-----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, Nv8YlrIfc+l4kkkLzLOQSI9E2CWqKKXlviSNmc+pbUOtN/SHn4RvOrnnV5QK0o/+ NGi5ghgIe7TiDKBbNmQtlw== 0000950123-99-007138.txt : 19990806 0000950123-99-007138.hdr.sgml : 19990806 ACCESSION NUMBER: 0000950123-99-007138 CONFORMED SUBMISSION TYPE: SC 14D9/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19990805 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 14D9/A SEC ACT: SEC FILE NUMBER: 005-34595 FILM NUMBER: 99677997 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: 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 14D9/A 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 SC 14D9/A 1 AMENDMENT #1 TO SCHEDULE 14D9 1 ======================================================================= SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ AMENDMENT NO. 1 TO SCHEDULE 14D-9 SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934 ------------------------ SPECTRAN CORPORATION (NAME OF SUBJECT COMPANY) ------------------------ SPECTRAN CORPORATION (NAME OF PERSON FILING STATEMENT) ------------------------ COMMON STOCK, $.10 PAR VALUE (TITLE OF CLASS OF SECURITIES) ------------------------ 847598109 (CUSIP NUMBER OF CLASS OF SECURITIES) ------------------------ CHARLES B. HARRISON CHIEF EXECUTIVE OFFICER SPECTRAN CORPORATION 50 HALL ROAD STURBRIDGE, MASSACHUSETTS 01566 (508) 347-2261 (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF THE PERSON FILING STATEMENT) ------------------------ Copies to: IRA S. NORDLICHT, ESQ. NORDLICHT & HAND 645 FIFTH AVENUE NEW YORK, NEW YORK 10022 (212) 421-6500 ======================================================================= 2 This Amendment No. 1 amends and supplements the solicitation/Recommendation Statement on Schedule 14D-9, dated July 21, 1999 (the "Schedule 14D-9") with respect to the tender offer by Lucent Technologies Inc., a Delaware corporation ("Lucent"), and Seattle Acquisition Inc., a Delaware corporation and wholly owned subsidiary of Lucent (the "Purchaser"), to acquire all of the outstanding common stock, $.10 par value per share (the "Shares"), of SpecTran Corporation (the "Company") at a price of $9.00 per Share, upon the terms and conditions set forth in the Offer to Purchase, dated July 21, 1999, and the related letter of transmittal. Capitalized terms used herein and not defined shall have the meanings ascribed to them in the Schedule 14D-9. The Schedule 14D-9 is hereby amended (a) by providing supplemental information concerning the complaint entitled Chase v. Harrison, et al., C.A. No. 17312-NC, including filing as an exhibit the Amended Class Action Complaint filed July 29, 1999, (b) by filing as exhibits the complaint entitled Airmont Associates et al., v. SpecTran Corporation et al., C.A. No. 17314-NC, and the original complaint entitled Chase v. Harrison, et al., C.A. No. 17312-NC, both of which were filed in Delaware Chancery Court on July 15, 1999 and were described previously in Item 8 "Additional Information to be Furnished" in the Schedule 14D-9, (c) by filing the Company's July 30, 1999 press release entitled "SpecTran Reports Second Quarter/Six Months Results" and (d) by providing information concerning expiration of the waiting period under the Hart-Scott-Rodino Antitrust Inprovements Act of 1976, as amended. Item 8. Additional Information to be Furnished. LITIGATION. On July 29, 1999, the plaintiff in Chase v. Harrison, et al., Civil Action No. 17312-NC, filed an Amended Class Action Complaint (the "Amended Complaint") in Delaware Chancery Court. In the Amended Complaint, the plaintiff alleges, among other things, that (1) the proposed purchase price is inadequate; (2) the Company's Solicitation/Recommendation Statement on Schedule 14D-9 is misleading and omits material information in that it fails to disclose (a) the Company's financial results for the second fiscal quarter ended June 30, 1999, (b) why the Company's projected financial results, as announced by the Company on May 28, 1999, did not warrant that a substantial premium be paid for the Company relative to the existing market price, (c) information concerning the identity of other bidders for the Company and the terms of any competing bids or expressions of interest, (d) why the Company did not wait until after its third quarter ended September 30, 1999 financial results were available to determine whether Company C would make an offer to acquire the Company, (e) the reasons for Lazard Freres & Co. LLC's determination that the merger was "fair", (f) the total amount of benefits that each of the Company's executive officers and directors will realize from the Merger, and (g) the value of the Company to Lucent and the benefits Lucent will derive from the Merger, including the equivalent amount that Lucent would have to spend to build the manufacturing capacity that it will be buying from the Company and that Lucent had approved a higher purchase price; and (3) the board of directors of the Company breached its fiduciary duty to the stockholders of the Company to exercise due care, loyalty and candor. The Amended Complaint further alleges that Lucent aided and abetted the breach of fiduciary duty by the individual defendants. The foregoing is qualified in its entirety by reference to the Amended Complaint, acopy which is filed as Exhibit (c) (6) which is incorporated by reference herein. Concurrent with the filing of the Amended Complaint, the plaintiff in Chase v. Harrison, et al. petitioned the Delaware Chancery Court for expedited discovery and the scheduling of a hearing on a preliminary injunction. A telephone conference call was held by the Delaware Chancery Court on July 30, 1999, at which time the court declined to permit expedited discovery and declined to schedule a hearing on a preliminary injunction. Instead, the court scheduled a hearing on August 13, 1999 to hear arguments as to whether an order temporarily restraining consummation of the Merger should be issued. This scheduled hearing was subsequently canceled when, by letter dated August 2, 1999, plaintiff's counsel withdrew plaintiff's application for a temporary restraining order. 3 SECOND QUARTER AND FIRST HALF 1999 PRELIMINARY FINANCIAL RESULTS. On July 30, 1999, SpecTran released its preliminary results for the second fiscal quarter and first half of 1999. A copy of the press release disclosing those preliminary results is attached hereto. HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED ("HSR"). As of August 4, 1999 the waiting period under HSR relating to the purchase of the Shares pursuant to the Offer had expired. Item 9. Material to be filed as Exhibits. (a)(1)* Offer to Purchase dated July 21, 1999. (a)(2)* Letter of Transmittal. (a)(3)* Press Release jointly prepared by Lucent and the Company and issued by Lucent on July 15, 1999. (a)(4)* Opinion of Lazard Freres & Co. LLC dated July 15, 1999. (a)(5)* Letter to Stockholders, dated July 21, 1999, from Charles B. Harrison, Chairman of the Board of Directors and President and Chief Executive Officer of the Company. (c)(1)* Agreement of Merger, dated as of July 15, 1999, among Lucent, the Purchaser and the Company. (c)(2)* The Company's Information Statement pursuant to Section 14(f) of the Securities Exchange Act of 1934 and Rule 14f-1 thereunder. (c)(3)* Contractual Agreement between Lucent Technologies Inc. and SpecTran Corporation, dated October 3, 1996. The Company has been granted confidential treatment for portions of this Exhibit. (c)(4)* Patent License Agreement between Lucent Technologies and SpecTran Corporation dated as of October 30, 1998. The Company has been granted confidential treatment for portions of this Exhibit. (c)(5) Chase v. Harrison, et al., C.A. No. 17312-NC, Complaint, filed in the Court of Chancery of the State of Delaware in and for New Castle County. (c)(6) Chase v. Harrison, et al., C.A. No. 17312-NC, Amended Class Action Complaint, filed in the Court of Chancery of the State of Delaware in and for New Castle County. (c)(7) Airmont Associates et al., v. SpecTran Corporation et al., C.A. No. 17314-NC, Complaint, filed in the Court of Chancery of the State of Delaware in and for New Castle County. (c)(8) July 30, 1999 press release entitled "SpecTran Reports Second Quarter/Six Months Results." - ------------------ *Previously Filed. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and accurate. 4 SPECTRAN CORPORATION By: /s/ CHARLES B. HARRISON ----------------------- Charles B. Harrison President, Chief Executive Officer and Chairman of the Board Dated: August 4, 1999 EX-99.C.5 2 CHASE VS HARRISION COMPLAINT 1 IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY _____________________________________________ X : RHONA CHASE, : : Plaintiff, : : -against- : C.A. No. 17312NC : CHARLES B. HARRISON, BRUCE A. CANNON, JOHN E. : CHAPMAN, RICHARD M. DONOFRIO, RAYMOND E. : JAEGER, LILY K. LAI, PAUL D. LAZAY, IRA S. : NORDLICHT, ROBERT A. SCHMITZ, SPECTRAN : CORPORATION, and LUCENT TECHNOLOGIES INC., : : Defendants. : : _____________________________________________ X CLASS ACTION COMPLAINT Plaintiff alleges upon information and belief, except for paragraph 1 hereof, which is alleged upon knowledge, as follows: 1. Plaintiff has been the owner of shares of the common stock of SpecTran Corporation ("SpecTran" or the "Company") since prior to the transaction herein complained of and continuously to date. 2. SpecTran is a corporation duly organized and existing under the laws of the State of Delaware. The Company is a leading manufacturer of high-performance multi-mode and single-mode optical fiber for data communications, telecommunications, CATV and industry applications world-wide. 2 3. Defendant Lucent Technologies Inc. ("Lucent") is a corporation organized under the laws of the State of Delaware. The company is one of the world's leading manufacturers of fiber, with thirteen fiber and cable manufacturing operations and joint ventures around the world. 4. Defendant Charles B. Harrison is Chairman, President, Chief Executive Officer and a Director of the Company. 5. Defendants Bruce A. Cannon, John E. Chapman, Richard M. Donofrio, Raymond E. Jaeger, Lily K. Lai, Paul D. Lazay, Ira S. Nordlicht, and Robert A. Schmitz are Directors of SpecTran. 6. The Individual Defendants are in a fiduciary relationship with plaintiff and the other public stockholders of SpecTran and owe them the highest obligations of good faith, due care and fair dealing. CLASS ACTION ALLEGATIONS 7. Plaintiff brings this action on her own behalf and as a class action, pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of all common stockholders of the Company (except the defendants herein and any person, firm, trust, corporation, or other entity related to or affiliated with any of the defendants) and their successors in interest, who are or will be threatened with injury arising from defendants' actions as more fully described herein. 8. This action is properly maintainable as a class action because: 2 3 (a) The class is so numerous that joinder of all members is impracticable. There are approximately 7 million shares of SpecTran common stock outstanding owned by hundreds, if not thousands, of record and beneficial holders; (b) There are questions of law and fact which are common to the class including, inter alia, the following: (i) whether the individual defendants ----- ---- have breached their fiduciary and other common law duties owned by them to plaintiff and the members of the class; and (ii) whether the class is entitled to injunctive relief or damages as a result of the wrongful conduct committed by defendants. (c) Plaintiff is committed to prosecuting this action and has retained competent counsel experienced in litigation of this nature. The claims of the plaintiff are typical of the claims of other members of the class and plaintiff has the same interests as the other members of the class. Plaintiff will fairly and adequately represent the class. (d) Defendants have acted in a manner which affects plaintiff and all members of the class alike, thereby making appropriate injunctive relief and/or corresponding-declaratory relief with respect to the class as a whole. (e) The prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications with respect to individual members of the Class, which would establish incompatible standards of conduct for defendants, or adjudications with respect to individual members of the Class which 3 4 would, as a practical matter, be dispositive of the interests of other members or substantially impair or impede their ability to protect their interests. SUBSTANTIVE ALLEGATIONS 9. On July 15, 1999, before the markets opened, SpecTran and Lucent announced that they had entered into a definitive merger agreement whereby Lucent will acquire SpecTran in a transaction valued at $99 million. Under the terms of the transaction, Lucent will commence a cash tender offer for all of SpecTran's outstanding common shares at a price of $9.00 per share and will assume $35 million in SpecTran debt. The tender offer will be followed by a merger in which any untendered shares of SpecTran will be acquired for $9.00 per share in cash. The tender offer will commence on July 21, 1999 and is not expected to close until the end of the quarter ending September 30, 1999. 10. By entering into the agreement with Lucent, the SpecTran Board has initiated a process to sell the Company which imposes heightened fiduciary responsibilities on its directors and requires enhanced scrutiny by the Court. However, the terms of the proposed transaction were not the result of an auction process or active market check; they were arrived at without a full and thorough investigation by the Individual Defendants; and they are intrinsically unfair and inadequate from the standpoint of the SpecTran shareholders. 11. The proposed purchase price is inadequate. It is substantially less than the closing price of SpecTran just the day before ($11.50 per share) or the price paid 4 5 in similar transactions. The proposed purchase price is lower than any closing price for SpecTran shares from June 21, 1999 until the announcement. Moreover, in transactions of this type it is usual and customary to pay a premium for achieving total control, which premium can be as much as or greater than 50% of the current price. Here, the proposed transaction involves a discount from the current market price. -------- 12. The Individual Defendants failed to make an informed decision, as no market check of the Company's value was obtained. In agreeing to the merger, the Individual Defendants failed to properly inform themselves of SpecTran's highest transactional value. 13. The Individual Defendants have violated their fiduciary duties owned to the public shareholders of SpecTran. The Individual Defendants' agreement to the terms of the transaction, its timing, and the failure to auction the Company and invite other bidders, and defendants' failure to provide a market check demonstrate a clear absence of the exercise of due care and of loyalty to SpecTran's public shareholders. 14. The Individual Defendants' fiduciary obligations under these circumstances require them to: (a) Undertake an appropriate evaluation of SpecTran's net worth as a merger/acquisition candidate; and (b) Engage in a meaningful auction with third parties in an attempt to obtain the best value for SpecTran's public shareholders. 5 6 15. The Individual Defendants have breached their fiduciary duties by reason of the acts and transactions complained of herein, including their decision to merge with Lucent without making the requisite effort to obtain the best offer possible. 16. Plaintiff and other members of the Class have been and will be damaged in that they have not and will not receive their fair proportion of the value of SpecTran's assets and business, and will be prevented from obtaining fair and adequate consideration for their shares of SpecTran common stock. 17. The consideration to be paid to class members in the proposed merger is unfair and inadequate because, among other things: (a) The intrinsic value of SpecTran's common stock is materially in excess of the amount offered for those securities in the merger giving due consideration to the anticipated operating results, net asset value, cash flow, and profitability of the Company. Indeed, the amount offered is 22% ($2.50 per share) less than the market price just the day before the announcement, although a substantial premium to the current selling price is the norm; (b) The merger price is not the result of an appropriate consideration of the value of SpecTran because the SpecTran Board approved the proposed merger without undertaking steps to accurately ascertain SpecTran's value through open bidding or at least a "market check" mechanism; and (c) By entering into the agreement with Lucent, the Individual Defendants have allowed the price of SpecTran stock to be capped, thereby depriving 6 7 plaintiff and the Class of the opportunity to realize any increase in the value of SpecTran stock. 18. By reason of the foregoing, each member of the Class will suffer irreparable injury and damages absent injunctive relief by this Court. 19. Defendant Lucent has knowingly aided and abetted the breaches of fiduciary duty committed by the other defendants to the detriment of SpecTran's public shareholders. Indeed, the proposed merger could not take place without the active participation of Lucent. Furthermore, Lucent and its shareholders are the intended beneficiaries of the wrongs complained of and would be unjustly enriched absent relief in this action. The market price of Lucent stock rose $1.00 per share on the announcement of the merger. 20. Plaintiff and the other members of the Class have no adequate remedy at law. WHEREFORE, plaintiff demands judgment against defendants as follows: a. Declaring that this action is properly maintainable as a class action and certifying plaintiff as the representative of the Class; b. Preliminary and permanently enjoining defendants and their counsel, agents, employees and all persons acting under, in concert with, or for them, from proceeding with, consummating, or closing the proposed transaction; 7 8 c. In the event that the proposed transaction is consummated, rescinding it and setting it aside, or awarding rescissory damages to the Class; d. Awarding the Class compensatory damages against defendants, individually and severally, in an amount to be determined at trial, together with pre-judgment and post-judgment and post-judgment interest at the maximum rate allowable by law; e. Awarding plaintiff her costs and disbursements and reasonable allowances for fees of plaintiff's counsel and experts; and f. Granting plaintiff and the Class such other and further relief as the Court may deem just and proper. ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A. By: /s/ -------------------------------------------------- Suite 1401, Mellon Bank Center P.O. Box 1070 Wilmington, DE 19899-1070 (302) 656-4433 Attorneys for Plaintiff OF COUNSEL: RABIN & PECKEL LLP 275 Madison Avenue New York, NY 10016 (212) 682-1818 EX-99.C.6 3 AMENDED CLASS ACTION COMPLAINT 1 IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY _______________________________________________X RHONA CHASE, : : Plaintiff, : : -against- : : CHARLES B. HARRISON, BRUCE A. CANNON, JOHN : C.A. No. 17312 NC E. CHAPMAN, RICHARD M. DONOFRIO, RAYMOND E. : JAEGER, LILY K. LAI, PAUL D. LAZAY, IRA S. : NORDLICHT, ROBERT A. SCHMITZ, SPECTRAN : CORPORATION, and LUCENT TECHNOLOGIES INC., : : Defendants. : _______________________________________________X AMENDED CLASS ACTION COMPLAINT Plaintiff alleges upon information and belief, except for paragraph 1 hereof, which is alleged upon personal knowledge, as follows: 1. Plaintiff has been the owner of shares of the common stock of SpecTran Corporation ("SpecTran" or the "Company") since prior to the transaction herein complained of and continuously to date. 2. SpecTran is a corporation duly organized and existing under the laws of the State of Delaware. The Company is a leading manufacturer of high-performance multi-mode and single-mode optical fiber for data communications, telecommunications, CATV and industry applications world-wide. 2 3. Defendant Lucent Technologies Inc. ("Lucent") is a corporation organized under the laws of the State of Delaware. The company is one of the world's leading manufacturers of fiber, with thirteen fiber and cable manufacturing operations and joint ventures around the world. 4. Defendant Charles B. Harrison is Chairman, President, Chief Executive Officer and a Director of the Company. 5. Defendants Bruce A. Cannon, John E. Chapman, Richard M. Donofrio, Raymond E. Jaeger, Lily K. Lai, Paul D. Lazay, Ira S. Nordlicht, and Robert A. Schmitz (the "Individual Defendants") are Directors of SpecTran. 6. The Individual Defendants are in a fiduciary relationship with plaintiff and the other public shareholders of SpecTran and owe them the highest obligations of good faith, due care and fair dealing. CLASS ACTION ALLEGATIONS ------------------------ 7. Plaintiff brings this action on her own behalf and as a class action, pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of all common shareholders of the Company (except the defendants herein and any person, firm, trust, corporation, or other entity related to or affiliated with any of the defendants) and their successors in interest, who are or will be threatened with injury arising from defendants' actions as more fully described herein. 8. This action is properly maintainable as a class action because: 2 3 (a) The class is so numerous that joinder of all members is impracticable. There are approximately 7 million shares of SpecTran common stock outstanding owned by hundreds, if not thousands, of record and beneficial holders; (b) There are questions of law and fact which are common to the class including, inter alia, the following: (i) whether the individual defendants have ----- ---- breached their fiduciary and other common law duties owed by them to plaintiff and the members of the class; and (ii) whether the class is entitled to injunctive relief or damages as a result of the wrongful conduct committed by defendants; (c) Plaintiff is committed to prosecuting this action and has retained competent counsel experienced in litigation of this nature. The claims of plaintiff are typical of the claims of other members of the class and plaintiff has the same interests as the other members of the class. Plaintiff will fairly and adequately represent the class; (d) Defendants have acted in a manner which affects plaintiff and all members of the class alike, thereby making appropriate injunctive relief and/or corresponding declaratory relief with respect to the class as a whole; and (e) The prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications with respect to individual members of the Class, which would establish incompatible standards of conduct for defendants, or adjudications with respect to individual members of the 3 4 Class which would, as a practical matter, be dispositive of the interests of other members or substantially impair or impede their ability to protect their interests. SUBSTANTIVE ALLEGATIONS ----------------------- THE TERMS OF THE MERGER - ----------------------- 9. On July 15, 1999, SpecTran and Lucent announced that they had entered into a definitive merger agreement whereby Lucent, through its wholly owned subsidiary, Seattle Acquisition, Inc. (collectively "Lucent"), will acquire SpecTran in a transaction (the "Merger") valued at $99 million, including the assumption of $35 million in SpecTran debt. Under the terms of the transaction, Lucent has commenced a cash tender offer for all of SpecTran's outstanding common shares at a price of $9.00 per share. The tender offer will be followed by a second step merger in which any untendered shares of SpecTran will be acquired for $9.00 per share in cash. The expiration date for the tender offer is 12:00 Midnight, New York City time, on August 17, 1999. 10. The proposed purchase price is inadequate. It is substantially less than the closing price of SpecTran shares just the day before, $11.50 per share. The proposed purchase price is lower than any closing price for SpecTran shares from June 21, 1999 until the announcement. Moreover, in transactions of this type it is usual and customary to pay a premium over the market price. Here, the proposed transaction involves a discount of nearly 25% from the unaffected market price. -------- 4 5 DEFENDANTS DISCLOSURE VIOLATIONS - -------------------------------- 11. On July 21, 1999, the Individual Defendants caused to be filed with the Securities and Exchange Commission a Solicitation/Recommendation Statement on Schedule 14D-9, for dissemination to SpecTran's shareholders in connection with Lucent's tender offer. The Schedule 14D-9 is wrongfully misleading and omits material information in violation of the individual defendants' duty of candor, in at least the following respects: (a) The Schedule 14D-9 is designed to assuage investor concern and create the misleading impression that the merger is necessary and beneficial. Having chosen to speak, the Individual Defendants are required to disclose material information so that shareholders can make an informed decision as to the adequacy of the proposed below market price. In these particular circumstances, where the offer is $2.50 per share lower than the market price on the day preceding the offer, it is material to shareholders to be informed of SpecTran's financial results for the second fiscal quarter ended June 30, 1999. Without those financial results, the public shareholders have no adequate basis upon which to make an informed decision whether to tender their shares. (b) Although the proposed Merger was announced on July 15, 1999 and the Schedule 14D-9 was filed with the SEC on July 21, 1999, weeks after the close of SpecTran's second fiscal quarter ending June 30, 1999, not even preliminary financial results are provided to SpecTran's shareholders. The expiration date for 5 6 the Tender Offer is midnight on August 17, 1999, approximately the date that SpecTran would be required to file its SEC Form 10-Q disclosing its financial results for the quarter ending June 30, 1999. Shareholders will therefore have no opportunity to review and consider those financial results before they must decide whether to tender their shares. (c) The absence of second quarter 1999 financial results is particularly egregious given public statements made by defendant Harrison at SpecTran's annual meeting on May 28, 1999 which were then disseminated by the Company in the financial news media. At the annual meeting and in the press release, defendant Harrison forecast SpecTran's 1999 net revenues to be more than $90 million, a 25% increase from 1998. In addition, defendant Harrison announced that net sales were expected to increase at a compound annual rate of 12% to 15% through 2003, with earnings per share expected to grow at an equivalent or faster rate. The market reaction was swift and positive, with the price per share closing at $9.25 that very day, a 24% increase from the $7.44 closing price just the day before. The Schedule 14D-9 does not explain why such stellar financial results, especially given the market's reaction to their announcement, did not warrant a substantial premium be paid for SpecTran. (d) The Schedule 14D-9 also omits the most relevant of information concerning other bidders for SpecTran, particularly, those identified as "Company B" (the purchaser of the Company for stock) and "Company C" (the purchaser of 6 7 the Company for cash). Company C, on June 18, 1999, had deferred proceeding with its bid until after the financial results for SpecTran's third quarter ending September 30, 1999 were known. As defendant Harrison had, less than a month before, on May 28, 1999, announced superior projected 1999 financial results, such a delay would not be onerous and may be in the best interests of the shareholders. No explanation for SpecTran's unwillingness to wait is provided. Furthermore, Company C apparently expressed interest in acquiring SpecTran at a price, or within a range, which was greater than the $9.00 per share price offered by Lucent. However, there is no disclosure of the price, or range, at which Company C expressed interest. (e) The Schedule 14D-9 also reported that Company B's offer was rejected because its stock was "highly illiquid, had limited institutional ownership and no equity research coverage and should the Company's shareholders receive such stock, and wish to liquidate their position, they may be unable to do so without realizing a significant discount." But if the price were high enough the shareholders might be willing to accept the risk of such a discount. Company B expressed interest in acquiring SpecTran at a price, or within a range, which was greater than $9.00 per share price offered by Lucent. At a minimum, the price, or range, should have been disclosed along with the acquiring company's identity. (f) The Schedule 14D-9 omits any discussion of how Lazard Freres & Co. LLC ("Lazard"), SpecTran's financial advisor, determined that the Merger was 7 8 "fair." Lazard's fairness opinion, an exhibit to the Schedule 14D-9, is bereft of analysis. In addition, Lazard disclaims responsibility for whatever information it used. Lazard also states that its opinion does not address the relative merits of the Merger as compared to alternative business transactions available to the Company (presumably offers from Company B and Company C). Other than Lazard's "trust me" statement, the shareholders have been provided with no information upon which to base a decision whether or not to tender their shares. (g) No clear understanding of the benefits to the Company's executive officers and directors are provided other than that the merger will result in the acceleration of benefits under the Company's Incentive Stock Option Plans, Supplemental Retirement Agreements, and Retirement Plan for Outside Directors. While some information is scattered throughout the Schedule 14D-9, nowhere can a shareholder find the total amount that each of the directors and executive officers will realize from the transaction. The amount is a measure of each Individual Defendant's independence, and is easily calculated and easily disclosed, yet it is omitted. (h) Neither Lucent's Offer to Purchase or the Schedule 14D-9 discloses how valuable SpecTran would be to Lucent and the benefits Lucent will derive from the Merger. The documents fail to disclose that Lucent would have to spend the equivalent of almost $20 per SpecTran share to build the manufacturing capacity that it was buying from SpecTran for $9 per share. Importantly, 8 9 defendants fail to disclose that Lucent had approved a purchase price of up to $13 per SpecTran share. THE SPECTRAN BOARD HAS NOT FULFILLED ITS REVLON DUTIES - ------------------------------------------------------ 12. By entering into the agreement with Lucent, the SpecTran Board has initiated a process to sell the Company which imposes heightened fiduciary responsibilities on its directors and requires enhanced scrutiny by the Court. However, the terms of the proposed transaction are intrinsically unfair and inadequate from the standpoint of the SpecTran shareholders. 13. The Individual Defendants have violated their fiduciary duties owed to the public shareholders of SpecTran. The Individual Defendants' agreement to the terms of the transaction, its timing, and the misleading and deficient Schedule 14D-9 disseminated by them demonstrate a clear absence of the exercise of due care, loyalty and candor to SpecTran's public shareholders. 14. The consideration to be paid to class members in the proposed Merger is unfair and inadequate because, among other things: (a) The intrinsic value of SpecTran's stock is materially in excess of the amount offered for those securities in the Merger giving due consideration to the anticipated operating results, including the forecasted results announced on May 28, 1999 at the annual meeting and publicly reported by the Company. Indeed, the amount offered is 22% ($2.50 per share) less than the market price the day before 9 10 the offer was announced in contrast to the norm of a substantial premium to the unaffected market price in a takeover; (b) By entering into the agreement with Lucent, the Individual Defendants have allowed the price of SpecTran stock to be capped, thereby depriving plaintiff and the Class of the opportunity to realize any increase in the value of SpecTran stock; (c) The individual defendants have agreed to the takeover by Lucent on terms inferior to other offers. At the very least, the individual defendants' lack of candor about other offers impairs the ability of SpecTran's shareholders to decide the quality and merits of competing proposals; and, (d) The merger terms do not reflect the significant benefits and synergies which Lucent will derive from the transaction. SPECTRAN'S SHAREHOLDERS WILL BE IRREPARABLY INJURED - --------------------------------------------------- 15. As a result of the individual defendants' breaches of their fiduciary duties, plaintiff and the other members of the Class have been and will be damaged in that they will be prevented from maximizing the value of their investment in SpecTran and will be denied the right to make an informed decision with respect to the Lucent transaction. By reason of the foregoing, each member of the Class will suffer irreparable injury and damages absent injunctive relief by this Court. 10 11 AIDING AND ABETTING - ------------------- 16. Defendant Lucent has knowingly aided and abetted the breaches of fiduciary duty committed by the individual defendants to the detriment of SpecTran's public shareholders. Indeed, the proposed Merger could not take place without the active participation of Lucent. Furthermore, Lucent and its shareholders are the intended beneficiaries of the wrongs complained of and would be unjustly enriched absent relief in this action. 17. Plaintiff and the other members of the Class have no adequate remedy at law. WHEREFORE, plaintiff demands judgment against defendants as follows: a. Declaring that this action is properly maintainable as a class action and certifying plaintiff as the representative of the Class; b. Preliminarily and permanently enjoining defendants and their counsel, agents, employees and all persons acting under, in concert with, or for them, from proceeding with, consummating, or closing the proposed transaction complained of herein; c. In the event that the proposed transaction is consummated, rescinding it and setting it aside, or awarding rescissory damages to the Class; d. Awarding the Class compensatory damages against defendants, individually and severally, in an amount to be determined at trial, together with pre-judgment and post-judgment interest at the maximum rate allowable by law; 11 12 e. Awarding plaintiff her costs and disbursements and reasonable allowances for fees of plaintiff's counsel and experts; and f. Granting plaintiff and the Class such other and further relief as the Court may deem just and proper. ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A. By: ----------------------------------- Suite 1401, Mellon Bank Center P.O. Box 1070 Wilmington, DE 19899-1070 (302) 656-4433 Attorneys for Plaintiff OF COUNSEL: RABIN & PECKEL LLP 275 MADISON AVENUE NEW YORK, NY 10016 (212) 682-1818 12 EX-99.C.7 4 AIRMONT ASSOCIATES V SPECTRAN COMPLAINT 1 IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY - ------------------------------------- AIRMONT PLAZA ASSOCIATES and RICHARD SCHATZ, Plaintiffs, -against- SPECTRAN CORPORATION, JOHN E. C.A. No. 17314NC CHAPMAN, CHARLES B. HARRISON, IRA S. NORDLICHT, LILY K. LAI, ROBERT A. CLASS ACTION SCHMITZ, RICHARD M. DONOFRIO, PAUL COMPLAINT D. LAZAY and LUCENT TECHNOLOGIES ------------ INC., Defendants. - ------------------------------------- Plaintiffs, by their attorneys, allege upon information and belief, except as to paragraph 1 which plaintiff's allege upon knowledge, as follows: 1. Plaintiffs are and were, at all times relevant to this action, shareholders of defendant SpecTran Corporation ("SpecTran" or the "Company"). 2. SpecTran is a corporation duly existing and organized under the laws of the State of Delaware. SpecTran develops, manufactures, and markets glass optical fibers and value-added fiber optic products. The Company manufactures standard fiber and cable, as well as special performance fiber and cable for global communications markets. SpecTran's optical fiber and cable products also serve industrial, military/aerospace, and medical markets worldwide. 3. Defendant Charles B. Harrison ("Harrison") is President, Chief 2 Executive Officer and a director of the Company. 4. Defendant John E. Chapman ("Chapman") is a director and senior vice president of the Company. He is also president of SpecTran Communication Fiber Technologies, Inc., a wholly owned subsidiary of the Company. 5. Defendant Ira S. Nordlicht is a director of the Company. He is a founding partner of the law firm which provides legal services to the Company. 6. Defendants Lily K. Lai, Robert A. Schmitz, Richard M. Donofrio and Paul D. Lazay are directors of the Company. 7. Defendant Lucent Technologies Inc. ("Lucent") is a corporation duly existing and organized under the laws of the State of Delaware. Lucent is one of the world's leading manufacturers of fiber, with 13 fiber and cable manufacturing operations and joint ventures around the world. 8. Each of the Individual Defendants has a fiduciary relationship and responsibility to plaintiffs and the other public stockholders of SpecTran and owes them the highest obligations of good faith, fair dealing and due care. CLASS ACTION ALLEGATIONS ------------------------ 9. Plaintiffs bring this action on their own behalf and as a class action, pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of all common stockholders of SpecTran, or their successors in interest, who are or will be threatened with the deprivation of their investment in SpecTran by reason of the proposed transaction complained of herein (the "Class"). Excluded from the Class are defendants herein and 2 3 any person, firm, trust, corporation, or other entity related to or affiliated with any of defendants. 10. This action is properly maintainable as a class action because: (a) The class is so numerous that joinder of all members is impracticable. There are hundreds of SpecTran stockholders of record who own the approximately 7,000,000 SpecTran shares outstanding; (b) There are questions of law and fact which are common to the class and which predominate over questions affecting any individual class members; (c) Plaintiffs are committed to prosecuting this action and have retained competent counsel experienced in litigation of this nature. The claims of plaintiffs are typical of the claims of the other members of the class and plaintiffs have the same interests as the other members of the class. Accordingly, plaintiffs are adequate representatives of the class and will fairly and adequately protect the interests of the class. SUBSTANTIVE ALLEGATIONS ----------------------- 11. On July 15, 1999, before the markets opened, SpecTran and Lucent announced that they had entered into a definitive merger agreement whereby Lucent will acquire SpecTran in a transaction valued at $99 million. Under the terms of the transaction, Lucent will commence a cash tender offer for all of SpecTran's outstanding common shares at a price of $9.00 per share and will assume $35 million in SpecTran debt. The tender offer will be followed by a merger in which any untendered shares of SpecTran will be acquired for $9.00 per share in cash. The tender offer will commence 3 4 on July 21, 1999 and is not expected to close until the end of the quarter ending September 30, 1999. 12. By entering into the agreement with Lucent, the SpecTran Board has initiated a process to sell the Company which imposes heightened fiduciary responsibilities on its directors and requires enhanced scrutiny by the Court. However, the terms of the proposed transaction were not the result of an auction process or active market check; they were arrived at without a full and thorough investigation by the Individual Defendants; and they are intrinsically unfair and inadequate from the standpoint of the SpecTran shareholders. 13. The proposed purchase price is inadequate. It is substantially less than the closing price of SpecTran just the day before ($11.50 per share) or the price paid in similar transactions. The proposed purchase price is lower than any closing price for SpecTran shares from June 21, 1999 until the announcement. Moreover, in transactions of this type it is usual and customary to pay a premium for achieving total control, which premium can be as much as or greater than 50% of the current price. Here, the proposed transaction involves a discount from the current market price. 14. The Individual Defendants failed to make an informed decision, as no market check of the Company's value was obtained. In agreeing to the merger, the Individual Defendants failed to properly inform themselves of SpecTran's highest transactional value. 4 5 15. The Individual Defendants have violated their fiduciary duties owed to the public shareholders of SpecTran. The Individual Defendants' agreement to the terms of the transaction, its timing, and the failure to auction the Company and invite other bidders, and defendants' failure to provide a market check demonstrate a clear absence of the exercise of due care and of loyalty to SpecTran's public shareholders. 16. The Individual Defendants' fiduciary obligations under these circumstances require them to: (a) Undertake an appropriate evaluation of SpecTran's net worth as a merger/acquisition candidate; and (b) Engage in a meaningful auction with third parties in an attempt to obtain the best value for SpecTran's public shareholders. 17. The Individual Defendants have breached their fiduciary duties by reason of the acts and transactions complained of herein, including their decision to merge with Lucent without making the requisite effort to obtain the best offer possible. 18. Plaintiffs and other members of the Class have been and will be damaged in that they have not and will not receive their fair proportion of the value of SpecTran's assets and business, and will be prevented from obtaining fair and adequate consideration for their shares of SpecTran's common stock. 19. The consideration to be paid to class members in the proposed merger is unfair and inadequate because, among other things: (a) The intrinsic value of SpecTran's common stock is materially 5 6 in excess of the amount offered for those securities in the merger giving due consideration to the anticipated operating results, net asset value, cash flow, and profitability of the Company. Indeed, the amount offered is 22% ($2.50 per share) less than the market price just the day before the announcement, although a substantial premium to the current selling price is the norm; (b) The merger price is not the result of an appropriate consideration of the value of SpecTran because the SpecTran Board approved the proposed merger without undertaking steps to accurately ascertain SpecTran's value through open bidding or at least a "market check" mechanism; and (c) By entering into the agreement with Lucent, the Individual Defendants have allowed the price of SpecTran stock to be capped, thereby depriving plaintiffs and the Class of the opportunity to realize any increase in the value of SpecTran stock. 20. By reason of the foregoing, each member of the Class will suffer irreparable injury and damages absent injunctive relief by this Court. 21. Defendant Lucent has knowingly aided and abetted the breaches of fiduciary duty committed by the other defendants to the detriment of SpecTran's public shareholders. Indeed, the proposed merger could not take place without the active participation of Lucent. Furthermore, Lucent and its shareholders are the intended beneficiaries of the wrongs complained of and would be unjustly enriched absent relief in this action. 6 7 22. Plaintiffs and the other members of the Class have no adequate remedy at law. WHEREFORE, plaintiffs demand judgment against defendants as follows: A. Declaring that this action is properly maintainable as a class action and certifying plaintiffs as representatives of the Class; B. Preliminarily and permanently enjoining defendants and their counsel, agents, employees and all persons acting under, in concert with, or for them, from proceeding with, consummating, or closing the proposed transaction; C. In the event that the proposed transaction is consummated, rescinding it and setting it aside, or awarding rescissory damages to the Class; D. Awarding the Class compensatory damages against defendants, individually and severally, in an amount to be determined at trial, together with pre-judgment and post-judgment interest at the maximum rate allowable by law; E. Awarding plaintiffs their costs and disbursements and reasonable allowances for fees of plaintiffs' counsel and experts; and 7 8 F. Granting plaintiffs and the Class such other and further relief as the Court may deem just and proper. ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A. By: /s/ ----------------------------------- Suite 1401, Mellon Bank Center P.O. Box 1070 Wilmington, DE 19899-1070 (302) 656-4433 Attorneys for Plaintiffs OF COUNSEL: ABBEY GARDY & SQUITIERI, LLP 212 East 39th Street New York, New York 10016 (212) 889-3700 SCHATZ & NOBEL, P.C. 216 Main Street Hartford, CT 06106-1817 (860) 493-6292 8 EX-99.C.8 5 PRESS RELEASE DATED 07-30-1999 1 FROM: L. B. STAUFFER, SR. VP NICHOLAS PATRUNO, INVESTOR RELATIONS PORTER, LEVAY & ROSE, INC. (212) 564-4700 COMPANY GEORGE ROBERTS, CFO CONTACT: (508) 347-2261 FOR IMMEDIATE RELEASE SPECTRAN REPORTS SECOND QUARTER/SIX MONTHS RESULTS STURBRIDGE, MA, JULY 30 -- SpecTran Corporation (NASDAQ, NM: SPTR), which develops, manufactures and markets glass optical fibers and value-added fiber optic products, today reported results for the second quarter and six months ended June 30, 1999. Second quarter revenues were $22,587,000, up 38 percent from revenues of $16,358,000 for the same period a year ago. Operating income was $1,763,000, up from the operating loss of $2,371,000 incurred during the same period in 1998. The 1998 operating loss included one-time charges, including inventory write-downs at SpecTran Specialty. In the second quarter of 1999, due primarily to tax losses associated with the sale of its interest in General Photonics, the company's joint venture with General Cable, SpecTran incurred a net loss of $621,000 or nine cents per share, compared with a net loss of $1,383,000 or twenty cents per share for the same period a year ago. - more - 2 - 2 - For the first six months of 1999, SpecTran incurred a net loss of $389,000 or six cents per share compared with a net loss of $518,000 or seven cents per share for the first half of 1998. Revenues for the first half of 1999 were $42,966,000, up 36 percent from the $31,471,000 achieved in the same period in 1998. Commenting on the company's results, SpecTran chairman and CEO, Charles B. Harrison, said, "During the second quarter, SpecTran sold its interest in General Photonics, SpecTran's joint venture with General Cable Corporation, to BICC General Cable, Inc. for $2,367,200. As part of the transaction, General Photonics repaid a loan to SpecTran for $325,000 and BICC General Cable purchased approximately 30,000 kilometers of optical fiber from SpecTran's CFT subsidiary. The sale resulted in an after-tax book loss of $237,000 on SpecTran's interest in the joint venture and a one-time tax liability of $1,099,000, both of which adversely affect this quarter's and the first half's results. Other income, as compared to last year, was adversely affected by the elimination of the Corning supply contract settlement at the end of 1998, coupled with the increased interest expense in 1999 associated with servicing our debt. "On July 15, 1999 SpecTran announced it entered into an Agreement of Merger with Lucent Technologies for $64 million or $9 a share, plus the assumption by Lucent of $35 million of SpecTran's debt, in an all-cash tender offer. Tender offer letters were mailed to SpecTran's shareholders of record on July 21, 1999 and are valid until August 17, 1999, unless extended. It is expected that the transaction will be completed by the end of the quarter ending September 30, 1999. SpecTran's board of directors unanimously approved the tender offer and the merger and determined that the terms of the tender offer and the merger are fair to and in the best interests of SpecTran's stockholders and unanimously recommends that all SpecTran stockholders accept the tender offer and tender their shares to the purchaser pursuant to the terms of the tender offer," Harrison concluded. - more - 3 -3- SpecTran Corporation develops, manufactures and markets glass optical fibers and value-added fiber optic products. For global communications markets, SpecTran manufactures standard fiber and cable as well as special performance fiber and cable. The company's application specific optical fiber and cable products also serve industrial, aerospace and medical markets worldwide. For additional information about SpecTran, visit the company's web site at www.spectran.com. NOTE: This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Investors are cautioned that all forward-looking statements involve risks and uncertainties that may cause results to differ materially from expectations, including without limitation, the ability of the company to market and develop its products, general economic conditions and competitive conditions in markets served by the company. Forward-looking statements include, but are not limited to, global economic conditions, product demand, competitive products and pricing, manufacturing efficiencies, cost reductions, manufacturing capacity, facility expansions and new plant start-up costs, the rate of technology change and other risks. Although the company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the company or any other person that the objectives and plans of the company will be achieved. - more - 4 - 4 - SPECTRAN CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS (UNAUDITED)
FOR THE SIX MONTHS ENDED FOR THE THREE MONTHS ENDED ------------------------ -------------------------- 6/30/99 6/30/98(a) 6/30/99 6/30/98(a) ------- ------- ------- ------- Net Sales $ 42,966 $ 31,471 $ 22,587 $ 16,358 Cost of Sales 31,547 23,806 16,489 13,805 -------- -------- -------- -------- Gross Profit 11,419 7,665 6,098 2,553 -------- -------- -------- -------- Selling and Administrative Expenses 6,749 6,653 3,666 3,518 Research and Development Costs 1,424 2,581 669 1,406 -------- -------- -------- -------- Income from Operations 3,246 (1,569) 1,763 (2,371) -------- -------- -------- -------- Other income (Expense): Interest Income 126 147 98 33 Interest Expense (1,475) (476) (739) (352) Other, Net 41 1,583 53 741 -------- -------- -------- -------- Other Income (Expense), net (1,308) 1,254 (588) 422 -------- -------- -------- -------- Income before Income Taxes and Equity in Joint Venture 1,938 (315) 1,175 (1,949) Income Tax Expense Before Joint Venture 756 (136) 458 (775) -------- -------- -------- -------- Net Income Before Joint Venture Sale 1,182 (179) 717 (1,174) -------- -------- -------- -------- Joint Venture: Equity in Loss of Joint Venture (385) (598) (3) (346) Tax Benefit in Equity Loss 150 259 1 137 Book & Tax Loss on Sale of Joint Venture (1,336) -- (1,336) -- -------- -------- -------- -------- Net Loss on Joint Venture (1,571) (339) (1,338) (209) -------- -------- -------- -------- Net Income $ (389) $ (518) $ (621) $ (1,383) ======== ======== ======== ======== Net Income Per Share of Common Stock: Basic $ (.06) $ (.07) $ (.09) $ (.20) Weighted Average Number of Common Shares Outstanding: Basic 7,004 7,002 7,005 7,002
(a) Due to a change in accounting treatment of certain fiber sales, sales and cost of sales for the second quarter and June year-to-date of 1998 were reduced by $674,000 and $789,000, respectively 5 ##### 1999 -----END PRIVACY-ENHANCED MESSAGE-----