestern Atrium Center, 500 West Madison Street (Suite 1400), Chicago, Illinois 60661 and Seven World Trade Center, 13th Floor, New York, New York 10048. Copies should be obtainable, by mail, upon payment of the Commission's customary charges, by writing to the Commission's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission maintains a web site that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission. Such reports, proxy and information statements and other information may be found on the Commission's web site, the address of which is: http://www.sec.gov. Such information should also be on file at The Nasdaq Stock Market, 1735 K Street, N.W., Washington, D.C. 20006. Except as otherwise stated in this Offer to Purchase, the information concerning the Company contained herein has been taken from or based upon publicly available documents on file with the Commission and other publicly available information. Although the Purchaser and Parent do not have any knowledge that any such information is untrue, neither the Purchaser nor Parent takes any responsibility for the accuracy or completeness of such information or for any failure by the Company to disclose events that may have occurred and may affect the significance or accuracy of any such information. 9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT. The Purchaser, a Delaware corporation and a wholly owned subsidiary of Parent, was organized to acquire the Company and has not conducted any unrelated activities since its organization. The principal offices of the Purchaser are located at 600 Mountain Avenue, Murray Hill, New Jersey, 07974. All outstanding shares of capital stock of the Purchaser are owned by Parent. Parent designs, builds and delivers a wide range of public and private networks, communications systems and software, data networking systems, business telephone systems and microelectronic components. Parent is a global leader in the sale of public communications systems, and is a supplier of systems or software to most of the world's largest network operators. Parent is also a global leader in the sale of business communications systems and in the sale of microelectronic components for communications applications to manufacturers of communications systems and computers. Parent conducts its research and development activities through Bell Laboratories, one of the world's foremost industrial research and development organizations. Parent is a Delaware corporation with its principal offices located at 600 Mountain Avenue, Murray Hill, New Jersey, 07974. Financial information with respect to Parent and its subsidiaries is included in Parent's Annual Report on Form 10-K for the fiscal year ended September 30, 1998, as amended by Amendment No. 1 thereto filed on Form 10-K/A on May 17, 1999, Parent's Quarterly Reports on Form 10-Q for the quarters ended December 31, 1998 and March 31, 1999, Parent's Form 8-K filed on January 8, 1999, Parent's Form 8-K filed on March 5, 1999 as amended by Amendment 1 thereto filed on Form 8-K/A on May 18, 1999, Parent's Form 8-K filed on June 28, 1999 and other documents filed by Parent with the Commission. Such reports and other documents should be available for inspection and copies thereof should be obtainable in the manner set forth below under "Available Information." Neither the Purchaser nor Parent (together, the "Corporate Entities") or, to the best knowledge of the Corporate Entities, any of the persons listed in Schedule I or any associate or majority-owned subsidiary of the Corporate Entities or any of the persons so listed, beneficially owns any equity security of the Company, and none of the Corporate Entities or, to the best knowledge of the Corporate Entities, any of the other persons 13 16 referred to above, or any of the respective directors, executive officers or subsidiaries of any of the foregoing, has effected any transaction in any equity security of the Company during the past 60 days. Except as described in this Offer to Purchase, (1) there have not been any contacts, negotiations or transactions between the Corporate Entities, any of their respective subsidiaries or, to the best knowledge of the Corporate Entities, any of the persons listed in Schedule I, on the one hand, and the Company or any of its directors, officers or affiliates, on the other hand, that are required to be disclosed pursuant to the rules and regulations of the Commission and (2) none of the Corporate Entities or, to the best knowledge of the Corporate Entities, any of the persons listed in Schedule I has any contract, arrangement, understanding or relationship with any person with respect to any securities of the Company. Except as described in this Offer to Purchase, during the last five years, none of the Corporate Entities or, to the best knowledge of the Corporate Entities, any of the persons listed in Schedule I (1) has been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors) or (2) was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation of such laws. The name, business address, present principal occupation or employment, five-year employment history and citizenship of each of the directors and executive officers of the Purchaser and Parent are set forth in Schedule I. AVAILABLE INFORMATION. Parent is subject to the reporting requirements of the Exchange Act and, in accordance therewith, is required to file reports and other information with the Commission relating to its business, financial condition and other matters. Information, as of particular dates, concerning Parent's directors and officers, their remuneration, stock options granted to them, the principal holders of Parent's securities and any material interest of such persons in transactions with Parent is disclosed in proxy statements distributed to Parent's stockholders and filed with the Commission. Such reports, proxy statements and other information should be available for inspection at the Commission, and copies thereof should be obtainable from the Commission, in the same manner as set forth with respect to information concerning the Company in Section 8. Such material should also be available for inspection at the library of the NYSE, 20 Broad Street, New York, New York 10005. 10. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required by the Purchaser to purchase all outstanding Shares pursuant to the Offer and to pay fees and expenses related to the Offer and the Merger is estimated to be approximately $64.2 million. The Purchaser plans to obtain all funds needed for the Offer and the Merger through a capital contribution which will be made by Parent to the Purchaser. Parent intends to provide to the Purchaser the funds required to consummate the Offer and the Merger from its available cash, which includes revenues from customers and the proceeds of short-term commercial paper issued to finance current assets. Parent generally repays commercial paper out of cash flow generated by Parent from operations and through the issuance of equity or long-term debt when advantageous opportunities arise. 11. CONTACTS WITH THE COMPANY; BACKGROUND OF THE OFFER. The Company has a long-standing relationship with Parent both as a supplier of optical fiber to Parent and a licensee of technology from Parent. SUPPLY RELATIONSHIP WITH THE COMPANY. The Company and Parent have a three-year supply agreement (the "Supply Agreement") terminating December 31, 1999, under which Parent is required to make certain annual minimum purchases of optical fiber. Parent has satisfied its minimum annual purchase obligations under the Supply Agreement through and including 1999. In 1998, Parent purchased quantities of optical fiber in excess of the required annual minimum. For the calendar years ending December 31, 1998 and 1997, Parent purchased from the Company approximately $26.0 million and $6.6 million, respectively, of optical fiber. 14 17 From January 1, 1999 through June 30, 1999, Parent purchased from the Company approximately $9.5 million of optical fiber. In the fall of 1998, the Company and Parent's Network Products Group had discussions regarding the quantities of optical fiber Parent would need in the future. The Company was invited to respond to a request for quotes regarding Parent's optical fiber needs for 1999 along with two other bidders. The Company's bid was above the two other bidders and the Company was invited to rebid but the Company's bid continued to remain above that of the two other bidders. Parent continued to purchase under the Supply Agreement during the first two calendar quarters of 1999. On June 1, 1999, Parent advised the Company that, due to excess inventories, Parent would decrease significantly the amount of optical fiber it would purchase from the Company for the remainder of the year. On June 17, 1999, a representative of Parent informed a representative of Lazard that Parent had completed its purchases of optical fiber from the Company for the year. LICENSE AGREEMENTS WITH THE COMPANY. The Company has been a licensee of Parent's and its predecessor company's optical fiber patents since 1981. Between mid-1997 and October 30, 1998, the Company and Parent discussed the possibility of entering into an additional patent license agreement. On October 30, 1998, the Company and Parent established a new worldwide, non-exclusive license exchanging rights under their optical fiber patents issued prior to January 1, 1998 and additional patents related to multimode fiber based on applications filed through October 1998. The Company is licensed by Parent to make optical fiber at its existing factories for worldwide use, sale and export from the United States. The license contains some product limitations including certain exclusions to make or sell select specialty fibers for some applications. Parent receives non-exclusive, royalty-free worldwide rights to the licensed Company patents. The Company agreed to pay Parent a $4.0 million license fee in installments and, beginning in 2000, a royalty on sales. On January 31, 1999, the Company paid the first license fee installment of $750,000 and will be making a further $500,000 payment on July 31, 1999. An additional $1.0 million is due in 2000, $1.0 million in 2001 and $750,000 in 2002. Parent has the right to terminate the agreement if the Company is acquired by an optical fiber manufacturer. For the six months ended June 30, 1999, the Company made no royalty payments to Parent. For the fiscal years ending December 31, 1998, 1997 and 1996, the Company made aggregate royalty payments to Parent of approximately $60,000, $890,000 and $760,000, respectively. All such royalty payments were in respect of sales by SpecTran Communication. MERGER NEGOTIATIONS WITH THE COMPANY. In early 1999, Parent's Network Products Group was contacted by Mr. Charles B. Harrison, President, Chief Executive Officer and Chairman of the Board of the Company, as part of an auction process conducted by Lazard, the Company's investment bank. Mr. Harrison met with Mr. Denys Gounot, Chief Operating Officer of Parent's Network Products Group, and Mr. Robert Mohalley, Strategy Vice President for Parent's Network Products Group, at Parent's Network Products Group's offices in Atlanta, Georgia on February 1, 1999. The parties signed a non-disclosure agreement on March 5, 1999. On March 24 and 25, 1999, representatives of Parent's Network Products Group met at the Company's offices with Mr. Harrison, Mr. John Chapman, President of SpecTran Communication, Mr. Martin Siefert, President of SpecTran Specialty, and other managers of the Company, to review the Company and gather initial due diligence information. On April 20, 1999, Lazard, on behalf of the Company, corresponded with Parent's Network Products Group to formally invite participation in an auction of the Company and to forward to Parent the Offering Memorandum of the Company. Parent informed Lazard that it was not going to submit a proposal, but that, under the right circumstances, Parent might be interested in pursuing a supply agreement with the Company. On May 10, 1999, Mr. Mohalley sent the Company a letter stating that upon further review Parent might be interested in pursuing a transaction. On May 11, 1999, during a telephone conversation, Mr. Mohalley 15 18 asked Mr. Harrison for at least an additional two weeks to conduct more due diligence before submitting an indication of interest letter. On May 17 and 18, 1999, representatives of Parent, including Mr. Terence Bentley, Director Corporate Development of Parent, and Mr. Richard Sullivan, Network Products Group Director Business Development of Parent, visited the Company's headquarters in Sturbridge, Massachusetts to conduct a preliminary due diligence review of the Company. Messrs. Bentley and Sullivan also met with Messrs. Harrison, Chapman, Siefert, and George Roberts, Chief Financial Officer of the Company, to discuss a potential acquisition by Parent of the Company. Due diligence by Parent continued throughout May and June. On June 14, 1999, Mr. William Spivey, President of Parent's Network Products Group, Mr. Gounot and Mr. Bentley visited the Company's manufacturing facilities and met with managers of the Company. On June 15, 1999, senior officers of Parent met and, after being briefed, approved formal negotiation relating to the purchase of the Company. Mr. Bentley indicated to Mr. Harrison of the Company that Parent would be willing to offer $8.00 per Share in cash, subject to due diligence. Parent and the Company executed a revised non-disclosure agreement on June 22, 1999. On June 16 and 17, 1999, representatives of Parent, including Mr. Bentley, the Company and Lazard had discussions regarding the form of consideration, the structure of the transaction and other material terms relating to the transaction, including human resources and real estate matters. On June 17, 1999, Parent submitted a non-binding proposal to acquire the Company for between $8.00 and $8.75 per Share. On Monday, June 21, 1999, Mr. Bentley and Mr. Harrison met in Murray Hill, New Jersey, to discuss various acquisition structures. Negotiations with respect to structure, prices, form of consideration and other material terms continued throughout the morning. Mr. Bentley indicated that Parent would be willing to increase its previous proposal to $9.00 per Share in cash but did not want to pursue a stock transaction. On the evening of June 21, 1999, the board of directors of the Company met by conference telephone call (one director was unavailable) and discussed Mr. Harrison's report of his meeting with Parent. The Board directed Mr. Harrison to discuss a possible stock transaction again with Mr. Bentley. On the morning of June 22, 1999, Mr. Harrison spoke with Mr. Bentley and reported that the Company's board of directors strongly preferred a stock transaction. Mr. Bentley reiterated that Parent would not agree to a stock transaction but would be interested in pursuing a $9.00 per Share cash transaction. On June 22, 1999 at 5:00 p.m., the board of directors of the Company met and was updated by Mr. Harrison. The Board reiterated its interest in a stock transaction. The board directed Mr. Harrison to attempt again to ascertain whether Parent would be willing to acquire the Company for stock, but also authorized Mr. Harrison to proceed with discussions regarding a cash transaction for $9.00 per Share or higher. Later that evening Mr. Harrison raised the matter of a stock transaction again with Mr. Bentley. On June 23, 1999, Mr. Bentley informed Mr. Harrison that Parent was strongly disinclined to enter into a stock transaction for a number of reasons, including additional cost and time to complete the acquisition. Mr. Bentley stated that he would consider discussing with Parent's Chief Financial Officer an acquisition of the Company at a per Share price of $8.00 in Parent stock but advised Mr. Harrison that he did not believe such a transaction would be approved and that the environment for obtaining such approval from Parent's senior management was very unfavorable. Mr. Harrison stated he would discuss the matter with the Company's directors and advise Mr. Bentley. Mr. Harrison polled the board and the unanimous sense was to proceed with negotiations for a $9.00 per Share cash transaction. Mr. Harrison so informed Mr. Bentley that same day. On June 28 and June 29, 1999, a due diligence team from Parent visited the Company to meet with management of the Company, to tour the Company's facilities and to continue due diligence. 16 19 From July 1 to July 14, 1999, representatives of Parent conducted further due diligence. These representatives also negotiated the Merger Agreement with representatives of the Company. During the negotiations, the Company requested and Parent agreed to eliminate several measures designed to make it more likely that a transaction would be completed if an agreement were reached, including granting Parent an option to acquire up to 19.9% of the Company's Shares under certain conditions and agreements from officers and directors to tender their Shares and vote in favor of the Merger. The Company also requested, and Parent agreed to, a reduction in the break-up fee payable to Parent in the event the transaction was not completed for certain reasons from $2.5 million to $2.0 million. On July 14, 1999, the board of directors of the Company held a meeting to consider the Offer, the Merger and the Merger Agreement. At the meeting, the board of directors of the Company heard presentations by its legal counsel with respect to the terms of the proposed offer, the Merger and the Merger Agreement, and legal counsel advised the board of directors that the negotiations for the Merger Agreement were substantially complete. The board of directors also heard a presentation by representatives of Lazard with respect to the financial terms of the Offer and the Merger and Lazard's valuation analysis. The board of directors, with the participation of the representatives of Lazard, reviewed again the alternatives for the Company. At the conclusion of the presentation, representatives of Lazard delivered Lazard's oral opinion that, as of the date of the Merger Agreement, the $9.00 in cash per Share to be paid to the stockholders of the Company pursuant to the Offer and the Merger was fair to such stockholders from a financial point of view. Lazard subsequently delivered a written opinion, dated the date of the Merger Agreement, to the same effect. On July 15, 1999, Parent, the Purchaser and the Company executed and delivered the Merger Agreement. Based upon such discussion, presentations and opinion, the Board of Directors of the Company has unanimously approved the Offer and the Merger and determined that the terms of the Offer and the Merger are fair to, and in the best interests of, the stockholders of the Company and unanimously recommends that stockholders of the Company accept the Offer and tender their Shares to the Purchaser pursuant to the terms of the Offer. 12. PURPOSE OF THE OFFER; THE MERGER AGREEMENT. PURPOSE OF THE OFFER. The purpose of the Offer is to enable Parent to acquire control of, and the entire equity interest in, the Company. Following the consummation of the Offer, the Purchaser and Parent intend to acquire any remaining equity interest in the Company not acquired in the Offer by consummating the Merger. The Offer is subject to certain terms and conditions. Notwithstanding anything to the contrary set forth in the Offer to Purchase, any determination concerning the satisfaction of such terms and conditions will be within the reasonable discretion of the Purchaser. THE MERGER AGREEMENT. The Merger Agreement provides that following the satisfaction or waiver of the conditions described below under "Conditions to the Merger," the Purchaser will be merged with and into the Company, and each then outstanding Share (other than Shares (1) owned or held in treasury by the Company, (2) owned by the Purchaser or Parent, (3) remaining outstanding held by any subsidiary of the Company or Parent or (4) owned by stockholders, if any, who are entitled to and who properly exercise dissenters' rights under Delaware law), will be converted into the right to receive an amount in cash, without interest, equal to the price per Share paid pursuant to the Offer. VOTE REQUIRED TO APPROVE MERGER. The DGCL requires, among other things, that the adoption of any plan of merger or consolidation of the Company must be approved by the board of directors of the Company and, if the "short form" merger procedure described below is not available, by the holders of a majority of the Company's outstanding Shares. The board of directors of the Company has approved the Offer, the Merger and the Merger Agreement; consequently, the only additional action of the Company that may be necessary to effect the Merger is approval by such stockholders if the "short-form" merger procedure described below is not available. Under the DGCL, the affirmative vote of holders of a majority of the outstanding Shares (including any Shares owned by the Purchaser), is generally required to approve the Merger. If the Purchaser acquires, through the Offer or otherwise, voting power with respect to at least a majority of the outstanding Shares (which would be the case if the Minimum Condition were satisfied and the Purchaser were to accept 17 20 for payment Shares tendered pursuant to the Offer), it would have sufficient voting power to effect the Merger without the vote of any other stockholder of the Company. However, the DGCL also provides that if a parent company owns at least 90% of each class of stock of a subsidiary, the parent company can effect a "short-form" merger with that subsidiary without the action of the other stockholders of the subsidiary. Accordingly, if, as a result of the Offer or otherwise, the Purchaser acquires or controls the voting power of at least 90% of the outstanding Shares, the Purchaser could (and, under the Merger Agreement, is required to) effect the Merger using the "short-form" merger procedures without prior notice to, or any action by, any other stockholder of the Company. CONDITIONS TO THE MERGER. The Merger Agreement provides that the respective obligations of Parent, the Purchaser and the Company to consummate the Merger are subject to the satisfaction of each of the following conditions: (1) if required by applicable law, the Merger Agreement having been approved and adopted by the affirmative vote of holders of a majority of the outstanding Shares, (2) no judgment, order, decree, statute, law, ordinance, rule or regulation enacted, enforced or issued by any court or other governmental entity of competent jurisdiction or other legal restraint or prohibition (collectively, "Restraints") shall be in effect, and there shall not be pending any suit, action or proceeding by any governmental entity (a) preventing the consummation of the Merger or (b) which is otherwise reasonably likely to have a material adverse effect on the Company or Parent, as applicable, arising out of the Merger Agreement or the transactions contemplated by the Merger Agreement; provided, that each of the parties shall have used its reasonable best efforts to prevent the entry of any such Restraints and to appeal as promptly as possible any such Restraints that may be entered and (3) the Purchaser shall have previously accepted for payment and paid for the Shares pursuant to the Offer. The obligations of Parent and Purchaser to consummate the Merger are also subject to the fulfilment or satisfaction at or prior to the effective time of the Merger that (1) the Company shall have performed and complied in all material respects with all agreements and conditions contained in the Merger Agreement that are required to be performed or complied with it prior to or at the effective time of the Merger, (2) each of the representations and warranties of the Company contained in the Merger Agreement that are qualified by material adverse effect, shall be true and correct and each of the representations and warranties of the Company to the extent it is not so qualified by material adverse effect, shall be true and correct in all material respects, in each case, on and as of the effective time of the Merger, (3) no event or events shall have occurred that could reasonably be expected to have a material adverse effect on the Company and (4) the Company shall have received all necessary consents or waivers, in form and substance satisfactory to Parent and the Purchaser, from the other parties to each contract, lease or agreement to which the Company is a party, except where the failure to receive such consent would not reasonably be expected, individually or in the aggregate, to have a material adverse effect on the Company. The obligations of the Company to consummate the Merger are also subject to the fulfilment or satisfaction at or prior to the effective time of the Merger that (1) Parent and Purchaser shall have performed and complied in all material respects with all agreements and conditions contained in the Merger Agreement that are required to be performed or complied with them prior to or at the effective time of the Merger and (2) each of the representations and warranties of the Purchaser and Parent contained in the Merger Agreement that are qualified by material adverse effect shall be true and correct and each of the representations and warranties of the Purchaser and Parent to the extent it is not so qualified by material adverse effect, shall be true and correct in all material respects, in each case, on and as of the effective time of the Merger. TERMINATION OF THE MERGER AGREEMENT. The Merger Agreement may be terminated at any time prior to the effective time of the Merger (the "Effective Time"), whether before or after approval and adoption of the Merger Agreement by the stockholders of the Company or the stockholder of Purchaser (provided, that if Shares are purchased pursuant to the Offer, neither Parent nor Purchaser may in any event terminate the Merger Agreement), (1) by the agreement of each of the boards of directors of Parent, the Purchaser and the Company, (2) by Parent, the Purchaser or the Company if (a) the Purchaser has not accepted for payment any Shares pursuant to the Offer prior to December 31, 1999, provided, that the right to terminate the Merger Agreement pursuant to this clause (2)(a) will not be available to any party whose failure to fulfill any 18 21 obligation under the Merger Agreement has been the cause of, or resulted in, the failure of the Purchaser to accept for payment any Shares on or before such date, or (b) any court of competent jurisdiction in the United States or other governmental authority shall have issued an order, decree or ruling or taken any other action permanently restraining, enjoining or otherwise prohibiting the acceptance for payment of, or payment for, Shares pursuant to the Offer or the Merger and such order, decree or ruling or other action has become final and nonappealable, (3) by Parent, if the Company or any of its directors or officers shall participate in discussions or negotiations in breach (other than an immaterial breach) of the covenants of the Company described under "No Solicitation by the Company; Takeover Proposals" in this Section 12, (4) by the Company prior to the meeting of the stockholders of the Company to approve the Merger ("Company Stockholders Meeting") if in response to a takeover proposal which constitutes a Superior Proposal (as defined in "No Solicitation by the Company; Takeover Proposals" in this Section 12 below) which was not solicited by the Company and which did not otherwise result from a breach of the covenants of the Company described under "No Solicitation by the Company; Takeover Proposals" in this Section 12; (5) by the Company, in the event Parent or the Purchaser materially breaches its obligations under the Merger Agreement, unless such breach is cured within 15 days after notice to Parent by the Company, (6) by Parent or the Purchaser, in the event the Company materially breaches its obligations under the Merger Agreement, unless such breach is cured within 15 days after notice to the Company by Parent or the Purchaser, or (7) by Parent or the Purchaser prior to the purchase of Shares pursuant to the Offer in the event of a breach or failure to perform by the Company of any representation, warranty, covenant or other agreement contained in the Merger Agreement which (a) would give rise to the failure of a condition set forth below in paragraph (4) or (5) described below in Section 14 and (b) cannot be cured, or has not been cured within 15 days after the Company receives written notice from Parent of such breach or failure to perform. NO SOLICITATION BY THE COMPANY; TAKEOVER PROPOSALS. The Merger Agreement provides that the Company will not, nor will it permit any of it subsidiaries to, nor will it authorize or permit any of its, directors, officers or employees or any investment banker, financial advisor, attorney, accountant or other representative retained by it or any of its subsidiaries to, directly or indirectly, (1) solicit, initiate or encourage (including by way of furnishing information), or take any other action designed to facilitate, any inquiries or the making of any proposal which constitutes a Takeover Proposal (as defined below) or (2) participate in any discussions or negotiations regarding any Takeover Proposal. Notwithstanding the foregoing, if prior to the Company Stockholders Meeting, the board of directors of the Company determines in good faith, after consultation with outside counsel, that it is legally advisable to do so in order to comply with its fiduciary duties to the Company's stockholders under applicable law, the Company, in response to a Superior Proposal (as defined below) which was not solicited by it or which did not result from a breach by the Company of its non-solicitation obligations, and subject to compliance with the Merger Agreement, may furnish information with respect to the Company and its subsidiaries to any person making a Superior Proposal pursuant to a customary confidentiality agreement and participate in discussions or negotiations regarding such Superior Proposal. For purposes of the Merger Agreement, a "Takeover Proposal" means any inquiry, proposal or offer from any person (1) relating to any direct or indirect acquisition or purchase of (a) a business that constitutes 15% or more of the net revenues, net income or the assets of the Company and its subsidiaries, taken as a whole, (b) 20% or more of any class of equity securities of the Company or (c) any material equity interest in any subsidiary of the Company, (2) relating to any tender offer or exchange offer that if consummated would result in any person beneficially owning 20% or more of any class of equity securities of the Company or any material equity interest in any of its subsidiaries, or (3) relating to any merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving the Company or any of its subsidiaries, other than the transactions contemplated by the Merger Agreement. For purposes of the Merger Agreement, "Superior Proposal" means any proposal made by a third party to acquire, directly or indirectly, including pursuant to a tender offer, exchange offer, merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction, for consideration consisting of cash and/or securities, more than 50% of the combined voting power of the Shares then outstanding or all or substantially all the assets of the Company and otherwise on terms which the board of directors of the Company determines in its good faith judgment (based on the advice of a financial advisor of 19 22 nationally recognized reputation) to be more favorable to the Company's stockholders than the Merger and for which financing, to the extent required, is then committed or which, in the good faith judgment of the board of directors of the Company, is reasonably capable of being obtained by such third party. The Merger Agreement provides further that neither the board of directors of the Company nor any committee thereof may (1) withdraw or modify, or propose publicly to withdraw or modify, in a manner adverse to Parent, the approval or recommendation by such board of directors or such committee of the Offer, the Merger or the Merger Agreement, (2) approve or recommend, or propose publicly to approve or recommend, any Takeover Proposal or (3) cause the Company to enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement related to any Takeover Proposal other than any such agreement entered into concurrently with the termination of the Merger Agreement by the Company to facilitate such action. See "Termination of the Merger Agreement" in this Section 12. The Merger Agreement provides that the Company must promptly advise Parent orally and in writing of any Takeover Proposal or any request for information by any person which the Company reasonably believes is in connection with the preparation of a Takeover Proposal, the material terms and conditions of the Takeover Proposal or the information requested by the person making the request and the identity of the person making the Takeover Proposal or request for information. The Company must promptly inform Parent of any change in the status and material terms and conditions (including amendments or proposed amendments) of any such Takeover Proposal or request for information. The Merger Agreement provides that nothing contained therein will prohibit the Company from taking and disclosing to its stockholders a position contemplated by Rule 14d-9 or Rule 14e-2(a) promulgated under the Exchange Act or from making any disclosure to the Company's stockholders if, in the good faith judgment of the board of directors of the Company, after consultation with outside counsel, failure so to disclose would be inconsistent with its obligations under applicable law; provided, that, except as expressly permitted by the Merger Agreement, neither the Company nor its board of directors nor any committee thereof may withdraw or modify, or propose publicly to withdraw or modify, its position with respect to the Offer, the Merger Agreement or the Merger or approve or recommend, or propose to approve or recommend, a Takeover Proposal. FEES AND EXPENSES; TERMINATION FEE. The Merger Agreement provides that all fees and expenses incurred in connection with the Offer, the Merger, the Merger Agreement and the transactions contemplated by the Merger Agreement will be paid by the party incurring such fees or expenses, whether or not the Offer or the Merger is consummated except that each of Parent and the Company shall bear and pay one-half of (1) the cost and expenses incurred in connection with the filing, printing and mailing of any proxy statement of the Company in connection with any meeting of the stockholders of the Company to approve the merger (including Commission filing fees) and (2) the filing fees for the pre-merger notification and report forms under the HSR Act. The Merger Agreement provides that the Company shall pay in same day funds to Parent $2,000,000 under the circumstances and terms set forth below: (1) A bona fide Superior Proposal shall have been made directly to the stockholders of the Company generally or shall have otherwise become publicly known or any Person shall have publicly announced an intention (whether or not conditional) to make a Superior Proposal and thereafter the Merger Agreement is terminated by any of Parent, the Purchaser or the Company because the Purchaser shall not have accepted for payment any Shares pursuant to the Offer prior to December 31, 1999, provided that the $2,000,000 is only payable to Parent if, within twelve months of the termination of the Merger Agreement, the Company or any of its subsidiaries enters into any definitive agreement with respect to, or consummates, any Superior Proposal; (2) The Merger Agreement is terminated by Parent or the Purchaser prior to the purchase of Shares pursuant to the Offer in the event of a breach or a failure to perform by the Company of any representation, warranty, covenant or other agreement contained in the Merger Agreement which (a) would give rise to a failure of condition (4) or (5) as set forth below in Section 14 and (b) cannot be 20 23 cured, or has not been cured within 15 days after the Company receives written notice from Parent of such breach or failure to perform; (3) The Merger Agreement is terminated by the Company prior to the Company Stockholder Meeting in response to a Superior Proposal which was not solicited by the Company and which does not otherwise result from a breach of the non-solicitation covenants of the Company described above under "No Solicitation by the Company; Takeover Proposals" in this Section 12; or (4) The Merger Agreement is terminated by Parent because the Company or any of its directors or officers participated in discussions or negotiations in breach (other than an immaterial breach) of the Company's covenants described under "No Solicitation by the Company; Takeover Proposals" in this Section 12. CONDUCT OF BUSINESS BY THE COMPANY. The Merger Agreement provides that until the consummation of the Merger, the Company will (and will cause each of its Subsidiaries to): (1) maintain its existence in good standing; (2) maintain the general character of its business and properties and conduct its business in the ordinary and usual manner consistent with past practices, except as expressly permitted by the Merger Agreement; (3) maintain business and accounting records consistent with past practices; and (4) use its reasonable best efforts (a) to preserve its business intact, (b) to keep available to the Company the services of its present officers and employees and (c) to preserve for the Company or such subsidiary the goodwill of its suppliers, customers and others having business relations with the Company or such subsidiary. In addition, the Merger Agreement provides that unless provided for in the Merger Agreement or approved by Parent in writing, until the consummation of the Merger, the Company will not (and will not permit any of its Subsidiaries to): (1) amend or otherwise change its certificate of incorporation or by-laws; (2) issue or sell or authorize for issuance or sale (other than any issuance of Common Stock upon the exercise of any outstanding option or warrant to purchase Common Stock which option or warrant was issued prior to the date of the Merger Agreement in accordance with the terms of the relevant stock option or warrant agreement), or grant any options or warrants or make other agreements with respect to, any shares of its capital stock or any other of its securities or warrants; (3) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise with respect to any of its capital stock; (4) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock; (5) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except (a) short-term borrowings (including borrowings under the Company's existing line of credit with Fleet National Bank) incurred in the ordinary course of business (or to refinance existing or maturing indebtedness) and (b) intercompany indebtedness between the Company and any of its subsidiaries or between subsidiaries; (6) (a) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any corporation, partnership, other business organization or any division thereof or any material amount of assets; (b) enter into any contract or agreement other than in the ordinary course of business, consistent with past practice; (c) authorize any capital commitment which is in excess of $50,000 or capital expenditures which are, in the aggregate, in excess of $100,000, except as otherwise disclosed in 21 24 the Merger Agreement; or (d) enter into or amend any contract, agreement, commitment or arrangement with respect to any of the foregoing matters described in these clauses (5) and (6); (7) mortgage, pledge or subject to lien, any of its assets or properties or agree to do so except for liens permitted by the Merger Agreement; (8) sell, lease, license, mortgage or otherwise encumber or subject to any lien or otherwise dispose of any of its properties or assets (including securitizations), other than sales or licenses of finished goods in the ordinary course of business consistent with past practice; (9) assume, guarantee or otherwise become responsible for the obligations of any other person or agree to so do; (10) enter into or agree to enter into any employment agreement; (11) except as otherwise disclosed in the Merger Agreement, take any action, other than in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivables); (12) make any tax election or settle or compromise any material federal, state, local or foreign income tax liability; (13) settle or compromise any pending or threatened suit, action or claim which is material or which relates to any of the transactions contemplated by the Merger Agreement; (14) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities reflected or reserved against in the most recently audited balance sheet contained in documents of the Company filed with the Commission or subsequently incurred in the ordinary course of business and consistent with past practice; (15) except in connection with the sale of the Company's products in the ordinary course of business and consistent with past practice, sell, assign, transfer, license, sublicense, pledge or otherwise encumber any of the Company's intellectual property rights; (16) except as required by law or contemplated hereby, enter into, adopt or amend in any material respect or terminate any Company benefit plan or any other agreement, plan or policy involving the Company or its subsidiaries, and one or more of its directors, officers or employees, or materially change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan, or change the manner in which contributions to any pension plan are made or the basis on which such contributions are determined; (17) except for normal increases in the ordinary course of business consistent with past practice that, in the aggregate, do not materially increase benefits or compensation expenses of the Company or its subsidiaries, or as contemplated by the Merger Agreement or by the terms of any employment agreement in existence on the date of the Merger Agreement, increase the cash compensation of any director, executive officer or other key employee or pay any benefit or amount not required by a plan or arrangement as in effect on the date of the Merger Agreement to any such Person; or (18) announce an intention, commit or agree to do any of the foregoing. BOARD OF DIRECTORS. The Merger Agreement provides that promptly upon the acceptance for payment of, and payment for, Shares by the Purchaser pursuant to the Offer, the Purchaser will be entitled to designate such number of directors on the board of directors of the Company as will give the Purchaser, subject to compliance with Section 14(f) of the Exchange Act, representation on the Company's board of directors equal to the product of (1) the total number of directors on the Company's board of directors and (2) the percentage that the number of Shares purchased by the Purchaser in the Offer bears to the number of Shares outstanding, and the Company will, at such time, cause the Purchaser's designees to be selected by its existing 22 25 board of directors. Subject to applicable law, the Company has agreed to take all action requested by Parent necessary to effect any such election, including mailing to its stockholders the Information Statement containing the information required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. The Merger Agreement further provides that in the event that the Purchaser's designees are elected to the board of directors of the Company, until the effective time of the Merger, the board of directors of the Company will have at least two independent directors who were directors on the date of the Merger Agreement and who are not officers of the Company or any of its subsidiaries. The Merger Agreement also provides that the Company will promptly, at the option of Parent, either increase the size of the Company's board of directors and/or obtain the resignation of such number of its current directors as is necessary to enable the Purchaser's designees to be elected or appointed to, and to constitute a majority of, the Company's board of directors as provided above. STOCK OPTIONS; WARRANTS. The Merger Agreement provides that the board of directors of the Company (or, if appropriate, any committee administering the Company stock plans) will adopt such resolutions and take such other actions as may be required to terminate the Company stock plans as of the effective time of the Merger and each then outstanding Company stock option granted under the Company stock plans, whether vested or unvested, will be cancelled and converted into a right to receive an amount in cash, without interest, equal to the product of (1) the number of shares of Common Stock represented by such Company stock option immediately prior to such cancellation and conversion multiplied by (2) the excess, if any, by which the Offer Price exceeds the exercise price per share with respect to such Company stock option (such payment to be net of all applicable federal, state, local or foreign taxes). Prior to the effective time of the Merger, the Company will obtain all necessary consents from, and provide (in a form acceptable to Parent) any required notices to, holders of Company stock options and amend the terms of the Company stock plans, in each case, as is necessary to give effect to the immediately preceding sentence. The Merger Agreement also provides that, prior to the effective time of the Merger, the Company will take all actions to receive from each holder of an outstanding warrant to purchase shares of Common Stock an agreement that, as of the effective time of the Merger, such warrant will be converted into a right of such holder to receive from the Depositary the consideration set forth in the next sentence at the same time that each such holder is entitled to receive payment for shares of Common Stock from the Surviving Corporation in connection with the Merger. Each holder of a warrant will be entitled to receive from the Depositary in respect of the shares of Common Stock to be issued upon the exercise of such warrant, an amount in cash, without interest, equal to the product of (1) the number of shares of Common Stock subject to such warrant immediately prior to the effective time of the Merger and (2) the excess, if any, by which the Offer Price exceeds the exercise price per share that was applicable with respect to such warrant. EMPLOYEE MATTERS. The Merger Agreement provides that as soon as practicable after the Merger, Parent will provide, or cause to be provided, employee benefit plans, programs and arrangements to employees of the Company that are the same as those made generally available to non-represented employees of Parent who are hired by Parent after December 31, 1998. Until then, Parent will provide, or cause to be provided, the employee benefit plans, programs and arrangements of the Company provided to employees of the Company as of the date of the Merger Agreement. The Merger Agreement also provides that with respect to each benefit plan, program practice, policy or arrangement maintained by Parent in which employees of the Company subsequently participate, for purposes of determining vesting and entitlement to benefits, including for severance benefits and vacation entitlement (but not for accrual of pension benefits), service with the Company (or predecessor employers to the extent the Company provides past service credit) will be treated as service with Parent, provided, that such service shall not be recognized to the extent that such recognition would result in a duplication of benefits. Such service also shall apply for purposes of satisfying any waiting periods, evidence of insurability requirements, or the application of any pre-existing condition limitations. Each Parent plan will waive pre-existing condition limitations to the same extent waived under the applicable Company benefit plan. Company employees will be given credit for amounts paid under a corresponding benefit plan during the same period for purposes of applying deductibles, copayments and out-of-pocket maximums as though such amounts had been paid in accordance with the terms and conditions of the Parent plan. 23 26 The Merger Agreement provides that, prior to the Merger, the Company shall take all necessary actions or agreements to terminate the retirement plan for employees of the Company in accordance with its terms. The effective date of such termination will in no event be later than the effective time of the Merger. Prior to such termination, the Company shall file with respect thereto a determination letter application on Form 5310 with the IRS. In connection with such termination, the assets of such plan (including any excess assets), net of expenses, will be allocated among participants based on the accrued benefit obligation. The Merger Agreement also provides that prior to the Merger, the Company will terminate its supplemental retirement agreements. In connection therewith, accrued benefits will be paid to each participant in such plan in accordance with the procedures described in each such supplemental retirement agreement. Also prior to the Merger, the Company will terminate its retirement plan for outside directors in accordance with the terms of such plan. In connection therewith, accrued benefits will be paid to each participant in the retirement plan in accordance with the procedures described in that plan. INDEMNIFICATION. From and after the consummation of the Offer, Parent will, or will cause the Surviving Corporation to, fulfill and honor in all respects the obligations of the Company to indemnify each person who is or was a director or officer (an "Indemnified Party") of the Company or any of its subsidiaries pursuant to any indemnification provision of the Company's certificate of incorporation or by-laws as each is in effect on the date of the Merger Agreement. In addition, the Merger Agreement provides that, for a period of six years after the consummation of the Offer, Parent shall cause to be maintained in effect the current officers' and directors' liability insurance maintained by the Company with respect to the Indemnified Parties (provided that Parent may elect either (1) to require the Company to obtain prior to the Merger coverage of the type contemplated by section 10 of the Company's existing directors, officers and corporate liability insurance policy or (2) to substitute therefor policies of at least the same coverage and amounts containing terms and conditions which are no less advantageous to the Indemnified Parties than such existing insurance) covering acts or omissions occurring prior to the effective time of the Merger. REASONABLE BEST EFFORTS. Upon the terms and subject to the conditions set forth in the Merger Agreement, Parent, the Purchaser and the Company have each agreed to use its reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with each other in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Offer, the Merger and the other transactions contemplated by the Merger Agreement, including (1) the taking of all reasonable acts necessary to cause the conditions of the Offer to be satisfied, (2) the obtaining of all necessary actions or nonactions, waivers, consents and approvals from governmental entities and the making of all necessary registrations and filings and the taking of all steps as may be necessary to obtain an approval or waiver from, or to avoid an action or proceeding by, any governmental entity, (3) the obtaining of all necessary consents, approvals or waivers from third parties, (4) the defending of any lawsuits or other legal proceedings, whether judicial or administrative, challenging the Merger Agreement or the consummation of the transactions contemplated by the Merger Agreement, including seeking to have any stay or temporary restraining order entered by any court or other governmental entity vacated or reversed, and (5) the execution and delivery of any additional instruments necessary to consummate the transactions contemplated by, and to fully carry out the purposes of, the Merger Agreement. In connection with and without limiting the foregoing, but subject to the terms and conditions of the Merger Agreement, the Company and its board of directors will (1) take all action necessary to ensure that no state takeover statute or similar statute or regulation is or becomes applicable to the Offer, the Merger, the Merger Agreement or any of the other transactions contemplated by the Merger Agreement, and (2) if any state takeover statute or similar statute or regulation becomes applicable to the Offer, the Merger, the Merger Agreement or any other transaction contemplated by the Merger Agreement, take all action necessary to ensure that the Offer, the Merger, the Merger Agreement and the other transactions contemplated by the Merger Agreement may be consummated as promptly as practicable on the terms contemplated by the Offer and the Merger Agreement and otherwise to minimize the effect of such statute or regulation on the Offer, the Merger, the Merger Agreement and the other transactions contemplated by the Merger Agreement. The Merger Agreement further provides that the Company will give prompt notice to Parent, and Parent will give prompt notice to the Company, of (1) the occurrence, or non-occurrence, of any event which would 24 27 be likely to cause any representation or warranty contained in the Merger Agreement to be untrue or inaccurate in any material respect or any covenant, condition or agreement contained in the Merger Agreement not to be complied with or satisfied or (2) any failure of the Company, Parent or the Purchaser to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it under the Merger Agreement; provided that no such notification will limit or otherwise affect the remedies available to the party receiving the notice. REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains various customary representations and warranties. The foregoing summary of the Merger Agreement is qualified in its entirety by reference to the Merger Agreement, a copy of which is filed as Exhibit (c)(1) to the Purchaser's Tender Offer Statement on Schedule 14D-1 filed with the Commission on the date hereof (the "Schedule 14D-1") and incorporated by reference herein. The Merger Agreement should be read in its entirety for a more complete description of the matters summarized above. APPRAISAL RIGHTS. No appraisal rights are available in connection with the Offer. However, if the Merger is consummated, holders of Shares will have certain rights pursuant to the provisions of Section 262 of the DGCL to dissent and demand appraisal of, and to receive payment in cash of the fair value of, their Shares. If the statutory procedures were complied with, such rights could lead to a judicial determination of the fair value required to be paid in cash to such dissenting holders for their Shares. In determining the fair value of the Shares, the court is required to take into account all relevant factors. Accordingly, any such judicial determination of the fair value of Shares could be based upon considerations other than or in addition to the Offer Price or the market value of the Shares, including the asset value and investment value of the Shares. The value so determined could be more or less than the Offer Price or the Merger Consideration. If any holder of Shares who demands appraisal under Section 262 of the DGCL fails to perfect, or effectively withdraws or loses his right to appraisal, as provided in the DGCL, the Shares of such stockholder will be converted into the Merger Consideration in accordance with the Merger Agreement. The foregoing discussion is not a complete statement of law pertaining to appraisal rights under the DGCL and is qualified in its entirety by the full text of Section 262 of the DGCL. FAILURE TO FOLLOW THE STEPS REQUIRED BY SECTION 262 OF THE DGCL FOR PERFECTING APPRAISAL RIGHTS MAY RESULT IN THE LOSS OF SUCH RIGHTS. GOING PRIVATE TRANSACTIONS. The Merger would have to comply with any applicable Federal law operative at the time of its consummation. Rule 13e-3 under the Exchange Act is applicable to certain "going private" transactions. The Purchaser does not believe that Rule 13e-3 will be applicable to the Merger unless the Merger is consummated more than one year after the termination of the Offer. If applicable, Rule 13e-3 would require, among other things, that certain financial information concerning the Company and certain information relating to the fairness of the Merger and the consideration offered to minority stockholders be filed with the Commission and disclosed to minority stockholders prior to consummation of the Merger. OTHER MATTERS. Except as otherwise described in this Offer to Purchase, the Purchaser and Parent have no current plans or proposals that would relate to, or result in, any extraordinary corporate transaction involving the Company or any of its subsidiaries, such as a merger, reorganization or liquidation involving the Company or any of its subsidiaries, a sale or transfer of a material amount of assets of the Company or any of its subsidiaries, any change in the present board of directors of the Company or management of the Company, any material change in the Company's capitalization or dividend policy or any other material change in the Company's business, corporate structure or personnel. 13. DIVIDENDS AND DISTRIBUTIONS. Pursuant to the terms of the Merger Agreement, the Company is prohibited from taking any of the actions described in the next paragraph, and nothing herein shall constitute a waiver by the Purchaser or 25 28 Parent of any of its rights under the Merger Agreement or a limitation of remedies available to the Purchaser or Parent for any breach of the Merger Agreement, including termination thereof. If, on or after the date of the Merger Agreement, any stock split, combination, reclassification or stock dividend with respect to the outstanding Shares, any change or conversion of outstanding shares of Common Stock into other securities or any other dividend or distribution with respect to the outstanding Shares should occur, appropriate and proportionate adjustments shall be made to the Merger Consideration. 14. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other term of the Offer or the Merger Agreement, the Purchaser will not be required to accept for payment or, subject to any applicable rules and regulations of the Commission, including Rule 14e-1(c) under the Exchange Act (relating to the Purchaser's obligation to pay for or return tendered Shares after the termination or withdrawal of the Offer), to pay for any Shares tendered pursuant to the Offer unless (1) the Minimum Condition shall have been satisfied and (2) any waiting period under the HSR Act applicable to the purchase of Shares pursuant to the Offer shall have expired or been terminated. Furthermore, the Purchaser will not be required to accept for payment or, subject as aforesaid, to pay for any Shares not theretofore accepted for payment or paid for, and may, in accordance with the provisions of the Merger Agreement described in the subsection entitled "Termination of the Merger Agreement" in Section 12 above, terminate the Merger Agreement or amend the Offer with the consent of the Company, if, upon the scheduled expiration date of the Offer (as extended, if required, pursuant to the provisions discussed in the fifth paragraph of Section 1 above), any of the following conditions exists and is continuing and does not result principally from the breach by Parent or the Purchaser of any of their obligations under the Merger Agreement: (1) there shall be instituted or pending by any governmental entity any suit, action or proceeding (a) challenging the acquisition by Parent or the Purchaser of any Shares under the Offer, seeking to restrain or prohibit the making or consummation of the Offer or the Merger or the performance of any of the other transactions contemplated by the Merger Agreement or seeking to obtain from the Company, Parent or the Purchaser any damages that are material in relation to the Company and its subsidiaries as a whole, (b) seeking to prohibit or materially limit the ownership or operation by the Company, Parent or any of Parent's subsidiaries of all or a portion of the business or assets of the Company or Parent and its subsidiaries, taken as a whole, or to compel the Company or Parent and its subsidiaries to dispose of or hold separate all or a portion of the business or assets of the Company or Parent and their subsidiaries, taken as a whole, in each case as a direct result of the Offer or any of the other transactions contemplated by the Merger Agreement, (c) seeking to impose material limitations on the ability of Parent or the Purchaser to acquire or hold, or exercise full rights of ownership of, any Shares to be accepted for payment pursuant to the Offer, including, without limitation, the right to vote such Shares on all matters properly presented to the stockholders of the Company, (d) seeking to prohibit Parent or any of its subsidiaries from effectively controlling in any material respect any material portion of the business or operations of the Company, (e) that could reasonably be expected to require the divestiture by Parent or the Purchaser of Shares, in the case of any of the foregoing in clauses (b), (c) or (d), which could reasonably be expected, individually or in the aggregate, to have a material adverse effect on the businesses of the Company and its subsidiaries, or (f) that could reasonably be expected to result in a material adverse effect on the Company or Parent; (2) there shall be any statute, rule, regulation, judgment, order or injunction enacted, entered, enforced, promulgated or deemed applicable to the Offer or the Merger, by any governmental entity or court, other than the application to the Offer or the Merger of applicable waiting periods under the HSR Act, that would result in any of the consequences referred to in clauses (a) through (f) of paragraph (1) above; (3) there shall have occurred any events or changes which have had or which could reasonably be expected to have, individually or in the aggregate, a material adverse effect on the Company; 26 29 (4) any of the representations and warranties of the Company set forth in the Merger Agreement that are qualified as to materiality shall not be true and correct or any such representations and warranties that are not so qualified shall not be true and correct in any material respect, in each case, at the date of the Merger Agreement and at the scheduled or extended expiration of the Offer; (5) the Company shall have failed to perform in any material respect any material obligation or to comply in any material respect with any material agreement or material covenant of the Company to be performed or complied with by it under the Merger Agreement, which failure to perform or comply cannot be cured, or has not been cured within 15 business days after the Company receives written notice from Parent of such breach or failure to perform; (6) the Merger Agreement shall have been terminated in accordance with its terms; (7) any consent (other than the filing of the Certificate of Merger or Company Stockholder Approval if required by the DGCL) required to be filed, occurred or been obtained by the Company or any of its Subsidiaries in connection with the execution and delivery of the Merger Agreement, the Offer and the consummation of the transactions contemplated by the Merger Agreement shall not have been filed or obtained or shall not have occurred, except where the failure to obtain such consent could not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the Company; (8) the Company's board of directors (a) shall have withdrawn, or modified or changed in a manner adverse to Parent or the Purchaser (including by amendment of the Schedule 14D-9) its recommendation of the Offer, the Merger Agreement or the Merger, (b) shall have recommended a Superior Proposal, (c) shall have adopted any resolution to effect any of the foregoing or (d) upon request of Parent or the Purchaser, shall fail to reaffirm its approval of recommendation of the Offer, the Merger Agreement or the Merger; or (9) any person or "group" (within the meaning of Section 13(d)(3) of the Exchange Act), other than Parent, the Purchaser or their affiliates or any group of which any of them is a member, shall have acquired or announced its intention to acquire beneficial ownership (as determined pursuant to Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the Shares; and, in the good faith judgment of Parent or the Purchaser, in its sole discretion, make it inadvisable to proceed with such acceptance of Shares for payment or the payment therefor. The Merger Agreement provides that the foregoing conditions are for the sole benefit of Parent and the Purchaser and (except for the Minimum Condition), subject to the terms of the Merger Agreement, may be waived by Parent and the Purchaser in whole or in part at any time and from time to time in their sole discretion. The failure by Parent or the Purchaser at any time to exercise any of the foregoing rights will not be deemed a waiver of any such right, the waiver of any such right with respect to particular facts and circumstances will not be deemed a waiver with respect to any other facts and circumstances and each such right will be deemed an ongoing right that may be asserted at any time and from time to time. 15. CERTAIN LEGAL MATTERS. Based on a review of publicly available filings made by the Company with the Commission and other publicly available information concerning the Company, neither the Purchaser nor Parent is aware of any license or regulatory permit that appears to be material to the business of the Company and its subsidiaries, taken as a whole, that might be adversely affected by the Purchaser's acquisition of Shares as contemplated herein or of any approval or other action, except as otherwise described in this Section 15, by any governmental entity that would be required for the acquisition or ownership of Shares by the Purchaser as contemplated herein. Should any such approval or other action be required, the Purchaser and Parent currently contemplate that such approval or other action will be sought, except as described below under "State Takeover Laws". Except as otherwise expressly described in this Section 15, while the Purchaser does not presently intend 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 27 30 action, if needed, would be obtained or would be obtained without substantial conditions or that failure to obtain any such approval or other action might not result in consequences adverse to the Company's business or that certain parts of the Company's business might not have to be disposed of if such approvals were not obtained or such other actions were not taken or in order to obtain any such approval or other action. If certain types of adverse action are taken with respect to the matters discussed below, the Purchaser could decline to accept for payment or pay for any Shares tendered. See Section 14 for certain conditions to the Offer. STATE TAKEOVER LAWS. A number of states throughout the United States have enacted takeover statutes that purport, in varying degrees, to be applicable to attempts to acquire securities of corporations that are incorporated or have assets, stockholders, executive offices or places or business in such states. In Edgar v. MITE Corp., the Supreme Court of the United States held that the Illinois Business Takeover Act, which involved state securities laws that made the takeover of certain corporations more difficult, imposed a substantial burden on interstate commerce and therefore was unconstitutional. In CTS Corp. v. Dynamics Corp. of America, however, the Supreme Court of the United States held that a state may, as a matter of corporate law, and, in particular, those laws concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without prior approval of the remaining stockholders; provided that such laws were applicable only under certain conditions. Section 203 of the DGCL limits the ability of a Delaware corporation to engage in business combinations with "interested stockholders" (defined generally as any beneficial owner of 15% or more of the outstanding voting stock of the corporation) unless, among other things, the corporation's board of directors has given its prior approval to either the business combination or the transaction which resulted in the stockholder becoming an "interested stockholder." The Company's board of directors has approved the Merger Agreement and the Purchaser's acquisition of Shares pursuant to the Offer and, therefore, Section 203 of the DGCL is inapplicable to the Offer and the Merger. Based on information supplied by the Company, the Purchaser does not believe that any other state takeover statutes purport to apply to the Offer, the Merger or the Merger Agreement. Neither the Purchaser nor Parent has currently complied with any state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer, the Merger or the Merger Agreement and nothing in this Offer to Purchase or any action taken in connection with the Offer, the Merger or the Merger Agreement is intended as a waiver of such right. If it is asserted that any state takeover statute is applicable to the Offer, the Merger or the Merger Agreement and if an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Merger or the Merger Agreement, the Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authorities, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or be delayed in consummating the Offer or the Merger. In such case, the Purchaser may not be obliged to accept for payment or pay for any Shares tendered pursuant to the Offer. ANTITRUST. Under the provisions of the HSR Act applicable to the Offer, the purchase of Shares under the Offer may be consummated following the expiration of a 15-calendar day waiting period following the filing by Parent of a Notification and Report Form with respect to the Offer, unless Parent receives a request for additional information or documentary material from the Antitrust Division or the FTC or unless early termination of the waiting period is granted. Parent is in the process of making such filing. If, within the initial 15-day waiting period, either the Antitrust Division or the FTC requests additional information or material from Parent concerning the Offer, the waiting period will be extended and would expire at 11:59 p.m., New York City time, on the tenth calendar day after the date of substantial compliance by Parent with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of Parent. In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the Antitrust Division or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. 28 31 The Merger would not require an additional filing under the HSR Act if the Purchaser owns 50% or more of the outstanding Shares at the time of the Merger or if the Merger occurs within one year after the HSR Act waiting period applicable to the Offer expires or is terminated. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's proposed acquisition of the Company. At any time before or after the Purchaser's purchase of Shares pursuant to the Offer, the Antitrust Division or FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the purchase of Shares pursuant to the Offer or the consummation of the Merger or seeking the divestiture of Shares acquired by the Purchaser or the divestiture of substantial assets of Parent or its subsidiaries, or the Company or its subsidiaries. Private parties may also bring legal action under the antitrust laws under certain circumstances. There can be no assurance that a challenge to the Offer on antitrust grounds will not be made or, if such a challenge is made, of the results thereof. LITIGATION. After the announcement of the Merger Agreement by Parent and the Company on July 15, 1999, two putative class action lawsuits relating to the Merger were filed in the Court of Chancery for the State of Delaware: Chase v. Harrison et. al., C.A. No. 17312-NC and Airmont Plaza Associates et. al. v. SpecTran Corporation et. al., C.A. No. 17314-NC. The lawsuits were filed by plaintiffs claiming to be stockholders of the Company, purportedly on behalf of all the Company's stockholders, against the Company, members of the board of directors of the Company and Parent. The plaintiffs in both lawsuits allege, among other things, that the terms of the proposed Merger were not the result of an auction process or active market check, that the $9.00 per share price offered by Parent is inadequate, and that the Company's directors breached their fiduciary duties to the stockholders of the Company in connection with the Merger Agreement. Both lawsuits seek to have the Merger enjoined or, if the Merger is completed, to have it rescinded and to recover unspecified damages, fees and expenses. The Company and Parent intend to vigorously oppose these lawsuits. 16. FEES AND EXPENSES. The Purchaser has retained Morrow & Co., Inc. to act as the Information Agent and The Bank of New York to serve as the Depositary in connection with the Offer. The Information Agent and the Depositary each will receive reasonable and customary compensation for their services, be reimbursed for certain reasonable out-of-pocket expenses and be indemnified against certain liabilities and expenses in connection therewith, including certain liabilities under the Federal securities laws. Neither the Purchaser nor Parent will pay any fees or commissions to any broker or dealer or other person (other than the Information Agent and the Depositary) in connection with the solicitation of tenders of Shares pursuant to the Offer. Brokers, dealers, banks and trust companies will be reimbursed by the Purchaser upon request for customary mailing and handling expenses incurred by them in forwarding materials to their customers. 17. 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 the acceptance thereof would not be in compliance with the laws of such jurisdiction. Neither the Purchaser or Parent is aware of any jurisdiction in which the making of the Offer or the tender of Shares in connection therewith would not be in compliance with the laws of such jurisdiction. To the extent the Purchaser or Parent becomes aware of any state law that would limit the class of offerees in the Offer, the Purchaser will amend the Offer and, depending on the timing of such amendment, if any, will extend the Offer to provide adequate dissemination of such information to holders of Shares prior to the expiration of the Offer. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION ON BEHALF OF THE PURCHASER OR PARENT NOT CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. 29 32 The Purchaser or Parent has filed with the Commission the Schedule 14D-1 pursuant to Rule 14d-3 under the Exchange Act, furnishing certain additional information with respect to the Offer. In addition, the Company has filed with the Commission the Schedule 14D-9 pursuant to Rule 14d-9 under the Exchange Act setting forth its recommendation with respect to the Offer and the reasons for such recommendation and furnishing certain additional related information. Such Schedules and any amendments thereto, including exhibits, should be available for inspection and copies should be obtainable in the manner set forth in Sections 8 and 9 (except that they will not be available at the regional offices of the Commission). SEATTLE ACQUISITION INC. July 21, 1999 30 33 SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE PURCHASER 1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The name, business address, present principal occupation or employment and five-year employment history of each of the directors and executive officers of Parent are set forth below. Unless otherwise indicated, the business address of each such director and each such executive officer is 600 Mountain Avenue, Murray Hill, New Jersey 07974. Except as set forth below, the directors and executive officers listed below are citizens of the United States.
POSITION WITH PARENT; PRINCIPAL OCCUPATION OR NAME AND BUSINESS ADDRESS EMPLOYEE 5-YEAR EMPLOYMENT HISTORY ------------------------- ---------------------------------- Paul A. Allaire...................... Director of Parent since 1996. Chairman of the Board of Xerox Corporation Xerox Corporation (document processing services and 800 Long Ridge Road products) since 1991. Chief Executive Officer of Xerox P.O. Box 1600 Corporation (1990-April 1999). Director of Sara Lee Corp., Stamford, CT 06904 SmithKline Beecham p.l.c., J.P. Morgan & Co., Inc. and Priceline.com Incorporated. Committees: Member of the Audit and Finance and Corporate Governance and Compensation Committees. Age: 61. Carla A. Hills....................... Director of Parent since 1996. Chairman of the Board and Hills & Company Chief Executive Officer of Hills & Company (international 1200 Nineteenth St., N.W. consultants) since 1993 and United States Trade Washington, DC 20036 Representative (1989-1993). Director of American International Group, Inc., Chevron Corp. and Time Warner Inc. Committees: Member of the Corporate Governance and Compensation Committee. Age: 65. Drew Lewis........................... Director of Parent since 1996. Retired Chairman of the Board Box 70 and Chief Executive Officer of Union Pacific Corporation Lederach, PA 19450 (1987-1996). Director of Aegis Communications Group, Inc., American Express Company, FPL Group, Inc., Gannett Co., Inc., Millennium Bank, Union Pacific Resources Group Inc. and Gulfstream Aerospace Corporation. Committees: Member of the Audit and Finance and Corporate Governance and Compensation Committees. Age: 67. Richard A. McGinn.................... Chairman of the Board and Chief Executive Officer of Parent since February 1998, Chief Executive Officer and President of Parent since October 1997 and Director of Parent since 1996. President and Chief Operating Officer of Parent (1996-1997). Executive Vice President of AT&T and Chief Executive Officer of the AT&T Network Systems Group (1994-1996) and President and Chief Operating Officer of the AT&T Network Systems Group (1993-1994). Director of Oracle Corporation and American Express Company. Age: 52. Paul H. O'Neill...................... Director of Parent since 1996. Chairman of the Board of ALCOA Alcoa Inc. (production of aluminum) since 1987. Chief 201 Isabella Street Executive Officer of Alcoa Inc. (1987-May 1999). Chairman of Pittsburgh, PA 15212-5858 the Rand Corporation. Director of Eastman Kodak Company, the National Association of Securities Dealers, Inc., the Gerald R. Ford Foundation and Manpower Demonstration Research Corporation. Committees: Member of the Audit and Finance and Corporate Governance and Compensation Committees. Age: 63.
I-1 34
POSITION WITH PARENT; PRINCIPAL OCCUPATION OR NAME AND BUSINESS ADDRESS EMPLOYEE 5-YEAR EMPLOYMENT HISTORY ------------------------- ---------------------------------- Donald S. Perkins.................... Director of Parent since 1996. Retired Chairman of the Board One First National Plaza and Chief Executive Officer of Jewel Companies, Inc. 21 South Clark Street (diversified retailer) (1970-1980). Non-Executive Chairman Chicago, IL 60603-2006 of Kmart Corp. (1995). Director of Aon Corp., LaSalle Hotel Properties and Nanophase Technologies Corporation. Committees: Chairman of the Audit and Finance Committee and Member of the Corporate Governance and Compensation Committee. Age: 72. Donald K. Peterson................... Executive Vice President and Chief Financial Officer of Parent since 1996. Joined AT&T in 1995 as Vice President and Chief Financial Officer of AT&T's Communications Services Group. Joined Northern Telecom, Inc. in 1976 and served in various executive positions there including President of Nortel Communications Systems, Inc. (1993-1995). Age: 49. Richard J. Rawson.................... Senior Vice President and General Counsel of Parent since 1996. Secretary of Parent from 1996 to February 1999. Joined AT&T Law Division in 1984 and was appointed Vice President, Law -- AT&T Network Systems Group in 1992. Age: 46. Patricia F. Russo.................... Executive Vice President, Strategy, Business Development and Corporate Operations of Parent since 1998. Executive Vice President, Corporate Staff Operations of Parent (1997-1998), Executive Vice President, Chief Staff Officer of Parent (1996-1997) and President, Business Communications Systems business unit of Parent (1996). President, Global Business Communications Systems of AT&T (1993-1996). Age: 46. Henry B. Schacht..................... Director of Parent since 1996. Chairman of the Board of E.M. Warburg, Pincus & Parent (1996-1998). Chief Executive Officer of Parent Co., LLC (1996-1997). Director and Senior Advisor of E.M. Warburg, 466 Lexington Avenue Pincus & Co., LLC since March 1999 (global venture capital New York, NY 10017 company). Chairman (1977-1995) and Chief Executive Officer (1973-1994) of Cummins Engine Company, Inc. (designer and manufacturer of diesel engines). Director of The Chase Manhattan Corporation and The Chase Manhattan Bank, N.A., Alcoa Inc., Cummins Engine Company, Inc., Johnson & Johnson, Knoll, Inc. and the New York Times Co. Age: 64. Daniel C. Stanzione.................. Executive Vice President and Chief Operating Officer of Parent since 1997, President, Broadband Networks Group of Parent (since January 1999), Bell Laboratories (since 1996) and Network Systems business unit of Parent (1996-1997). President, AT&T Bell Laboratories (1995-1996) and President, Global Public Networks (1994-1995) and Switching Systems (1993-1994), both units of the AT&T Network Systems Group. Age: 53. Franklin A. Thomas................... Director of Parent since 1996. Consultant to the TFF Study TFF Study Group Group since 1996 (a non-profit initiative assisting Fuller Building development in southern Africa). Retired President of The 595 Madison Avenue Ford Foundation (1979-1996). Director of Alcoa Inc., New York, NY 10022 Citigroup N.A., Cummins Engine Company, Inc. and PepsiCo, Inc. Committees: Chairman of the Corporate Governance and Compensation Committee and Member of the Audit and Finance Committee. Age: 65.
I-2 35
POSITION WITH PARENT; PRINCIPAL OCCUPATION OR NAME AND BUSINESS ADDRESS EMPLOYEE 5-YEAR EMPLOYMENT HISTORY ------------------------- ---------------------------------- Ben J. M. Verwaayen.................. Executive Vice President and Chief Operating Officer of Parent since 1997 and Executive Vice President-President International (1997). President of PTT Telecom (national telecommunications operator of the Netherlands) from 1988 through September 1997. Co-founder of Unisource (pan-European alliance of Telia of Sweden, Swiss Telecom and PTT Telecom). Citizen of The Netherlands. Age: 47. John A. Young........................ Director of Parent since 1996. Vice Chairman of Novell, Inc. Hewlett-Packard Co. since 1997 (provider of directory-enabled networking 3200 Hillview Avenue software). Retired President and Chief Executive Officer of Palo Alto, CA 94304 Hewlett-Packard Company (manufacturer of measurement and computation products) (1978-1992). Director of Wells Fargo Bank, Wells Fargo & Co., Chevron Corp., International Integration Incorporated, SmithKline Beecham p.l.c., Affymetrix, Inc. and Novell, Inc. Committees: Member of the Corporate Governance and Compensation Committee. Age: 67.
2. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The name, business address, present principal occupation or employment and five-year employment history of each of the directors and executive officers of the Purchaser are set forth below. The business address of the directors and executive officers listed below is 600 Mountain Avenue, Murray Hill, New Jersey 07974. Except as set forth below, the directors and executive officers listed below are citizens of the United States.
POSITION WITH THE PURCHASER; PRINCIPAL OCCUPATION OR NAME EMPLOYEE 5-YEAR EMPLOYMENT HISTORY - ---- ---------------------------------- William R. Spivey.................... Group President, Network Products Group of Parent since October 1997 and President of the Purchaser since June 1999. Previously Dr. Spivey was Vice President, Systems and Components, Microelectronics business unit of Parent. Joined AT&T in 1994. Previously Dr. Spivey was President of Tektronix Development Company for Tektronix, Inc. based in Oregon. He has also held senior management positions for Honeywell, Inc. and General Electric in various systems control, computer and semiconductor units. Age: 53. Carol E. Kirby....................... Corporate Counsel for the Network Products Group of Parent since 1998 and Director and Vice President of the Purchaser since June 1999. Corporate counsel for Parent and AT&T Corp. since 1991. Age: 45. Pamela F. Craven..................... Vice President -- Law of Parent since 1996 and Secretary of Parent since February 1999. Director and Vice President of the Purchaser since June 1999. Joined AT&T Corp. Law Division in 1991. Age: 45. Justin C. Choi....................... Corporate Counsel in the Mergers and Acquisitions Law Group of Parent since 1997 and Director and Secretary of the Purchaser since June 1999. Associate at Paul, Hastings, Janofsky & Walker (law firm) (1990-1997). Citizen of the Republic of Korea. Age: 33.
I-3 36 Manually signed facsimile copies of the Letter of Transmittal will be accepted. The Letter of Transmittal, certificates for Shares and any other required documents should be sent or delivered by each stockholder of the Company or such stockholder's broker, dealer, bank, trust company or other nominee to the Depositary at one of its addresses set forth below. The Depositary for the Offer is: THE BANK OF NEW YORK By Mail: By Facsimile: By Hand/Overnight Courier: (for Eligible Institutions Tender & Exchange Department only) Tender & Exchange Department P.O. Box 11248 (212) 815-6213 101 Barclay Street Church Street Station Receive and Delivery Window New York, New York 10286-1248 Confirm by Telephone New York, New York 10286 1-800-507-9357
Questions or requests for assistance may be directed to the Information Agent at its address and telephone number listed below. Additional copies of this Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained from the Information Agent. A stockholder may also contact brokers, dealers, commercial banks or trust companies for assistance concerning the Offer. The Information Agent for the Offer is: MORROW & CO., INC. 445 Park Avenue 5th Floor New York, NY 10022 Banks and Brokerage Firms call: (800) 662-5200 Shareholders please call: (800) 566-9061 EX-99.A.2 3 LETTER OF TRANSMITTAL 1 LETTER OF TRANSMITTAL TO TENDER SHARES OF COMMON STOCK OF SPECTRAN CORPORATION PURSUANT TO THE OFFER TO PURCHASE DATED JULY 21, 1999 BY SEATTLE ACQUISITION INC. A WHOLLY OWNED SUBSIDIARY OF LUCENT TECHNOLOGIES INC. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, AUGUST 17, 1999 UNLESS EXTENDED. The Depositary for the Offer is: THE BANK OF YORK By Mail: By Facsimile: By Hand or Overnight Courier: Tender & Exchange Department (For Eligible Institutions Only) Tender & Exchange Department P.O. Box 11248 (212) 815-6213 101 Barclay Street Church Street Station Receive and Deliver Window New York, New York 10286-1248 Confirmation by Telephone: New York, New York 10286 1-800-507-9357
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
- ------------------------------------------------------------------------------------------------------------------------ DESCRIPTION OF SHARES TENDERED - ------------------------------------------------------------------------------------------------------------------------ NAME(S) AND ADDRESS(ES) OF REGISTERED OWNER(S) (PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARES TENDERED APPEAR(S) ON CERTIFICATE(S)) (ATTACH ADDITIONAL LIST IF NECESSARY) - ------------------------------------------------------------------------------------------------------------------------ TOTAL NUMBER OF SHARES NUMBER CERTIFICATE REPRESENTED BY OF SHARES NUMBER(S)(1) CERTIFICATE(S)(1) TENDERED(2) ------------------------------------------------------ ------------------------------------------------------ ------------------------------------------------------ ------------------------------------------------------ ------------------------------------------------------ Total Shares - ------------------------------------------------------------------------------------------------------------------------ (1) Need not be completed by Book-Entry Stockholders. (2) Unless otherwise indicated, it will be assumed that all Shares described herein are being tendered. See Instruction 4. - ------------------------------------------------------------------------------------------------------------------------
2 This Letter of Transmittal is to be used either if certificates for Shares (as defined below) are to be forwarded herewith or, unless an Agent's Message (as defined in Section 2 of the Offer to Purchase (as defined below)) is utilized, if delivery of Shares is to be made by book-entry transfer to an account maintained by the Depositary at the Book-Entry Transfer Facility (as defined in and pursuant to the procedures set forth in Section 2 of the Offer to Purchase). Stockholders who deliver Shares by book-entry transfer are referred to herein as "Book-Entry Stockholders" and other Stockholders are referred to herein as "Certificate Stockholders." Stockholders whose certificates for Shares are not immediately available or who cannot deliver either the certificates for, or a Book-Entry Confirmation (as defined in Section 2 of the Offer to Purchase) with respect to, their Shares and all other documents required hereby to the Depositary prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase) must tender their Shares in accordance with the guaranteed delivery procedures set forth in Section 2 of the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. [ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER): Name of Tendering Institution The Depository Trust Company Account Number Transaction Code Number [ ] 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 Registered Owner(s) Date of Execution of Notice of Guaranteed Delivery If delivered by book-entry transfer check box: [ ] The Depository Trust Company Account Number Transaction Code Number 2 3 NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY Ladies and Gentlemen: The undersigned hereby tenders to Seattle Acquisition Inc., a Delaware corporation (the "Purchaser") which is a wholly owned subsidiary of Lucent Technologies Inc., a Delaware corporation ("Parent"), the above-described shares of Common Stock, par value $.10 per share (the "Shares"), of SpecTran Corporation, a Delaware corporation (the "Company"), upon the terms and subject to the conditions set forth in the Purchaser's Offer to Purchase dated July 21, 1999 (the "Offer to Purchase"), and this Letter of Transmittal (which, together with any amendments or supplements thereto or hereto, collectively constitute the "Offer"), receipt of which is hereby acknowledged. Upon the terms of the Offer, subject to, and effective upon, acceptance for payment of, and payment for, the Shares tendered herewith in accordance with the terms of the Offer, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Purchaser all right, title and interest in and to all the Shares that are being tendered hereby (and any and all other Shares or other securities or rights issued or issuable in respect thereof on or after July 15, 1999), and irrevocably constitutes and appoints The Bank of New York (the "Depositary"), the true and lawful agent and attorney-in-fact of the undersigned, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to the full extent of the undersigned's rights with respect to such Shares (and any such other Shares or securities or rights), (a) to deliver certificates for such Shares (and any such other Shares or securities or rights) or transfer ownership of such Shares (and any such other Shares or securities or rights) 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, (b) to present such Shares (and any such other Shares or securities or rights) for transfer on the Company's books and (c) to receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and any such other Shares or securities or rights), all in accordance with the terms of the Offer. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the tendered Shares (and any and all other shares or other securities or rights issued or issuable in respect of such Shares on or after July 15, 1999) and, when the same are accepted for payment by the Purchaser, the Purchaser will acquire good title thereto, free and clear of all liens, restrictions, claims and encumbrances, and the same will not be subject to any adverse claim. The undersigned, upon request, will execute any additional documents deemed by the Depositary or the Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the tendered Shares (and any and all such other Shares or securities or rights). All authority conferred or agreed to be conferred pursuant to this Letter of Transmittal shall be binding upon the successors, assigns, heirs, executors, administrators and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. Except as stated in the Offer to Purchase, this tender is irrevocable. The undersigned hereby irrevocably appoints Justin C. Choi and Carol E. Kirby, and each of them, and any other designees of the Purchaser, the attorneys-in-fact and proxies of the undersigned, each with full power of substitution, to vote at any annual, special or adjourned meeting of the Company's stockholders or otherwise in such manner as each such attorney-in-fact and proxy or his substitute shall in his or her sole discretion deem proper with respect to, to execute any written consent concerning any matter as each such attorney-in-fact and proxy or his or her substitute shall in his or her sole discretion deem proper with respect to, and to otherwise act as each such attorney-in-fact and proxy or his or her substitute shall in his or her sole discretion deem proper with respect to, the Shares tendered hereby that have been accepted for payment by the Purchaser prior to the time any such action is taken and with respect to which the undersigned is entitled to vote (and any and all other Shares or other securities or rights issued or issuable in respect of such Shares on or after July 15, 1999). This appointment is effective when, and only to the extent that, the Purchaser accepts for payment such Shares as provided in the Offer to Purchase. This power of attorney and proxy are irrevocable and are granted in consideration of the acceptance for payment of such Shares in accordance with the terms of the Offer. Upon such acceptance for payment, all prior powers of attorney, proxies and consents given by the undersigned with respect to such Shares (and any such other Shares or securities or rights) will, without further action, be revoked and no 3 4 subsequent powers of attorney, proxies, consents or revocations may be given (and, if given, will not be deemed effective) by the undersigned. The undersigned understands that the valid tender of Shares pursuant to any of the procedures described in Section 2 of the Offer to Purchase and in the Instructions hereto will constitute a binding agreement between the undersigned and the Purchaser upon the terms and subject to the conditions of the Offer. Unless otherwise indicated herein under "Special Payment Instructions," please issue the check for the purchase price and/or return any certificates for Shares not tendered or accepted for payment in the name(s) of the registered holder(s) appearing under "Description of Shares Tendered." Similarly, unless otherwise indicated under "Special Delivery Instructions," please mail the check for the purchase price and/or return any certificates for Shares not tendered or accepted for payment (and accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing under "Description of Shares Tendered." In the event that both "Special Delivery Instructions" and "Special Payment Instructions" are completed, please issue the check for the purchase price and/or return any certificates for Shares not tendered or accepted for payment (and any accompanying documents, as appropriate) in the name of, and deliver such check and/or return such certificates (and any accompanying documents, as appropriate) to, the person or persons so indicated. Please credit any Shares tendered herewith by book-entry transfer that are not accepted for payment by crediting the account at the Book-Entry Transfer Facility. The undersigned recognizes that the Purchaser has no obligation pursuant to "Special Payment Instructions" to transfer any Shares from the name of the registered holder thereof if the Purchaser does not accept for payment any of the Shares so tendered. [ ] CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE BEEN LOST OR DESTROYED AND SEE INSTRUCTION 11. Number of Shares represented by the lost or destroyed certificates: __________. 4 5 ------------------------------------------------------------ SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 5, 6 AND 7) To be completed ONLY if certificates for Shares not tendered or not accepted for payment and/or the check for the purchase price of Shares accepted for payment are to be issued in the name of someone other than the undersigned. Issue: [ ] Check [ ] Certificate(s) to: Name: ---------------------------------------------------- (PLEASE PRINT) Address: -------------------------------------------------- ------------------------------------------------------------ (INCLUDE ZIP CODE) ------------------------------------------------------------ (EMPLOYER IDENTIFICATION OR SOCIAL SECURITY NUMBER) ------------------------------------------------------------ ------------------------------------------------------------ SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 5, 6 AND 7) To be completed ONLY if certificates for Shares not tendered or not accepted for payment and/or the check for the purchase price of Shares accepted for payment are to be sent to someone other than the undersigned, or to the undersigned at an address other than that above. Mail: [ ] Check [ ] Certificate(s) to: Name: ---------------------------------------------------- (PLEASE PRINT) Address: -------------------------------------------------- ------------------------------------------------------------ (INCLUDE ZIP CODE) ------------------------------------------------------------ (EMPLOYER IDENTIFICATION OR SOCIAL SECURITY NUMBER) ------------------------------------------------------------ 5 6 SIGN HERE (ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (SIGNATURE(S) OF STOCKHOLDER(S)) Dated: - --------------------------- , 1999 (Must be signed by registered holder(s) as name(s) appear(s) on the certificate(s) for the Shares 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 trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, please provide the following information and see Instruction 5.) Name(s) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (PLEASE PRINT) Capacity (Full Title) - -------------------------------------------------------------------------------- Address - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) Daytime Area Code and Telephone No. - ---------------------------------------------------------------------------- Employer Identification or Social Security Number - ---------------------------------------------------------------- (SEE SUBSTITUTE FORM W-9) GUARANTEE OF SIGNATURE(S) (IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5) Authorized Signature - -------------------------------------------------------------------------------- Name - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (PLEASE PRINT) Name of Firm - -------------------------------------------------------------------------------- Address - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) Daytime Area Code and Telephone No. - ---------------------------------------------------------------------------- Dated: - --------------------------- , 1999 6 7 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this Letter of Transmittal (a) if this Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this Section, includes any participant in the Book-Entry Transfer Facility's system whose name appears on a security position listing as the owner of the Shares) of Shares tendered herewith, unless such registered holder(s) has completed either the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" on this Letter of Transmittal or (b) if such Shares are tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a participant in the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program (such participant, an "Eligible Institution"). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 5. 2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed by stockholders either if certificates are to be forwarded herewith or, unless an Agent's Message (as defined below) is utilized, if delivery of Shares is to be made pursuant to the procedures for book-entry transfer set forth in Section 2 of the Offer to Purchase. For a stockholder to validly tender Shares pursuant to the Offer, either (a) a Letter of Transmittal (or facsimile thereof), properly completed and duly executed, together with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message, and any other required documents, must be received by the Depositary at one of its addresses set forth herein prior to the Expiration Date and either certificates for tendered Shares must be received by the Depositary at one of such addresses or such Shares must be delivered pursuant to the procedures for book-entry transfer set forth herein (and a Book-Entry Confirmation received by the Depositary), in each case prior to the Expiration Date, or (b) the tendering stockholder must comply with the guaranteed delivery procedures set forth below and in Section 2 of the Offer to Purchase. If a stockholder desires to tender Shares pursuant to the Offer and such stockholder's certificates for Shares are not immediately available or the procedures for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Depositary prior to the Expiration Date, such stockholder's tender may be effected by properly completing and duly executing the Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth in Section 2 of the Offer to Purchase. Pursuant to such procedures, (a) such tender must be made by or through an Eligible Institution, (b) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Purchaser, must be received by the Depositary prior to the Expiration Date and (c) the certificates for all tendered Shares in proper form for transfer (or a Book-Entry Confirmation with respect to all such Shares), together with a Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message, and any other required documents, must be received by the Depositary within three trading days after the date of execution of such Notice of Guaranteed Delivery as provided in Section 2 of the Offer to Purchase. A "trading day" is any day on which the New York Stock Exchange, Inc. is open for business. The term "Agent's Message" means a message transmitted by the Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Purchaser may enforce such agreement against the participant. THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT 7 8 REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. No alternative, conditional or contingent tenders will be accepted and no fractional Shares will be purchased. All tendering stockholders, by execution of this Letter of Transmittal (or facsimile thereof), waive any right to receive any notice of the acceptance of their Shares for payment. 3. INADEQUATE SPACE. If the space provided herein is inadequate, the certificate numbers and/or the number of Shares should be listed on a separate schedule attached hereto. 4. PARTIAL TENDERS (Applicable to Certificate Stockholders Only). If fewer than all the Shares evidenced by any certificate submitted are to be tendered, fill in the number of Shares that are to be tendered in the box entitled "Number of Shares Tendered." In any such case, new certificate(s) for the remainder of the Shares that were evidenced by the old certificate(s) will be sent to the registered holder, unless otherwise provided in the appropriate box on this Letter of Transmittal, as soon as practicable after the acceptance for payment of, and payment for, the Shares tendered herewith. 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 of the Shares tendered hereby, the signature must correspond with the name as written on the face of the certificate(s) without any change whatsoever. If any of the Shares tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any tendered Shares are registered in different names on several 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 or any certificates or stock powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and proper evidence satisfactory to the Purchaser of their authority so to act must be submitted. When this Letter of Transmittal is signed by the registered owner(s) of the Shares listed and transmitted hereby, no endorsements of certificates or separate stock powers are required unless payment is to be made to, or certificates for Shares not tendered or accepted for payment are to be issued to, a person other than the registered owner(s). Signatures on 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 owner(s) of the certificates listed, the certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered owner or owners appear on the certificates. Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution. 6. STOCK TRANSFER TAXES. The Purchaser will pay any stock transfer taxes with respect to the transfer and sale of Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or if certificates for Shares not tendered or accepted for payment are to be registered in the name of, any person(s) other than the registered owner(s), or if tendered certificates are registered in the name(s) of any person(s) other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered owner(s) or such person(s)) payable on account of the transfer to such person(s) will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes or exemption therefrom is submitted. EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF TRANSMITTAL. 7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued in the name of, and/or certificates for Shares not accepted for payment are to be returned to, a person other than the signer of this 8 9 Letter of Transmittal or if a check is to be sent and/or such certificates are to be returned to a person other than the signer of this Letter of Transmittal or to an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed. 8. WAIVER OF CONDITIONS. The Purchaser reserves the absolute right in its sole discretion to waive any of the specified conditions of the Offer, in whole or in part, in the case of any Shares tendered, except for the condition that such number of Shares representing a majority of the outstanding Shares (determined on a fully diluted basis for all outstanding stock options and any other rights to acquire Shares on the date of the purchase) be validly tendered and not withdrawn prior to the expiration of the Offer, which condition may not be waived without the prior written consent of the Company. 9. 31% BACKUP WITHHOLDING. In order to avoid backup withholding of Federal income tax on payments of cash pursuant to the Offer, a stockholder surrendering Shares in the Offer must, unless an exemption applies, provide the Depositary with such stockholder's correct taxpayer identification number ("TIN") on Substitute Form W-9 below in this Letter of Transmittal and certify under penalty of perjury that such TIN is correct and that such stockholder is not subject to backup withholding. If a stockholder does not provide such stockholder's correct TIN or fails to provide the certifications described above, the Internal Revenue Service (the "IRS") may impose a penalty on such stockholder and the payment of cash to such stockholder pursuant to the Offer may be subject to backup withholding of 31%. Backup withholding is not an additional income tax. Rather, the amount of the backup withholding can be credited against the U.S. federal income tax liability of the person subject to the backup withholding, provided that the required information is given to the IRS. If backup withholding results in an overpayment of tax, a refund can be obtained by the stockholder upon filing an income tax return. 10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for assistance or additional copies of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery and the Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 may be directed to the Information Agent at its address set forth below. 11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate representing Shares has been lost, destroyed or stolen, the stockholder should promptly notify the Depositary by checking the box immediately preceding the special payment/special delivery instructions and indicating the number of Shares lost. The stockholder will then be instructed as to the steps that must be taken in order to replace the certificate. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost or destroyed certificates have been followed. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE 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, PRIOR TO THE EXPIRATION DATE, OR THE TENDERING STOCKHOLDER MUST COMPLY WITH THE PROCEDURES FOR GUARANTEED DELIVERY. 9 10 IMPORTANT TAX INFORMATION Under Federal income tax law, a stockholder is required to provide the Depositary such stockholder's TIN (i.e., social security number or employer identification number) on Substitute Form W-9 (or otherwise establish a basis for exemption from backup withholding) and certify under penalty of perjury that such TIN is correct and that such stockholder is not subject to backup withholding. If the Shares are held in more than one name or are not in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report. If the Depositary is not provided with a stockholder's correct TIN, the stockholder or other payee may be subject to a penalty imposed by the Internal Revenue Service. In addition, any amounts payable to such stockholder in connection with the Offer may be subject to backup withholding at a 31% rate. The box in Part 3 of the Substitute Form W-9 may be checked if the tendering stockholder has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in Part 3 is checked, the stockholder or other payee must also complete the Certificate of Awaiting Taxpayer Identification Number below in order to avoid backup withholding. Notwithstanding that the box in Part 3 is checked and the Certificate of Awaiting Taxpayer Identification Number is completed, the Depositary will withhold 31% on all payments made prior to the time a properly certified TIN is provided to the Depositary. Certain stockholders (including, among others, all corporations and certain foreign individuals and entities) are not subject to backup withholding. Noncorporate foreign stockholders should complete and sign the main signature form and a Form W-8, Certificate of Foreign Status, a copy of which may be obtained from the Depositary, in order to avoid backup withholding. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for more instructions. 10 11 - ---------------------------------------------------------------------------------------------------------------------------- PAYER'S NAME: THE BANK OF NEW YORK - ---------------------------------------------------------------------------------------------------------------------------- SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT ------------------------------- FORM W-9 AND CERTIFY BY SIGNING AND DATING BELOW Social Security Number DEPARTMENT OF THE TREASURY INTERNAL REVENUE SERVICE OR PAYER'S REQUEST FOR ------------------------------- TAXPAYER IDENTIFICATION Employer Identification NUMBER (TIN) Number(s) ----------------------------------------------------------------------------------------- PART 2 -- Certification -- Under penalties of perjury, I certify that: PART 3 -- (1) the number shown on this form is my correct Awaiting TIN Taxpayer Identification Number (or I am waiting for a number to be issued to me) and [ ] (2) I am not subject to backup withholding because --------------------------------- (a) I am exempt from backup withholding or (b) I have not been notified by the Internal Revenue Service ("IRS") that I am subject to backup withholding PART 4 -- as a result of a failure to report all interest Exempt TIN or dividends or (c) the IRS has notified me that I am no longer subject to backup withholding. [ ] ----------------------------------------------------------------------------------------- CERTIFICATION INSTRUCTIONS -- You must cross out item (2) in Part 2 above if you have been notified by the IRS that you are subject to backup withholding because of under reporting interest or dividends on your tax returns. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS stating that you are no longer subject to backup withholding, do not cross out such item (2). If you are exempt from backup withholding, check the box in Part 4 above. - ---------------------------------------------------------------------------------------------------------------------------- Signature --------------------------------------------------------------------------------------------------------------------------- Date --------------------------------------------------------------------------------------------------------------------------------- , 1999 - ----------------------------------------------------------------------------------------------------------------------------
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9 CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalty of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that, if I do not provide a taxpayer identification number to the Depositary by the time of payment, 31% of all reportable payments made to me thereafter will be withheld until I provide a properly certified taxpayer identification number to the Depositary. - ------------------------------------------------------------ -------------------------------, 1999 Signature Date
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL INFORMATION. 12 The Information Agent for the Offer is: MORROW & CO., INC. 445 Park Avenue 5th Floor New York, NY 10022 Banks and Brokerage Firms please call: (800) 662-5200 Shareholders please call: (800) 566-9061 EX-99.A.3 4 NOTICE OF GUARANTEED DELIVERY 1 NOTICE OF GUARANTEED DELIVERY FOR TENDER OF SHARES OF COMMON STOCK OF SPECTRAN CORPORATION As set forth in Section 2 of the Offer to Purchase (as defined below), this form or one substantially equivalent hereto must be used to accept the Offer (as defined below) if certificates for shares of Common Stock, par value $.10 per share (the "Shares"), of SpecTran Corporation, a Delaware corporation (the "Company"), are not immediately available or if the procedure for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Depositary prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase). This form may be delivered by hand to the Depositary or transmitted by facsimile transmission or mail to the Depositary and must include a guarantee by an Eligible Institution (as defined in Section 2 of the Offer to Purchase). See Section 2 of the Offer to Purchase. The Depositary for the Offer is: THE BANK OF NEW YORK By Mail: By Facsimile: By Hand or Overnight Courier: Tender & Exchange Department (For Eligible Institutions Tender & Exchange Department P.O. Box 11248 Only) 101 Barclay Street Church Street Station (212) 815-6213 Receive and Deliver Window New York, New York 10286-1248 New York, New York 10286 Confirmation by Telephone: 1-800-507-9357
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. This form is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an Eligible Institution under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal. 2 Ladies and Gentlemen: The undersigned hereby tenders to Seattle Acquisition Inc., a Delaware corporation (the "Purchaser"), which is a wholly owned subsidiary of Lucent Technologies Inc., a Delaware corporation, upon the terms and subject to the conditions set forth in the Purchaser's Offer to Purchase dated July 21, 1999 (the "Offer to Purchase"), and the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"), receipt of which is hereby acknowledged, the number of Shares set forth below, all pursuant to the guaranteed delivery procedures set forth in Section 2 of the Offer to Purchase. Number of Shares - -------------------------------- Certificate Nos. (if available): - ---------------------------------------------------- - ---------------------------------------------------- - ---------------------------------------------------- Check box if Shares will be tendered by book-entry transfer: [ ] The Depository Trust Company Account Number - ---------------------------------------------------- Dated: - -------------------------------------------- Name(s) of Record Holder(s) - ---------------------------------------------------- - ---------------------------------------------------- - ---------------------------------------------------- Please Print Address(es) - -------------------------------------- - ---------------------------------------------------- Zip Code Daytime Area Code and Tel. No.: - ---------------------------------------------------- Signature(s): - ------------------------------------- - ---------------------------------------------------- GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a participant in the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program, hereby guarantees to deliver to the Depositary either the certificates representing the Shares tendered hereby, in proper form for transfer, or a Book-Entry Confirmation (as defined in the Offer to Purchase) with respect to such Shares, in any such case together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees, or an Agent's Message (as defined in the Offer to Purchase), and any other required documents, within three trading days (as defined in the Offer to Purchase) after the date hereof. The Eligible Institution that completes this form must communicate this guarantee to the Depositary and must deliver the Letter of Transmittal and certificates for Shares to the Depositary within the time period shown herein. Failure to do so could result in a financial loss to such Eligible Institution. Name of Firm: - ----------------------------------- - ---------------------------------------------------- Address: - ------------------------------------------ - ---------------------------------------------------- Area Code and Tel No. - ---------------------------------------------------- - ---------------------------------------------------- AUTHORIZED SIGNATURE Name: - -------------------------------------------- Please print Title: - ---------------------------------------------- Dated - --------------------------------------------- NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES FOR SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. 2 EX-99.A.4 5 LETTER TO BROKERS, DEALERS 1 MORROW & CO., INC. 445 Park Avenue New York, New York 10022 OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF SPECTRAN CORPORATION AT $9.00 NET PER SHARE BY SEATTLE ACQUISITION INC. A WHOLLY OWNED SUBSIDIARY OF LUCENT TECHNOLOGIES INC. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, AUGUST 17, 1999 UNLESS EXTENDED. July 21, 1999 To Brokers, Dealers, Banks, Trust Companies and Other Nominees: We have been appointed by Seattle Acquisition Inc., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Lucent Technologies Inc., a Delaware corporation ("Parent"), to act as Information Agent in connection with the Purchaser's offer to purchase all outstanding shares of common stock, par value $.10 per share (the "Shares"), of SpecTran Corporation, a Delaware corporation (the "Company"), at $9.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Purchaser's Offer to Purchase dated July 21, 1999 (the "Offer to Purchase"), and the related Letter of Transmittal (which, together with any supplements or amendments thereto, collectively constitute the "Offer"). Please furnish copies of the enclosed materials to those of your clients for whom you hold Shares registered in your name or in the name of your nominee. Enclosed herewith are copies of the following documents: 1. Offer to Purchase dated July 21, 1999; 2. Letter of Transmittal to be used by stockholders of the Company accepting the Offer; 3. The Letter to Stockholders of the Company from the President, Chief Executive Officer and Chairman of the Board of the Board of Directors of the Company accompanied by the Company's Solicitation/Recommendation Statement on Schedule 14D-9; 4. A printed form of letter that may be sent to your clients for whose account you hold Shares in your name or in the name of a nominee, with space provided for obtaining such client's instructions with regard to the Offer; 5. Notice of Guaranteed Delivery; 6. Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9; and 7. Return envelope addressed to The Bank of New York, the Depositary. 2 THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF SHARES THAT WOULD REPRESENT AT LEAST A MAJORITY OF THE OUTSTANDING SHARES (DETERMINED ON A FULLY DILUTED BASIS FOR ALL OUTSTANDING STOCK OPTIONS AND ANY OTHER RIGHTS TO ACQUIRE SHARES ON THE DATE OF PURCHASE) (THE "MINIMUM CONDITION") AND (2) ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE REGULATIONS THEREUNDER APPLICABLE TO THE PURCHASE OF SHARES PURSUANT TO THE OFFER HAVING EXPIRED OR BEEN TERMINATED. WE URGE YOU TO CONTACT YOUR CLIENTS PROMPTLY. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, AUGUST 17, 1999, UNLESS EXTENDED. The Board of Directors of the Company has unanimously approved the Offer and the Merger and determined that the terms of the Offer and the Merger are fair to, and in the best interests of, the stockholders of the Company and unanimously recommends that stockholders of the Company accept the Offer and tender their Shares. The Offer is being made pursuant to the Agreement of Merger dated as of July 15, 1999 (the "Merger Agreement"), among Parent, the Purchaser and the Company pursuant to which, following the consummation of the Offer and the satisfaction or waiver of certain conditions, the Purchaser will be merged with and into the Company, with the Company surviving the merger as a wholly owned subsidiary of Parent (the "Merger"). In the Merger, each outstanding Share (other than Shares owned by the Company or any subsidiary of the Company or by Parent, the Purchaser or any other subsidiary of Parent or by stockholders, if any, who are entitled to and who properly exercise dissenters' rights under Delaware law) will be converted into the right to receive $9.00 per Share, without interest, as set forth in the Merger Agreement and described in the Offer to Purchase. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by The Bank of New York (the "Depositary"), of (a) certificates for (or a timely Book-Entry Confirmation (as defined in the Offer to Purchase) with respect to) such Shares, (b) a Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees, or, in the case of a book-entry transfer effected pursuant to the procedure set forth in Section 2 of the Offer to Purchase, an Agent's Message (as defined in the Offer to Purchase), and (c) any other documents required by the Letter of Transmittal. Accordingly, tendering stockholders may be paid at different times depending upon when certificates for Shares or Book-Entry Confirmations with respect to Shares are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT. Neither the Purchaser nor Parent will pay any fees or commissions to any broker or dealer or other person (other than the Information Agent and the Depositary as described in the Offer to Purchase) in connection with the solicitation of tenders of Shares pursuant to the Offer. You will be reimbursed upon request for customary mailing and handling expenses incurred by you in forwarding the enclosed offering materials to your customers. Questions and requests for additional copies of the enclosed material may be directed to the Information Agent at the address and telephone number set forth on the back cover of the enclosed Offer to Purchase. Very truly yours, MORROW & CO., INC. NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, PARENT, THE DEPOSITARY, THE INFORMATION AGENT OR ANY AFFILIATE THEREOF OR AUTHORIZE YOU OR ANY OTHER PERSON TO GIVE ANY INFORMATION OR USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN. 2 EX-99.A.5 6 LETTER TO CLIENTS 1 OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF SPECTRAN CORPORATION AT $9.00 NET PER SHARE BY SEATTLE ACQUISITION INC. A WHOLLY OWNED SUBSIDIARY OF LUCENT TECHNOLOGIES INC. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, AUGUST 17, 1999, UNLESS EXTENDED. July 21, 1999 To Our Clients: Enclosed for your consideration is an Offer to Purchase, dated July 21, 1999 (the "Offer to Purchase"), and a related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer") relating to an offer by Seattle Acquisition Inc., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Lucent Technologies Inc., a Delaware corporation ("Parent"), to purchase shares of Common Stock, par value $.10 per share (the "Shares"), of SpecTran Corporation, a Delaware corporation (the "Company"), at $9.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer. Also enclosed is the Letter to Stockholders of the Company from the President, Chief Executive Officer and Chairman of the Board of Directors of the Company accompanied by the Company's Solicitation/Recommendation Statement on Schedule 14D-9. WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT. We request instructions as to whether you wish to tender any of or all the Shares held by us for your account, pursuant to the terms and conditions set forth in the Offer. Your attention is directed to the following: 1. The tender price is $9.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer. 2. The Board of Directors of the Company has unanimously approved the Offer and the Merger (as defined below) and determined that the terms of the Offer and the Merger are fair to, and in the best interests of, the stockholders of the Company and unanimously recommends that the stockholders of the Company accept the Offer and tender their Shares. 2 3. The Offer is being made for all outstanding Shares. 4. The Offer is being made pursuant to the Agreement of Merger, dated as of July 15, 1999 (the "Merger Agreement"), by and among Parent, the Purchaser and the Company pursuant to which, following the consummation of the Offer and the satisfaction or waiver of certain conditions, the Purchaser will be merged with and into the Company, with the Company surviving the merger as a wholly owned subsidiary of Parent (the "Merger"). In the Merger, each outstanding Share (other than Shares owned by the Company or any subsidiary of the Company or by Parent, the Purchaser or any other subsidiary of Parent or by stockholders, if any, who are entitled to and who properly exercise dissenters' rights under Delaware law) will be converted into the right to receive $9.00 per Share, without interest, as set forth in the Merger Agreement and described in the Offer to Purchase. 5. The Offer is conditioned upon, among other things, (1) there being validly tendered and not withdrawn prior to the expiration of the Offer that number of Shares which would represent at least a majority of the outstanding Shares (determined on a fully diluted basis for all outstanding stock options and any other rights to acquire Shares on the date of purchase) (the "Minimum Condition") and (2) any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the regulations thereunder applicable to the purchase of Shares pursuant to the Offer having expired or been terminated. 6. The Offer and withdrawal rights will expire at 12:00 midnight, New York City time, on Tuesday, August 17, 1999, unless the Offer is extended by the Purchaser. 7. The Purchaser will pay any stock transfer taxes with respect to the transfer and sale of Shares to it or its order pursuant to the Offer, except as otherwise provided in Instruction 6 of the Letter of Transmittal. If you wish to have us tender any of or all your Shares, please so instruct us by completing, executing, detaching and returning to us the instruction form set forth 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 below. Your instructions to us should be forwarded promptly to permit us to submit a tender on your behalf prior to the expiration of the Offer. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by The Bank of New York (the "Depositary"), of (a) certificates for (or a timely Book-Entry Confirmation (as defined in the Offer to Purchase) with respect to) such Shares, (b) a Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees, or, in the case of a book-entry transfer effected pursuant to the procedure set forth in Section 2 of the Offer to Purchase, an Agent's Message (as defined in the Offer to Purchase), and (c) any other documents required by the Letter of Transmittal. Accordingly, tendering stockholders may be paid at different times depending upon when certificates for Shares or Book-Entry Confirmations with respect to Shares are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT. 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 or acceptance of the Offer would not be in compliance with the laws of such jurisdiction. 2 3 INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE ALL OUTSTANDING SHARES OF COMMON STOCK OF SPECTRAN CORPORATION The undersigned acknowledges receipt of your letter enclosing the Offer to Purchase, dated July 21, 1999, of Seattle Acquisition Inc., a Delaware corporation and a wholly owned subsidiary of Lucent Technologies Inc., a Delaware corporation, and the related Letter of Transmittal, relating to shares of Common Stock, par value $.10 per share, of SpecTran Corporation, a Delaware corporation (the "Shares"). This will instruct you to tender the number of Shares indicated below held by you for the account of the undersigned on the terms and conditions set forth in such Offer to Purchase and the related Letter of Transmittal. Dated: ------------------------------ 1999 ----------------------------------------------------- ----------------------------------------------------- SIGNATURE(S) Number of Shares to be Tendered* ----------------------------------------------------- ------------------------------ Shares ----------------------------------------------------- PLEASE PRINT NAME(S) Address -------------------------------------------- ----------------------------------------------------- (INCLUDE ZIP CODE) ----------------------------------------------------- AREA CODE AND TELEPHONE NO. ----------------------------------------------------- TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER
- --------------- * Unless otherwise indicated, it will be assumed that all your Shares are to be tendered. 3 EX-99.A.6 7 W-9 TAXGUIDELINES 1 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. - ------------------------------------------------------------ GIVE THE FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY NUMBER OF-- - ------------------------------------------------------------ 1. An individual's account The individual 2. Two or more individuals (joint The actual owner of account) the account or, if combined funds, any one of the individuals(1) 3. Husband and wife (joint account) The actual owner of the account or, if joint funds, either person(1) 4. Custodian account of a minor The minor(2) (Uniform Gift to Minors Act) 5. Adult and minor (joint account) The adult or, if the minor is the only contributor, the minor(1) 6. Account in the name of guardian or The ward, minor, or committee for a designated ward, incompetent minor, or incompetent person person(3) 7. a. The usual revocable savings The grantor- trust account (grantor is also trustee(1) trustee) b. So-called trust account that is The actual owner(1) not a legal or valid trust under State law - ------------------------------------------------------------ - ------------------------------------------------------------ GIVE THE EMPLOYER FOR THIS TYPE OF ACCOUNT: IDENTIFICATION NUMBER OF-- - ------------------------------------------------------------ 8. Sole proprietorship account The owner(4) 9. A valid trust, estate, or pension Legal entity (Do trust not furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)(5) 10. Corporate account The corporation 11. Religious, charitable, or The organization educational organization account 12. Partnership account held in the The partnership name of the business 13. Association, club, or other tax- The organization exempt organization 14. A broker or registered nominee The broker or nominee 15. Account with the Department of The public entity Agriculture in the name of a public entity (such as a State or local government, school district, or prison) that receives agricultural program payments - ------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's social security number. (3) Circle the ward's, minor's or incompetent person's name and furnish such person's social security number. (4) Show the name of the owner. (5) List first and circle the name of the legal trust, estate, or pension trust. NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. 2 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 OBTAINING A NUMBER If you don't have a taxpayer identification number or you don't know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number. PAYEES EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from backup withholding on ALL payments include the following: - A corporation. - A financial institution. - An organization exempt from tax under section 501(a), or an individual retirement plan or a custodial account under Section 403(b)(7). - The United States or any agency or instrumentality thereof. - A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof. - A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof. - An international organization or any agency, or instrumentality thereof. - A registered dealer in securities or commodities registered in the U.S. or a possession of the U.S. - A real estate investment trust. - A common trust fund operated by a bank under section 584(a). - An exempt charitable remainder trust, or a nonexempt trust described in section 4947(a)(1). - An entity registered at all times under the Investment Company Act of 1940. - A foreign central bank of issue. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: - Payments to nonresident aliens subject to withholding under section 1441. - Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner. - Payments of patronage dividends where the amount received is not paid in money. - Payments made by certain foreign organizations. Payments of interest not generally subject to backup withholding include the following: - Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. - Payments of tax-exempt interest (including exempt-interest dividends under section 852). - Payments described in section 6049(b)(5) to non-resident aliens. - Payments on tax-free covenant bonds under section 1451. - Payments made by certain foreign organizations. - Payments made to a nominee. Exempt payees described above should file Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER. FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER, IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM. Certain payments other than interest, dividends, and patronage dividends, that are not subject to information reporting are also not subject to backup withholding. For details, see the regulations under sections 6041, 6041A(a), 6045, and 6050A. PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend, interest, or other payments to give taxpayer identification numbers to payers who must report the payments to IRS. IRS uses the numbers for identification purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 31% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail to furnish your 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) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to include any portion of an includible payment for interest, dividends, or patronage dividends in gross income, such failure will be treated as being due to negligence and will be subject to a penalty of 5% on any portion of an under-payment attributable to that failure unless there is clear and convincing evidence to the contrary. (3) 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. (4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--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 EX-99.A.7 8 FORM OF SUMMARY ADVERTISEMENT 1 This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares. The Offer is made solely by the Offer to Purchase, dated July 21, 1999, and the related Letter of Transmittal and 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 the acceptance thereof would not be in compliance with the laws of such jurisdiction. NOTICE OF OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF SPECTRAN CORPORATION AT $9.00 NET PER SHARE BY SEATTLE ACQUISITION INC. a wholly owned subsidiary of LUCENT TECHNOLOGIES INC. Seattle Acquisition Inc., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Lucent Technologies Inc., a Delaware corporation ("Parent"), is offering to purchase all outstanding shares of Common Stock, par value $.10 per share (the "Shares"), of SpecTran Corporation, a Delaware corporation (the "Company"), at $9.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated July 21, 1999, and in the related Letter of Transmittal (which together with any amendments or supplements thereto, collectively constitute the "Offer"). THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, AUGUST 17, 1999, UNLESS EXTENDED. 2 The Offer is conditioned upon, among other things, (i) there being validly tendered and not withdrawn prior to the expiration of the Offer such number of Shares that would constitute at least a majority of the outstanding Shares (determined on a fully diluted basis for all outstanding stock options and any other rights to acquire Shares on the date of purchase) (the "Minimum Condition") and (ii) any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, applicable to the purchase of Shares pursuant to the Offer having expired or been terminated. The Offer is being made pursuant to an Agreement of Merger, dated as of July 15, 1999 (the "Merger Agreement"), among Parent, the Purchaser and the Company pursuant to which, following the consummation of the Offer, the Purchaser will be merged with and into the Company (the "Merger"). On the effective date of the Merger, each outstanding Share (other than Shares owned by the Company or any subsidiary of the Company or by Parent, the Purchaser or any other subsidiary of Parent or by stockholders, if any, who are entitled to and who properly exercise appraisal rights under Delaware law) will be converted into the right to receive $9.00, in cash, without interest. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER AND THE MERGER AND DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY, AND UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES. For purposes of the Offer, the Purchaser shall be deemed to have accepted for payment, and thereby purchased, Shares properly tendered to the Purchaser and not properly withdrawn as, if and when the Purchaser gives oral or written notice to the Depositary of the Purchaser's acceptance for payment of such Shares. Upon the terms and subject to the conditions of the Offer, payment for Shares purchased pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payment from the Purchaser and transmitting payment to tendering stockholders whose Shares have been accepted for payment. In all cases, payment for Shares purchased pursuant to the Offer will be made only after timely receipt by the Depositary of (i) certificates for such Shares or timely confirmation of book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility (as defined in the Offer to Purchase) pursuant to the procedures set forth in Section 2 of the Offer to Purchase, (ii) a properly completed and duly executed Letter of Transmittal (or facsimile thereof) with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message (as defined in the Offer to Purchase) and (iii) any other documents required by the Letter of Transmittal. Under no circumstances will interest be paid by the Purchaser on the purchase price of the Shares to be paid by the Purchaser, regardless of any extension of the Offer or any delay in making such payment. The term "Expiration Date" means 12:00 midnight, New York City time, on Tuesday, August 17, 1999, unless and until the Purchaser, in its sole discretion but subject to the terms of the Merger Agreement, shall have extended the period of time during which the Offer is open, in which event the term "Expiration Date" shall mean the latest time and date on which the Offer, as 3 so extended by the Purchaser, shall expire. The Purchaser expressly reserves the right, in its sole discretion, at any time or from time to time, and regardless of whether or not any of the events set forth in Section 14 of the Offer to Purchase shall have occurred, (i) to extend the period of time during which the Offer is open and thereby delay acceptance for payment of, and the payment for, any Shares, by giving oral or written notice of such extension to the Depositary and (ii) to amend the Offer in any other respect by giving oral or written notice of such amendment to the Depositary. The Purchaser shall not have any obligation to pay interest on the purchase price for tendered Shares, whether or not the Purchaser exercises its right to extend the Offer. There can be no assurance that the Purchaser will exercise its right to extend the Offer (other than as required by the Merger Agreement). Any such extension will be followed by a public announcement thereof no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. During any such extension, all Shares previously tendered and not withdrawn will remain subject to the Offer, subject to the right of a tendering stockholder to withdraw such stockholder's Shares. Except as otherwise provided below, tenders of Shares are irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date and, unless previously accepted for payment and paid for by the Purchaser pursuant to the Offer, may also be withdrawn at any time after Saturday, September 18, 1999. For a withdrawal to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of the Offer to Purchase and must specify the name of the person having delivered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of the Shares to be withdrawn, if different from the name of the person who tendered the Shares. If certificates for Shares have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such certificates, the serial numbers shown on such certificates must be submitted to the Depositary and, unless such Shares have been tendered by an Eligible Institution (as defined in Section 2 of the Offer to Purchase), the signatures on the notice of withdrawal must be guaranteed by an Eligible Institution. If Shares have been tendered pursuant to the procedures for book-entry transfer as set forth in Section 2 of the Offer to Purchase, any notice of withdrawal must also specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn shares and otherwise comply with the Book-Entry Transfer Facility's procedures. Withdrawals of tenders of Shares may not be rescinded, and any Shares properly withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. However, withdrawn Shares may be retendered by again following one of the procedures described in Section 2 of the Offer to Purchase at any time prior to the Expiration Date. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Purchaser, in its sole discretion, whose determination will be final and binding. The Offer to Purchase and the related Letter of Transmittal and other relevant materials will be mailed to record holders of Shares and furnished to brokers, dealers, banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder lists or, if applicable, who are listed as participants in a clearing agency's security position listing, for subsequent transmittal to beneficial owner of Shares. The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the Securities Exchange Act of 1934 is contained in the Offer to Purchase and is incorporated herein by reference. 4 THE OFFER TO PURCHASE AND LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. Requests for copies of the Offer to Purchase, the Letter of Transmittal and all other tender offer materials may be directed to the Information Agent as set forth below, and copies will be furnished promptly at the Purchaser's expense. The Information Agent for the Offer is: MORROW & CO., INC. 445 Park Avenue 5th Floor New York, New York 10022 Banks and Brokerage Firms Please Call:(800) 662-5200 Shareholders Please call: (800) 566-9061 The Depositary for the Offer is: THE BANK OF NEW YORK By Mail: By Facsimile: By Hand/Overnight Courier: Tender & Exchange Department (for Eligible Institutions only) Tender & Exchange Department P.O. Box 11248 (212) 815-6213 101 Barclay Street Church Street Station Receive and Deliver Window New York, New York Confirm by Telephone: New York, New York 10286 10286-1248 1-800-507-9357
EX-99.A.8 9 TEXT OF PRESS RELEASE 1 News Release [LUCENT LOGO] Bill Price Roger Frizzell Michael Polyviou Lucent Technologies Lucent Technologies Porter, LeVay & Rose, Inc. 908-582-4820 (office) 972-745-4831 (office) (For Spectran) 973-515-5038 (home) 972-539-6653 (home) 212-564-4700
LUCENT TECHNOLOGIES TO PURCHASE SPECTRAN CORPORATION, A LEADING MANUFACTURER OF WORLD-CLASS OPTICAL FIBER AND FIBER OPTIC PRODUCTS FOR IMMEDIATE RELEASE: THURSDAY, JULY 15, 1999 MURRAY HILL, N.J. - Lucent Technologies (NYSE:LU) today announced it has signed an agreement to acquire SpecTran Corporation (NASDAQ, NM:SPTR), an industry leader in the design and manufacture of specialty optical fibers and fiber optic products, for about $64 million or $9 a share, plus the assumption of $35 million in SpecTran debt, in an all-cash tender offer. SpecTran, based in Sturbridge, Mass., employs approximately 500 people in two divisions. The first, SpecTran Communication Fiber Technologies in Sturbridge, manufactures high-performance optical fiber for premises data communications and telecommunications applications. SpecTran Specialty Optics Company, located in Avon, Conn., develops custom-engineered fiber solutions and cable components for industrial automation, data communications, military/aerospace and medical applications. Lucent and SpecTran are building off an established relationship. Last year, the two companies signed an agreement giving SpecTran rights to certain Lucent fiber patents for use in the company's manufacturing operations. In addition, Lucent has been one of SpecTran's major customers. The transaction is expected to be completed by the end of the quarter ending Sept. 30, 1999. The impact of the purchase on earnings is expected to be immaterial. "The communications revolution is fueling strong worldwide demand for optical fiber," said Bill Spivey, president of the Network Products Group for Lucent Technologies. "Our acquisition of SpecTran will support continued growth in our business by providing us with new fiber products, additional expertise and new market niches within the optical fiber industry." "SpecTran and Lucent have a number of important synergies that should make this match successful," said Charles B. Harrison, president and chief executive officer of SpecTran. "Working with Lucent and the unmatched technical capabilities of Bell Labs, we have the opportunity to deliver world-class fiber solutions." Harrison intends to stay with Lucent for a transition period to ensure a successful integration of the businesses. Under the terms of the definitive agreement, which has been approved by SpecTran's board of directors, Lucent will begin a cash tender offer for all outstanding shares of SpecTran common stock for $9 a share. The offer is expected to commence on July 21. Any shares not purchased in the offer will be acquired for the same price in cash, in a second-step merger. The offer and merger are subject to the purchase of the majority of the outstanding shares of SpecTran. Lazard Freres & Co. LLC has acted as investment banker to SpecTran Corporation. 2 Lucent's Optical Fiber Business Lucent Technologies is one of the world's leading manufacturers of fiber, with 13 fiber and cable manufacturing operations and joint ventures around the world. Earlier this year, Lucent announced a joint venture in Russia with SviaStroy-1 to produce optical fiber cable. In addition, Lucent has a $350 million expansion program underway at its manufacturing facility in Atlanta, as well as expansion programs under way at other sites in Denmark and China. Lucent's extensive fiber product line is designed by the company's research and development organization, Bell Laboratories, which holds more than 1,600 patents in optical networking. Lucent's Bell Labs invented nonzero-dispersion (NZDF) fiber with its award-winning TrueWave(R) fiber offering. Lucent remains the industry leader in providing fiber for high-capacity networks. To date, Lucent has produced more than 6 billion meters of its TrueWave fiber -- enough fiber to wrap around the world 150 times. About SpecTran Corporation SpecTran Corporation is a leading manufacturer of high-performance multimode and single-mode optical fiber for data communications, telecommunications, CATV and industry applications worldwide. Founded in 1981, the company's application-specific optical fiber and cable products also serve industrial, aerospace and medical markets. For additional information about SpecTran, visit the company's web site at http://www.spectran.com. About Lucent Technologies Lucent Technologies designs, builds and delivers a wide range of public and private networks, communications systems and software, data networking systems, business telephone systems and microelectronics components. Bell Labs is the research and development arm for the company. More information about Lucent Technologies, headquartered in Murray Hill, N.J., is available on its Web site at http://www.lucent.com. EX-99.C.1 10 AGREEMENT OF MERGER 1 EXHIBIT (c)(1) CONFORMED COPY ----------------------------------------------------------------- AGREEMENT OF MERGER BY AND AMONG LUCENT TECHNOLOGIES INC., SEATTLE ACQUISITION INC., AND SPECTRAN CORPORATION ------------------------------------------- Dated as of July 15, 1999 ------------------------------------------- 2 TABLE OF CONTENTS
Page ---- 1. The Offer......................................................................... -2- 1.1. The Offer................................................................ -2- 1.2. Company Actions.......................................................... -4- 2. The Merger........................................................................ -4- 2.1. General.................................................................. -4- 2.2. Certificate of Incorporation............................................. -5- 2.3. By-Laws.................................................................. -5- 2.4. Directors and Officers................................................... -5- 2.5. Conversion of Securities................................................. -6- 2.6. Adjustment of the Merger Consideration................................... -6- 2.7. Dissenting Shares........................................................ -6- 2.8. Surrender of Shares; Stock Transfer Books................................ -7- 2.9. No Further Ownership Rights in Company Capital Stock..................... -9- 2.10. Return of Payment Fund................................................... -9- 2.11. Further Assurances....................................................... -9- 3. Representations and Warranties of the Company..................................... -9- 3.1. Organization............................................................. -10- 3.2. Subsidiaries............................................................. -10- 3.3. Capital Structure........................................................ -10- 3.4. Authority................................................................ -12- 3.5. No Conflict.............................................................. -12- 3.6. SEC Documents; Undisclosed Liabilities................................... -13- 3.7. Schedule 14D-9; Company Proxy Statement.................................. -14- 3.8. Absence of Certain Changes............................................... -14- 3.9. Properties............................................................... -16- 3.10. Leases................................................................... -16- 3.11. Contracts................................................................ -17- 3.12. Absence of Default....................................................... -18- 3.13. Litigation............................................................... -18- 3.14. Compliance with Law...................................................... -19- 3.15. Intellectual Property; Year 2000......................................... -19- 3.16. Taxes.................................................................... -20- 3.17. Benefit Plans............................................................ -21- 3.18. ERISA Compliance......................................................... -21- 3.19. Employment Matters....................................................... -23- 3.20. Environmental Laws....................................................... -24-
-i- 3 3.21. Accounts Receivable; Inventory........................................... -24- 3.22. Customers and Suppliers.................................................. -24- 3.23. Voting Requirements...................................................... -25- 3.24. State Takeover Statutes.................................................. -25- 3.25. Brokers.................................................................. -25- 3.26. Opinion of Financial Advisor............................................. -26- 3.27. Complete Copies of Materials............................................. -26- 3.28. Disclosure............................................................... -26- 4. Representations and Warranties of Lucent and Acquisition.......................... -26- 4.1. Organization, Standing and Corporate Power............................... -26- 4.2. Authority................................................................ -26- 4.3. No Conflict.............................................................. -27- 4.4. Information Supplied..................................................... -27- 4.5. Brokers.................................................................. -28- 5. Conduct Pending Closing........................................................... -28- 5.1. Conduct of Business Pending Closing...................................... -28- 5.2. Prohibited Actions Pending Closing....................................... -38- 5.3. Other Actions............................................................ -30- 6. Additional Agreements............................................................. -31- 6.1. Access; Documents; Supplemental Information.............................. -31- 6.2. No Solicitation by the Company........................................... -32- 6.3. Preparation of the Company Proxy Statement; Company Stockholders Meeting............................................. -34- 6.4. Reasonable Best Efforts.................................................. -35- 6.5. Stock Options; Warrants.................................................. -35- 6.6. Employee Benefit Plans; Existing Agreement............................... -36- 6.7. Indemnification.......................................................... -37- 6.8. Directors................................................................ -37- 6.9. Fees and Expenses........................................................ -38- 6.10. Public Announcements..................................................... -39- 6.11. Stockholder Litigation................................................... -39- 7. Conditions Precedent.............................................................. -39- 7.1. Conditions Precedent to Each Party's Obligation to Effect the Merger..... -39- 7.2. Conditions Precedent to Obligations of Acquisition and Lucent............ -40- 7.3. Conditions Precedent to the Company's Obligations........................ -41- 8. Non-Survival of Representation and Warranties..................................... -41- 8.1. Representations and Warranties........................................... -41-
-ii- 4 9. Contents of Agreement; Parties in Interest; etc................................... -41- 10. Assignment and Binding Effect..................................................... -42- 11. Termination....................................................................... -42- 12. Definitions....................................................................... -43- 13. Notices........................................................................... -45- 14. Amendment......................................................................... -46- 15. Extensions; Waiver................................................................ -47- 16. Governing Law..................................................................... -47- 17. No Benefit to Others.............................................................. -47- 18. Severability...................................................................... -47- 19. Section Headings.................................................................. -47- 20. Schedules and Exhibits............................................................ -48- 21. Counterparts...................................................................... -48- Glossary of Defined Terms.................................................................. i
-iii- 5 AGREEMENT OF MERGER AGREEMENT OF MERGER ("Agreement") dated as of July 15, 1999 by and among LUCENT TECHNOLOGIES INC., a Delaware corporation ("Lucent"), SEATTLE ACQUISITION INC., a Delaware corporation ("Acquisition"), and SPECTRAN CORPORATION, a Delaware corporation (the "Company"). BACKGROUND A. The Company is a Delaware corporation with its registered office located at 9 East Lockerman Street, Dover, Delaware 19901 and has authorized 20,000,000 shares of common stock with voting rights, par value $.10 per share (the "Company Voting Common Stock"), of which 7,040,930 shares of Company Voting Common Stock are issued and outstanding, and 250,000 shares of common stock with no voting rights, par value $.10 per share (the "Company Non-Voting Common Stock" and together with the Company Voting Common Stock, the "Company Common Stock"), of which no shares of Company Non-Voting Common Stock are issued and outstanding. The Company is engaged principally in the design, development, production, marketing, distribution, maintenance and support of multi-mode and single-mode optical fiber for data communications and telecommunications applications. B. Lucent is a Delaware corporation with its registered office located at 1013 Centre Road, Wilmington, Delaware. C. Acquisition is a wholly-owned subsidiary of Lucent and was formed to merge with and into the Company so that, as a result of the merger, the Company will survive and become a wholly-owned subsidiary of Lucent. Acquisition is a Delaware corporation with its registered office located at 1013 Centre Road, Wilmington, Delaware and has authorized an aggregate of 1,000 shares of common stock, no par value per share (the "Acquisition Common Stock"). D. In furtherance of the acquisition of the Company by Lucent on the terms and subject to the conditions set forth in this Agreement, Lucent proposes to cause Acquisition to make a tender offer (as it may be amended from time to time as permitted under this Agreement, the "Offer") to purchase all the outstanding shares of Company Common Stock (the "Shares"), at a purchase price of $9.00 per Share (the "Offer Price"), net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in this Agreement. E. The Board of Directors of each of Lucent, Acquisition and the Company has determined that the Offer, this Agreement and the merger of Acquisition with and into the Company (the "Merger") in accordance with the provisions of the Delaware General Corporation Law, as amended (the "DGCL"), and, subject to the terms and conditions of this Agreement, is advisable and in the best interests of Lucent, Acquisition and the Company and their respective 6 stockholders. The Board of Directors of each of Lucent, Acquisition and the Company have approved the Offer, this Agreement and the Merger. NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto intending to be legally bound do hereby agree as follows: 1. The Offer. 1.1. The Offer. (a) Subject to the provisions of this Agreement, as promptly as practicable but in no event later than five business days after the date of the public announcement by Lucent and the Company of this Agreement, Acquisition shall, and Lucent shall cause Acquisition to, commence the Offer. The initial expiration date for the Offer shall be the 20th business day following the commencement of the Offer. The obligation of Acquisition to accept for payment, and pay for, any Shares tendered pursuant to the Offer shall be subject only to the conditions set forth in Exhibit A (the "Offer Conditions") (any of which may be waived in whole or in part by Acquisition in its sole discretion; provided that, without the prior written consent of the Company, Acquisition shall not waive the Minimum Condition (as defined in Exhibit A)) and to the terms and conditions of this Agreement. Acquisition expressly reserves the right to modify the terms of the Offer, except that, without the consent of the Company, Acquisition shall not (i) reduce the number of Shares subject to the Offer, (ii) reduce the Offer Price, (iii) amend or add to the Offer Conditions any terms that are adverse to the holders of the Shares, (iv) except as provided in the next sentence, extend the Offer, (v) change the form of consideration payable in the Offer or (vi) amend any other term of the Offer in any manner adverse to the holders of the Shares. Notwithstanding the foregoing, Acquisition may, without the consent of the Company, (A) extend the Offer, if at the scheduled or extended expiration date of the Offer any of the Offer Conditions shall not be satisfied or waived, until such time as such conditions are satisfied or waived, (B) extend the Offer for any period required by any rule, regulation, interpretation or position of the Securities and Exchange Commission (the "SEC") or the staff thereof applicable to the Offer or any period required by applicable law and (C) extend the Offer on one or more occasions for an aggregate period of not more than 10 business days beyond the latest expiration date that would otherwise be permitted under clause (A) or (B) of this sentence, if on such expiration date there shall not have been tendered at least 90% of the outstanding Shares. Lucent and Acquisition agree that if all the Offer Conditions are not satisfied on any scheduled expiration date of the Offer then, provided that all such conditions are reasonably capable of being satisfied, Acquisition shall extend the Offer from time to time until such conditions are satisfied or waived; provided that Acquisition shall not be required to extend the Offer beyond September 30, 1999. Subject to the terms and conditions of the Offer and this Agreement, Acquisition shall, and Lucent shall cause Acquisition to, accept for payment, and pay for, all Shares validly tendered and not withdrawn pursuant to the Offer that Acquisition becomes obligated to accept for payment and pay for, pursuant to the Offer as promptly as practicable after the expiration of the Offer. -2- 7 (b) On the date of commencement of the Offer, Lucent and Acquisition shall file with the SEC a Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1") with respect to the Offer, which shall contain an offer to purchase and a related letter of transmittal and summary advertisement (such Schedule 14D-1 and the documents included therein pursuant to which the Offer shall be made, together with any supplements or amendments thereto, the "Offer Documents"). Lucent and Acquisition agree that the Offer Documents shall comply as to form in all material respects with the Securities Exchange Act of 1934 (the "Exchange Act"), and the rules and regulations promulgated thereunder and the Offer Documents, on the date first published, sent or given to the Company's stockholders, shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that no representation or warranty is made by Lucent or Acquisition with respect to information supplied by the Company or any of its stockholders specifically for inclusion or incorporation by reference in the Offer Documents. Each of Lucent, Acquisition and the Company agree promptly to correct any information provided by it for use in the Offer Documents if and to the extent that such information shall have become false or misleading in any material respect, and Lucent and Acquisition further agree to take all steps necessary to cause the Schedule 14D-1 as so corrected to be filed with the SEC and the other Offer Documents as so corrected to be disseminated to the Company's stockholders, in each case as and to the extent required by applicable federal securities laws. The Company and its counsel shall be given reasonable opportunity to review and comment upon the Offer Documents prior to their filing with the SEC or dissemination to the stockholders of the Company. Lucent and Acquisition agree to provide the Company and its counsel any comments Lucent, Acquisition or their counsel may receive from the SEC or its staff with respect to the Offer Documents promptly after the receipt of such comments. (c) Lucent shall provide or cause to be provided to Acquisition on a timely basis the funds necessary to accept for payment, and pay for, any Shares that Acquisition becomes obligated to accept for payment, and pay for, pursuant to the Offer. 1.2. Company Actions. (a) The Company hereby approves of and consents to the Offer and represents that the Board of Directors of the Company, at a meeting duly called and held, duly and unanimously adopted resolutions approving this Agreement, the Offer and the Merger, determining, as of the date of such resolutions, that the terms of the Offer and the Merger are fair to, and in the best interests of, the Company's stockholders, recommending that the Company's stockholders accept the Offer, tender their shares pursuant to the Offer and approve this Agreement (if required) and approving the acquisition of Shares by Acquisition pursuant to the Offer and the other transactions contemplated by this Agreement. The Company has been advised by each of its directors and executive officers who owns Shares (each of whom is listed in Item 1.2(a) of the Company Disclosure Schedule) that such person currently intends to tender all Shares (other than Shares, if any, held by such person that, if tendered, could cause such person to incur liability under the provisions of Section 16(b) of the Exchange Act) owned by such person pursuant to the Offer. -3- 8 (b) On the date the Offer Documents are filed with the SEC, the Company shall file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as supplemented or amended from time to time, the "Schedule 14D-9") containing, subject to the terms of this Agreement, the recommendation described in paragraph (a) and shall mail the Schedule 14D-9 to the stockholders of the Company. The Schedule 14D-9 shall comply as to form in all material respects with the requirements of the Exchange Act and the rules and regulations promulgated thereunder and, on the date filed with the SEC and on the date first published, sent or given to the Company's stockholders, shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that no representation or warranty is made by the Company with respect to information supplied by Lucent or Acquisition specifically for inclusion in the Schedule 14D-9. Each of the Company, Lucent and Acquisition agrees promptly to correct any information provided by it for use in the Schedule 14D-9 if and to the extent that such information shall have become false or misleading in any material respect, and the Company further agrees to take all steps necessary to amend or supplement the Schedule 14D-9 and to cause the Schedule 14D-9 as so amended or supplemented to be filed with the SEC and disseminated to the Company's stockholders, in each case as and to the extent required by applicable federal securities laws. Lucent and its counsel shall be given reasonable opportunity to review and comment upon the Schedule 14D-9 prior to its filing with the SEC or dissemination to stockholders of the Company. The Company agrees to provide Lucent and its counsel any comments the Company or its counsel may receive from the SEC or its staff with respect to the Schedule 14D-9 promptly after the receipt of such comments. (c) In connection with the Offer and the Merger, the Company shall cause its transfer agent to furnish Acquisition promptly with mailing labels containing the names and addresses of the record holders of Shares as of a recent date and of those persons becoming record holders subsequent to such date, together with copies of all lists of stockholders, security position listings and computer files and all other information in the Company's possession or control regarding the beneficial owners of Shares, and shall furnish to Acquisition such information and assistance (including updated lists of stockholders, security position listings and computer files) as Lucent may reasonably request in communicating the Offer to the Company's stockholders. Subject to the requirements of applicable law, and except for such steps as are necessary to disseminate the Offer Documents and any other documents necessary to consummate the Merger, Lucent and Acquisition and each of their agents shall hold in confidence the information contained in any such labels, listings and files, will use such information only in connection with the Offer and the Merger and, if this Agreement shall be terminated, will deliver, and will use their reasonable efforts to cause their agents to deliver, to the Company all copies and any extracts or summaries from such information then in their possession or control. -4- 9 2. The Merger. 2.1. General. (a) Upon the terms and subject to the conditions of this Agreement and in accordance with the DGCL, at the Effective Time, (i) Acquisition shall be merged with and into the Company, (ii) the separate corporate existence of Acquisition shall cease and (iii) the Company shall be the surviving corporation (the "Surviving Corporation") and shall succeed to and assume all the rights and obligations of Acquisition in accordance with the DGCL. At the election of Lucent, to the extent that any such action would not cause a failure of a condition to the Offer or the Merger, any direct or indirect wholly owned Subsidiary of Lucent may be substituted for and assume all of the rights and obligations of Acquisition as a constituent corporation in the Merger. In either such event, the parties agree to execute an appropriate amendment to this Agreement in order to reflect the foregoing. (b) The Merger shall become effective at the time of filing of the certificate of merger with the Secretary of State of the State of Delaware substantially in the form of Exhibit B attached hereto (the "Certificate of Merger") in accordance with the provisions of Section 251 of the DGCL or such later time as may be stated in the Certificate of Merger or such later date as the parties may mutually agree (the "Effective Time"). Subject to the terms and conditions of this Agreement, the Company and Acquisition shall duly execute and file the Certificate of Merger with the Secretary of State of the State of Delaware at the time of the Closing. The closing of the Merger (the "Closing") shall take place at the offices of Sidley & Austin, 875 Third Avenue, New York, N.Y. at 10:00 A.M., two business days after the date on which the last of the conditions set forth in Article 7 shall have been satisfied or waived, or on such other date, time and place as the parties may mutually agree (the "Closing Date"). (c) At the Effective Time, the effect of the Merger shall be as provided in the applicable provisions of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the property, rights, privileges, powers and franchises of the Company and Acquisition shall vest in the Surviving Corporation, and all debts, liabilities, obligations, restrictions, disabilities and duties of the Company and Acquisition shall become the debts, liabilities, obligations, restrictions, disabilities and duties of the Surviving Corporation. 2.2. Certificate of Incorporation. The certificate of incorporation of Acquisition, as in effect immediately prior to the Effective Time, shall be the certificate of incorporation of the Surviving Corporation until thereafter amended as provided therein and by law except that Article I of such certificate of incorporation shall be amended to read as follows: "The name of the Corporation is: SpecTran Corporation." 2.3. By-Laws. The by-laws of Acquisition, as in effect immediately prior to the Effective Time, shall be the by-laws of the Surviving Corporation until thereafter amended as provided therein and by law. -5- 10 2.4. Directors and Officers. From and after the Effective Time, (a) the directors of Acquisition immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation, each to hold office in accordance with the certificate of incorporation and by-laws of the Surviving Corporation, and (b) the officers of Acquisition immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation, in each case, until their respective successors are duly elected or appointed and qualified. 2.5. Conversion of Securities. At the Effective Time, by virtue of the Merger and without any action on the part of Lucent, Acquisition, the Company or the holders of any of the following securities: (a) Each issued and outstanding share of common stock of Acquisition shall be converted into one validly issued, fully paid and nonassessable share of Common Stock, $.10 par value per share, of the Surviving Corporation; (b) Each Share that is owned or held in treasury by the Company and each Share that is owned by Acquisition or Lucent shall automatically be canceled and retired and shall cease to exist without any conversion thereof and no payment or distribution shall be made with respect thereto. Each Share that is owned by any Subsidiary of either the Company or Lucent (other than Acquisition) shall remain outstanding without change; and (c) Subject to the provisions of Section 2.6, each Share issued and outstanding immediately prior to the Effective Time (other than Shares to be canceled or to remain outstanding in accordance with Section 2.5(b) and other than Dissenting Shares) shall be converted into the right to receive from the Surviving Corporation in cash, without interest, the price per share paid in the Offer (the "Merger Consideration"). As of the Effective Time, all such Shares shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and each holder of record of a certificate representing any such Shares shall cease to have any rights with respect thereto other than the right to receive the Merger Consideration, without interest. 2.6. Adjustment of the Merger Consideration. In the event that, subsequent to the date of this Agreement but prior to the Effective Time, any stock split, combination, reclassification or stock dividend with respect to the outstanding shares of Company Common Stock, any change or conversion of outstanding shares of Company Common Stock into other securities or any other dividend or distribution with respect to the outstanding shares of Company Common Stock should occur, appropriate and proportionate adjustments shall be made to the Merger Consideration, and thereafter all references to the Merger Consideration shall be deemed to be to the Merger Consideration as so adjusted. 2.7. Dissenting Shares. (a) Notwithstanding any provision of this Agreement to the contrary, shares of Company Common Stock that are outstanding immediately prior to the Effective Time and which are held by stockholders who shall not have voted in favor of the -6- 11 Merger or consented thereto in writing and who shall have demanded properly in writing appraisal for such shares in accordance with Section 262 of the DGCL (collectively, the "Dissenting Shares") shall not be converted into or represent the right to receive the consideration set forth in Section 2.5(c). Such stockholders shall instead be entitled to receive such consideration as is determined to be due with respect to such Dissenting Shares in accordance with the provisions of Section 262, except that all Dissenting Shares held by such stockholders who shall have failed to perfect or who effectively shall have withdrawn their demand for appraisal or lost their rights to appraisal of such shares under Section 262, after the Effective Time, shall thereupon be deemed to have been converted into and to have become exchangeable for, as of the Effective Time, the right to receive the Merger Consideration in Section 2.5(c), without any interest thereon, upon surrender, in the manner provided in Section 2.8, of the certificate or certificates that formerly evidenced by such Dissenting Shares. (b) The Company shall give Lucent (i) prompt notice of any demands for appraisal of Shares received by the Company, withdrawals of such demands, and any other instruments served pursuant to the DGCL and received by the Company and (ii) the opportunity to participate in and direct all negotiations and proceedings with respect to demands for appraisal under the DGCL. The Company shall not, except with the prior written consent of Lucent, make any payment with respect to any demands for appraisal or offer to settle or settle any such demands. 2.8. Surrender of Shares; Stock Transfer Books. (a) Prior to the Effective Time, Lucent shall designate The Bank of New York, or another bank or trust company designated by Lucent, to act as paying agent in the Merger (the "Paying Agent"), and, from time to time, on, prior to or after the Effective Time, Lucent shall make available, or cause the Surviving Corporation to make available, to the Paying Agent cash in the amounts and at the times necessary for the prompt payment of the Merger Consideration upon surrender of certificates representing outstanding shares of Company Common Stock (the "Certificates") as part of the Merger pursuant to Section 2.5, and such amounts as and when so made available shall hereinafter be referred to as the "Payment Fund" (it being understood that any and all interest earned on funds deposited with the Paying Agent pursuant to this Agreement shall be turned over to Lucent). (b) As soon as practicable after the Effective Time, Lucent shall use its reasonable best efforts to cause the Paying Agent to send to each Person who was, at the Effective Time, a holder of record of Certificates, a letter of transmittal which (i) shall specify that delivery shall be effected and risk of loss and title to such Certificates shall pass, only upon actual delivery thereof to the Paying Agent and (ii) shall contain instructions for use in effecting the surrender of the Certificates. Upon surrender to the Paying Agent of Certificates for cancellation, together with such letter of transmittal duly completed and validly executed in accordance with the instructions thereto and such other documents as the Paying Agent may reasonably require, such holder shall be entitled to receive in exchange therefor the applicable -7- 12 Merger Consideration, and the Certificates so surrendered shall then be canceled. Such Merger Consideration shall be mailed as promptly as practicable after the satisfaction by such holder of the foregoing. Subject to Section 2.8(c), until surrendered as contemplated by this Section 2.8(b), each Certificate, from and after the Effective Time, shall be deemed to represent only the right to receive, upon such surrender, the Merger Consideration. No interest will be paid or will accrue on the cash payable upon the surrender of any Certificate. (c) If payment of any portion of the Merger Consideration is to be made to any Person other than the registered holder of the Certificate surrendered in exchange therefor, it shall be a condition to such payment that such surrendered Certificate shall be properly endorsed and otherwise in proper form for transfer and such Person either (i) shall pay to the Paying Agent any transfer or other taxes required as a result of the payment of the Merger Consideration to such Person or (ii) shall establish to the satisfaction of the Surviving Corporation that such taxes have been paid or are not applicable. Lucent, Acquisition or the Paying Agent, as the case may be, shall be entitled to deduct and withhold from the Merger Consideration or Company Stock Option Consideration otherwise payable pursuant to this Agreement to any holder of shares of Company Common Stock or holder of Company Stock Options such amounts as are required to be deducted and withheld with respect to the making of such payment under the Code, or any provision of state, local or foreign tax law. To the extent that amounts are so withheld by Lucent, Acquisition or the Paying Agent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of shares of Company Common Stock or holder of Company Stock Options, in respect of which such deduction and withholding was made by Lucent, Acquisition or the Paying Agent. All amounts in respect of taxes received or withheld by Lucent, Acquisition or the Paying Agent shall be disposed of by Lucent, Acquisition or the Paying Agent in accordance with the Code or such state, local or foreign tax law, as applicable. (d) If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and subject to such other conditions as the Board of Directors of the Surviving Corporation may impose, the Paying Agent shall pay in exchange for such lost, stolen or destroyed Certificate the Merger Consideration deliverable in respect of such Certificate as determined in accordance herewith. When authorizing such payment of the Merger Consideration in exchange for such Certificate, the Board of Directors of the Surviving Corporation (or any authorized officer thereof) may, in its reasonable discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed Certificate to deliver to the Surviving Corporation a bond in such sum as the Surviving Corporation may reasonably require as indemnity against any claim that may be made against Lucent, the Surviving Corporation or the Paying Agent with respect to the Certificate alleged to have been lost, stolen or destroyed. (e) At the close of business on the day on which the Effective Time occurs, the stock transfer books of the Company shall be closed and thereafter there shall be no further -8- 13 registration of transfers of shares of Company Common Stock on the records of the Company. From and after the Effective Time, the holders of shares of Company Common Stock outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such shares except as otherwise provided herein or by applicable law. (f) Neither Lucent nor the Company shall be liable to any former holder of Company Capital Stock for any Merger Consideration which is delivered to a public official pursuant to an official request under any applicable abandoned property, escheat or similar law. 2.9. No Further Ownership Rights in Company Capital Stock. The Merger Consideration shall be deemed to have been delivered (and paid) in full satisfaction of all rights pertaining to the Company Common Stock previously represented by such surrendered Certificates. 2.10. Return of Payment Fund. Any portion of the Payment Fund which remains undistributed to the former holders of Company Common Stock for six months after the Effective Time shall be delivered to Lucent, upon its request, and any such former holders who have not theretofore surrendered to the Paying Agent their Certificates in compliance herewith shall thereafter look only to Lucent for payment of their claim for their portion of the Payment Fund. Neither Lucent, Acquisition, the Paying Agent or the Company shall be liable to any former holder of Company Common Stock for any portion of the Payment Fund which is delivered to a public official pursuant to an official request under any applicable abandoned property, escheat or similar law. 2.11. Further Assurances. If at any time after the Effective Time the Surviving Corporation shall consider or be advised that any deeds, bills of sale, assignments or assurances or any other acts or things are necessary, desirable or proper (a) to vest, perfect or confirm, of record or otherwise, in the Surviving Corporation its right, title or interest in, to or under any of the rights, privileges, powers, franchises, properties or assets of either the Company or Acquisition or (b) otherwise to carry out the purposes of this Agreement, the Surviving Corporation and its proper officers and directors or their designees shall be authorized to execute and deliver, in the name and on behalf of either the Company or Acquisition, all such deeds, bills of sale, assignments and assurances and do, in the name and on behalf of the Company or Acquisition, all such other acts and things necessary, desirable or proper to vest, perfect or confirm its right, title or interest in, to or under any of the rights, privileges, powers, franchises, properties or assets of the Company or Acquisition, as applicable, and otherwise to carry out the purposes of this Agreement. 3. Representations and Warranties of the Company. Except as set forth on the Disclosure Schedule delivered by the Company to Lucent prior to the execution of this Agreement (the "Company Disclosure Schedule") and making reference to the particular subsection of this Agreement to which exception is being taken, the Company represents and warrants to Lucent and Acquisition as follows: -9- 14 3.1. Organization. Each of the Company and its Subsidiaries is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization and has all requisite power and authority and all necessary governmental approval to carry on its business as it has been and is now being conducted. Except as set forth in Item 3.1 of the Company Disclosure Schedule, each of the Company and its Subsidiaries is duly qualified or licensed as a foreign corporation to do business and is in good standing (with respect to jurisdictions which recognize such concept) in each jurisdiction where the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing necessary, except where the failure to be so qualified or licensed and in good standing, would not have a Material Adverse Effect. The Company has made available to Lucent prior to the execution of this Agreement complete and correct copies of its certificate of incorporation and by-laws and the charter documents for each of its Subsidiaries in each case, as amended to the date hereof. 3.2. Subsidiaries. Item 3.2 of the Company Disclosure Schedule contains (i) the name and jurisdiction of incorporation of each Subsidiary of the Company, (ii) the total number of shares of each class of capital stock of (or other equity interests in) each Subsidiary authorized, the number of shares (or other equity interests) outstanding and the number of shares (or other equity interests) owned by the Company or any other Subsidiary of the Company and (iii) a complete list of the directors and officers of the Company and each Subsidiary. All the issued and outstanding capital stock of (or other equity interests in) each Subsidiary have been duly and validly authorized and issued and are fully paid, nonassessable and free of pre-emptive rights. None of the outstanding capital stock of (or other equity interests in) any Subsidiary has been issued in violation of the preemptive rights of any equity holder of such Subsidiary. The capital stock of (or other equity interests in) each Subsidiary were issued in compliance in all material respects with all applicable federal and state securities laws and regulations, are owned free and clear of all Liens (except as set forth in Item 3.2 of the Company Disclosure Schedule) and are free of any restriction on the right to vote, sell or otherwise dispose of such capital stock or other equity interest. 3.3. Capital Structure. (a) The authorized capital stock of the Company consists of 20,000,000 shares of Company Voting Common Stock and 250,000 shares of Company Non-Voting Common Stock. At the close of business on July 14, 1999, (i) 7,040,930 shares of Company Voting Common Stock were issued and outstanding; (ii) no shares of Company Non-Voting Common Stock were issued and outstanding; (iii) no shares of Company Common Stock were held by the Company in its treasury; (iv) 150,000 shares of Company Common Stock were reserved for issuance upon exercise of the Warrants; and (v) 1,411,836 shares of Company Common Stock were reserved for issuance pursuant to the SpecTran Corporation 1991 Incentive Stock Option Plan and the SpecTran Corporation Incentive Stock Option Plan (collectively, the "Company Stock Plans") (of which 1,037,739 shares are subject to outstanding Company Stock Options as of July 14, 1999). -10- 15 (b) Except as set forth in paragraph (a), at the close of business on July 14, 1999, no shares of capital stock or other voting securities of the Company were issued, reserved for issuance or outstanding. There are no outstanding stock appreciation rights ("SARs") or rights (other than outstanding stock options or other rights to purchase or receive Company Common Stock granted under the Company Stock Plans (collectively, "Company Stock Options")) to receive shares of Company Common Stock on a deferred basis granted under the Company Stock Plans or otherwise and no warrants to purchase shares of capital stock of the Company at any time or upon the occurrence of any stated event. The Company has delivered to Lucent a complete and correct list, as of June 30, 1999, of the number of shares of Company Common Stock subject to Company Stock Options and the exercise prices thereof. (c) As of the date of this Agreement, no bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company may vote are issued or outstanding. All outstanding shares of capital stock of the Company are, and all shares which may be issued upon the exercise of the Warrants will be, when issued, duly authorized, validly issued, fully paid and nonassessable, not subject to preemptive rights and were issued in compliance in all material respects with all applicable federal and state securities laws. (d) Except as set forth in this Section 3.3 and except for changes since July 14, 1999 resulting from the issuance of shares of Company Common Stock pursuant to Company Stock Options outstanding as of July 14, 1999, there are not issued, reserved for issuance or outstanding (i) any shares of capital stock or other voting securities of the Company, (ii) any securities of the Company convertible into or exchangeable or exercisable for shares of capital stock or voting securities of the Company, (iii) any warrants, calls, options or other rights to acquire from the Company or any Subsidiary, and no obligation of the Company or any Subsidiary to issue, any capital stock, voting securities or securities convertible into or exchangeable or exercisable for capital stock or voting securities of the Company. Except as set forth in this Section 3.3, on the date hereof there are not any outstanding obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any such securities or to issue, deliver or sell, or cause to be issued, delivered or sold, any such securities. The Company is not a party to any voting agreement with respect to the voting of any such securities. (e) There are no outstanding (i) securities of the Company or any Subsidiary convertible into or exchangeable or exercisable for shares of capital stock or other voting securities or ownership interests in any Subsidiary, (ii) warrants, calls, options or other rights to acquire from the Company or any Subsidiary, and no obligation of the Company or any Subsidiary to issue, any capital stock, voting securities or other ownership interests in, or any securities convertible into or exchangeable or exercisable for any capital stock, voting securities or ownership interests in, any such Subsidiary or (iii) obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any such outstanding securities of such Subsidiaries or to issue, deliver or sell, or cause to be issued, delivered or sold, any such -11- 16 securities. Except for the Company's ownership of the Subsidiaries, the Company does not, directly or indirectly, have any ownership or other interest in, or control of, any Person, nor is the Company or any Subsidiary controlled by or under common control with any Person. 3.4. Authority. The Company has all requisite corporate power and authority to enter into this Agreement and, subject to Company Stockholder Approval, to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate action on the part of the Company, and except, in the case of this Agreement, for (i) Company Stockholder Approval and (ii) the filing and recordation of appropriate merger documents as required by the DGCL, no other corporate proceedings on the part of the Company are necessary to authorize this Agreement and the transactions contemplated by this Agreement. This Agreement has been duly authorized, executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by the effect of general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). 3.5. No Conflict. (a) Except as set forth in Item 3.5 of the Company Disclosure Schedule, the execution and delivery of this Agreement do not, and the consummation of the transactions contemplated by this Agreement and compliance with the provisions of this Agreement will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or loss of a benefit under, or result in the creation of any Lien upon any of the properties or assets of the Company or any of its Subsidiaries under, (i) the certificate of incorporation or by-laws of the Company or the comparable organizational documents of any of its Subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise, license or similar authorization applicable to the Company or any of its Subsidiaries or their respective properties or assets or (iii) subject to the governmental filings and other matters referred to in paragraph (b), any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Company or any of its Subsidiaries or their respective properties or assets, other than, in the case of clauses (ii) and (iii), any such conflicts, violations, defaults, rights, losses or Liens that individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect on the Company. (b) No consent, approval, order or authorization of, action by or in respect of, or registration, declaration or filing with, any federal, state, local or foreign government, any court, administrative, regulatory or other governmental agency, commission or authority or any non-governmental self-regulatory agency, commission or authority (each a "Governmental Entity") is required by or with respect to the Company or any of its Subsidiaries in connection -12- 17 with the execution and delivery of this Agreement by the Company or the consummation by the Company of the transactions contemplated by this Agreement, except for (i) the filing of a premerger notification and report form by the Company under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") and any applicable filings and approvals under similar foreign antitrust laws and regulations; (ii) the filing with the SEC and The Nasdaq National Market ("Nasdaq") of (A) the Schedule 14D-9, (B) a proxy statement relating to the Company Stockholders Meeting for the approval by the stockholders of the Company of the Merger (such proxy statement, as amended or supplemented from time to time, the "Company Proxy Statement"), and (C) such reports under Section 13(a), 13(d), 15(d) or 16(a) of the Exchange Act as may be required in connection with this Agreement and the transactions contemplated by this Agreement; (iii) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware and appropriate documents with the relevant authorities of other states in which the Company is qualified to do business; and (iv) such consents, approvals, orders or authorizations which if not made or obtained, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect on the Company. 3.6. SEC Documents; Undisclosed Liabilities. Except as set forth in Item 3.6 of the Company Disclosure Schedule, the Company has filed with the SEC since January 1, 1997 or, with respect to the Offer, will file with the SEC all required registration statements, reports, schedules, forms, statements, proxy or information statements and other documents (including exhibits and all other information incorporated therein) (the "Company SEC Documents"). As of their respective dates, the Company SEC Documents complied or, with respect to those not yet filed, will comply in all material respects with the requirements of the Securities Act of 1933 (the "Securities Act"), or the Exchange Act, as the case may be, and, in each case, the rules and regulations of the SEC promulgated thereunder and, except to the extent that information contained in any Company SEC Document has been revised and superseded by a later filed Company SEC Document, did not or, with respect to those not yet filed, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the Company SEC Documents comply as to form, as of their respective dates of filing with the SEC, in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with generally accepted accounting principles (except, in the case of unaudited statements, as permitted by Form 10-Q of the SEC) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal recurring year-end audit adjustments). Except for liabilities (i) reflected in such financial statements or in the notes thereto, (ii) incurred in the ordinary course of business consistent with past practice since the date of the most recent audited financial statements included in the Company SEC Documents filed and publicly available prior to the date of this Agreement (as amended to the date of this Agreement, the "Company Filed -13- 18 SEC Documents"), (iii) incurred in connection with this Agreement or the transactions contemplated hereby, or (iv) disclosed in Item 3.6 of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries has any liabilities or obligations of any nature which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect on the Company. 3.7. Schedule 14D-9; Company Proxy Statement. None of the information supplied or to be supplied by the Company specifically for inclusion or incorporation by reference in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the information to be filed by the Company in connection with the Offer pursuant to Rule 14f-1 promulgated under the Exchange Act (the "Information Statement") or (iv) the Company Proxy Statement, if any, will, in the case of the Offer Documents, the Schedule 14D-9 and the Information Statement, at the respective times the Offer Documents, the Schedule 14D-9 and the Information Statement are filed with the SEC or first published, sent or given to the Company's stockholders, or, in the case of the Company Proxy Statement, if any, at the date the Company Proxy Statement is first mailed to the Company's stockholders and at the time of the Stockholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Schedule 14D-9, the Information Statement and the Company Proxy Statement, if any, will comply as to form in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder, except that no representation or warranty is made by the Company with respect to statements made or incorporated by reference therein based on information supplied by Lucent specifically for inclusion or incorporation by reference therein. 3.8. Absence of Certain Changes. Except for liabilities incurred in connection with this Agreement or the transactions contemplated hereby and except as disclosed in the Company Filed SEC Documents, since December 31, 1998, the Company and its Subsidiaries have conducted their business only in the ordinary course, and there has not been: (a) any event or occurrence which could reasonably be expected to have a Material Adverse Effect on the Company; (b) any declaration, setting aside or payment of any dividend or other distribution (whether in cash, stock or property) with respect to any of the Company's capital stock; (c) any split, combination or reclassification of any of the Company's capital stock or any issuance or the authorization of any issuance of any other securities in respect of, in lieu of or in substitution, for shares of the Company's capital stock, except for issuances of Company Common Stock upon the exercise of Company Stock Options under the Company Stock Plans, in each case awarded prior to the date hereof in accordance with their present terms; -14- 19 (d) (i) Except as set forth in Item 3.8(d)(i) of the Company Disclosure Schedule, any granting by the Company or any of its Subsidiaries to any current or former director, executive officer or other key employee of the Company or its Subsidiaries of any increase in compensation, bonus or other benefits, except for normal increases in cash compensation in the ordinary course of business consistent with past practice or as was required under any employment agreements in effect as of the date of the most recent audited financial statements included in the Company Filed SEC Documents, (ii) any granting by the Company or any of its Subsidiaries to any such current or former director, executive officer or key employee of any increase in severance or termination pay, except in the ordinary course of business consistent with past practice, (iii) except as set forth in Item 3.8(d)(iii) of the Company Disclosure Schedule, any entry by the Company or any of its Subsidiaries into, or any amendments of, any employment, deferred compensation, consulting, severance, termination or indemnification agreement with any such current or former director, executive officer or key employee, or (iv) any amendment to, or modification of, any Company Stock Option; (e) except insofar as may have been required by a change in generally accepted accounting principles, any change in accounting methods, principles or practices by the Company; (f) any tax election that individually or in the aggregate could reasonably be expected to have a Material Adverse Effect on the Company or any of its tax attributes or any settlement or compromise of any material income tax liability; (g) any impairment, damage, destruction, loss or claim, whether or not covered by insurance, or condemnation or other taking which could reasonably be expected to have a Material Adverse Effect on the Company; (h) any issuance, delivery or agreement (conditionally or unconditionally) to issue or deliver any bonds, notes or other debt securities, or the incurrence of or agreement to incur any indebtedness for borrowed money, other than in the ordinary course of business consistent with past practice or the entry into any lease the obligations of which, in accordance with GAAP, would be capitalized; (i) any material amendment or termination of any agreement to which the Company or any of its Subsidiaries is a party and is or should be set forth on Item 3.11 of the Company Disclosure Schedule; (j) except as set forth in Item 3.8(j) of the Company Disclosure Schedule, any undertaking or commitment to undertake capital expenditures exceeding $100,000 for any single project or related series of projects; (k) except as set forth in Item 3.8(k) of the Company Disclosure Schedule, any sale, lease (as lessor), transfer or other disposition of, mortgage, pledge, or imposition of any -15- 20 Lien on, any of the assets reflected on the Company's most recent audited financial statement included in the Company Filed SEC Documents or any assets acquired by the Company or any of its Subsidiaries after the date of such audited financial statement, except for inventory and personal property sold or otherwise disposed of for fair value in the ordinary course of its business consistent with past practice and except for Permitted Liens; (l) cancellation of any debts owed to or claims held by the Company or any of its Subsidiaries (including the settlement of any claims or litigation) other than in the ordinary course of its business consistent with past practice; (m) except as set forth in Item 3.8(m) of the Company Disclosure Schedule, acceleration or delay in collection of accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of its business consistent with past practice; (n) acceleration or delay in payment of any account payable or other liability beyond or in advance of its due date or the date when such liability would have been paid in the ordinary course of its business consistent with past practice; and (o) entry into or commitment to enter into any other material transaction except in the ordinary course of business. 3.9. Properties. (a) Each of the Company and its Subsidiaries has good and valid title to or a valid leasehold interest in all its properties and assets reflected on the most recently audited balance sheet contained in the Company Filed SEC Documents or acquired after the date thereof except for (i) properties and assets sold or otherwise disposed of in the ordinary course of business since the date of such balance sheet, (ii) properties and assets the loss of which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect on the Company and (iii) properties and assets sold in connection with the transaction referred to in Item 3.8(k) of the Company Disclosure Schedule. (b) Except as set forth in Item 3.9(b) of the Company Disclosure Schedule, neither the Company nor any or its Subsidiaries owns any real property. 3.10. Leases. Item 3.10 of the Company Disclosure Schedule lists all outstanding leases, both capital and operating, or licenses, pursuant to which the Company or any of its Subsidiaries has (i) obtained the right to use or occupy any real or tangible personal property under arrangements where the remaining obligation is more than $50,000, inclusive of any renewal rights or (ii) granted to any other Person the right to use any material item of machinery, equipment, furniture, vehicle or other personal property of the Company or any of its Subsidiaries having an original cost of $50,000 or more. -16- 21 3.11. Contracts. Item 3.11 of the Company Disclosure Schedule lists any of the following not otherwise listed on any other item of the Company Disclosure Schedule: (a) each written contract or commitment which creates an obligation on the part of the Company or any of its Subsidiaries in excess of $100,000; (b) each written debt instrument, including, without limitation, any loan agreement, line of credit, promissory note, security agreement or other evidence of indebtedness, where the Company or any of its Subsidiaries is a lender, borrower or guarantor, in a principal amount in excess of $100,000; (c) each written contract or commitment restricting the Company or any of its Subsidiaries from engaging in any industry or in any line of business in any location; (d) each written contract or commitment in excess of $10,000 to which the Company or any of its Subsidiaries is a party for any charitable contribution; (e) each written joint venture or partnership agreement to which the Company or any of its Subsidiaries is a party; (f) each written agreement in excess of $25,000 to which the Company or any of its Subsidiaries is a party with respect to any assignment, discounting or reduction of any receivables of the Company or such Subsidiary; (g) each written distributorship, sales agency, sales representative, reseller or marketing agreement to which the Company or any of its Subsidiaries is a party, and each sales representative agreement is substantially identical to the form previously delivered to Lucent; (h) each value added reseller, original equipment manufacturing, technology transfer, source code license or other license or each other agreement containing the right to sublicense software and/or technology, in each case, to which the Company or any of its Subsidiaries is a party, other than "off-the-shelf" software; (i) each agreement, option or commitment or right with, or held by, any third party to acquire any assets or properties, or any interest therein, of the Company or any of its Subsidiaries, having a value in excess of $100,000, except for contracts for the sale of inventory, machinery or equipment in the ordinary course of business; (j) each written employment contract entered into by the Company or any of its Subsidiaries; and -17- 22 (k) each supply agreement to which the Company or any of its Subsidiaries is a party that the Company or such Subsidiary could not readily replace without a Material Adverse Effect on the Company. There are (i) no oral contracts or commitments of the types described in this Section 3.11 which create an obligation on the part of the Company or any of its Subsidiaries in excess of $25,000, (ii) no contracts or commitments between the Company or any of its Subsidiaries and any Affiliate (other than a wholly-owned Subsidiary) and (iii) no contracts or commitments which would create rights to any Person against Lucent or any of its Affiliates (other than rights against the Company and its Subsidiaries as in effect on the Closing Date). 3.12. Absence of Default. Except as set forth in Item 3.12 of the Company Disclosure Schedule, each of the leases, contracts and other agreements listed or required to be listed in Items 3.10 and 3.11 of the Company Disclosure Schedule that create obligations on any Person in excess of $100,000 constitutes a valid and binding obligation of the parties thereto and is in full force and effect and will continue in full force and effect after the Effective Time, in each case, without breaching the terms thereof or resulting in the forfeiture or impairment of any rights thereunder and without the consent, approval or act of, or the making of any filing with, any other Person. Each of the Company and its Subsidiaries has fulfilled and performed in all material respects its obligations under each such lease, contract or other agreement to which it is a party to the extent such obligations are required by the terms thereof to have been fulfilled or performed through the date hereof (except for any such lease, contract or other agreement which, by its terms, will expire prior to the Effective Time) and neither the Company nor any such Subsidiary is, and, neither the Company nor any such Subsidiary is alleged in writing to be, in breach or default under, nor is there or is there alleged in writing to be any basis for termination of, any such lease, contract or other agreement. To the best knowledge of the Company, no other party to any such lease, contract or other agreement has breached or defaulted thereunder. No event has occurred and no condition or state of facts exists which, with the passage of time or the giving of notice or both, would constitute such a default or breach by the Company or, to the best knowledge of the Company, by any such other party. The Company is not currently renegotiating any such lease, contract or other agreement or paying liquidated damages in lieu of performance thereunder. Complete and correct copies of each such lease, contract or other agreement and any amendments thereto have heretofore been delivered to Lucent. 3.13. Litigation. Item 3.13 of the Disclosure Schedule sets forth (i) any actions, suits, arbitrations, legal or administrative proceedings or investigations pending or, to the best knowledge of the Company, threatened against the Company or any of its Subsidiaries; (ii) any judgment, order, writ, injunction or decree of any court, governmental agency or arbitration tribunal as to which any of the assets, properties or business of the Company or any of its Subsidiaries is subject; and (iii) any actions, suits, arbitrations or proceedings as to which the Company or any such Subsidiary is the plaintiff or the Company or any such Subsidiary is contemplating commencing legal action against any other Person. None of the matters, if any, -18- 23 listed on Item 3.13 of the Disclosure Schedule could reasonably be expected to have a Material Adverse Effect on the Company. 3.14. Compliance with Law. (a) Each of the Company and its Subsidiaries has complied in all material respects with, and is not in violation of, in any material respect, any law, ordinance or governmental rule or regulation (collectively, "Laws") to which it or its business is subject; (b) Each of the Company and its Subsidiaries has obtained all licenses, permits, certificates or other governmental authorizations (collectively "Authorizations") necessary for the ownership or use of its assets and properties or the conduct of its business other than Authorizations (i) which are ministerial in nature and which the Company or such Subsidiary has no reason to believe would not be issued in due course and (ii) which, the failure of the Company or such Subsidiary to possess, would not subject the Company and its Subsidiaries to penalties other than fines not to exceed $50,000 in the aggregate ("Immaterial Authorizations"); and (c) Neither the Company nor any of its Subsidiaries has received notice of violation of, or knows of any violation of, any Laws to which it or its business is subject or any Authorization necessary for the ownership or use of its assets and properties or the conduct of its business (other than Immaterial Authorizations). 3.15. Intellectual Property; Year 2000. (a) Except as set forth in Item 3.15 of the Company Disclosure Schedule, the Company and its Subsidiaries own, or are validly licensed or otherwise have the right to use, all patents, patent rights, trademarks, trade secrets, trade names, service marks, copyrights and other proprietary intellectual property rights and computer programs (the "Intellectual Property Rights") which are material to the conduct of the business of the Company and its Subsidiaries as presently conducted. (b) To the Company's best knowledge, neither the Company nor any of its Subsidiaries has interfered with, infringed upon, misappropriated or otherwise come into conflict with any Intellectual Property Rights or other proprietary information of any other Person. Neither the Company nor any of its Subsidiaries has received any written charge, complaint, claim, demand or notice alleging any such interference, infringement, misappropriation or violation (including any claim that the Company or any such Subsidiary must license or refrain from using any Intellectual Property Rights or other proprietary information of any other Person) which has not been settled or otherwise fully resolved. To the Company's best knowledge, no other Person has interfered with, infringed upon, misappropriated or otherwise come into conflict with any Intellectual Property Rights or other proprietary information of the Company or any of its Subsidiaries. -19- 24 (c) Assuming that Lucent continues to operate the business of the Company and its Subsidiaries as presently conducted and proposed to be conducted by the Company then, to the Company's best knowledge, Lucent's use of the Intellectual Property Rights or other proprietary information which is material to the conduct of the business of the Company and its Subsidiaries, taken as a whole, will not interfere with, infringe upon, misappropriate or otherwise come into conflict with the Intellectual Property Rights or other proprietary information of any other Person. (d) Each employee, agent, consultant or contractor who has materially contributed to or participated in the creation or development of any copyrightable, patentable or trade secret material on behalf of the Company, any of its Subsidiaries or any predecessor in interest thereto either: (i) is a party to a "work-for-hire" agreement under which the Company or such Subsidiary is deemed to be the original owner/author of all property rights therein; or (ii) has executed an assignment or an agreement to assign in favor of the Company, such Subsidiary or such predecessor in interest, as applicable all right, title and interest in such material. (e) The Company has taken all necessary steps reasonably to assure that the year 2000 date change will not adversely affect its operations or the systems and facilities that support the operations of the Company and its Subsidiaries, except as could not reasonably be expected to have a Material Adverse Effect on the Company. 3.16. Taxes. (a) Each of the Company and its Subsidiaries has filed all material tax returns and reports required to be filed by it and all such returns and reports are complete and correct in all material respects, or requests for extensions to file such returns or reports have been timely filed, granted and have not expired, except to the extent that such failures to file, to be complete or correct or to have extensions granted that remain in effect individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect. The Company and each of its Subsidiaries has paid (or the Company has paid on its behalf) all Taxes shown as due on such returns, and the most recent financial statements contained in the Company Filed SEC Documents reflect an adequate reserve for all taxes payable by the Company and its Subsidiaries for all taxable periods and portions thereof accrued through the date of such financial statements. (b) No deficiencies for any taxes have been proposed, asserted or assessed against the Company or any of its Subsidiaries that are not adequately reserved for, except for deficiencies that individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect on the Company. (c) The Company Benefit Plans and other Company employee compensation arrangements in effect as of the date of this Agreement have been designed so that the disallowance of a material deduction under Section 162(m) of the Code for employee remuneration will not apply to any amounts paid or payable by the Company or any of its Subsidiaries under any such plan or arrangement and, to the best knowledge of the Company, no -20- 25 fact or circumstance exists that could reasonably be expected to cause such disallowance to apply to any such amounts. (d) Neither the Company nor any of its Subsidiaries has constituted either a "distributing corporation" or a "controlled corporation" in a distribution of stock qualifying for tax-free treatment under Section 355 of the Code (x) in the two years prior to the date of this Agreement or (y) in a distribution which could otherwise constitute part of a "plan" or "series of related transactions" (within the meaning of Section 355(e) of the Code) in conjunction with the Merger. (e) Neither the Company nor any of its Subsidiaries is a party (other than as an investor) to any outstanding industrial development bond. 3.17. Benefit Plans. (a) Item 3.17 of the Company Disclosure Schedule contains a list and brief description of all "employee pension benefit plans" (as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) (sometimes referred to as "Pension Plans"), "employee welfare benefit plans" (as defined in Section 3(1) of ERISA) (sometimes referred to as "Welfare Plans") and all other Benefit Plans (together with the Pension Plans and Welfare Plans, the "Company Benefit Plans") maintained, or contributed to, by the Company, any of its Subsidiaries or any Person that, together with the Company or any of its Subsidiaries, is treated as a single employer under Section 414(b), (c), (m) or (o) of the Code (the Company, such Subsidiaries and each such other Person, a "Commonly Controlled Entity") for the benefit of any current or any former employees, officers or directors of the Company. The Company has made available to Lucent true, complete and correct copies of (i) each Company Benefit Plan (or, in the case of any unwritten Company Benefit Plans, descriptions thereof), (ii) the most recent annual report on Form 5500 filed with the Internal Revenue Service (the "IRS") with respect to each Company Benefit Plan (if any such report was required), (iii) the most recent summary plan description for each Company Benefit Plan for which such summary plan description is required, (iv) each trust agreement and group annuity contract relating to any Company Benefit Plan and (v) all correspondence with the IRS or the United States Department of Labor relating to any outstanding controversy or audit. (b) Since the date of the most recent audited financial statements included in the Company Filed SEC Documents, there has not been any adoption or amendment in any material respect by the Company, any of its Subsidiaries or any Commonly Controlled Entity of any Company Benefit Plans, or any material change in any actuarial or other assumption used to calculate funding obligations with respect to any Pension Plans of the Company, or any change in the manner in which contributions to any Pension Plans of the Company are made or the basis on which such contributions are determined. -21- 26 3.18. ERISA Compliance. (a) With respect to the Company Benefit Plans, no event has occurred and, to the best knowledge of the Company, there exists no condition or set of circumstances, in connection with which the Company or any of its Subsidiaries could be subject to any liability under ERISA, the Code or any other applicable law that individually or in the aggregate could reasonably be expected to have a Material Adverse Effect under ERISA, the Code or any other applicable law. (b) Each Benefit Plan has been administered in accordance with its terms, except for any failures so to administer any Benefit Plan that individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect on the Company. The Company, its Subsidiaries and all the Company Benefit Plans are in compliance with the applicable provisions of ERISA, the Code, all regulations promulgated thereunder, all other applicable laws, regulations and other pronouncements, and the terms of all applicable collective bargaining agreements, except for any failures to be in such compliance that individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect. Each Benefit Plan that is intended to be qualified under Section 401(a) or 401(k) of the Code has received a favorable determination letter from the IRS that it is so qualified and each trust established in connection with any Company Benefit Plan that is intended to be exempt from federal income taxation under Section 501(a) of the Code has received a determination letter from the IRS that such trust is so exempt. To the best knowledge of the Company, no fact or event has occurred since that date of any determination letter from the IRS which could reasonably be expected to affect adversely the qualified status of any such Benefit Plan or the exempt status of any such trust. There are no pending or, to the best knowledge of the Company, threatened lawsuits, claims, grievances, investigations or audits of any Benefit Plan that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries has engaged in a transaction with respect to any Company Benefit Plan that, assuming the taxable period of such transaction expired as of the date hereof, could subject it to a tax or penalty imposed by either Section 4975 of the Code or Section 502(i) of ERISA. (c) Neither the Company nor any of its Subsidiaries has incurred any liability under Title IV of ERISA (other than liability for premiums to the Pension Benefit Guaranty Corporation arising in the ordinary course). No Benefit Plan has incurred an "accumulated funding deficiency" (within the meaning of Section 302 of ERISA or Section 412 of the Code) whether or not waived. To the best knowledge of the Company, there are no facts or circumstances that could reasonably be expected to materially change the funded status of any Benefit Plan that is a "defined benefit" plan (as defined in Section 3(35) of ERISA) since the date of the most recent actuarial report for such plan. No notice of a "reportable event", within the meaning of Section 4043 of ERISA, for which the 30-day reporting requirement has not been waived has been required to be filed within the 12-month period ending on the date hereof. No Benefit Plan is a "multiemployer plan" within the meaning of Section 3(37) of ERISA. -22- 27 (d) Under each Benefit Plan that is a "defined benefit" plan (as defined in Section 3(35) of ERISA) as of the last day of the most recent plan year ended prior to the date hereof, the actuarially determined present value of all "benefit liabilities", within the meaning of Section 4001(a)(16) of ERISA (as determined on the basis of the actuarial assumptions contained in such plan's most recent actuarial valuation), did not exceed the then current value of the assets of such plan. (e) Except as set forth in Item 3.18(e) of the Company Disclosure Schedule, no employee of the Company will be entitled to any additional benefits or any acceleration of the time of payment or vesting of any benefits under any Benefit Plan as a result of the transactions contemplated by this Agreement. Except as set forth in Item 3.18(e) of the Company Disclosure Schedule, no amount payable, or economic benefit provided, by the Company or its Subsidiaries (including any acceleration of the time of payment or vesting of any benefit) could be considered an "excess parachute payment" under Section 280G of the Code as a result of the transactions contemplated by this Agreement. No Person is entitled to receive any additional payment from the Company or its Subsidiaries or any other Person (a "Parachute Gross-Up Payment") in the event that the excise tax of Section 4999 of the Code is imposed on such Person. The Board of Directors of the Company or any of its Subsidiaries has not granted to any Person any right to receive any Parachute Gross-Up Payment. (f) Except as set forth in Item 3.18(f) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries has any liability or obligation under any "employee welfare benefit plans" (as defined in Section 3(1) of ERISA) to provide life insurance or medical benefits after termination of employment to any employee or dependent other than as required by Part 6 of Title I of ERISA. 3.19. Employment Matters. (a) Each of the Company and its Subsidiaries has complied in all material respects with all applicable laws, rules and regulations respecting employment and employment practices, terms and conditions of employment, wages and hours, and neither the Company nor any of its Subsidiaries is liable for any arrears of wages or any taxes or penalties for failure to comply with any such laws, rules or regulations; (b) the Company believes that the Company's and its Subsidiaries' relations with their respective employees is satisfactory; (c) there are no controversies pending or, to the best knowledge of the Company, threatened between the Company or any of its Subsidiaries and any of their respective employees, which controversies have or could have a Material Adverse Effect on the Company; (d) neither the Company nor any Subsidiary is a party to any collective bargaining agreement or other labor union contract applicable to Persons employed by the Company or any such Subsidiary, nor, to the best knowledge of the Company, are there any activities or proceedings of any labor union to organize any such employees; (e) there are no unfair labor practice complaints pending against the Company or any of its Subsidiaries before the National Labor Relations Board or any current union representation questions involving employees of the Company or any of its Subsidiaries; (f) there is no strike, slowdown, work stoppage or lockout existing, or, to the best knowledge of the Company, threatened, by or with respect to any employees of the -23- 28 Company or any of its Subsidiaries; (g) except as set forth in Item 3.19(g) of the Company Disclosure Schedule, no charges are pending before the Equal Employment Opportunity Commission or any state, local or foreign agency responsible for the prevention of unlawful employment practices with respect to the Company or any of its Subsidiaries; (h) there are no claims pending against the Company or any of its Subsidiaries before any workers' compensation board which could reasonably be expected to have a Material Adverse Effect on the Company; and (i) neither the Company nor any of its Subsidiaries has received notice that any federal, state, local or foreign agency responsible for the enforcement of labor or employment laws intends to conduct an investigation of or relating to the Company or any of its Subsidiaries and, to the best knowledge of the Company, no such investigation is in progress. 3.20. Environmental Laws. The Company has not received any notice or claim (and is not aware of any facts that would form a reasonable basis for any claim), or entered into any negotiations or agreements with any other Person, and, to the best knowledge of the Company, neither the Company nor any of its Subsidiaries is the subject of any investigation by any governmental or regulatory authority, domestic or foreign, relating to any material or potentially material liability or remedial action under any Environmental Laws. There are no pending or, to the best knowledge of the Company, threatened, actions, suits or proceedings against the Company, any of its Subsidiaries or any of their respective properties, assets or operations asserting any such material liability or seeking any material remedial action in connection with any Environmental Laws. 3.21. Accounts Receivable; Inventory. (a) Except as set forth in Item 3.21(a) of the Company Disclosure Schedule, all accounts receivable of the Company and its Subsidiaries (i) have arisen from bona fide transactions by the Company or its Subsidiaries in the ordinary course of its business and represent and will represent bona fide claims against debtors for sales and other charges and (ii) are not subject to discount except for normal cash and immaterial trade discount. The amount carried for doubtful accounts and allowances accrued on the books of the Company and its Subsidiaries is sufficient to provide for any losses that may be sustained on realization of the accounts receivable of the Company and its Subsidiaries. (b) The inventories (and any reserves established with respect thereto) of the Company and its Subsidiaries as of December 31, 1998 are described in Item 3.21(b) of the Company Disclosure Schedule. All such inventories (net of any such reserves) are properly reflected on the Company's most recent audited financial statement included in the Company Filed SEC Documents in accordance with GAAP and, to the best knowledge of the Company, are of such quality as to be useable and saleable in the ordinary course of business (subject, in the case of work-in-process inventory, to completion in the ordinary course of business) and are reflected in the books and records of the Company or its Subsidiaries at the lower of cost (based on a first-in-first-out basis) or market value. Such inventories are located at the locations set forth in Item 3.21(b) of the Company Disclosure Schedule. -24- 29 3.22. Customers and Suppliers. Neither the Company's nor any of its Subsidiaries' customers which individually accounted for more than 5% of the Company's or such Subsidiary's gross revenues during the 12-month period preceding the date hereof has terminated any agreement with the Company or such Subsidiary. Except as set forth in Item 3.22 of the Company Disclosure Schedule, as of the date hereof, no material supplier of the Company or any of its Subsidiaries has notified the Company in writing that it will stop, or decrease the rate of, supplying materials, products or services to the Company or such Subsidiary. Neither the Company nor any of its Subsidiaries has knowingly breached, so as to provide a benefit to the Company or any of its Subsidiaries that was not intended by the parties, any agreement with, or engaged in any fraudulent conduct with respect to, any customer or supplier of the Company or any of its Subsidiaries. 3.23. Voting Requirements. Pursuant to the provisions of the DGCL, the certificate of incorporation of the Company, the by-laws of the Company and any other applicable law, the affirmative vote of the holders of a majority of the voting power of all outstanding shares of Company Common Stock at the Company Stockholders Meeting to adopt this Agreement (the "Company Stockholder Approval") is the only vote of the holders of any class or series of the Company's capital stock necessary to approve and adopt the Merger, this Agreement and the transactions contemplated by this Agreement. The Board of Directors of the Company (at a meeting duly called and held) has (i) unanimously approved the Offer, this Agreement and the transactions contemplated by this Agreement, (ii) determined that the Offer and the Merger are fair to and in the best interests of the Company's stockholders, (iii) resolved (subject to Section 6.2) to recommend this Agreement, the Offer and the Merger to such holders for approval and adoption and (iv) directed (subject to Section 6.2) that this Agreement be submitted to the Company's stockholders. The Company hereby agrees to the inclusion in the Schedule 14D-9 and the Company Proxy Statement of the recommendation of such Board of Directors. 3.24. State Takeover Statutes. The Board of Directors of the Company (including the disinterested directors thereof) has unanimously approved the Offer, this Agreement and the consummation of the Merger and the other transactions contemplated by this Agreement and such approval is sufficient to render inapplicable to the Offer, the Merger, this Agreement and the transactions contemplated by this Agreement the provisions of Chapter 203 of the DGCL. To the Company's knowledge, no other state takeover statute is applicable to the Offer, the Merger, this Agreement or the transactions contemplated by this Agreement and no provision of the certificates of incorporation, by-laws or other governing instruments of the Company or any of its Subsidiaries would, directly or indirectly, restrict or impair the ability of Lucent to vote, or otherwise exercise the rights of a stockholder with respect to, shares of capital stock or other equity interest of the Company and its Subsidiaries that may be acquired or controlled by Lucent as contemplated by this Agreement. 3.25. Brokers. No broker, investment banker, financial advisor or other Person, other than Lazard Freres & Co. LLC, the fees and expenses of which will be paid by the -25- 30 Company, is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company. The Company has furnished to Lucent true and complete copies of all agreements under which any such fees or expenses are payable and all indemnification and other agreements related to the engagement of the Persons to whom such fees are payable. 3.26. Opinion of Financial Advisor. The Company has received the opinion of Lazard Freres & Co. LLC, dated the date of this Agreement, to the effect that, as of such date, the consideration to be received in the Offer and the Merger by the Company's stockholders is fair from a financial point of view to the Company's stockholders (other than Lucent and its Affiliates), a signed copy of which opinion has been or will promptly be delivered to Lucent. 3.27. Complete Copies of Materials. The Company has delivered or made available to Lucent true and complete copies of each material document related to the Company or its business in connection with their legal and accounting review of the Company. 3.28. Disclosure. None of the representations or warranties of the Company contained herein, none of the information contained in the Company Disclosure Schedule, and none of the other information or documents furnished or to be furnished to Lucent or Acquisition by the Company or any of its Subsidiaries or pursuant to the terms of this Agreement, when taken as a whole, contains, or at the Effective Time will contain, any untrue statement of a material fact or omits, or at the Effective Time will omit, to state a material fact required to be stated herein or therein necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading in any material respect. 4. Representations and Warranties of Lucent and Acquisition. Except as set forth on the Disclosure Schedule delivered by Lucent to the Company prior to the execution of this Agreement (the "Lucent Disclosure Schedule") and making reference to the particular subsection of this Agreement to which exception is being taken, Lucent and Acquisition represent and warrant to the Company as follows: 4.1. Organization, Standing and Corporate Power. Each of Lucent and Acquisition is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized and has the requisite corporate or other power, as the case may be, and authority to carry on its business as now being conducted, except for those jurisdictions where the failure to be so organized, existing or in good standing individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect on Lucent. Each of Lucent and Acquisition is duly qualified or licensed to do business and is in good standing (with respect to jurisdictions which recognize such concept) in each jurisdiction in which the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing necessary, except for those jurisdictions where -26- 31 the failure to be so qualified or licensed or to be in good standing individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect on Lucent. 4.2. Authority. Each of Lucent and Acquisition has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Lucent and Acquisition and the consummation by Lucent and Acquisition of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Lucent and Acquisition. This Agreement has been duly executed and delivered by Lucent and Acquisition and, constitutes the legal, valid and binding obligation of Lucent and Acquisition, enforceable against each of them in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by the effect of general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). 4.3. No Conflict. (a) The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated by this Agreement and the compliance with the provisions of this Agreement will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or loss of a benefit under, or result in the creation of any Lien upon any of the properties or assets of Lucent or Acquisition or any of Lucent's other Subsidiaries under, (i) the charter documents of Lucent or Acquisition, (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise, license or similar authorization applicable to Lucent or Acquisition or any of Lucent's other Subsidiaries or their respective properties or assets or (iii) subject to the governmental filings and other matters referred to in Section 4.3(b), any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Lucent or any of its Subsidiaries or their respective properties or assets, other than, in the case of paragraph (b), any such conflicts, violations, defaults, rights, losses or Liens that individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect on Lucent. (b) No consent, approval, order or authorization of, action by, or in respect of, or registration, declaration or filing with, any Governmental Entity is required by or with respect to Lucent or Acquisition in connection with the execution and delivery of this Agreement by Lucent and Acquisition or the consummation by Lucent and Acquisition of the transactions contemplated by this Agreement, except for (i) the filing of a premerger notification and report form by Lucent under the HSR Act and any applicable filings and approvals under similar foreign antitrust laws and regulations; (ii) the filing with the SEC of (A) the Offer Documents and (B) such reports under Section 13(a), 13(d), 15(d) or 16(a) of the Exchange Act as may be required in connection with this Agreement and the transactions contemplated by this Agreement; (iii) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware and appropriate documents with the relevant authorities of other states in which Lucent is qualified to do business; and (iv) such consents, approvals, orders or authorizations the failure -27- 32 of which to be made or obtained individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect on Lucent. 4.4. Information Supplied. None of the information supplied or to be supplied by Lucent specifically for inclusion or incorporation by reference in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the Information Statement or (iv) the Company Proxy Statement, if any, will, in the case of the Offer Documents, the Schedule 14D-9 and the Information Statement, at the respective times the Offer Documents, the Schedule 14D-9 and the Information Statement are filed with the SEC or first published, sent or given to the Company's stockholders, or, in the case of the Company Proxy Statement, if any, at the date the Company Proxy Statement is first mailed to the Company's stockholders and at the time of the Stockholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Offer Documents will comply as to form in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder, except that no representation or warranty is made by Lucent or Acquisition with respect to statements made or incorporated by reference therein based on information supplied by the Company specifically for inclusion or incorporation by reference therein. 4.5. Brokers. No broker, investment banker, financial advisor or other Person is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Lucent. 5. Conduct Pending Closing. 5.1. Conduct of Business Pending Closing. From the date hereof until the Closing, the Company shall (and shall cause each of its Subsidiaries to): (a) maintain its existence in good standing; (b) maintain the general character of its business and properties and conduct its business in the ordinary and usual manner consistent with past practices, except as expressly permitted by this Agreement; (c) maintain business and accounting records consistent with past practices; and (d) use its reasonable best efforts (i) to preserve its business intact, (ii) to keep available to the Company the services of its present officers and employees, and (iii) to preserve for the Company or such Subsidiary the goodwill of its suppliers, customers and others having business relations with the Company or such Subsidiary. -28- 33 5.2. Prohibited Actions Pending Closing. Unless otherwise provided for herein or approved by Lucent in writing, from the date hereof until the Closing, the Company shall not (and shall not permit any of its Subsidiaries to): (a) amend or otherwise change its certificate of incorporation or by-laws; (b) issue or sell or authorize for issuance or sale (other than any issuance of Company Common Stock upon the exercise of any outstanding option or warrant to purchase Company Common Stock which option or warrant was issued prior to the date hereof in accordance with the terms of the relevant stock option or warrant agreement), or grant any options or warrants or make other agreements with respect to, any shares of its capital stock or any other of its securities or warrants; (c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise with respect to any of its capital stock; (d) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock; (e) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans or advances, except (i) short-term borrowings (including borrowings under the Company's existing line of credit with Fleet National Bank) incurred in the ordinary course of business (or to refinance existing or maturing indebtedness) and (ii) intercompany indebtedness between the Company and any of its Subsidiaries or between Subsidiaries; (f) (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any corporation, partnership, other business organization or any division thereof or any material amount of assets; (ii) enter into any contract or agreement other than in the ordinary course of business, consistent with past practice; (iii) authorize any capital commitment which is in excess of $50,000 or capital expenditures which are, in the aggregate, in excess of $100,000, except as contemplated in Item 3.8(j) of the Company Disclosure Schedule; or (iv) enter into or amend any contract, agreement, commitment or arrangement with respect to any matter set forth in Section 5.2(e) or this Section 5.2(f); (g) mortgage, pledge or subject to Lien, any of its assets or properties or agree to do so except for Permitted Liens; (h) sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of any of its properties or assets (including securitizations), other than sales or licenses of finished goods in the ordinary course of business consistent with past practice; -29- 34 (i) assume, guarantee or otherwise become responsible for the obligations of any other Person or agree to so do; (j) enter into or agree to enter into any employment agreement; (k) except as set forth in Item 5.2(k) of the Company Disclosure Schedule, take any action, other than in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivables); (l) make any Tax election or settle or compromise any material federal, state, local or foreign income Tax liability; (m) settle or compromise any pending or threatened suit, action or claim which is material or which relates to any of the transactions contemplated by this Agreement; (n) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities reflected or reserved against in the most recently audited balance sheet contained in the Company SEC Documents or subsequently incurred in the ordinary course of business and consistent with past practice; (o) except in connection with the sale of the Company's products in the ordinary course of business and consistent with past practice, sell, assign, transfer, license, sublicense, pledge or otherwise encumber any of the Intellectual Property Rights; (p) except as required by law or contemplated hereby, enter into, adopt or amend in any material respect or terminate any Company Benefit Plan or any other agreement, plan or policy involving the Company or its Subsidiaries, and one or more of its directors, officers or employees, or materially change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan, or change the manner in which contributions to any pension plan are made or the basis on which such contributions are determined; (q) except for normal increases in the ordinary course of business consistent with past practice that, in the aggregate, do not materially increase benefits or compensation expenses of the Company or its Subsidiaries, or as contemplated hereby or by the terms of any employment agreement in existence on the date hereof, increase the cash compensation of any director, executive officer or other key employee or pay any benefit or amount not required by a plan or arrangement as in effect on the date of this Agreement to any such Person; or (r) announce an intention, commit or agree to do any of the foregoing. -30- 35 5.3. Other Actions. The Company shall not take any action that would reasonably be expected to result in (i) any of the representations and warranties of the Company set forth in this Agreement that are qualified as to materiality becoming untrue, (ii) any of such representations and warranties that are not so qualified becoming untrue in any material respect or (iii) any of the Offer Conditions not being satisfied. 6. Additional Agreements. 6.1. Access; Documents; Supplemental Information. (a) From and after the date hereof until the Closing, the Company shall afford, shall cause its Subsidiaries to afford and, with respect to clause (ii) below, shall use its reasonable best efforts to cause the independent certified public accountants for the Company to afford, (i) to the officers, independent certified public accountants, counsel and other representatives of Acquisition and Lucent, upon reasonable advance notice, free and full access at all reasonable times to the properties, books and records including tax returns filed and those in the process of being prepared by the Company or any of its Subsidiaries and the right to consult with the officers, employees, accountants, counsel and other representatives of the Company or any of its Subsidiaries in order that Acquisition and Lucent may have full opportunity to make such investigations as they shall reasonably desire to make of the operations, properties, business, financial condition and prospects of the Company and its Subsidiaries, (ii) to the independent certified public accountants of Acquisition and Lucent, upon reasonable advance notice, free and full access at all reasonable times to the work papers and other records of the accountants relating to the Company and its Subsidiaries, and (iii) to Acquisition and Lucent and their representatives, such additional financial and operating data and other information as to the properties, operations, business, financial condition and prospects of the Company and its Subsidiaries as Acquisition and Lucent shall from time to time reasonably require. (b) From the date of this Agreement through and including the Closing, Acquisition, Lucent and the Company agree to furnish to each other copies of any notices, documents, requests, court papers, or other materials received from any governmental agency or any other third party with respect to the transactions contemplated by this Agreement, except where it is obvious from such notice, document, request, court paper or other material that the other party was already furnished with a copy thereof. (c) Except as required by law, the Company and Lucent shall not, and shall not permit any of their respective Subsidiaries to, voluntarily take any action that would, or that could reasonably be expected to, result in (i) any of the representations and warranties of such party set forth in this Agreement that are qualified as to materiality becoming untrue at the Effective Time, (ii) any of such representations and warranties that are not so qualified becoming untrue in any material respect at the Effective Time, or (iii) any of the conditions to the Merger set forth in Article 7 not being satisfied. -31- 36 (d) The Company shall give prompt notice to Lucent, and Lucent shall give prompt notice to the Company, of (a) the occurrence, or non-occurrence, of any event which would be likely to cause (i) any representation or warranty contained in this Agreement to be untrue or inaccurate in any material respect or (ii) any covenant, condition or agreement contained in this Agreement not to be complied with or satisfied; and (b) any failure of the Company, Lucent or Acquisition, as the case may be, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; provided that the delivery of any notice pursuant to this Section 6.1(d) shall not limit or otherwise affect the remedies available to the party receiving such notice. (e) The Company shall notify Lucent of any filing made by the Company with the SEC under the Exchange Act, including, without limitation, any Form 10-Q, 8-K or 10-K, not later than five business days after the date of such filing. 6.2. No Solicitation by the Company. (a) The Company shall not, nor shall it permit any of its Subsidiaries to, nor shall it authorize or permit any of its directors, officers or employees or any investment banker, financial advisor, attorney, accountant or other representative retained by it or any of its Subsidiaries to, directly or indirectly through another Person, (i) solicit, initiate or encourage (including by way of furnishing information), or take any other action designed to facilitate, any inquiries or the making of any proposal which constitutes a Takeover Proposal (as defined below) or (ii) participate in any discussions or negotiations regarding any Takeover Proposal; provided, that if, at any time prior to the date of the Company Stockholders Meeting (the "Applicable Period"), the Board of Directors of the Company determines in good faith, after consultation with outside counsel, that it is legally advisable to do so in order to comply with its fiduciary duties to the Company's stockholders under applicable law, the Company may, in response to a Superior Proposal (as defined below) which was not solicited by it or which did not otherwise result from a breach of this Section 6.2, and subject to providing prior written notice of its decision to take such action to Lucent (a "Section 6.2 Notice") and complying with Section 6.2(c), (A) furnish information with respect to the Company and its Subsidiaries to any Person making a Superior Proposal pursuant to a customary confidentiality agreement (as determined by the Company after consultation with its outside counsel) and (B) participate in discussions or negotiations regarding such Superior Proposal. For purposes of this Agreement, a "Takeover Proposal" means any inquiry, proposal or offer from any Person (i) relating to any direct or indirect acquisition or purchase of (A) a business that constitutes 15% or more of the net revenues, net income or the assets of the Company and its Subsidiaries, taken as a whole, (B) 20% or more of any class of equity securities of the Company or (C) any material equity interest in any Subsidiary of the Company (i.e., in excess of 20% of the outstanding capital stock of such Subsidiary), (ii) relating to any tender offer or exchange offer that if consummated would result in any Person beneficially owning 20% or more of any class of equity securities of the Company or any material equity interest in any of its Subsidiaries, or (iii) relating to any merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving the Company or any of its Subsidiaries, other than the transactions contemplated by this Agreement. -32- 37 (b) Except as expressly permitted by this Section 6.2, neither the Board of Directors of the Company nor any committee thereof shall (i) withdraw or modify, or propose publicly to withdraw or modify, in a manner adverse to Lucent, the approval or recommendation by such Board of Directors or such committee of the Offer, the Merger or this Agreement, (ii) approve or recommend, or propose publicly to approve or recommend, any Takeover Proposal, or (iii) cause the Company to enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement (each, an "Acquisition Agreement") related to any Takeover Proposal, other than any such agreement entered into concurrently with a termination pursuant to the next sentence in order to facilitate such action. Notwithstanding the foregoing, during the Applicable Period, in response to a Superior Proposal which was not solicited by the Company and which did not otherwise result from a breach of Section 6.2(a), the Board of Directors of the Company may (subject to this and the following sentences) terminate this Agreement (and concurrently with or after such termination, if it so chooses, cause the Company to enter into any Acquisition Agreement with respect to any Superior Proposal), but only at a time that is during the Applicable Period and is after the third business day following Lucent's receipt of written notice advising Lucent that the Board of Directors of the Company is prepared to accept a Superior Proposal, specifying the material terms and conditions of such Superior Proposal and identifying the Person making such Superior Proposal. For purposes of this Agreement, a "Superior Proposal" means any proposal made by a third party to acquire, directly or indirectly, including pursuant to a tender offer, exchange offer, merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction, for consideration consisting of cash and/or securities, more than 50% of the combined voting power of the shares of Company Common Stock then outstanding or all or substantially all the assets of the Company and otherwise on terms which the Board of Directors of the Company determines in its good faith judgment (based on the advice of a financial advisor of nationally recognized reputation) to be more favorable to the Company's stockholders than the Merger and for which financing, to the extent required, is then committed or which, in the good faith judgment of the Board of Directors of the Company, is reasonably capable of being obtained by such third party. (c) In addition to the obligations of the Company set forth in paragraphs (a) and (b) of this Section 6.2, the Company shall promptly advise Lucent orally and in writing of any Takeover Proposal or any request for information by any Person which the Company reasonably believes is in connection with the preparation of a Takeover Proposal, the material terms and conditions of such Takeover Proposal or the information requested by any such Person and the identity of the Person making such Takeover Proposal or request for information. The Company will promptly inform Lucent of any change in the status and material terms and conditions (including amendments or proposed amendments) of any such Takeover Proposal or request for information. (d) Nothing contained in this Section 6.2 shall prohibit the Company from taking and disclosing to its stockholders a position contemplated by Rule 14d-9 or Rule 14e-2(a) promulgated under the Exchange Act or from making any disclosure to the Company's stockholders if, in the good faith judgment of the Board of Directors of the Company, after -33- 38 consultation with outside counsel, failure so to disclose would be inconsistent with its obligations under applicable law; provided, that, except as expressly permitted by this Section 6.2, neither the Company nor its Board of Directors nor any committee thereof shall withdraw or modify, or propose publicly to withdraw or modify, its position with respect to the Offer, this Agreement or the Merger or approve or recommend, or propose publicly to approve or recommend, a Takeover Proposal. 6.3. Preparation of the Company Proxy Statement; Company Stockholders Meeting. (a) If the Company Stockholder Approval is required by law, the Company shall, as soon as practicable following the expiration of the Offer, prepare and file with the SEC a preliminary Company Proxy Statement and shall use its reasonable best efforts to respond to any comments of the SEC or its staff and to cause the Company Proxy Statement to be mailed to the Company's stockholders as promptly as practicable after responding to all such comments to the satisfaction of the staff. No filing of, or amendment or supplement to, the Company Proxy Statement will be made by the Company without providing Lucent the opportunity to review and comment thereon. The Company shall notify Lucent promptly of the receipt of any comments from the SEC or its staff and of any request by the SEC or its staff for amendments or supplements to the Company Proxy Statement or for additional information and will supply Lucent with copies of all correspondence between the Company or any of its representatives, on the one hand, and the SEC or its staff, on the other hand, with respect to the Company Proxy Statement or the Merger. If at any time prior to the Company Stockholders Meeting there shall occur any event or information that should be set forth in an amendment or supplement to the Company Proxy Statement, so that the Company Proxy Statement would not include any misstatement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the Company shall notify Lucent and shall promptly prepare and mail to its stockholders and file with the SEC an appropriate amendment or supplement describing such information. The Company shall not mail any Company Proxy Statement or any amendment or supplement thereto, to which Lucent reasonably objects. (b) If the Company Stockholder Approval is required by law, the Company shall, as soon as practicable following the expiration of the Offer, duly call, give notice of, convene and hold a meeting of its stockholders (the "Company Stockholders Meeting") for the purpose of obtaining the Company Stockholder Approval and shall, through its Board of Directors, recommend to its stockholders the approval and adoption of the Offer, this Agreement, the Merger and the other transactions contemplated hereby. Without limiting the generality of the foregoing but subject to its rights to terminate this Agreement pursuant to Section 6.2(b), the Company agrees that its obligations pursuant to the first sentence of this Section 6.3(b) shall not be affected by the commencement, public proposal, public disclosure or communication to the Company of any Takeover Proposal. Notwithstanding the foregoing, if Acquisition or any other Subsidiary of Lucent shall acquire at least 90% of the outstanding Shares, the parties shall take all necessary and appropriate action to cause the Merger to become effective as soon as -34- 39 practicable after the expiration of the Offer without a Stockholders Meeting in accordance with Section 253 of the DGCL. (c) Lucent agrees to cause all Shares purchased pursuant to the Offer and all other Shares owned by Lucent or any Subsidiary of Lucent to be voted in favor of the Merger, this Agreement and the transactions contemplated hereby. 6.4. Reasonable Best Efforts. (a) Upon the terms and subject to the conditions set forth in this Agreement, each of the parties agrees to use its reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Offer, the Merger and the other transactions contemplated by this Agreement, including (i) the taking of all reasonable acts necessary to cause the Offer Conditions to be satisfied, (ii) the obtaining of all necessary actions or nonactions, waivers, consents and approvals from Governmental Entities and the making of all necessary registrations and filings and the taking of all steps as may be necessary to obtain an approval or waiver from, or to avoid an action or proceeding by, any Governmental Entity, (iii) the obtaining of all necessary consents, approvals or waivers from third parties, (iv) the defending of any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the transactions contemplated by this Agreement, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Entity vacated or reversed, and (v) the execution and delivery of any additional instruments necessary to consummate the transactions contemplated by, and to fully carry out the purposes of, this Agreement. (b) In connection with and without limiting the foregoing, the Company and its Board of Directors shall (i) take all action necessary to ensure that no state takeover statute or similar statute or regulation is or becomes applicable to the Offer, the Merger, this Agreement or any of the other transactions contemplated by this Agreement and (ii) if any state takeover statute or similar statute or regulation becomes applicable to the Offer, the Merger, this Agreement or any other transaction contemplated by this Agreement, take all action necessary to ensure that the Offer, the Merger, this Agreement and the other transactions contemplated by this Agreement may be consummated as promptly as practicable on the terms contemplated by the Offer and this Agreement and otherwise to minimize the effect of such statute or regulation on the Offer, the Merger or this Agreement and the other transactions contemplated by this Agreement. 6.5. Stock Options; Warrants. (a) The Board of Directors of the Company (or, if appropriate, any committee administering the Company Stock Plans) shall adopt such resolutions and take such other actions as may be required to terminate the Company Stock Plans as of the Effective Time and each then outstanding Company Stock Option granted under the Company Stock Plans, whether vested or unvested, shall be cancelled and converted into a right of the holder thereof to receive in respect of such Company Stock Option an amount in cash, without interest (the "Company Stock Option Consideration"), equal to the product of (i) the -35- 40 number of shares of Company Common Stock represented by such Company Stock Option immediately prior to such cancellation and conversion multiplied by (ii) the excess, if any, by which the Offer Price exceeds the exercise price per share with respect to such Company Stock Option (such payment to be net of all applicable federal, state, local or foreign taxes). (b) Prior to the Effective Time, the Company shall (i) obtain all necessary consents from, and provide (in a form acceptable to Lucent) any required notices to, holders of Company Stock Options and (ii) amend the terms of the Company Stock Plans, in each case, as is necessary to give effect to the provisions of Section 6.5(a). (c) Prior to the Effective Time, the Company shall take all actions to receive from each holder of an outstanding warrant (each, a "Warrant") to purchase shares of Company Common Stock an agreement that, as of the Effective Time, such Warrant shall be converted into a right of such holder to receive from the Paying Agent the consideration set forth in the next sentence at the same time that each such holder is entitled to receive payment for shares of Company Common Stock from the Surviving Corporation in connection with the Merger. Each holder of a Warrant shall be entitled to receive from the Paying Agent in respect of the shares of Company Common Stock to be issued upon the exercise of such Warrant, an amount in cash, without interest (the "Warrant Consideration"), equal to the product of (i) the number of shares of Company Common Stock subject to such Warrant immediately prior to the Effective Time and (ii) the excess, if any, by which the Offer Price exceeds the exercise price per share that was applicable with respect to such Warrant. 6.6. Employee Benefit Plans; Existing Agreement. (a) As soon as practicable after the Effective Time (the "Benefits Date"), Lucent shall provide, or cause to be provided, employee benefit plans, programs and arrangements to employees of the Company that are the same as those made generally available to non-represented employees of Lucent who are hired by Lucent after December 31, 1998. From the Effective Time to the Benefits Date (which the parties acknowledge may occur on different dates with respect to different plans, programs or arrangements of the Company) (the "Continuation Period"), Lucent shall provide, or cause to be provided, the employee benefit plans, programs and arrangements of the Company provided to employees of the Company as of the date hereof. (b) With respect to each benefit plan, program practice, policy or arrangement maintained by Lucent (the "Lucent Plans") in which employees of the Company subsequently participate, for purposes of determining vesting and entitlement to benefits, including for severance benefits and vacation entitlement (but not for accrual of pension benefits), service with the Company (or predecessor employers to the extent the Company provides past service credit) shall be treated as service with Lucent; provided, that such service shall not be recognized to the extent that such recognition would result in a duplication of benefits. Such service also shall apply for purposes of satisfying any waiting periods, evidence of insurability requirements, or the application of any pre-existing condition limitations. Each Lucent Plan shall waive pre-existing condition limitations to the same extent waived under the applicable Company Benefit Plan. -36- 41 Company Employees shall be given credit for amounts paid under a corresponding benefit plan during the same period for purposes of applying deductibles, copayments and out- of-pocket maximums as though such amounts had been paid in accordance with the terms and conditions of the Lucent Plan. (c) Prior to the Effective Time, the Company shall take all necessary actions or agreements to terminate the retirement plan for employees of the Company in accordance with its terms. The effective date of such termination shall in no event be later than the Effective Time. Prior to such termination, the Company shall file with respect thereto a determination letter application on Form 5310 with the IRS. In connection with such termination, the assets of such plan (including any excess assets), net of expenses, shall be allocated among participants based on the accrued benefit obligation. (d) Prior to the Effective Time, the Company shall terminate its supplemental retirement agreements. In connection therewith, accrued benefits shall be paid to each participant in such plan in accordance with the procedures described in Section 10.2 of each such supplemental retirement agreement. (e) Prior to the Effective Time, the Company shall terminate its retirement plan for outside directors in accordance with the terms of such plan. In connection therewith, accrued benefits shall be paid to each participant in such plan in accordance with the procedures described in Section 16 of such plan. 6.7. Indemnification. (a) From and after the consummation of the Offer, Lucent shall, or shall cause the Surviving Corporation to, fulfill and honor in all respects the obligations of the Company to indemnify each Person who is or was a director or officer (an "Indemnified Party") of the Company or any of its Subsidiaries pursuant to any indemnification provision of the Company's certificate of incorporation or by-laws as each is in effect on the date hereof. (b) For a period of six years after the consummation of the Offer, Lucent shall cause to be maintained in effect the current officers' and directors' liability insurance maintained by the Company with respect to the Indemnified Parties; provided that Lucent may elect either (i) to require the Company to obtain prior to the Effective Time coverage of the type contemplated by Section 10 of the Company's existing directors, officers and corporate liability insurance policy or (ii) to substitute therefor policies of at least the same coverage and amounts (containing terms and conditions which are no less advantageous to the Indemnified Parties than such existing insurance) covering acts or omissions occurring prior to the Effective Time. The current annual premium paid by the Company for its existing coverage is set forth in Item 6.7(b) of the Company Disclosure Schedule. (c) This Section 6.7 shall survive the closing of all the transactions contemplated hereby, is intended to benefit the Indemnified Parties and their respective heirs and -37- 42 personal representative (each of which shall be entitled to enforce this Section 6.7 against Lucent and the Surviving Corporation, as the case may be, as a third-party beneficiary of this Agreement), and shall be binding on all successors and assigns of Lucent and the Surviving Corporation. 6.8. Directors. Promptly upon the acceptance for payment of, and payment for, Shares by Acquisition pursuant to the Offer, Acquisition shall be entitled to designate such number of directors on the Board of Directors of the Company as will give Acquisition, subject to compliance with Section 14(f) of the Exchange Act, representation on the Company's Board of Directors equal to the product of (i) the total number of directors on the Company's Board of Directors and (ii) the percentage that the number of Shares purchased by Acquisition in the Offer bears to the number of Shares outstanding, and the Company shall, at such time, cause Acquisition's designees to be so elected by its existing Board of Directors; provided, that in the event that Acquisition's designees are elected to the Board of Directors of the Company, until the Effective Time such Board of Directors shall have at least two directors who are directors of the Company on the date of this Agreement and who are not officers of the Company or any of its Subsidiaries (the "Independent Directors") and; provided further that, in such event, if the number of Independent Directors shall be reduced below two for any reason whatsoever, the remaining Independent Director shall designate a person to fill such vacancy who shall be deemed to be an Independent Director for purposes of this Agreement or, if no Independent Directors then remain, the other directors of the Company on the date hereof shall designate two persons to fill such vacancies who shall not be officers or affiliates of the Company or any of its Subsidiaries, or officers or affiliates of Lucent or any of its Subsidiaries, and such persons shall be deemed to be Independent Directors for purposes of this Agreement. Subject to applicable law, the Company shall take all action requested by Lucent necessary to effect any such election, including mailing to its stockholders the Information Statement containing the information required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, and the Company agrees to make such mailing with the mailing of the Schedule 14D-9 (provided that Acquisition shall have provided to the Company on a timely basis all information required to be included in the Information Statement with respect to Acquisition's designees). In connection with the foregoing, the Company will promptly, at the option of Lucent, either increase the size of the Company's Board of Directors and/or obtain the resignation of such number of its current directors as is necessary to enable Acquisition's designees to be elected or appointed to, and to constitute a majority of the Company's Board of Directors as provided above. 6.9. Fees and Expenses; Termination Fee. (a) Except as provided in this Section 6.9, all fees and expenses incurred in connection with the Offer, the Merger, this Agreement and the transactions contemplated by this Agreement shall be paid by the party incurring such fees or expenses, whether or not the Offer or the Merger is consummated, except that each of Lucent and the Company shall bear and pay one-half of (i) the costs and expenses incurred in connection with the filing, printing and mailing of the Company Proxy Statement (including SEC filing fees) and (ii) the filing fees for the pre-merger notification and report forms under the HSR Act. -38- 43 (b) In the event that (i) a bona fide Superior Proposal shall have been made directly to the stockholders of the Company generally or shall have otherwise become publicly known or any Person shall have publicly announced an intention (whether or not conditional) to make a Superior Proposal and thereafter this Agreement is terminated by any of Lucent, Acquisition or the Company pursuant to Section 11(b)(i), or (ii) this Agreement is terminated (A) by Lucent or Acquisition pursuant to Section 11(g), (B) by the Company pursuant to Section 11(d) or (C) by Lucent pursuant to Section 11(c), then the Company shall promptly, but in no event later than the date of such termination, pay Lucent a fee equal to $2,000,000 (the "Termination Fee"), payable by wire transfer of same day funds; provided, that no Termination Fee shall be payable to Lucent pursuant to clause (i) of this Section 6.9(b) unless within twelve (12) months of such termination the Company or any of its Subsidiaries enters into any definitive agreement with respect to, or consummates, any Superior Proposal. The Company acknowledges that the agreements contained in this Section 6.9(b) are an integral part of the transactions contemplated by this Agreement and that, without these agreements, Lucent would not enter into this Agreement. Accordingly, if the Company fails promptly to pay the amount due pursuant to this Section 6.9(b), and, in order to obtain such payment, Lucent commences a suit which results in a final, non-appealable judgment against the Company for the fee set forth in this Section 6.9(b), the Company shall pay to Lucent its costs and expenses (including attorneys' fees and expenses) in connection with such suit, together with interest on the amount of the fee at the prime rate of Citibank, N.A. in effect on the date such payment was required to be made. 6.10. Public Announcements. Lucent and the Company will consult with each other before issuing, and provide each other the opportunity to review, comment upon and concur with, any press release or other public statements with respect to the transactions contemplated by this Agreement, including the Merger, and shall not issue any such press release or make any such public statement prior to such consultation, except as either party may determine is required by applicable law (including Rule 14d-9 promulgated under the Exchange Act), court process or by obligations pursuant to any listing agreement with any national securities exchange or national trading system or as contemplated or provided elsewhere herein. The parties agree that the initial press release to be issued with respect to the transactions contemplated by this Agreement shall be in the form heretofore agreed to by the parties. 6.11. Stockholder Litigation. The Company agrees that it shall not settle any litigation commenced after the date hereof against the Company or any of its directors by any stockholder of the Company relating to the Offer, the Merger or this Agreement without the prior written consent of Lucent, which consent shall not be unreasonably withheld. The Company shall give Lucent the opportunity to participate in the defense or settlement of any stockholder litigation against the Company and/or its directors relating to the transactions contemplated by this Agreement. In addition, the Company shall not voluntarily cooperate with any third party that may hereafter seek to restrain or prohibit or otherwise oppose the Offer, the Merger or the transactions contemplated by this Agreement and shall cooperate with Lucent and Acquisition to -39- 44 resist any such effort to restrain or prohibit or otherwise oppose the Offer, the Merger or the transactions contemplated by this Agreement. 7. Conditions Precedent. 7.1. Conditions Precedent to Each Party's Obligation to Effect the Merger. The respective obligations of each party hereto to effect the Merger shall be subject to the fulfillment or satisfaction, prior to or on the Closing Date of the following conditions: (a) Stockholder Approval. If required by applicable law, the Company Stockholder Approval shall have been obtained. (b) No Litigation. No judgment, order, decree, statute, law, ordinance, rule or regulation, entered, enacted, promulgated, enforced or issued by any court or other Governmental Entity of competent jurisdiction or other legal restraint or prohibition (collectively, "Restraints") shall be in effect, and there shall not be pending any suit, action or proceeding by any Governmental Entity (i) preventing the consummation of the Merger or (ii) which otherwise is reasonably likely to have a Material Adverse Effect on the Company or Lucent, as applicable, arising out of this Agreement or the transactions contemplated hereby; provided, that each of the parties shall have used its reasonable best efforts to prevent the entry of any such Restraints and to appeal as promptly as possible any such Restraints that may be entered. (c) Purchases of Shares. Acquisition shall have previously accepted for payment and paid for Shares pursuant to the Offer. 7.2. Conditions Precedent to Obligations of Acquisition and Lucent. All obligations of Acquisition and Lucent under this Agreement are subject to the fulfillment or satisfaction, prior to or on the Closing Date, of each of the following conditions precedent: (a) Performance of Obligations. The Company shall have performed and complied in all material respects with all agreements and conditions contained in this Agreement that are required to be performed or complied with by it prior to or at the Closing. (b) Representations and Warranties. Each of the Company's representations and warranties contained in Section 3 of this Agreement to the extent it is qualified by Material Adverse Effect shall be true and correct and each of the Company's representations and warranties to the extent it is not so qualified by Material Adverse Effect, shall be true and correct in all material respects, in each case, on and as of the Closing with the same effect as though such representations and warranties were made on and as of the Closing, except for changes permitted by this Agreement and except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be as of such earlier date. Lucent and Acquisition shall have received a certificate dated the Closing -40- 45 Date and signed by the Chairman, President or a Vice-President of the Company, certifying that, the conditions specified in clauses (a) and (b) of this Section 7.2 have been satisfied. (c) No Material Adverse Change. No event or events shall have occurred that could reasonably be expected to have a Material Adverse Effect on the Company, and Lucent shall have received a certificate signed on behalf of the Company by its Chief Executive Officer and Chief Financial Officer to such effect. (d) Consents. The Company shall have received all necessary consents or waivers, in form and substance satisfactory to Lucent and Acquisition, from the other parties to each contract, lease or agreement to which the Company is a party, except where the failure to receive such consent would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on the Company. 7.3. Conditions Precedent to the Company's Obligations. All obligations of the Company under this Agreement are subject to the fulfillment or satisfaction, prior to or on the Closing Date, of each of the following conditions precedent: (a) Performance of Obligations. Acquisition and Lucent shall have performed and complied in all material respects with all agreements and conditions contained in this Agreement that are required to be performed or complied with by them prior to or at the Closing. (b) Representations and Warranties. Each of the representations and warranties of Acquisition and Lucent contained in Section 4 of this Agreement to the extent it is qualified by Material Adverse Effect shall be true and correct and each of the representations and warranties of Acquisition and Lucent to the extent it is not so qualified by Material Adverse Effect shall be true and correct in all material respects, in each case, on and as of the Closing with the same effect as though such representations and warranties were made on and as of the Closing except for changes permitted by this Agreement and except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be as of such earlier date. The Company shall have received certificates dated the Closing Date and signed by the President or a Vice-President of Acquisition and an authorized signatory of Lucent, certifying that the conditions specified in clauses (a) and (b) of this Section 7.3 have been satisfied. 8. Non-Survival of Representation and Warranties. 8.1. Representations and Warranties. None of the representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Effective Time or, in the case of the Company, shall survive the acceptance of payment for, Shares by Acquisition pursuant to the Offer. This Section shall not limit any covenant or agreement by the parties which contemplates performance after the Effective Time. -41- 46 9. Contents of Agreement; Parties in Interest; etc. This Agreement and the agreements referred to or contemplated herein and the letter agreement dated June 18, 1999, concerning confidentiality (the "Confidentiality Agreement") set forth the entire understanding of the parties hereto with respect to the transactions contemplated hereby, and, except as set forth in this Agreement, such other agreements and the Exhibits hereto and the Confidentiality Agreement, there are no representations or warranties, express or implied, made by any party to this Agreement with respect to the subject matter of this Agreement and the Confidentiality Agreement. Except for the matters set forth in the Confidentiality Agreement, any and all previous agreements and understandings between or among the parties regarding the subject matter hereof, whether written or oral, are superseded by this Agreement and the agreements referred to or contemplated herein. 10. Assignment and Binding Effect. This Agreement may not be assigned by either party hereto without the prior written consent of the other party; provided, that Acquisition may assign its rights and obligations under this Agreement to any directly or indirectly wholly-owned Subsidiary of Lucent, upon written notice to the Company if the assignee shall assume the obligations of Acquisition hereunder and Lucent shall remain liable for its obligations hereunder. All the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto. 11. Termination. This Agreement may be terminated, and the Merger may be abandoned at any time prior to the Effective Time whether before or after the approval and adoption of this Agreement and the transactions contemplated hereby by the stockholders of the Company or the stockholder of Acquisition (provided that if the Shares are purchased pursuant to the Offer, neither Lucent nor Acquisition may in any event terminate this Agreement): (a) by the agreement of each of the Board of Directors of Lucent, Acquisition and the Company; (b) by Lucent, Acquisition or the Company if (i) Acquisition shall not have accepted for payment any Shares pursuant to the Offer prior to December 31, 1999; provided that the right to terminate this Agreement under this Section 11(b)(i) shall not be available to any party whose failure to fulfill any obligation under this Agreement has been the cause of, or resulted in, the failure of Acquisition to accept for payment any Shares on or before such date; or (ii) any court of competent jurisdiction in the United States or other United States governmental authority shall have issued an order, decree, ruling or taken any other action restraining, enjoining or otherwise prohibiting the acceptance for payment of, or payment for, Shares pursuant to the Offer or the Merger and such order, decree, ruling or other action shall have become final and nonappealable; (c) by Lucent, if the Company or any of its directors or officers shall participate in discussions or negotiations in breach (other than an immaterial breach) of Section 6.2; -42- 47 (d) by the Company in accordance with Section 6.2(b); provided that, in order for the termination of this Agreement pursuant to this paragraph (d) to be deemed effective, the Company shall have complied with all provisions of Section 6.2, including the notice provisions therein, and with applicable requirements, including the payment of the Termination Fee; (e) by the Company, in the event Lucent or Acquisition materially breaches its obligations under this Agreement, unless such breach is cured within 15 days after notice to Lucent by the Company; (f) by Lucent or Acquisition, in the event the Company materially breaches its obligations under this Agreement unless such breach is cured within 15 days after notice to Company by Lucent or Acquisition; or (g) by Lucent or Acquisition prior to the purchase of Shares pursuant to the Offer in the event of a breach or failure to perform by the Company of any representation, warranty, covenant or other agreement contained in this Agreement which (i) would give rise to the failure of a condition set forth in paragraph (d) or (e) of Exhibit A and (ii) cannot be cured, or has not been cured within 15 days after the Company receives written notice from Lucent of such breach or failure to perform. 12. Definitions. As used in this Agreement the terms set forth below shall have the following meanings: (a) "Affiliate" of a Person means any other Person who directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, such Person. As used in this definition, "control" means the possession of the power, directly or indirectly, to direct or cause the direction of the management and policies of a Person whether through the ownership of voting securities, by contract or otherwise. (b) "Benefit Plan" shall mean any bonus, pension, profit sharing, deferred compensation, incentive compensation, stock ownership, stock purchase, stock option, phantom stock, retirement, vacation, severance, disability, death benefit, hospitalization, medical or other material plan, arrangement or understanding (whether or not legally binding) providing material benefits to any current or former employee, officer or director of the Company. (c) "best knowledge" of any Person which is not an individual means, with respect to any specific matter, the knowledge, after due inquiry, of such Person's executive officers and any other officer or persons having primary responsibility for such matter. (d) "Code" shall mean the Internal Revenue Code of 1986, as amended. (e) "Environmental Laws" shall mean all applicable federal, state, local or foreign laws, rules and regulations, orders, decrees, judgments, permits, filings and licenses -43- 48 relating (i) to protection and clean-up of the environment and activities or conditions related thereto, including those relating to the generation, handling, disposal, transportation or release of Hazardous Substances and (ii) the health or safety of employees in the workplace environment, all as amended from time to time, and shall also include any common law theory based on nuisance, trespass, negligence or other tortious conduct. (f) "GAAP" shall mean generally accepted accounting principles. (g) "Hazardous Substances" shall mean any and all hazardous and toxic substances, wastes or materials, any pollutants, contaminants, or dangerous materials (including, but not limited to, polychlorinated biphenyls, PCBs, friable asbestos, volatile and semi-volatile organic compounds, oil, petroleum products and fractions, and any materials which include hazardous constituents or become hazardous, toxic, or dangerous when their composition or state is changed), or any other similar substances or materials which are included under or regulated by any Environmental Laws. (h) "Liens" shall mean any mortgage, pledge, lien, security interest, conditional or installment sale agreement, encumbrance, charge or other claims of third parties of any kind. (i) "Material Adverse Effect" on a Person shall mean (unless otherwise specified) any condition or event that: (i) has a material adverse effect on the assets, business, financial condition, operations or prospects of such Person and its Subsidiaries, taken as a whole, other than any condition or event (A) relating to the economy in general, (B) relating to the industries in which such party operates in general, (C) arising out of or resulting from actions contemplated by the parties in connection with, or which is attributable to, the announcement of this Agreement and the transactions contemplated hereby (including loss of personnel, customers or suppliers or the delay or cancellation of orders for products) or (D) in the case of the Company, litigation brought or threatened against the Company or any member of its Board of Directors in respect of this Agreement; (ii) materially impairs the ability of such Person to perform its obligations under this Agreement; or (iii) prevents or materially delays the consummation of transactions contemplated under this Agreement. (j) "Permitted Liens" shall mean (i) Liens for taxes, assessments, or similar charges, incurred in the ordinary course of business that are not yet due and payable or are being contested in good faith; (ii) pledges or deposits made in the ordinary course of business; (iii) Liens of mechanics, materialmen, warehousemen or other like Liens securing obligations incurred in the ordinary course of business that are not yet due and payable or are being contested in good faith; and (iv) similar Liens and encumbrances which are incurred in the ordinary course of business and which do not in the aggregate materially detract from the value of such assets or properties or materially impair the use thereof in the operation of such business. -44- 49 (k) "Person" shall mean any individual, corporation, partnership, limited partnership, limited liability company, trust, association or entity or government agency or authority. (l) "reasonable best efforts" shall mean prompt, substantial and persistent efforts as a prudent Person desirous of achieving a result would use in similar circumstances; provided that the Company, Lucent or Acquisition, as applicable, shall be required to expend only such resources as are commercially reasonable in the applicable circumstances. (m) "Subsidiary" of a Person shall mean any corporation, partnership, joint venture or other entity in which such Person (i) owns, directly or indirectly, 50% or more of the outstanding voting securities or equity interests or (ii) is a general partner. (n) "Tax" (and, with correlative meaning, "Taxes" and "Taxable") shall include all (i) federal, state, local or foreign net income, gross income, gross receipts, windfall profit, severance, property, production, sales, use, license, excise, franchise, employment, payroll, withholding, alternative or add-on minimum, ad valorem, value-added, transfer, stamp, or environmental tax, or any other tax, custom, duty, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or penalty, addition to tax or additional amount imposed by any governmental authority, (ii) liability for the payment of any amounts described in (i) as a result of being a member of an affiliated, consolidated, combined or unitary group and (iii) liability for the payment of any amounts as a result of being party to any tax sharing agreement or as a result of any express or implied obligation to indemnify any other Person with respect to the payment of any amounts of the type described in clause (i) or (ii). (o) "Tax Return" shall mean any return, report or similar statement required to be filed with respect to any Tax (including any attached schedules), including, without limitation, any information return, claim for refund, amended return or declaration of estimated Tax. 13. Notices. Any notice, request, demand, waiver, consent, approval, or other communication which is required or permitted to be given to any party hereunder shall be in writing and shall be deemed given only if delivered to the party personally or sent to the party by facsimile transmission (promptly followed by a hard-copy delivered in accordance with this Section 13) or by registered or certified mail (return receipt requested), with postage and registration or certification fees thereon prepaid, addressed to the party at its address set forth below: -45- 50 If to Acquisition or Lucent: Lucent Technologies Inc. 2000 Northeast Expressway Norcross, Georgia 30071 Att: President, NPG Telephone No: separately supplied Facsimile No: separately supplied with copies to: Lucent Technologies Inc. 600 Mountain Avenue Room 6A 311 Murray Hill, NJ 07974 Att: Pamela F. Craven Vice President-Law Telephone No: separately supplied Facsimile No: separately supplied If to the Company: SpecTran Corporation 50 Hall Road Sturbridge, MA 01566 Att: President Telephone No: separately supplied Facsimile No: separately supplied with a copy to: Nordlicht & Hand 645 Fifth Avenue New York, New York 10022 Att: Ira S. Nordlicht, Esq. Telephone No: separately supplied Facsimile No: separately supplied or to such other address or Person as any party may have specified in a notice duly given to the other party as provided herein. Such notice, request, demand, waiver, consent, approval or other -46- 51 communication will be deemed to have been given as of the date so delivered, telegraphed or mailed. 14. Amendment. This Agreement may be amended, modified or supplemented at any time before or after obtaining the Company Stockholder Approval, provided that (i) after any such approval, there shall not be made any amendment that by Law requires further approval by the stockholders of the Company or the approval of the stockholders of Lucent without the further approval of such stockholders and (ii) after the purchase of the Shares pursuant to the Offer, there shall not be made any amendment which decreases the Merger Consideration. Any amendment, modification or revision of this Agreement and any waiver of compliance or consent with respect hereto shall be effective only by a written instrument executed by each of the parties hereto. Following the election or appointment of Acquisition's designees pursuant to Section 6.8 and prior to the Effective Time, the affirmative vote of a majority of the Independent Directors then in office shall be required by the Company to (i) amend or terminate this Agreement by the Company, (ii) exercise or waive any of the Company's rights or remedies under this Agreement, (iii) extend the time for performance of Lucent and Acquisition's respective obligations under this Agreement or (iv) take any action to amend or otherwise modify the Company's certificate of incorporation or by-laws (or similar governing instruments of the Company's Subsidiaries) in violation of Section 6.7. 15. Extensions; Waiver. At any time prior to the Effective Time, a party may (a) extend the time for the performance of any of the obligations or other acts of the other parties, (b) waive any inaccuracies in the representations and warranties of the other parties contained in this Agreement or in any document delivered pursuant to this Agreement or (c) subject to the proviso of Section 14, waive compliance by the other party with any of the agreements or conditions contained in this Agreement. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute shall not constitute a waiver of such rights. 16. Governing Law. This Agreement shall be governed by and interpreted and enforced in accordance with the laws of the State of Delaware as applied to contracts made and fully performed in such state. 17. No Benefit to Others. The representations, warranties, covenants and agreements contained in this Agreement are for the sole benefit of the parties hereto, and their respective successors and assigns, and they shall not be construed as conferring, and are not intended to confer, any rights on any other Person. -47- 52 18. Severability. If any term or other provision of this Agreement is determined to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms and provisions of the Agreement shall remain in full force and effect. Upon such determination, the parties hereto shall negotiate in good faith to modify this Agreement so as to give effect to the original intent of the parties to the fullest extent permitted by applicable law. 19. Section Headings. All section headings are for convenience only and shall in no way modify or restrict any of the terms or provisions hereof. 20. Schedules and Exhibits. All Schedules and Exhibits referred to herein are intended to be and hereby are specifically made a part of this Agreement. 21. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and the Company, Acquisition and Lucent may become a party hereto by executing a counterpart hereof. This Agreement and any counterpart so executed shall be deemed to be one and the same instrument. -48- 53 IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have duly executed this Agreement as of the date first above written. LUCENT TECHNOLOGIES INC. By: /s/ William R. Spivey ________________________________ Name: William R. Spivey Title: Group President, Networks Products Group SEATTLE ACQUISITION INC. By: /s/ William R. Spivey ________________________________ Name: William R. Spivey Title: President SPECTRAN CORPORATION By: /s/ Charles B. Harrison ________________________________ Name: Charles B. Harrison Title: President, Chief Executive Officer and Chairman of the Board of Directors 54 EXHIBIT A Conditions of the Offer: Notwithstanding any other term of the Offer or this Agreement, Acquisition shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating to Acquisition's obligation to pay for or return tendered Shares after the termination or withdrawal of the Offer), to pay for any Shares tendered pursuant to the Offer unless (i) there shall have been validly tendered and not withdrawn prior to the expiration of the Offer such number of Shares that would constitute at least a majority of the outstanding Shares (determined on a fully diluted basis for all outstanding stock options and any other rights to acquire Shares on the date of purchase) (the "Minimum Condition") and (ii) any waiting period under the HSR Act applicable to the purchase of Shares pursuant to the Offer shall have expired or been terminated. Furthermore, Acquisition shall not be required to accept for payment or, subject as aforesaid, to pay for any Shares not theretofore accepted for payment or paid for, and may, in accordance with Section 11, terminate this Agreement or amend the Offer with the consent of the Company, if, upon the scheduled expiration date of the Offer (as extended, if required, pursuant to the second to the last sentence of Section 1.1(a)), any of the following conditions exists and is continuing and does not result principally from the breach by Lucent or Acquisition of any of their obligations under this Agreement: (a) there shall be instituted or pending by any Governmental Entity any suit, action or proceeding (i) challenging the acquisition by Lucent or Acquisition of any Shares under the Offer, seeking to restrain or prohibit the making or consummation of the Offer or the Merger or the performance of any of the other transactions contemplated by this Agreement or seeking to obtain from the Company, Lucent or Acquisition any damages that are material in relation to the Company and its Subsidiaries taken as a whole, (ii) seeking to prohibit or materially limit the ownership or operation by the Company, Lucent or any of Lucent's Subsidiaries of all or a portion of the business or assets of the Company or Lucent and its Subsidiaries, taken as a whole, or to compel the Company or Lucent and its Subsidiaries to dispose of or hold separate all or a portion of the business or assets of the Company or Lucent and their Subsidiaries, taken as a whole, in each case as a direct result of the Offer or any of the other transactions contemplated by this Agreement or (iii) seeking to impose material limitations on the ability of Lucent or Acquisition to acquire or hold, or exercise full rights of ownership of, any Shares to be accepted for payment pursuant to the Offer including, without limitation, the right to vote such Shares on all matters properly presented to the stockholders of the Company; (iv) seeking to prohibit Lucent or any of its Subsidiaries from effectively controlling in any material respect any material portion of the business or operations of the Company; (v) that could reasonably be expected to require the divestiture by Lucent or Acquisition of Shares, in the case of any of the foregoing in clauses (ii), (iii) or (iv), which could reasonably be expected, individually or in the aggregate, to have a material adverse effect on the businesses of the Company and its Subsidiaries; or (vi) that could reasonably be expected to result in a Material Adverse Effect on the Company or Lucent; 55 (b) there shall be any statute, rule, regulation, judgment, order or injunction enacted, entered, enforced, promulgated or deemed applicable to the Offer or the Merger, by any Governmental Entity or court, other than the application to the Offer or the Merger of applicable waiting periods under the HSR Act, that would result in any of the consequences referred to in clauses (i) through (vi) of paragraph (a) above; (c) there shall have occurred any events or changes which have had or which could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company; (d) any of the representations and warranties of the Company set forth in this Agreement that are qualified as to materiality shall not be true and correct or any such representations and warranties that are not so qualified shall not be true and correct in any material respect, in each case at the date of this Agreement and at the scheduled or extended expiration of the Offer; (e) the Company shall have failed to perform in any material respect any material obligation or to comply in any material respect with any material agreement or material covenant of the Company to be performed or complied with by it under this Agreement, which failure to perform or comply cannot be cured, or has not been cured within 15 days after the Company receives written notice from Lucent of such breach or failure to perform; (f) this Agreement shall have been terminated in accordance with its terms; (g) any consent (other than the filing of the Certificate of Merger or Company Stockholder Approval if required by the DGCL) required to be filed, occurred or been obtained by the Company or any of its Subsidiaries in connection with the execution and delivery of this Agreement, the Offer and the consummation of the transactions contemplated by this Agreement shall not have been filed or obtained or shall not have occurred, except where the failure to obtain such consent could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company; (h) the Company's Board of Directors (i) shall have withdrawn, or modified or changed in a manner adverse to Lucent or Acquisition (including by amendment of the Schedule 14D-9) its recommendation of the Offer, the Merger Agreement or the Merger, (ii) shall have recommended a Superior Proposal, (iii) shall have adopted any resolution to effect any of the foregoing or (iv) upon request of Lucent or Acquisition, shall fail to reaffirm its approval of recommendation of the Offer, the Merger Agreement or the Merger; or (i) any Person or "group" (within the meaning of Section 13(d)(3) of the Exchange Act), other than Lucent, Acquisition or their Affiliates or any group of which any of them is a member, shall have acquired or announced its intention to acquire beneficial ownership -ii- 56 (as determined pursuant to Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the Shares. and, in the good faith judgment of Lucent or Acquisition, in its sole discretion, make it inadvisable to proceed with such acceptance of Shares for payment or the payment therefor; The foregoing conditions are for the sole benefit of Lucent and Acquisition and (except for the Minimum Condition), subject to the terms of this Agreement, may be waived by Lucent and Acquisition in whole or in part at any time and from time to time in their sole discretion. The failure by Lucent or Acquisition at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right, the waiver of any such right with respect to particular facts and circumstances shall not be deemed a waiver with respect to any other facts and circumstances and each such right shall be deemed an ongoing right that may be asserted at any time and from time to time. Terms used but not defined herein shall have the meanings assigned to such terms in the Agreement to which this Exhibit A is a part. -iii- 57 GLOSSARY OF DEFINED TERMS Defined Term Location of Definition - ------------ ---------------------- Acquisition........................................... Preamble Acquisition Agreement................................. Section 6.2(b) Acquisition Common Stock ............................. Recitals Affiliate............................................. Section 12(a) Agreement............................................. Preamble Applicable Period..................................... Section 6.2(a) Authorizations........................................ Section 3.14(b) Benefit Plan.......................................... Section 12(b) Benefits Date ........................................ Section 6.6 best knowledge........................................ Section 12(c) Certificate of Merger................................. Section 2.1(b) Certificates.......................................... Section 2.8(a) Closing............................................... Section 2.1(b) Closing Date.......................................... Section 2.1(b) Code.................................................. Section 12(d) Commonly Controlled Entity............................ Section 3.17(a) Company............................................... Preamble Company Benefit Plans................................. Section 3.17(a) Company Common Stock.................................. Recitals Company Disclosure Schedule........................... Section 3 Company Filed SEC Documents........................... Section 3.6 Company Non-Voting Common Stock....................... Recitals Company Proxy Statement............................... Section 3.5(b) Company SEC Documents................................. Section 3.6 Company Stockholder Approval.......................... Section 3.23 Company Stockholders Meeting.......................... Section 6.3(b) Company Stock Options................................. Section 3.3(b) Company Stock Option Consideration.................... Section 6.5(a) Company Stock Plans................................... Section 3.3(a) Confidentiality Agreement............................. Section 9 Continuation Period................................... Section 6.6(a) DGCL.................................................. Recitals Dissenting Shares..................................... Section 2.7(a) Effective Time........................................ Section 2.1(b) Environmental Laws.................................... Section 12(e) ERISA................................................. Section 3.17(a) Exchange Act.......................................... Section 1.1(b) GAAP.................................................. Section 12(f) Governmental Entity................................... Section 3.5(b) -i- 58 Hazardous Substances.................................. Section 12(g) HSR Act............................................... Section 3.5(b) Immaterial Authorizations............................. Section 3.14(b) Indemnified Party..................................... Section 6.7(a) Information Statement................................. Section 3.7 Intellectual Property Rights.......................... Section 3.15(a) IRS................................................... Section 3.17(a) Laws.................................................. Section 3.14(a) Liens................................................. Section 12(h) Lucent................................................ Preamble Lucent Disclosure Schedule............................ Section 4 Lucent Plans.......................................... Section 6.6(b) Material Adverse Effect............................... Section 12(i) Merger................................................ Recitals Merger Consideration.................................. Section 2.5(c) Minimum Condition..................................... Exhibit A Nasdaq................................................ Section 3.5(b) Offer................................................. Recitals Offer Conditions...................................... Section 1.1(a) Offer Documents....................................... Section 1.1(b) Offer Price........................................... Recitals Parachute Gross-Up Payment............................ Section 3.18(e) Paying Agent.......................................... Section 2.8(a) Pension Plans......................................... Section 3.17(a) Permitted Liens....................................... Section 12(j) Person................................................ Section 12(k) reasonable best efforts............................... Section 12(l) Restraints............................................ Section 7.1(b) SARs.................................................. Section 3.3(b) Schedule 14D-1........................................ Section 1.1(b) Schedule 14D-9........................................ Section 1.2(b) SEC................................................... Section 1.1(a) Section 6.2 Notice.................................... Section 6.2(a) Shares................................................ Recitals Securities Act........................................ Section 3.6 Subsidiary............................................ Section 12(m) Superior Proposal..................................... Section 6.2(b) Surviving Corporation................................. Section 2.1(a) Takeover Proposal..................................... Section 6.2(a) Tax................................................... Section 12(n) Tax Return............................................ Section 12(o) Termination Fee....................................... Section 6.9(b) Warrant............................................... Section 6.5(c) -ii- 59 Warrant Consideration................................. Section 6.5(c) -iii- -----END PRIVACY-ENHANCED MESSAGE-----