-----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, Vv5WpZDSv7vK2D1Ro6u3OnLURuucuriah8JqhNtDDyeb2b6qqdh3zPVVSG/yRFaw 0j10NQc7Y6iCYzEO01exSw== 0000950124-00-000855.txt : 20000223 0000950124-00-000855.hdr.sgml : 20000223 ACCESSION NUMBER: 0000950124-00-000855 CONFORMED SUBMISSION TYPE: SC TO-T PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 20000222 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: IMTEC INC CENTRAL INDEX KEY: 0000730045 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-PAPER AND PAPER PRODUCTS [5110] IRS NUMBER: 030283466 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-41457 FILM NUMBER: 550508 BUSINESS ADDRESS: STREET 1: ONE IMTEC LN CITY: BELLOWS FALLS STATE: VT ZIP: 05101 BUSINESS PHONE: 8024639502 MAIL ADDRESS: STREET 1: ONE IMTEC LN CITY: BELLOWS FALLS STATE: VT ZIP: 05101 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: IMTEC INC CENTRAL INDEX KEY: 0000730045 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-PAPER AND PAPER PRODUCTS [5110] IRS NUMBER: 030283466 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC TO-T SEC ACT: SEC FILE NUMBER: 005-41457 FILM NUMBER: 550509 BUSINESS ADDRESS: STREET 1: ONE IMTEC LN CITY: BELLOWS FALLS STATE: VT ZIP: 05101 BUSINESS PHONE: 8024639502 MAIL ADDRESS: STREET 1: ONE IMTEC LN CITY: BELLOWS FALLS STATE: VT ZIP: 05101 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BRADY CORP CENTRAL INDEX KEY: 0000746598 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS MANUFACTURING INDUSTRIES [3990] IRS NUMBER: 390178960 STATE OF INCORPORATION: WI FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: SC TO-T BUSINESS ADDRESS: STREET 1: 6555 W GOOD HOPE RD STREET 2: P O BOX 571 CITY: MILWAUKEE STATE: WI ZIP: 53201-0571 BUSINESS PHONE: 4143586600 FORMER COMPANY: FORMER CONFORMED NAME: BRADY W H CO DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BRADY CORP CENTRAL INDEX KEY: 0000746598 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS MANUFACTURING INDUSTRIES [3990] IRS NUMBER: 390178960 STATE OF INCORPORATION: WI FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: SC TO-T BUSINESS ADDRESS: STREET 1: 6555 W GOOD HOPE RD STREET 2: P O BOX 571 CITY: MILWAUKEE STATE: WI ZIP: 53201-0571 BUSINESS PHONE: 4143586600 FORMER COMPANY: FORMER CONFORMED NAME: BRADY W H CO DATE OF NAME CHANGE: 19920703 SC TO-T 1 SCHEDULE TO-T & SCHEDULE 13D/A 1 As filed with the Securities and Exchange Commission on February 22, 2000. ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------ SCHEDULE TO TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 AND SCHEDULE 13D (AMENDMENT NO. 1) PURSUANT TO SECTION 13(D) OF THE SECURITIES EXCHANGE ACT OF 1934 ----------------- IMTEC INC. (NAME OF SUBJECT COMPANY) ----------------- BRADY CORPORATION IMTC ACQUISITION CORP. (NAMES OF FILING PERSONS - OFFERORS) ----------------- COMMON STOCK, PAR VALUE $.01 PER SHARE (TITLE OF CLASS OF SECURITIES) 452909-10-4 (CUSIP NUMBER OF CLASS OF SECURITIES) ----------------- THOMAS E. SCHERER BRADY CORPORATION 6555 WEST GOOD HOPE ROAD MILWAUKEE, WI 53223 (414) 358-6600 (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF FILING PERSONS) ----------------- COPY TO: CONRAD G. GOODKIND, ESQ. QUARLES & BRADY LLP 411 EAST WISCONSIN AVENUE MILWAUKEE, WISCONSIN 53202 (414) 277-5000 =============================================================================== 2 CALCULATION OF FILING FEE - ---------------------------------------------------------------------------- TRANSACTION VALUATION: $22,134,156* AMOUNT OF FILING FEE: $4,426.84 - ---------------------------------------------------------------------------- * Estimated for purposes of calculating the amount of the filing fee only. The amount assumes the purchase of 1,844,513 shares of common stock, par value $0.01 per share of Imtec Inc., a Delaware corporation (the "Company"), on a fully diluted basis (consisting of 1,635,313 shares currently issued and outstanding plus an additional 209,200 shares issuable upon exercise of outstanding options) at $12.00 in cash per share. The amount of the filing fee, calculated in accordance with Regulation 240.0-11 of the Securities Exchange Act of 1934, as amended, equals 1/50th of one percent of the value of the transaction. |_| Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. AMOUNT PREVIOUSLY PAID: NOT APPLICABLE FORM OR REGISTRATION NO.: NOT APPLICABLE FILING PARTY: NOT APPLICABLE DATE FILED: NOT APPLICABLE |_| Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: |X| third-party tender offer subject to Rule 14d-1. |_| issuer tender offer subject to Rule 13e-4. |_| going-private transaction subject to Rule 13e-3. |X| amendment to Schedule 13D under Rule 13d-2. Check the following box if the filing is a final amendment reporting the result of the tender offer: |_| 3 CUSIP NO. 452909-10-4 13D --------------------- - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Brady Corporation 39-0178960 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) WC - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Wisconsin - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF -0-** (984,703 assuming full exercise of the options to purchase shares of common stock described below.)** SHARES ----------------------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY -0- OWNED BY EACH ----------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER REPORTING -0-** (984,703 assuming full exercise of the options to purchase shares of common stock described below.)** PERSON ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER WITH -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON -0-** (984,703 assuming full exercise of the options to purchase shares of common stock described below.)** - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0%** (57.9% of the shares of common stock as computed in accordance with Rule 13d-3(d)(1)(i) under the Act assuming full exercise of the options to purchase shares of common stock described below.)** - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) CO - -------------------------------------------------------------------------------- ** On December 9, 1999, Brady Corporation, a Wisconsin corporation ("Brady"), entered into a Shareholder Option Agreement ("Shareholder Option Agreement # 1") with certain shareholders of Imtec Inc., a Delaware corporation ("Imtec"), including all of the directors and one executive officer of Imtec and all but one holder of greater than five percent (5%) of Imtec's common stock (the "Group Shareholders"), who, in the aggregate, own 875,326 shares of Imtec common stock, including certain options to purchase shares of Imtec common stock (the "Group Shares"). In addition, on December 9, 1999, Brady entered into a second Shareholder Option Agreement ("Shareholder Option Agreement #2" and together with Shareholder Option Agreement #1, the "Shareholder Option Agreements"), with the remaining holder of greater than 5% of Imtec common stock (the "Individual Shareholder" and together with the Group Shareholders, the "Shareholders") with respect to 109,377 shares of Imtec common stock (the "Individual Shares" and together with the Group Shares, the "Shares"), which constitute a portion of the shares of Imtec common stock owned by such holder. Pursuant to the Shareholder Option Agreements, the Shareholders have (i) granted Brady an option to purchase their Shares at an exercise price $12.00 per Share (subject to adjustment in certain circumstances) exercisable upon the occurrence of certain events specified in the Shareholder Option Agreements, (ii) agreed to tender, in accordance with the terms of the Offer, all of the Option Shares (including any subsequently acquired Shares with respect to the Group Shareholders) and (iii) irrevocably granted to, and appointed Brady proxy and attorney-in-fact to vote the Shares with respect to certain matters. The Shareholder Option Agreements are described in Section 10 of the Offer to Purchase dated as of February 22, 2000 filed as Exhibit(a)(1) to this Schedule TO. 3 4 CUSIP NO. 452909-10-4 13D --------------------- - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) IMTC Acquisition Corp. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) AF - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF -0- SHARES ----------------------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY -0- OWNED BY EACH ----------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER WITH -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON -0- - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) CO - -------------------------------------------------------------------------------- 4 5 ITEM 1. SUMMARY TERM SHEET The information set forth in the "Summary Term Sheet" of the Offer to Purchase, dated February 22, 2000 (the "Offer to Purchase"), a copy of which is filed as Exhibit (a)(1) hereto, is incorporated herein by reference. ITEM 2. SUBJECT COMPANY INFORMATION (a) The name of the subject company is Imtec Inc., a Delaware corporation (the "Company"). The information set forth in Section 7 ("Certain Information Concerning The Company") of the Offer to Purchase is incorporated herein by reference. (b) The information set forth in "Introduction" of the Offer to Purchase is incorporated herein by reference (c) The information set forth in Section 6 ("Price Range Of Shares; Dividends") of the Offer to Purchase is incorporated herein by reference. ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON (a) The name of each of the filing persons are Brady Corporation, a Wisconsin corporation ("Parent"), and IMTC Acquisition Corp., a Delaware corporation and indirect, wholly owned subsidiary of Parent (the "Purchaser"). The information set forth in Section 8 ("Certain Information Concerning Parent And The Purchaser") and "Schedule I" of the Offer to Purchase is incorporated herein by reference. (b)-(c) The information set forth in "Introduction," Section 8 ("Certain Information Concerning Parent And The Purchaser") and Schedule I of the Offer to Purchase is incorporated herein by reference. During the past five years, neither the Purchaser, Parent, nor any of the persons listed in Schedule I of the Offer to Purchase has been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining future violations of, or prohibiting activities subject to, federal or state securities laws, or finding of any violation of such laws. ITEM 4. TERMS OF THE TRANSACTION (a) The information set forth in "Summary Term Sheet," "Introduction," Section 1 ("Terms Of The Offer; Expiration Date"), Section 2 ("Acceptance For Payment And Payment For Shares"), Section 3 ("Procedures For Accepting The Offer And Tendering Shares"), Section 4 ("Withdrawal Rights"), Section 5 ("Certain Federal Income Tax Consequences") and Section 14 ("Certain Conditions Of The Offer") of the Offer to Purchase is incorporated herein by reference. ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS (a)-(b) The information set forth in "Summary Term Sheet," "Introduction," Section 8 ("Certain Information Concerning Parent And The Purchaser"), Section 10 ("Background Of The Offer; Contacts With The Company; The Merger Agreement; Shareholder Option Agreements") and Section 11 ("Purpose Of The Offer; Plans For The Company After The Offer And The Merger") of the Offer to Purchase is incorporated herein by reference. ITEM 6. PURPOSE OF THE TRANSACTION AND PLANS OR PROPOSALS (a) and (c)(1)-(7) The information set forth in "Summary Term Sheet," "Introduction," Section 6 ("Price Range Of Shares; Dividends"), Section 10 ("Background Of The Offer; Contacts With The Company; The Merger Agreement; Shareholder Option Agreements"), Section 11 ("Purpose Of The Offer; Plans For The Company After The Offer And the Merger") and Section 13 ("Effect Of The Offer On The Market For The Shares; Nasdaq Listing And Exchange Act Registration") of the Offer to Purchase is incorporated herein by reference. 5 6 ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION (a) The information set forth in "Summary Term Sheet," "Introduction" and Section 9 ("Financing Of The Offer And The Merger") of the Offer to Purchase is incorporated herein by reference. (b) None. (d) Not applicable. ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY (a) The information contained in Items 7, 9, and 11 of the cover pages hereto is incorporated herein by reference. The information set forth in the "Introduction," Section 10 ("Background Of The Offer; Contacts With The Company; The Merger Agreement; Shareholder Option Agreements") and Schedule I of the Offer to Purchase is incorporated herein by reference. (b) The information set forth in the "Introduction," Section 10 ("Background Of The Offer; Contacts With The Company; The Merger Agreement; Shareholder Option Agreements")and Schedule I of the Offer to Purchase is incorporated herein by reference. ITEM 9. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED. (a) The information set forth in Section 16 ("Fees And Expenses") of the Offer to Purchase is incorporated herein by reference. ITEM 10. FINANCIAL STATEMENTS (a) Not Applicable. (b) Not Applicable. ITEM 11. ADDITIONAL INFORMATION (a) The information contained in Section 14 ("Certain Conditions Of The Offer") and Section 15 ("Certain Regulatory And Legal Matters") of the Offer to Purchase are incorporated herein by reference. (b) Not applicable. ITEM 12. EXHIBITS (a)(1) - Offer to Purchase, dated February 22, 2000. (a)(2) - Form of Letter of Transmittal, dated February 22, 2000. (a)(3) - Form of Notice of Guaranteed Delivery. (a)(4) - Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(5) - Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(6) - Form of Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(7) - Text of Press Release, dated February 11, 2000. (Incorporated herein by reference to Exhibit (a)(1) of Schedule TO filed with the Commission by Brady Corporation and IMTC Acquisition Corp. on February 11, 2000.) (a)(8) - Text of Press Release, dated December 9, 1999. (Incorporated herein by reference to Exhibit (a)(2) of Schedule TO filed with the Commission by Brady Corporation and IMTC Acquisition Corp. on February 11, 2000.) (a)(9) - Solicitation/Recommendation Statement on Schedule 14D-9 of the Company, dated February 22, 2000. (Incorporated herein by reference to Schedule 14D-9 filed by Imtec Inc. with the Commission on February 22, 2000.) 6 7 (b) - Not Applicable. (d)(1) - Agreement and Plan of Merger, dated as of February 11, 2000, by and among Brady Corporation, IMTC Acquisition Corp. and Imtec Inc. (d)(2) Shareholder Option Agreement, dated December 9, 1999, among Brady Corporation and the persons listed on Schedule I of such Agreement. (Incorporated herein by reference to Exhibit 1 of Schedule 13D filed with the Commission by Brady Corporation on December 20, 1999.) (d)(3) - Shareholder Option Agreement, dated December 9, 1999, between Brady Corporation and Laifer Capital Management, Inc. (Incorporated herein by reference to Exhibit 2 of Schedule 13D filed with the Commission by Brady Corporation on December 20, 1999.) (d)(4) - Confidentiality Agreement, dated November 2, 1999, between Brady Corporation and Imtec Inc. (g) - Not Applicable. (h) - Not Applicable. ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3 Not Applicable. 7 8 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: February 22, 2000 IMTC Acquisition Corp. BY: /s/ Frank M. Jaehnert ---------------------------------- Frank M. Jaehnert, Vice President and Treasurer BRADY CORPORATION. BY: /s/ Frank M. Jaehnert ---------------------------------- Frank M. Jaehnert, Vice President and Chief Financial Officer S-1 9 EXHIBIT INDEX EXHIBIT NO. (a)(1) - Offer to Purchase, dated February 22, 2000. (a)(2) - Form of Letter of Transmittal, dated February 22, 2000. (a)(3) - Form of Notice of Guaranteed Delivery. (a)(4) - Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(5) - Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(6) - Form of Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(7) - Text of Press Release, dated February 11, 2000. (Incorporated herein by reference to Exhibit (a)(1) of Schedule TO filed with the Commission by Brady Corporation and IMTC Acquisition Corp. on February 11, 2000.) (a)(8) - Text of Press Release, dated December 9, 1999. (Incorporated herein by reference to Exhibit (a)(2) of Schedule TO filed with the Commission by Brady Corporation and IMTC Acquisition Corp. on February 11, 2000.) (a)(9) - Solicitation/Recommendation Statement on Schedule 14D-9 of the Company, dated February 22, 2000. (Incorporated herein by reference to Schedule 14D-9 filed by Imtec Inc. with the Commission on February 22, 2000.) (b) - Not Applicable. (d)(1) - Agreement and Plan of Merger, dated as of February 11, 2000, by and among Brady Corporation, IMTC Acquisition Corp. and Imtec Inc. (d)(2) - Shareholder Option Agreement, dated December 9, 1999, among Brady Corporation and the persons listed on Schedule I of such Agreement. (Incorporated herein by reference to Exhibit 1 of Schedule 13D filed with the Commission by Brady Corporation on December 20, 1999.) (d)(3) - Shareholder Option Agreement, dated December 9, 1999, between Brady Corporation and Laifer Capital Management, Inc. (Incorporated herein by reference to Exhibit 2 of Schedule 13D filed with the Commission by Brady Corporation on December 20, 1999.) (d)(4) - Confidentiality Agreement, dated November 2, 1999, between Brady Corporation and Imtec Inc. (g) - Not Applicable. (h) - Not Applicable. EI-1 EX-99.(A).(1) 2 OFFER TO PURCHASE 1 OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF IMTEC INC. AT $12.00 NET PER SHARE BY IMTC ACQUISITION CORP., AN INDIRECT, WHOLLY OWNED SUBSIDIARY OF BRADY CORPORATION THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., EASTERN TIME, ON TUESDAY, MARCH 21, 2000, UNLESS THE OFFER IS EXTENDED. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE AT LEAST 75% OF THE OUTSTANDING SHARES OF COMMON STOCK OF IMTEC INC. MEASURED ON A FULLY DILUTED BASIS. THE OFFER IS ALSO CONDITIONED UPON CERTAIN OTHER TERMS AND CONDITIONS, INCLUDING THE EXPIRATION OR TERMINATION OF ALL WAITING PERIODS IMPOSED BY THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE REGULATIONS THEREUNDER. SEE SECTIONS 14 AND 15. THE OFFER IS NOT CONDITIONED ON THE RECEIPT OF FINANCING. ------------------------- THE BOARD OF DIRECTORS OF IMTEC INC. HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT, THE OFFER AND THE MERGER, HAS DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE HOLDERS OF SHARES AND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER. ------------------------- IMPORTANT If you desire to tender all or any portion of your shares of Imtec common stock, you should either (1) complete and sign the Letter of Transmittal (or a facsimile of it) in accordance with the instructions in the Letter of Transmittal, including any required signature guarantees, and mail or deliver the Letter of Transmittal (or facsimile) with the certificate(s) for the tendered Shares and any other required documents to the Depositary, (2) follow the procedures for book-entry tender of shares set forth in Section 3, or (3) request your broker, dealer, commercial bank, trust company or other nominee to effect the transaction for you. If your Shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee you should contact that person or entity to tender your Shares. If you desire to tender Shares and your stock certificates are not immediately available, or if you cannot comply with the procedures for book-entry transfer on a timely basis, you may tender the Shares by following the procedures for guaranteed delivery set forth in Section 3. Questions and requests for assistance may be directed to the Information Agent at its address and telephone number set forth on the back cover of this Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may also be obtained from the Information Agent or from brokers, dealers, commercial banks or trust companies. ------------------------ February 22, 2000 2 SUMMARY TERM SHEET This Summary Term Sheet highlights the most important or material terms of the Offer. It may not contain all of the information that is important to you. To understand the Offer and related transactions more fully, you should read this entire document carefully, together with the other documents to which we refer. See "17. MISCELLANEOUS." - - Shares Being Purchased: Imtec Inc. Common Stock - - Purchase Price: $12.00 net per Share, in cash - - Amount Sought: 100% of the outstanding Shares. It is a condition of the Offer that at least 75% of the outstanding Shares measured on a fully diluted basis be tendered (1,383,385 outstanding Shares), unless waived by the Purchaser. Certain insiders have promised to tender or sell to the Purchaser an aggregate of 984,703 Shares (53.4% of the outstanding Shares on a fully diluted basis). See "10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY; THE MERGER AGREEMENT; SHAREHOLDER OPTION AGREEMENTS." - - Purchaser: IMTC Acquisition Corp., an indirect, wholly owned subsidiary of Brady Corporation
- - The Purchaser has the financial resources to complete the Offer, so there is no financing condition. The most significant conditions are the minimum amount sought described above and federal antitrust clearance of the transaction. See "14. CERTAIN CONDITIONS OF THE OFFER." - - The Offer will expire at 5:00 p.m. Eastern time on Tuesday, March 21, 2000, unless extended by the Purchaser in its discretion by notice to the Depositary, with a press release announcing the extension promptly thereafter. - - To tender your Shares, you should do one of the following: - complete, sign and send the Letter of Transmittal, with certificates for the tendered Shares and any other required documents to the Depositary; - follow the procedures for book-entry tender of Shares, if applicable; or - request your broker or other nominee holder to tender your shares for you. See "3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES." - - After tendering Shares, you may withdraw them at any time prior to the Expiration Date (March 21, 2000, unless extended) and, unless the Purchaser has accepted them for payment, at any time after April 21, 2000. The withdrawal notice must satisfy the requirements described under "4. WITHDRAWAL RIGHTS." - - Under the Merger Agreement, the Offer will be followed by a merger in which holders of any Shares that are not tendered will receive $12.00 net per Share, in cash. No appraisal rights are available in connection with the Offer, but shareholders may have appraisal rights in connection with the Merger. See "11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY AFTER THE OFFER AND THE MERGER." - - Imtec's board of directors has unanimously approved the Merger Agreement, the Offer and the Merger, has determined that the Offer and the Merger are fair to and in the best interests of Imtec's shareholders, and unanimously recommends that shareholders accept the Offer and tender their Shares pursuant to the Offer. See "10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY; THE MERGER AGREEMENT; SHAREHOLDER OPTION AGREEMENTS." - - On December 9, 1999, the last full trading day prior to the issuance of Brady's press release indicating that a transaction was being negotiated at a price of $12.00 per Share, the closing bid price of Imtec's Shares on the Nasdaq/SM market was $5.50. On February 10, 2000, the last full trading day prior to announcement that the Merger Agreement was signed, the closing price was $11.125 per Share. See "6. PRICE RANGE OF SHARES; DIVIDENDS." - - Questions should be directed to Georgeson Shareholder Communications Inc., the Information Agent, at 1-800-223-2064. 3 TABLE OF CONTENTS
PAGE ---- INTRODUCTION........................................................... 1 1. Terms Of The Offer; Expiration Date......................... 2 2. Acceptance For Payment And Payment For Shares............... 3 3. Procedures For Accepting The Offer And Tendering Shares..... 4 4. Withdrawal Rights........................................... 6 5. Certain Federal Income Tax Consequences..................... 7 6. Price Range Of Shares; Dividends............................ 8 7. Certain Information Concerning The Company.................. 8 8. Certain Information Concerning Parent And The Purchaser..... 9 9. Financing Of The Offer And The Merger....................... 9 10. Background Of The Offer; Contacts With The Company; The Merger Agreement; Shareholder Option Agreements............. 10 11. Purpose Of The Offer; Plans For The Company After The Offer And The Merger.............................................. 18 12. Dividends And Distributions; Stock Issuances................ 19 13. Effect Of The Offer On The Market For The Shares; Nasdaq Listing And Exchange Act Registration....................... 20 14. Certain Conditions Of The Offer............................. 20 15. Certain Regulatory And Legal Matters........................ 22 16. Fees And Expenses........................................... 25 17. Miscellaneous............................................... 25 SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE PURCHASER................................................... I-1
4 To the Holders of Common Stock of Imtec Inc.: INTRODUCTION IMTC Acquisition Corp., a Delaware corporation (the "Purchaser"), an indirect, wholly owned subsidiary of Brady Corporation, a Wisconsin corporation ("Parent"), hereby offers to purchase all of the outstanding shares of common stock, par value $.01 per share (the "Shares"), of Imtec Inc., a Delaware corporation (the "Company"), at $12.00 per Share, net to the seller in cash, without interest thereon (the "Offer Price"), upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which, as either may be amended or supplemented from time to time, collectively constitute the "Offer"). Tendering shareholders will not be obligated to pay brokerage fees or commissions or, subject to Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase of Shares by the Purchaser. The Purchaser will pay all charges and expenses of Firstar Bank, National Association, which firm is acting as the Depositary (the "Depositary"), and of Georgeson Shareholder Communications Inc., which firm is acting as the Information Agent (the "Information Agent"), incurred in connection with the Offer. See Section 16 herein. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED IN SECTION 1) A NUMBER OF SHARES REPRESENTING NOT LESS THAN SEVENTY-FIVE PERCENT (75%) OF THE SHARES THEN OUTSTANDING AND ENTITLED TO VOTE, MEASURED ON A FULLY DILUTED BASIS (THE "MINIMUM CONDITION"). AS OF THE DATE HEREOF, TENDER OF 1,383,385 SHARES WOULD BE REQUIRED TO SATISFY THE MINIMUM CONDITION. IN ADDITION TO THE OPTION SHARES DESCRIBED BELOW, THIS WOULD REQUIRE THE TENDER OF 398,682 ADDITIONAL SHARES. THE OFFER IS ALSO CONDITIONED UPON CERTAIN OTHER TERMS AND CONDITIONS, INCLUDING THE EXPIRATION OR TERMINATION OF ALL WAITING PERIODS IMPOSED BY THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR ACT"), AND THE REGULATIONS THEREUNDER. SEE SECTIONS 14 AND 15. THE OFFER IS NOT CONDITIONED ON THE RECEIPT OF FINANCING. The Offer is being made pursuant to an Agreement and Plan of Merger (the "Merger Agreement"), dated as of February 11, 2000, among the Company, Parent and the Purchaser, pursuant to which, after the completion of the Offer and the satisfaction or waiver of certain conditions, the Purchaser will be merged with and into the Company and each outstanding Share (except as described below) will be converted into the right to receive $12.00 in cash (the "Merger"). The Merger Agreement is more fully described in Section 10. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT, THE OFFER AND THE MERGER, DETERMINED THAT EACH OF THE OFFER AND THE MERGER IS FAIR TO, AND IN THE BEST INTERESTS OF, THE SHAREHOLDERS OF THE COMPANY, AND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER. In order to induce Parent to enter into negotiations with the Company concerning the Merger and as a pre-condition to making a public announcement regarding the possible acquisition of the Company by Parent, on December 9, 1999, certain shareholders of the Company, including all of the Company's directors and one of its executive officers, and all but one holder of greater than five percent 5% of the Shares (the "Group Shareholders"), who, in the aggregate, own 875,326 Shares, including certain options to purchase Shares (the "Group Shares"), entered into a Shareholder Option Agreement ("Shareholder Option Agreement #1") with Parent. In addition, on December 9, 1999, Parent entered into a second Shareholder Option Agreement ("Shareholder Option Agreement #2" and together with Shareholder Option Agreement #1, the "Shareholder Option Agreements"), with the remaining holder of greater than 5% of the Shares (the "Individual Shareholder" and together with Group Shareholders, the "Shareholders") with respect to 109,377 Shares (the "Individual Shares" and together with the Group Shares, the "Option Shares"), which constitute a portion of the Shares owned by the Individual Shareholder. Pursuant to the Shareholder Option Agreements, each Shareholder agreed, among other things, (a) to grant Parent an irrevocable option (individually an "Option" and together the "Options") to purchase the Option Shares held by such Shareholder at an exercise price of $12.00 per Share (subject to adjustment in certain circumstances), (b) to tender, in accordance with the terms of the Offer, all of the Option Shares (including any subsequently acquired Shares with respect to 1 5 the Group Shareholders) owned by such Shareholder and (c) to vote all of the Option Shares (including any subsequently acquired Shares with respect to the Group Shareholders) owned by such Shareholder in favor of the Merger and against certain other extraordinary transactions. The Option Shares represent approximately 57.9% of the Shares computed in accordance with Rule 13d-3(d)(1)(i) under the Exchange Act (53.4% of the Shares outstanding on a fully diluted basis). See Section 10. The Offer is conditioned upon, among other things, the Minimum Condition being satisfied. The Company has informed Purchaser that, as of February 11, 2000, there were 1,635,313 Shares issued and outstanding and there were 209,200 Shares subject to issuance pursuant to the Company's stock option and incentive plans. Parent, the Purchaser and their affiliates do not currently beneficially own any Shares or rights to acquire Shares other than Parent's rights under the Shareholder Option Agreements. Based on the foregoing and assuming no additional Shares (or warrants, options, or rights exercisable for, or securities convertible into, Shares) have been issued (other than Shares issued pursuant to such options referred to above) as of February 11, 2000, Purchaser believes there are approximately 1,844,513 Shares outstanding on a fully diluted basis. Accordingly, if all of the Shares subject to the Shareholder Option Agreements are tendered into the Offer and not withdrawn, Purchaser believes that the Minimum Condition would be satisfied if at least 398,682 additional Shares are validly tendered prior to the Expiration Date (as defined in Section 1) and not withdrawn. The purpose of the Offer is to acquire for cash as many outstanding Shares as possible as a first step in acquiring the entire equity interest in the Company. As soon as possible after completion of the Offer, Parent intends to consummate the Merger pursuant to and in accordance with the terms set forth in the Merger Agreement. The Merger Agreement provides that, among other things, as soon as practicable after the purchase of Shares pursuant to the Offer and the satisfaction or waiver of the other conditions set forth in the Merger Agreement and in accordance with the relevant provisions of the Delaware General Corporation Law ("DGCL"), the Purchaser will be merged with and into the Company. Following consummation of the Merger, the Company will continue as the surviving corporation (the "Surviving Corporation") and will become an indirect, wholly owned subsidiary of Parent. At the effective time of the Merger (the "Effective Time"), each Share issued and outstanding immediately prior to the Effective Time (other than Shares held in the treasury of the Company or owned by the Purchaser, Parent or any direct or indirect subsidiary of Parent or the Company, and other than Shares held by shareholders who shall have demanded and perfected appraisal rights, if any, under the DGCL) will be canceled and converted automatically into the right to receive $12.00 in cash, without interest (the "Merger Consideration"). See Sections 10 and 11. No appraisal rights are available in connection with the Offer; however, shareholders may have appraisal rights in connection with the Merger. See Section 11. THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. 1. TERMS OF THE OFFER; EXPIRATION DATE. Upon the terms and subject to the conditions set forth in the Offer (including, if the Offer is extended or amended, the terms and conditions of such extension or amendment), the Purchaser will accept for payment, and pay for, all Shares validly tendered on or prior to the Expiration Date and not withdrawn as permitted by Section 2. The term "Expiration Date" means 5:00 p.m., Eastern time, on Tuesday, March 21, 2000, unless and until the Purchaser, in its sole discretion, 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, will expire. The Offer is conditioned upon, among other things, expiration or termination of all waiting periods imposed by the HSR Act and the Minimum Condition being satisfied. The Purchaser expressly reserves the right, in its sole discretion but subject to the provisions of the Merger Agreement, at any time or from time to time, to extend the period of time during which the Offer is open by giving oral or written notice of such extension to the Depositary. See Section 10. Any such extension will also be publicly announced by press release issued no later than 9:00 a.m., Eastern 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 shareholder to 2 6 withdraw his or her Shares. See Section 4. Subject to the applicable regulations of the Securities and Exchange Commission (the "Commission"), the Purchaser also expressly reserves the right, in its sole discretion but subject to the provisions of the Merger Agreement, at any time or from time to time, (i) to delay acceptance for payment of or, regardless of whether such Shares were theretofore accepted for payment, payment for any Shares or to terminate the Offer and not accept for payment or pay for any Shares not theretofore accepted for payment, or paid for, upon the occurrence of any of the conditions specified in Section 14 and (ii) to waive any condition or otherwise amend the Offer in any respect, by giving oral or written notice of such delay, termination, waiver or amendment to the Depositary and by making a public announcement thereof. See Section 10. If the Purchaser accepts any Shares for payment pursuant to the terms of the Offer, it will accept for payment all Shares validly tendered prior to the Expiration Date and not withdrawn, and, subject to (i) above, will promptly pay for all Shares so accepted for payment. The Purchaser confirms that its reservation of the right to delay payment for Shares which it has accepted for payment is limited by Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended (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. Any extension, delay, termination or amendment of the Offer will be followed as promptly as practicable by public announcement thereof, such announcement in the case of an extension to be issued no later than 9:00 a.m., Eastern time, on the next business day after the previously scheduled Expiration Date. Subject to applicable law (including Rules 14d-4(d) and 14d-6(c) under the Exchange Act, which require that any material change in the information published, sent or given to shareholders in connection with the Offer be promptly disseminated to shareholders in a manner reasonably designed to inform shareholders of such change) and without limiting the manner in which the Purchaser may choose to make any public announcement, the Purchaser shall have no obligation to publish, advertise or otherwise communicate any such public announcement other than by making a release to the PR Newswire and making any appropriate filing with the Commission. The Purchaser confirms that if it makes a material change in the terms of the Offer or the information concerning the Offer, or if it waives a material condition of the Offer, the Purchaser will extend the Offer to the extent required by Rules 14d-4(d) and 14d-6(c) under the Exchange Act. If, prior to the Expiration Date, the Purchaser, with the Company's consent, shall decrease the percentage of Shares being sought or the consideration offered to holders of Shares, such decrease shall be applicable to all holders whose Shares are accepted for payment pursuant to the Offer and, if at the time notice of any decrease is first published, sent or given to holders of Shares, the Offer is scheduled to expire at any time earlier than the tenth business day from and including the date that such notice is first so published, sent or given, the Offer will be extended until the expiration of such ten business-day period. For purposes of the Offer, a "business day" means any day other than a Saturday, Sunday or federal holiday and consists of the time period from 12:01 a.m. through 12:00 Midnight, Eastern time. The Offer is being mailed to holders of Shares from a list provided to the Purchaser by the Company pursuant to the Merger Agreement. 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the Purchaser will accept for payment, and will pay for, Shares validly tendered and not withdrawn as promptly as practicable after the later of (i) the expiration or termination of the waiting period applicable to the acquisition of Shares pursuant to the Offer under the HSR Act, and (ii) the Expiration Date. Parent expects to file a Notification and Report Form under the HSR Act on or about February 22, 2000, and unless earlier terminated or extended by a request for additional information, the waiting period under the HSR Act would expire at 11:59 p.m., Eastern time, on the fifteenth day following such filing. See Section 15. In addition, subject to applicable rules of the Commission, the Purchaser expressly reserves the right to delay acceptance for payment of or payment for Shares in order to comply, in whole or in part, with any applicable law. See Section 14. In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) certificates for such Shares (or a confirmation 3 7 of a book-entry transfer of such Shares into the Depositary's account at The Depository Trust Company (the "Book-Entry Transfer Facility")), (ii) a properly completed and duly executed Letter of Transmittal (or facsimile thereof) and (iii) any other required documents. For purposes of the Offer, the Purchaser will be deemed to have accepted for payment Shares validly tendered and not withdrawn as, if and when the Purchaser gives oral or written notice to the Depositary of its acceptance for payment of such Shares pursuant to the Offer. Payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for the tendering shareholders for purpose of receiving payments from the Purchaser and transmitting such payments to the tendering shareholders. Under no circumstances will interest on the purchase price for Shares be paid, regardless of any delay in making such payment. If any tendered Shares are not accepted for payment pursuant to the terms and conditions of the Offer for any reason, or if certificates are submitted for more Shares than are tendered, certificates for such unpurchased Shares will be returned, without expense to the tendering shareholder (or, in the case of Shares tendered by book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility pursuant to the procedures set forth in Section 3, such Shares will be credited to an account maintained with the Book-Entry Transfer Facility), as soon as practicable following expiration or termination of the Offer. The Purchaser reserves the right to transfer or assign in whole or in part from time to time to one or more direct or indirect subsidiaries of Parent the right to purchase all or any portion of the Shares tendered pursuant to the Offer, but 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 shareholders to receive payment for Shares validly tendered and accepted for payment pursuant to the Offer. 3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES. In order for a holder of Shares validly to tender Shares pursuant to the Offer, either (a) a properly completed and duly executed Letter of Transmittal (or a facsimile thereof) in accordance with the instructions of the Letter of Transmittal, with any required signature guarantees, along with certificates for the Shares to be tendered 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, (b) such Shares must be delivered pursuant to the procedures for book-entry transfer described below (and a confirmation of such delivery must be received by the Depositary, including an Agent's Message (as defined herein) if the tendering shareholder has not delivered a Letter of Transmittal), prior to the Expiration Date, or (c) the tendering shareholder must comply with the guaranteed delivery procedures set forth below. 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 such Book-Entry Transfer Facility tendering the Shares which are the subject of such book-entry confirmation, that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Purchaser may enforce such agreement against the participant. Book-Entry Delivery. The Depositary will establish accounts with respect to the Shares at the Book-Entry Transfer Facility for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in the Book-Entry Transfer Facility's systems may make a book-entry transfer 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, either the Letter of Transmittal (or facsimile thereof), properly completed and duly executed, together with any required signature guarantees, or an Agent's Message in lieu of the Letter of Transmittal, and any other required documents, must, in any case, be transmitted to and received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase by the Expiration Date, or the tendering shareholder must comply with the guaranteed delivery procedures 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 4 8 a "Book-Entry Confirmation." DELIVERY OF 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 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 SHAREHOLDER. 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, WE RECOMMEND THAT THE SHAREHOLDER USE PROPERLY INSURED REGISTERED MAIL WITH RETURN RECEIPT REQUESTED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. Signature Guarantees. Except as otherwise provided below, all signatures on a Letter of Transmittal must be guaranteed by a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program (an "Eligible Institution"). Signatures on a Letter of Transmittal need not be guaranteed (a) if the Letter of Transmittal is signed by the registered holder of Shares (which term, for purposes of this section, includes any participant in the Book-Entry Transfer Facility's systems whose name appears on a security position listing as the owner of the Shares) and such registered holder has not completed the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" on the Letter of Transmittal or (b) if such Shares are tendered for the account of an Eligible Institution. See Instructions 1 and 5 of 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 returned to a person other than the registered holder of the certificates surrendered, then 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 described above. See Instructions 1 and 5 of the Letter of Transmittal. Guaranteed Delivery. A shareholder who desires to tender Shares pursuant to the Offer and whose certificates for Shares are not immediately available, or who cannot comply with the procedure for book-entry transfer on a timely basis, or who cannot deliver all required documents to the Depositary prior to the Expiration Date, may tender such Shares by following all of the procedures set forth below: (i) such tender is made by or through an Eligible Institution; (ii) 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 (iii) 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 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 in lieu of the Letter of Transmittal), and any other required documents, are received by the Depositary within three (3) New York Stock Exchange Inc. trading days after the date of execution of such Notice of Guaranteed Delivery. 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. Other Requirements. Notwithstanding any 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 (a) certificates for (or a timely Book-Entry Confirmation 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, an Agent's Message in lieu of the Letter of Transmittal) and (c) any other documents required by the Letter of Transmittal. Accordingly, tendering shareholders may be paid at different times depending upon when certificates for Shares or Book-Entry Confirmations with respect to Shares are actually 5 9 received by the Depositary. Under no circumstances will interest on the purchase price of the Shares be paid by the Purchaser, regardless of any extension of the Offer or any delay in making such payment. Tender Constitutes An Agreement. The valid tender of Shares pursuant to one of the procedures described above will constitute a binding agreement between the tendering shareholder and the Purchaser upon the terms and subject to the conditions of the Offer. Appointment. By executing a Letter of Transmittal as set forth above, the tendering shareholder irrevocably appoints designees of the Purchaser as such shareholder's proxies, each with full power of substitution, to the full extent of such shareholder's rights with respect to the Shares tendered by such shareholder and accepted for payment by the Purchaser and with respect to any and all other Shares or other securities issued or issuable in respect of such Shares on or after February 22, 2000. All such proxies will be considered coupled with an interest in the tendered Shares. Such appointment is effective when, and only to the extent that, the Purchaser deposits the payment for such Shares with the Depositary. Upon the effectiveness of such appointment, all prior powers of attorney, proxies and consents given by such shareholder will be revoked, and no subsequent powers of attorney, proxies and consents may be given (and, if given, will not be deemed effective). The Purchaser's designees will, with respect to the Shares for which the appointment is effective, be empowered to exercise all voting and other rights of such shareholder as they, in their sole discretion, may deem proper at any annual, special or adjourned meeting of the shareholders of the Company, by written consent in lieu of any such meeting or otherwise. The Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon the Purchaser's payment for such Shares, the Purchaser must be able to exercise full voting rights with respect to such Shares. 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 and all tenders determined by it not to be in proper form or the acceptance for payment of or payment for which may, in the opinion of the Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute right to waive any defect or irregularity in the tender of any Shares of any particular shareholder whether or not similar defects or irregularities are waived in the case of other shareholders. No tender of Shares will be deemed to have been validly made until all defects and irregularities relating thereto have been cured or waived. None of the Purchaser, the Depositary, the Information Agent, or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. The Purchaser's interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and Instructions thereto) will be final and binding. Backup Withholding. In order to avoid "backup withholding" of Federal income tax on payments of cash pursuant to the Offer, a shareholder surrendering Shares in the Offer must, unless an exemption applies, provide the Depositary with such shareholder's correct social security number or other taxpayer identification number ("TIN") on a Substitute Form W-9 and certify under penalties of perjury that such TIN is correct and that such shareholder is not subject to backup withholding. If a shareholder does not provide such shareholder's correct TIN or fails to provide the certifications described above, the Internal Revenue Service (the "IRS") may impose a penalty on such shareholder and payment of cash to such shareholder pursuant to the Offer may be subject to backup withholding of 31%. All shareholders 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 proved in a manner satisfactory to the Purchaser and the Depositary). Certain shareholders (including, among others, corporations and certain foreign individuals and entities) may not be subject to backup withholding. Non-corporate foreign shareholders 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. 4. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer are irrevocable except that Shares tendered pursuant to the Offer may be withdrawn pursuant to the procedures set forth below at any time prior 6 10 to the Expiration Date and, unless theretofore accepted for payment by the Purchaser pursuant to the Offer, may also be withdrawn at any time after April 21, 2000. To be effective, a written, telegraphic, telex or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase. Any notice of withdrawal must specify the name of the person having tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the names in which the certificate(s) evidencing the Shares to be withdrawn are registered, if different from that of the person who tendered such Shares. The signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution, unless such Shares have been tendered for the account of any Eligible Institution. If Shares have been tendered pursuant to the procedures for book-entry transfer as set forth in Section 3, any notice of withdrawal must specify the name and number of the account at the Depository Institution to be credited with the withdrawn Shares. If certificates have been delivered or otherwise identified to the Depositary, the name of the registered holder and the serial numbers of the particular certificates evidencing the Shares withdrawn must also be furnished to the Depositary prior to the physical release of such certificates. All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by the Purchaser, in its sole discretion, which determination shall 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 such notification. Withdrawals of tenders of Shares may not be rescinded, and any Shares properly withdrawn will be deemed not to have been validly tendered for purposes of the Offer. However, withdrawn Shares may be retendered by following one of the procedures described in Section 3 at any time prior to the Expiration Date. If the Purchaser extends the Offer, is delayed in its acceptance for payment of Shares, or is unable to accept for payment Shares tendered pursuant to the Offer, for any reason, then, without prejudice to the Purchaser's rights under this Offer but in accordance with any applicable rules or interpretations of the Commission, the Depositary may, nevertheless, on behalf of the Purchaser, retain tendered Shares, and such Shares may not be withdrawn except to the extent that tendering shareholders are entitled to exercise, and do duly exercise, withdrawal rights as set forth in this Section 4. 5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The following is a summary of the material United States Federal income tax consequences to the Company's shareholders of the sale of Shares pursuant to the Offer and the exchange of Shares for cash pursuant to the Merger. The summary does not purport to be a description of all tax consequences that may be relevant to the Company's shareholders, and assumes an understanding of tax rules of general application. It does not address special rules which may apply to the Company's shareholders based on their tax status, individual circumstances or other factors unrelated to the Offer or the Merger. Shareholders are encouraged to consult their own tax advisors regarding the Offer and the Merger. Sales of Shares pursuant to the Offer and the exchange of Shares for cash pursuant to the Merger will be taxable transactions for Federal income tax purposes and may also be taxable under applicable state, local, foreign and other tax laws. For Federal income tax purposes, a shareholder whose Shares are purchased pursuant to the Offer or who receives cash as a result of the Merger will realize gain or loss equal to the difference between the adjusted basis of the Shares sold or exchanged and the amount of cash received therefor. Such gain or loss will be capital gain or loss if the Shares are held as capital assets by the shareholder and will be long-term capital gain or loss if the shareholder's holding period in such Shares for Federal income tax purposes is more than one year at the time of the sale or exchange. A shareholder (other than certain exempt shareholders including, among others, certain corporations, foreign individuals and foreign entities) who tenders Shares may be subject to 31% backup withholding unless the shareholder provides its TIN and certifies that such number is correct or properly certifies that it is awaiting a TIN, or unless an exemption applies. A shareholder that does not furnish its TIN may be subject to a penalty imposed by the IRS. See Section 3. If backup withholding applies to a shareholder, the Depositary is required to withhold 31% from payments to such shareholder. Backup withholding is not an additional tax. Rather, the amount of the backup 7 11 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 shareholder upon filing an appropriate income tax return. The Federal income tax discussion set forth above is included for general information only and may not be applicable to shareholders in special situations such as shareholders who received their Shares upon the exercise of employee stock options or otherwise as compensation and shareholders who are not United States persons. Shareholders should consult their own tax advisors with respect to the specific tax consequences to them of the Offer and the Merger, including the application and effect of state, local, foreign or other tax laws. 6. PRICE RANGE OF SHARES; DIVIDENDS. The Shares are quoted on The Nasdaq Stock Market, Inc.'s ("Nasdaq") Small Cap Market tier ("Nasdaq/SM") under the symbol IMTC. The following table sets forth, for the periods indicated, the high and low bid prices per Share on the Nasdaq/SM. These quotations represent prices between dealers, without retail markups, markdowns or commissions and do not necessarily represent actual transactions:
HIGH LOW ---- --- Fiscal Year Ended June 30, 1998: First Quarter............................................. $ 10.00 $ 8.00 Second Quarter............................................ 12.50 8.50 Third Quarter............................................. 11.50 8.75 Fourth Quarter............................................ 13.00 10.0625 Fiscal Year Ended June 30, 1999: First Quarter............................................. $12.875 $ 9.25 Second Quarter............................................ 10.875 6.50 Third Quarter............................................. 8.50 5.25 Fourth Quarter............................................ 9.25 5.125 Fiscal Year Ending June 30, 2000: First Quarter............................................. $ 8.00 $ 6.00 Second Quarter............................................ 14.00 5.50 Third Quarter (through February 18, 2000)................. 11.875 10.25
On December 9, 1999, the last full trading day prior to Parent's and the Company's press release indicating that a possible transaction was being negotiated with Parent at a price of $12.00 per Share, the closing bid price per Share on the Nasdaq/SM was $5.50. On February 10, 2000, the last full trading day prior to announcement that the Merger Agreement had been signed, the closing bid price per Share on the Nasdaq/ SM was $11.125. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. The Company has not paid any cash dividends since its inception. Pursuant to the terms of the Merger Agreement, the Company is prohibited from paying any dividends on its capital stock. 7. CERTAIN INFORMATION CONCERNING THE COMPANY. The Company is a Delaware corporation with its principal executive offices at One Imtec Lane, Bellows Falls, Vermont 05101, telephone number 802-463-9502. The following description of the Company's business has been taken from the Company's Form 10-K for the year ended June 30, 1999: The Company designs, manufactures and sells labeling systems. These systems include label printer laminators, label printer applicators, preprinted labels and labeling supplies. The Company's products are designed for automated identification (bar coding) applications in the electronics, pharmaceutical, transportation, textile, automotive and warehousing industries. Company Information. Except as otherwise set forth herein, the information concerning the Company contained in this Offer to Purchase has been taken from or based upon publicly available documents and records on file with the Commission and other public sources and is qualified in its entirety by reference thereto. Although Parent has no knowledge that would indicate that any statements contained herein based on such documents and records are untrue, Parent cannot take responsibility for the accuracy or completeness of 8 12 the information contained in such documents and records, or for any failure by the Company to disclose events which may have occurred or may affect the significance or accuracy of any such information but which are unknown to Parent. Available Information. The Company is subject to the information and reporting requirements of the Exchange Act and in accordance therewith is obligated 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, any material interests of such persons in transactions with the Company and other matters is required to be disclosed in proxy statements distributed to the Company's shareholders and filed with the Commission. Such reports, proxy statements and other information are available for inspection and copying at the public reference facilities of the Commission located at 450 Fifth Street, N.W., Room 1024, Judiciary Plaza, Washington, D.C. 20549. Copies may be obtained by mail, upon payment of the Commission's customary charges, by writing to its principal office at 450 Fifth Street, N.W., Room 1024, Judiciary Plaza, Washington, D.C. 20549. The Commission also maintains an Internet site on the World Wide Web that contains reports, proxy statements and other information. The address of that site is http://www.sec.gov. 8. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER. The Purchaser is a newly incorporated Delaware corporation organized in connection with the Offer and the Merger and to date has engaged in no activities other than those incident to its formation and the commencement of the Offer. The Purchaser is an indirect, wholly owned subsidiary of Parent. The principal offices of the Purchaser are located at 6555 West Good Hope Road, Milwaukee, Wisconsin 53223, telephone number 414-358-6600. Until immediately prior to the time that the Purchaser will purchase Shares pursuant to the Offer, it is not anticipated that the Purchaser will have any significant assets or liabilities or engage in activities other than those incident to its formation and capitalization and the transactions contemplated by the Offer and the Merger. Because the Purchaser is newly formed and has minimal assets and capitalization, no meaningful financial information regarding the Purchaser is available. Parent is a company organized under the laws of the State of Wisconsin with its principal offices at 6555 West Good Hope Road, Milwaukee, Wisconsin 53223, telephone number 414-358-6600. Parent's principal business is the manufacturing and marketing of high-performance identification solutions and specialty coated materials. Major product categories include: industrial identification and data collection products; safety and facility identification products; and specialty materials. Certain Other Information. The name, citizenship, business address, present principal occupation or employment, and material positions held during the last five years for each of the directors and executive officers of the Purchaser and Parent are set forth in Schedule I hereto. Available Information. Parent is subject to the informational requirements of the Exchange Act and in accordance therewith files periodic reports, proxy statements and other information with the Commission relating to its business, financial condition and other matters. Such reports, proxy statements and other information are available for inspection and copying at the public reference facilities of the Commission in the same manner as set forth with respect to the Company in Section 7. 9. FINANCING OF THE OFFER AND THE MERGER. The total amount of funds required by the Purchaser to purchase all of the outstanding Shares (1,844,513 on a fully diluted basis) is approximately $22.1 million. The Purchaser will obtain all of such funds from Parent or from one or more direct or indirect wholly owned subsidiaries of Parent, which currently have these funds in available cash. This Offer is not subject to a financing condition. 9 13 10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY; THE MERGER AGREEMENT; SHAREHOLDER OPTION AGREEMENTS. Background Of The Offer. David W. Schroeder, Parent's Vice President -- Identification Solutions & Specialty Tapes, and Richard L. Kalich, former President and CEO of the Company, have known each other for a number of years and discussed from time to time a possible strategic transaction between the two companies. As a result of these prior discussions between Messrs. Schroeder and Kalich, Mr. Schroeder, Katherine M. Hudson, President and CEO, Donald P. DeLuca, former Chief Financial Officer and Gary L. Johnson, Vice President -- Corporate Development, all of Parent, met with Mr. Kalich and Ralph E. Crump, Robert W. Ham and David C. Sturdevant, all of whom were directors of the Company, and Marjorie Crump, the Company's Assistant Corporate Secretary, in Connecticut on September 7, 1995 to explore the feasibility of a merger or other business combination between the Company and Parent. No agreement on price could be reached during this meeting, which lasted most of the day, because the Company informed Parent that it wanted $20.00 per share. Periodic conversations between Mr. Schroeder and Mr. Kalich continued to take place over the next four years, but none of these discussions led to any concrete actions or specific proposals by either party. In late August 1999, Mr. Ham, still a director of the Company, was in contact with Mr. Schroeder of Parent, regarding a matter unrelated to the Company. During the course of their conversation, Mr. Schroeder inquired of Mr. Ham if the Company would have any interest in discussing a possible merger or other business combination with Parent. Messrs. Ham and Schroeder agreed to schedule a follow-up meeting. In early September 1999, Messrs. Schroeder and Ham agreed to meet on October 6, 1999, at a trade show in Chicago, Illinois to discuss the possibility of a merger or other business combination between Parent and the Company. On October 6, 1999, at the trade show, Mr. Schroeder met with Mr. Ham and Douglas T. Granat, also a director of the Company, to discuss the possibility of a transaction between Parent and the Company. Messrs. Ham and Granat indicated that any transaction must provide value to the Company's shareholders. They also indicated that any offer or proposal would be given due consideration by the entire Board of Directors of the Company. No understandings or agreements were reached during this discussion. However, Mr. Granat indicated that the price would need to be somewhere in the low teens. Mr. Schroeder invited Messrs. Granat and Ham to visit Parent to get a better understanding of Parent's business as a basis for further discussions regarding a possible merger or other business combination with Parent. On October 19, 1999, Messrs. Schroeder, Johnson and Matthew O. Williamson, Vice President -- Identification Solutions and Specialty Tapes -- North America, all of Parent, met with Messrs. Granat and Ham at Parent's headquarters in Milwaukee to discuss a possible strategic transaction between Parent and the Company. At this meeting, Mr. Schroeder presented a verbal non-binding expression of interest in exploring a potential acquisition of all of the Company's issued and outstanding shares of common stock for cash at a price ranging from $9.00 to $9.50 per share, subject to customary conditions. Messrs. Granat and Ham reiterated that any transaction must provide value to the Company's shareholders and indicated that the proposed price range was below their expectations. Mr. Granat also indicated that another party was discussing the potential purchase of the Company. Messrs. Schroeder, Williamson and Johnson then expressed an interest in learning more about the Company and requested an on-site visit with a view toward potentially raising its indication of interest as to an acquisition price. While no formal understandings or agreements were reached during this discussion, the parties agreed to continue their dialogue during a visit by Parent's representatives to the Company's headquarters in Bellows Falls, Vermont. On November 2, 1999, Parent sent a Confidentiality Agreement to Steven D. Anton, President and CEO of the Company. Mr. Anton signed the Confidentiality Agreement on November 2, 1999, and returned it to Parent on November 3, 1999. Parent then sent Mr. Anton a list of questions seeking further information on the Company's operations including sales growth, printer applicator historical sales and sales projections, sales 10 14 channels and sales force, US Postal Service contract, international activities, new product development capabilities, marketing activities, manufacturing capabilities and capacity, facilities and number of employees. Mr. Anton responded to these questions on November 5, 1999. On November 9, 1999, Messrs. Schroeder, Williamson and Johnson visited the Company and met with Mr. Anton for purposes of evaluating the Company and to form an opinion regarding a possible strategic transaction. During this visit, they toured the Company's Vermont and New Hampshire facilities with Mr. Anton, discussed Mr. Anton's response to Parent's inquiries and discussed other relevant matters pertaining to the Company's operations. Parent presented no new indication of a possible purchase price at this meeting. After returning from this trip, Parent prepared a valuation of the Company taking into consideration various potential cost saving synergies as well as the potential for future sales growth. On or about November 18, 1999, Mr. Schroeder telephonically presented Parent's non-binding expression of interest to purchase the Company's issued and outstanding shares at $11.00 per share. Mr. Granat responded that he believed a higher offer was warranted. On November 29, 1999, Mr. Granat informed Mr. Schroeder that the Company had received a non-binding verbal offer higher than Parent's last nonbinding indication of interest at $11.00 per share, but did not identify the offeror. Mr. Granat stated that the Company's board was scheduled to meet telephonically on December 2, 1999, to discuss both offers and requested that Parent present its final offer prior to this meeting. On December 1, 1999, Parent's management met with the Finance Committee of its Board of Directors seeking approval to extend a revised nonbinding indication of interest to acquire the Company for $12.00 per share in cash. The Finance Committee verbally approved the revised indication of interest during this meeting. Formal, written approval from Parent's entire Board of Directors was obtained during the first week of December 1999. On December 2, 1999, Mr. Schroeder sent a letter to Mr. Granat outlining the terms of Parent's non-binding expression of interest concerning the possible acquisition of the Company by Parent for $12.00 per share in cash. Parent understands that Mr. Granat presented this information to the Company's entire Board of Directors on December 2, 1999. On December 3, 1999, Mr. Granat advised Parent that the Company's board was prepared to accept Parent's indication of interest of $12.00 per share, subject to negotiation and execution of a definitive merger agreement. Parent indicated that as a pre-condition to making a public announcement regarding the possible acquisition of the Company by Parent and in order to induce Parent to enter into negotiations with the Company concerning a definitive merger agreement, Parent wished to acquire irrevocable options from the holders of greater than 50% of the Company's issued and outstanding shares. Commencing on December 3, 1999, and continuing through December 9, 1999, Parent's representatives negotiated with a limited number of shareholders to gain such persons' commitment to tender their shares at the $12.00 per share price in Parent's eventual tender offer. During such time, draft option agreements were prepared, commented on and revised by respective counsel for each of Parent and the Company. On December 9, 1999, the Company's Board of Directors unanimously approved the Shareholder Option Agreements, and, subject to the ratification of the final terms thereof, the Merger Agreement, the Offer and the Merger. On December 9, 1999, and following the above approval by the Company's Board of Directors, Parent entered into the Shareholder Option Agreements with nine persons. On December 9, 1999, Parent and the Company issued a joint press release announcing that the companies were discussing a possible acquisition at $12.00 per share in cash. From early December 1999 through early February 2000, representatives of Parent and its advisors conducted a due diligence investigation of the Company. On December 13, 1999, Parent submitted to the Company a proposed Merger Agreement and the parties and their legal advisors began to negotiate the terms of the proposed transaction. 11 15 On February 11, 2000, (i) the Company, Parent and Purchaser entered into the Merger Agreement, (ii) Parent issued a press release announcing the execution of the Merger Agreement and that Parent and the Purchaser expected to commence the Offer no later than February 22, 2000, and (iii) Parent and the Purchaser filed a Tender Offer Statement on Schedule TO solely for the purpose of filing the press releases issued on December 9, 1999, and February 11, 2000. Contacts With The Company. Except for the Shareholder Option Agreements or as otherwise set forth in this Offer to Purchase none of the Purchaser, Parent or, to the best of their knowledge, any of the persons listed in Schedule I hereto, or any associate or majority-owned subsidiary of such persons, beneficially owns any equity security of the Company, and none of the Purchaser, Parent or, to the best of their knowledge, any of the other persons referred to above, or any of the respective directors, executive officers or subsidiaries of the Purchaser or Parent, has effected any transaction in any equity security of the Company during the past 60 days. Except for the Shareholder Option Agreements or as otherwise set forth in this Offer to Purchase, none of the Purchaser, Parent, or, to the best of their knowledge, any of the persons listed in Schedule I hereto, has any contract, arrangement, understanding or relationship with any other person with respect to any securities of the Company, including, without limitation, any contract, arrangement, understanding or relationship concerning the transfer or the voting of any securities of the Company, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against loss or the giving or withholding of proxies. Except as set forth in this Offer to Purchase, none of the Purchaser, Parent or, to the best of their knowledge, any of the persons listed in Schedule I hereto has had any transactions with the Company, or any of its executive officers, directors or affiliates, that would require reporting under the rules of the Commission. Except for the Shareholder Option Agreements or as otherwise set forth in this Offer to Purchase, there have been no contacts, negotiations or transactions between the Purchaser or Parent, any of their respective subsidiaries, or, to the best of their knowledge, any of the persons listed in Schedule I hereto, on the one hand, and the Company or its executive officers, directors or affiliates, on the other hand, concerning a merger, consolidation or acquisition, tender offer or other acquisition of securities, election of directors, or a sale or other transfer of a material amount of assets that would require reporting under the rules of the Commission. Transactions Between Parent and the Company. During its fiscal years ended July 31, 1999 and 1998, Parent, through one of its subsidiaries, purchased approximately $537,000 and $729,000 of preprinted labels from the Company. These purchases are continuing in the present fiscal year and are expected to not exceed $500,000. All such purchases were at then-current market prices. The Merger Agreement. The following is a summary of the Merger Agreement, a copy of which is filed as an Exhibit to the Tender Offer Statement on Schedule TO on file with the Commission. Such summary is qualified in its entirety by reference to the Merger Agreement. The Offer. The Merger Agreement provides for the commencement of the Offer no later than five business days after the initial public announcement of the execution of the Merger Agreement. The obligation of the Purchaser to accept for payment Shares tendered pursuant to the Offer is subject, among other things, to the satisfaction of the Minimum Condition. See Introduction. The Purchaser and Parent expressly reserve the right to waive any condition to the Offer (including the Minimum Condition) without the consent of the Company; provided, however, that neither the Purchaser nor Parent will, without the prior written consent of the Board of Directors of the Company, make any change in the Offer which decreases the price per Share or changes the form of consideration payable in the Offer, decreases the number of Shares sought pursuant to the Offer, imposes conditions to the Offer in addition to those set forth in the Merger Agreement, or modifies or amends any terms of the Offer in a manner adverse to the Company's shareholders. The Purchaser and Parent have the right to (i) extend the Offer if at the then scheduled Expiration Date any of the conditions to the Offer shall not have been satisfied or waived, until such conditions are satisfied or waived, (ii) extend the Offer for any period required by any rule, regulation, interpretation or position of the Commission, United States Department of Justice or United States Federal Trade Commission or the staff of any such governmental entities applicable to the Offer, and (iii) extend the Offer for any reason on one or more occasions for an 12 16 aggregate period of not more than 30 business days (for all such extensions) beyond the latest Expiration Date that would otherwise be permitted under (i) or (ii) of this sentence. Approval of the Company's Board of Directors. The Board of the Directors of the Company has unanimously determined that the Offer and the Merger, taken together, are fair to and in the best interests of the Company's shareholders, and has approved and adopted the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger. The Company's Board of Directors also unanimously resolved to recommend that the Company's shareholders tender their Shares to the Purchaser in this Offer and, if necessary, approve and adopt the Merger Agreement and the Merger. The Company has agreed to file with the Commission a Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9") containing the recommendation of the Board of Directors that the Company's shareholders tender their Shares, and mail the Schedule 14D-9 to the Company's shareholders on or about the date of the commencement of the Offer. Board Control. The Merger Agreement provides that promptly following the purchase by the Purchaser pursuant to the Offer or otherwise of such number of Shares as represents at least a majority of the outstanding shares, Purchaser shall be entitled to designate such number of directors, rounded up to the next whole number, on the Board of Directors of the Company as will give Purchaser representation on the Board of Directors of the Company equal to the product of the number of directors on the Board of Directors of the Company and the percentage that such number of Shares so purchased bears to the number of Shares outstanding. The Company agreed, upon request of Purchaser, promptly to increase the size of the Board of Directors of the Company or use its best efforts to secure the resignations of such number of directors as is necessary to provide Purchaser with such level of representation and to cause Purchaser's designees to be so elected. There are currently four directors of the Company. The Company's obligation to appoint the Purchaser's designees to the Board of Directors of the Company following the purchase by the Purchaser of Shares pursuant to the Offer is subject to Section 14(f) of the Exchange Act and Rule 14f-1 thereunder (which require that information be furnished to the Company's shareholders about Purchaser's nominees to the Company's Board of Directors not later than 10 days prior to the time such nominees take office as directors). The Company has agreed to take all actions required under such section and rule in order to effect any such election or appointment of the Purchaser's designees and to include information about such persons in the Schedule 14D-9. At this time, Purchaser intends to designate four persons to the Company's Board of Directors, following the resignation of all four of the Company's current directors. The Company has indicated that it will include the names and ages of, and biographical information about, Purchaser's four designees in the Schedule 14D-9. From and after the time, if any, that Purchaser's designees are appointed to the Company's Board of Directors and prior to the Effective Time of Merger, and so long as there is at least one Continuing Director (as defined below), any amendment of the Merger Agreement requiring action by the Company's board, any extension of time for performance of any of the obligations of Parent or the Purchaser thereunder, or any waiver of any condition under the Merger Agreement for the benefit of the Company may be effected only by the action of a majority of the directors of the Company then in office who were directors of the Company on the date of the Merger Agreement (the "Continuing Directors"), which action will be deemed to constitute the action of the full Board of Directors of the Company; provided, however, that in no event may the Company, Parent or the Purchaser amend the provision of the Merger Agreement regarding the continuation of indemnification and insurance for the Company's officers and directors. Nothing in this provision prohibits any of the Purchaser's designees to the Company's Board of Directors from voting on the termination of the Merger Agreement. The Merger. The Merger Agreement provides that, upon the terms and subject to the conditions thereof, and in accordance with the DGCL, at the Effective Time, the Purchaser shall be merged with and into the Company. As a result of the Merger, the separate corporate existence of the Purchaser will cease and the Company will continue as the Surviving Corporation and will become an indirect, wholly owned subsidiary of Parent. 13 17 Upon consummation of the Merger, each issued and then outstanding Share (other than any Shares held in the treasury of the Company, or owned by the Purchaser, Parent or any direct or indirect wholly owned subsidiary of Parent or of the Company, or dissenting shares) shall be automatically converted into, and exchanged for, the right to receive the Merger Consideration. The Merger Agreement provides that the directors of the Purchaser immediately prior to the Effective Time will be the initial directors of the Surviving Corporation and that the officers of the Purchaser immediately prior to the Effective Time will be the initial officers of the Surviving Corporation. The Merger Agreement also provides that, at the Effective Time, the Certificate of Incorporation and Bylaws of the Purchaser, each as in effect immediately prior to the Effective Time, will be the Certificate of Incorporation and Bylaws of the Surviving Corporation. The Merger is subject to the satisfaction of the following conditions (which may be waived, where permissible): (a) there shall not be in effect any statute, rule, regulation, executive order, decree, ruling or injunction or other order of a court or governmental or regulatory agency or competent jurisdiction directing that the transactions contemplated in the Merger Agreement not be consummated; provided, however, that prior to invoking this condition each party shall use its reasonable best efforts to have any such decree, ruling, injunction or order vacated; (b) all governmental consents, orders and approvals legally required for the consummation of the Merger and the transactions contemplated by the Merger Agreement shall have been obtained and be in effect at the Effective Time; (c) all necessary requirements of the HSR Act shall have been complied with and any "waiting periods" applicable to the Merger and to the transactions described in the Merger Agreement which are imposed by the HSR Act shall have expired prior to the closing date for the transactions described in the Merger Agreement or shall have been terminated by the appropriate agency; (d) the Purchaser shall have purchased pursuant to the Offer all of the Shares validly tendered and not withdrawn; and (e) to the extent required by applicable law, the Merger Agreement, the Merger and the transactions contemplated by the Merger Agreement shall have received the requisite approval and authorization of the Company's shareholders (with Parent and the Purchaser and their respective affiliates required to vote all of their Shares in favor of the Merger). Stock Options and Restricted Stock Awards. From and after the date and time that the Company executed the Merger Agreement, the Company is prohibited by the Merger Agreement from granting any options or other rights to acquire Shares. The Merger Agreement provides that, prior to the consummation of the Offer, the Company shall take all actions necessary or desirable (including obtaining all required consents from optionees) to provide for the cancellation, effective at the Effective Time, of all the outstanding stock options (the "Existing Stock Options") granted under any stock option, employment or similar plan or arrangement of the Company or under any such similar plan or agreement which benefits any person providing services to the Company (the "Stock Option Plans"), without any payment therefore except as otherwise provided in the Merger Agreement. At the Effective Time (or such earlier time as Parent shall designate), each holder of an Existing Stock Option will be entitled, in settlement therefor, to an amount in cash (subject to any applicable withholding taxes that may apply to payments made in connection with the performance of services) equal to the product of (i) the excess of $12.00 over the per share exercise or purchase price of such Existing Stock Option and (ii) the number of Shares subject to such Existing Stock Option (the "Option Consideration"). The Stock Option Plans terminate as of the Effective Time and any and all rights under any provisions in any other plan, program or arrangement providing for the issuance or grant of any other interest in respect of the capital stock of the Company shall be canceled. Notwithstanding the foregoing, no holder of an Existing Stock Option will be entitled to any payment with respect to any such Existing Stock Option under the Merger Agreement or otherwise unless he or she delivers to Purchaser a consent to the cancellation of such Existing Stock Option in a form to be prescribed by Purchaser. Prior to the Effective Time, the Merger Agreement provides that the Company shall take all necessary and appropriate actions (including obtaining all applicable consents) to provide that, upon the Effective Time, each then outstanding restricted stock award in respect of Shares and any other stock based award (the "Stock Awards") which is subject to any vesting requirement and which was issued pursuant to a Stock Option Plan or any other plan or arrangement (other than any Existing Stock Option) shall, whether or not then exercisable or vested, become 100% vested. At the Effective Time, a holder of Shares underlying any such 14 18 Stock Award shall be entitled to receive the Merger Consideration (subject to any applicable withholding taxes that may apply to payments in connection with the performance of services), upon the surrender of the certificate representing such Shares. Notwithstanding the foregoing, no holder of a Stock Award will be entitled to any payment with respect to such Stock Award under the Merger Agreement or otherwise unless he or she delivers to Purchaser a consent to the cancellation of such Stock Award in a form to be prescribed by Purchaser. Acquisition Proposals. The Company has agreed that neither it nor its officers, directors, employees, agents, affiliates or representatives shall, directly or indirectly, (a) initiate, solicit or encourage any inquiries concerning an Acquisition or an Acquisition Proposal (each as defined below); (b) engage in any negotiations concerning, or provide any confidential information or data to, or have any discussions with, any person relating to an Acquisition or an Acquisition Proposal; (c) facilitate any effort or attempt to make or implement an Acquisition Proposal; or (d) consummate, agree or commit to consummate any Acquisition or Acquisition Proposal. The term "Acquisition" means any or all of the following, other than the Offer and the Merger: a merger, share exchange, consolidation, reorganization, combination or similar transaction involving the Company; a purchase, exchange or tender offer for twenty percent (20%) or more of the outstanding Shares; the purchase, lease or other acquisition of all or any significant portion of the assets or any equity interest (or any option (other than Existing Stock Options), warrant or security convertible into any equity interest) of the Company; or any other transaction the consummation of which could reasonably be expected to impede, interfere with, prevent or delay the Offer or the Merger. The term "Acquisition Proposal" means any inquiry, request for information, expression of interest, indication of a desire to have discussions, or the making of any proposal by any person concerning an Acquisition. Notwithstanding the foregoing, the Board of Directors of the Company may furnish information about the Company to a person making a Superior Proposal (as defined below) pursuant to a confidentiality agreement in customary form and participate in discussions and negotiations regarding such Superior Proposal if the Board of Directors of the Company determines in good faith, upon the written advice of outside legal counsel, that the failure to take such action would violate its fiduciary duties to the Company's shareholders under applicable law. In addition, the Company will be permitted to take and disclose to the Company's shareholders a position contemplated by Rules 14d-9 and 14e-2(a) under the Exchange Act with respect to an Acquisition Proposal by means of a tender offer. The Company must notify Parent orally and in writing of any Acquisition Proposal within 24 hours from the receipt thereof, specifying all of the material terms and conditions of such Acquisition Proposal and identifying the person making such Acquisition Proposal, keep Parent informed of the status and all material developments and information regarding the Acquisition Proposal, and give Parent five business days' prior notice and an opportunity to negotiate with the Company before entering into, executing or agreeing to any Acquisition or Acquisition Proposal. The term "Superior Proposal" means a written, bona fide, unsolicited Acquisition Proposal by any person (other than Parent) which the Board of Directors of the Company determines in good faith, and in the exercise of reasonable judgment, to be more favorable to the Company and its shareholders than the Offer and the Merger from a financial point of view, which proposal is capable of being consummated without undue delay and has the requisite financing committed to it or, as determined in good faith, and in the exercise of reasonable judgment, is reasonably capable of being financed by such person. Best Efforts. The Merger Agreement provides that, subject to its terms and conditions, the Company, Parent and the Purchaser will use their reasonable best efforts to take all actions necessary and proper under applicable law to consummate the Merger, including using their reasonable best efforts to prevent any injunction by a government entity relating to consummation of the transactions contemplated by the Merger Agreement. Directors And Officers Indemnification And Insurance. Pursuant to the Merger Agreement, Parent has agreed that for a period ending not sooner than the third anniversary of the Effective Time, the Surviving Corporation will maintain all rights to indemnification existing on the date of the Merger Agreement in favor of the present and former directors and officers of the Company as provided in the Company's Certificate of Incorporation and Bylaws, in each case as in effect on the date of the Merger Agreement, and that during such 15 19 period, the Certificate of Incorporation and Bylaws of the Surviving Corporation will not be amended or repealed or otherwise modified in any manner that would adversely affect the rights of indemnity afforded to the present and former directors and officers of the Company unless required by law; provided, however, that if any claim is asserted within such three-year period, all rights to indemnification in respect of such claim shall continue until disposition of such claim. Under the Merger Agreement, Parent and the Surviving Corporation will maintain in effect for not less than three years from the Effective Time the current directors' and officers' liability insurance policies and fiduciary insurance policies maintained by the Company (provided that Parent may substitute policies of substantially the same coverage containing terms and conditions which are no less advantageous to the Company's present or former directors or officers or other employees covered by such policies prior to the Effective Time) with respect to matters occurring at or prior to the Effective Time; provided, however, that in no event will Parent or the Surviving Corporation be required to pay an annual premium for such insurance greater than 125% of the last annual premium paid prior to the date thereof by the Company for such insurance. Termination And Termination Fee. The Merger Agreement provides that it may be terminated and the Merger and the Offer may be abandoned at any time prior to the Effective Time: (a) by mutual written agreement duly authorized by the Boards of Directors of Parent, the Purchaser and the Company, respectively; (b) by Parent or the Company if (i) any court of competent jurisdiction or any other governmental body or regulatory authority shall have issued an order, decree or ruling or taken any other action permanently restraining, enjoining or otherwise prohibiting the Offer or the Merger and such order, decree, ruling or other action shall have become final and non-appealable, or (ii) the Purchaser shall not have purchased Shares pursuant to the Offer on or before June 30, 2000; (c) by the Company if (i) the Board of Directors of the Company shall have determined in good faith, upon the written advice of outside legal counsel, that its fiduciary duties require the termination of the Merger Agreement in order to pursue a Superior Proposal, or (ii) the Purchaser shall have failed to commence the Offer within five business days following the date of the Merger Agreement or terminated the Offer without purchasing Shares pursuant to the Offer; (d) by the Company if either Parent or the Purchaser shall have breached in any material respect any of its representations, warranties, covenants or other agreements contained in the Merger Agreement which breach is incapable of being cured or, if curable, shall not have been cured within thirty (30) days after the giving of written notice to Parent and the Purchaser; (e) by Parent if the Company shall have breached in any material respect any of its representations, warranties, covenants or other agreements contained in the Merger Agreement (except to the extent any such breach gives rise to the termination rights described in (f)(ii) below), which breach is incapable of being cured or, if curable, shall not have been cured within thirty (30) days after the giving of written notice to the Company; or (f) by Parent and the Purchaser, if (i) the Board of Directors of the Company has withdrawn, or materially modified or changed its favorable recommendation of the Offer, the Merger or the Merger Agreement, or shall have approved or recommended any Acquisition Proposal or Acquisition, (ii) the Company shall have breached its obligations to Parent concerning an Acquisition Proposal, or (iii) the Purchaser shall have otherwise terminated the Offer in accordance with the Merger Agreement without purchasing Shares pursuant to the Offer. In the event of the termination of the Merger Agreement and abandonment of the Offer, the Merger Agreement provides that all further obligations of the parties under or pursuant to the Merger Agreement shall terminate without further liability thereunder on the part of any party except under the provisions of the Merger Agreement related to fees and expenses described below and under certain other provisions of the Merger Agreement which survive termination, provided that each party to the Merger Agreement will retain any and all remedies which it may have for breach of contract provided by law. The Merger Agreement provides that upon the occurrence of a Special Event (as defined below) the Company will pay $25,000 (the "Termination Fee") to Parent and will reimburse Parent for all documented out-of-pocket costs, fees and expenses incurred by Parent and the Purchaser in connection with the preparation and negotiation of the Merger Agreement and the transactions contemplated thereby. The Termination Fee shall be payable to Parent in immediately available funds within three business days following the occurrence of the Special Event. If the Company fails to timely pay the Termination Fee (or any 16 20 portion thereof) due Parent pursuant to this provision, the Termination Fee (or portion thereof) will accrue interest at the lesser of the rate of fifteen percent (15%) per annum or the maximum amount allowed by law until paid. The term "Special Event" means the occurrence of any of the following on or prior to December 9, 2000: (a) a person unrelated to Parent shall have consummated, or shall have publicly announced or proposed and subsequently consummated, a tender or exchange offer for Shares representing, on a fully diluted basis, 20% of more of the outstanding Shares; (b) a person unrelated to Parent shall have consummated an Acquisition or the Company shall have entered into an agreement with respect to an Acquisition; (c) the Company shall have terminated the Merger Agreement for the purpose of pursuing an Acquisition Proposal; (d) Parent shall have terminated the Merger Agreement due to the Company's breach of its obligations to notify Parent of an Acquisition Proposal and to negotiate with Parent with respect thereto; (e) the Board of Directors of the Company shall have withdrawn or materially modified or changed its favorable recommendation of the Offer, the Merger or the Merger Agreement (whether or not Parent shall have terminated the Merger Agreement); (f) Parent and Purchaser shall have terminated the Merger Agreement due to Purchaser's termination of the Offer pursuant to paragraphs (b), (e), (g) or (h) of Section 14 of this Offer to Purchase; or (g) the Company shall have terminated the Merger Agreement due to Purchaser's termination of the Offer pursuant to paragraphs (b), (e), (g) or (h) of Section 14 of this Offer to Purchase. The Merger Agreement also contains other restrictions as to the conduct of business by the Company pending the Merger, as well as representations and warranties of each of the parties customary in transactions of this kind. The Shareholder Option Agreements. The Shareholder Option Agreements were entered into for the purpose of inducing Parent to enter into negotiations for the acquisition of the Company on the terms and conditions set forth in the Merger Agreement and as a pre-condition to making a public announcement regarding the possible acquisition of the Company by Parent. Pursuant to the Shareholder Option Agreements, each Shareholder has agreed to validly tender in the Offer and not withdraw all of the Options Shares beneficially owned by such Shareholder (including any subsequently acquired Shares with respect to each Group Shareholder), which in the aggregate constitute approximately 57.9% of the Shares computed in accordance with Rule 13d-3(d)(1)(i) under the Exchange Act. Each Shareholder has granted Parent an irrevocable Option to purchase the Option Shares (including any subsequently acquired Shares with respect to the Group Shareholders) at $12.00 per Share. The Shareholder Option Agreements provide that the Options are exercisable at any time, in whole or in part, after (i) February 7, 2000, if the Merger Agreement has not been signed; (ii) the occurrence of any event as a result of which Parent is entitled to receive the Termination Fee under the Merger Agreement; or (iii) such time as a Shareholder shall have breached the Merger Agreement. Each Option that becomes exercisable shall remain exercisable until the later of (i) the date that is 120 days after the date such Option becomes exercisable or (ii) the date that is 60 days after the date that all waiting periods under the HSR Act applicable to the Merger and/or purchase of the Option Shares shall have expired or been terminated; provided that if at the expiration of such period there shall be in effect any injunction or other order issued by any federal, state, local or foreign governmental unit or agency prohibiting the exercise of such Option, the exercise period shall be extended until 60 days after the date that no such injunction or order is in effect. Each Shareholder has agreed that at any meeting of the shareholders of the Company or in connection with any written consent of the shareholders of the Company, such Shareholder will vote (or cause to be voted) all Option Shares (including any subsequently acquired Shares with respect to each Group Shareholder), (i) in favor of the Merger Agreement, the Merger and any other actions contemplated by the Merger Agreement and the applicable Shareholder Option Agreement and (ii) against any Acquisition Proposal and against any action or agreement that would impede, frustrate, prevent or nullify the Shareholder Option Agreements, or result in a breach in any respect of any covenant, representation or warranty or any other obligation or agreement of the Company under the Merger Agreement or which would result in any of the conditions set forth in the Merger Agreement not being fulfilled. Each Shareholder irrevocably granted to and appointed Parent as such Shareholder's proxy and attorney-in-fact to vote the Option Shares owned by such 17 21 Shareholder or to grant a consent or approval in respect of such Option Shares (including any subsequently acquired Shares with respect to the Group Shareholders), in the manner specified above. Each Shareholder has agreed that, except as provided by the Merger Agreement and the applicable Shareholder Option Agreement, such Shareholder will not (i) offer to transfer, transfer or consent to any transfer, (ii) enter into any contract, option or other agreement or understanding with respect to any transfer, (iii) grant any proxy, power-of-attorney or other authorization or consent or (iv) deposit into a voting trust or enter into a voting agreement or arrangement, each with respect to all of the Option Shares (including any subsequently acquired Shares with respect to the Group Shareholders) beneficially owned by such Shareholder. Each Shareholder has agreed that such Shareholder shall not encourage, solicit, initiate or participate in any way in any discussion or negotiation with, or provide information or otherwise take any action to assist or facilitate, any person concerning any Acquisition Proposal. Each Shareholder has agreed to cease any such existing activities and to immediately communicate to Parent the terms of any Acquisition Proposal. Each Shareholder has waived any rights of appraisal or rights to dissent from the Merger. The Shareholder Option Agreements with respect to each Shareholder shall terminate upon the earliest of (i) the Effective Time, (ii) December 9, 2000, or (iii) the termination of the Merger Agreement, unless, in the case of clause (iii), Parent is or may be entitled to receive the Termination Fee under the Merger Agreement following such termination or prior to such termination such Shareholder has breached certain specified agreements contained in the applicable Shareholder Option Agreement. The description of the Shareholder Option Agreements set forth herein does not purport to be complete and is qualified in its entirety by the provisions of Shareholder Option Agreement #1 and Shareholder Option Agreement #2, copies of which were filed as Exhibits 1 and 2, respectively, to Parent's Schedule 13D filed with the Commission on December 9, 1999. Confidentiality Agreement. On November 2, 1999, the Company and Parent entered into a Confidentiality Agreement (the "Confidentiality Agreement") pursuant to which the Company and Parent and each of their respective representatives agreed to keep confidential certain information concerning the other party which was furnished to it by the other party (the "Evaluation Material"). Pursuant to the Confidentiality Agreement, the Company, Parent and their respective subsidiaries and affiliates having had access to the Evaluation Material, agreed not to solicit any employee of the other during the term of the Confidentiality Agreement and for a period of twelve months following notice by either party that it does not wish to proceed with a transaction between the parties. The description of the Confidentiality Agreement set forth herein does not purport to be complete and is qualified in its entirety by the provisions of Confidentiality Agreement, a copy of which is filed as an Exhibit to the Tender Offer Statement on Schedule TO concerning the Offer on file with the Commission. 11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY AFTER THE OFFER AND THE MERGER. Purpose Of The Offer. The purpose of the Offer and the Merger is to enable Parent to acquire control of, and the entire equity interest in, the Company. Following the consummation of the Offer, the Purchaser will effect the Merger, pursuant to which each then issued and outstanding Share (excluding Shares owned by the Purchaser, Parent or any direct or indirect subsidiary of Parent or the Company, Shares held in the treasury of the Company and Shares owned by shareholders who perfect their dissenters' rights under the DGCL, if any), will be converted into the right to receive an amount in cash equal to the price per Share paid pursuant to the Offer, and the Company will become an indirect, wholly owned subsidiary of Parent. The Offer, as the first step in the acquisition of the Company, is intended to facilitate the acquisition of all outstanding Shares. The Merger, as the second step in the acquisition of the Company, is intended to facilitate the acquisition of any Shares not acquired by the Purchaser in the Offer. Consummation of the Merger will require, except as set forth below, the affirmative vote of the holders of a majority of the outstanding Shares entitled to vote upon such matter. 18 22 Under certain circumstances, the Merger could be consummated without the approval of the Company's shareholders. In particular, the DGCL provides that if a corporation holds 90% or more of the outstanding shares of each class of stock of a subsidiary corporation, the corporation may merge with the subsidiary upon approval of the corporation's board of directors and execution, acknowledgment and filing of a certificate of ownership and merger and upon complying with certain notice requirements, but without approval of the shareholders of the subsidiary (a "Short-Form Merger"). Accordingly, if the Purchaser owns 90% or more of the outstanding Shares after consummation of the Offer, a Short-Form Merger could be effected by action of the Board of Directors of the Purchaser without the approval of the Company's shareholders. Even if the Purchaser does not own 90% of the outstanding Shares following consummation of the Offer, Parent and the Purchaser could seek to purchase additional Shares in the open market or otherwise in order to reach the 90% threshold and effect a Short-Form Merger. The per Share consideration paid for any Shares so acquired may be greater or less than that paid in the Offer. Parent and the Purchaser presently intend to effect a Short-Form Merger if permitted to do so under the DGCL. In addition, the DGCL and the Company's Bylaws provide that any action that is required to or may be taken at any annual or special meeting of shareholders of a corporation may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by holders of outstanding stock of the corporation having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Accordingly, if Purchaser owns more than a majority of the outstanding Shares after the consummation of the Offer, the Merger could be effected by a written consent action of the Purchaser without the approval of the Company's other shareholders. If, following the Offer, Purchaser owns more than a majority of the outstanding Shares, but less than 90% of the outstanding Shares, Parent and Purchaser presently intend to effect the Merger by a written consent action. Plans For The Company After The Offer And The Merger. In connection with the Offer, Parent has reviewed, and will continue to review, various possible business strategies in the event that the Purchaser acquires control of the Company pursuant to the Offer and the Merger, or otherwise, and will continue to consider and determine what, if any, changes would be desirable in light of the circumstances which then exist. Parent intends to undertake a thorough review of the Company's operations and to study the manner in which operations of the two companies can best be optimized, and will take such actions as a result of this review as may be appropriate under the circumstances. Parent may also seek to achieve efficiencies through the consolidation or elimination of duplicative functions and/or operations. Actions that may be taken by Parent include, among other things, changes in the Company's business, corporate structure, Certificate of Incorporation, Bylaws, capitalization, or management. Except as described in this Offer to Purchase, Parent and the Purchaser have no present plans or proposals that would result in an extraordinary corporate transaction, such as a merger, consolidation, reorganization, liquidation or sale or transfer of a material amount of assets, involving the Company or any of its subsidiaries, or any material changes in the Company's present capitalization, dividend policy, employee benefit plans, corporate structure or business or any material changes or reductions in the composition of its management or personnel. Following further review of the Company's businesses, financial records, personnel, operations and other matters, it is possible such plans and intentions of Parent and the Purchaser may change. Appraisal Rights. While no appraisal rights are available in connection with the Offer, Section 262 of the DGCL ("Section 262") provides appraisal rights to holders of the Shares, subject to the procedures described therein, to object to the Merger and demand payment of the "fair value" of their Shares in cash in connection with the consummation of the Merger. Shareholders of the Company who comply with the applicable statutory procedures will be entitled to receive a judicial determination of the fair value of their Shares (exclusive of any element of value arising from the accomplishment or expectation of the Merger) and to receive payment of such fair value in cash, together with a fair rate of interest thereon, if any. Any such judicial determination of the fair value of the Shares could be based upon factors other than, or in addition to, the price per Share to be paid in the Merger and the market value of the Shares. The value so determined could be more or less than the price per Share to be paid in the Merger. 19 23 The foregoing summary of the rights of dissenting shareholders does not purport to be a complete statement of the procedures to be followed by shareholders desiring to exercise their dissenters' rights in connection with the Merger. The preservation and exercise of dissenters' rights are conditioned on strict adherence to the applicable provisions of the DGCL. 12. DIVIDENDS AND DISTRIBUTIONS; STOCK ISSUANCES. If on or after February 11, 2000, the Company should (i) issue any additional Shares (except upon the exercise of Existing Options) or grant any warrants, options or other rights to subscribe for or acquire any additional Shares or any other shares of capital stock of the Company, (ii) declare or pay any dividend or make any capital or surplus distribution of any nature (including special dividends) or directly or indirectly redeem, purchase or otherwise acquire, split, combine, reclassify the Shares or any other shares of capital stock of the Company or liquidate in whole or in part, then Parent and the Purchaser may terminate the Merger Agreement and refuse to purchase Shares pursuant to the Offer, provided such action has a Material Adverse Effect (as defined below) on the Company. 13. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; NASDAQ LISTING AND EXCHANGE ACT REGISTRATION. The purchase of Shares by the Purchaser pursuant to the Offer will reduce the number of Shares that might otherwise trade publicly and may reduce the number of holders of Shares, which could adversely affect the liquidity and market value of the remaining Shares held by the public. The Shares are listed on the Nasdaq/SM. According to Nasdaq's published guidelines the Shares may no longer be included in the Nasdaq/SM if, among other things, the number of publicly held Shares (excluding Shares held directly or indirectly by officers, directors and any person who is a beneficial owner of more than 10% of the Shares) is less than 500,000, the aggregate market value of publicly held Shares is less than $1,000,000 or there are fewer than 300 round lots holders. As described below, the Purchaser intends to cause the Company to terminate its Nasdaq/SM listing and Exchange Act registration if there are fewer than 300 Shares held of record following consummation of the Offer. If the Nasdaq/SM were to delist the Shares, the market therefor would be adversely affected. It is possible that the Shares would be traded on other securities exchanges or in the over-the-counter market, and that price quotations would be reported by such exchanges, or through Nasdaq or other sources. The extent of the public market for the Shares and the availability of such quotations would, however, depend upon the number of shareholders and/or the aggregate market value of the Shares remaining at such time, the interest in maintaining a market in the Shares on the part of securities firms, the possible termination of registration of the Shares under the Exchange Act and other factors. The Shares are currently registered under the Exchange Act. Such registration may be terminated by the Company upon application to the Commission if the outstanding Shares are not included for trading in the Nasdaq/SM and if there are fewer than 300 holders of Shares of record. Termination of registration of the Shares under the Exchange Act would eliminate the information required to be furnished by the Company to its shareholders and to the Commission and would make certain provisions of the Exchange Act, such as the short-swing profit recovery provisions of Section 16(b) and the requirement of furnishing a proxy statement in connection with shareholders' meetings pursuant to Section 14(a) and the related requirement of furnishing an annual report to shareholders, no longer applicable with respect to the Shares. 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 under the Securities Act of 1933, as amended, may be impaired or eliminated. If registration of the Shares under the Exchange Act were terminated, the Shares would no longer be eligible for Nasdaq reporting. While the Shares are not currently "margin securities" under the regulations of the Federal Reserve Board, termination of registration of the Shares under the Exchange Act would result in the Shares being ineligible for inclusion on the Federal Reserve Board's list of "margin securities." The Purchaser intends to cause the Company to apply for termination of registration of the Shares under the Exchange Act as soon as possible after consummation of the Offer if the requirements for termination of registration are met. 14. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision of the Offer or the Merger Agreement and provided that the Purchaser shall not be obligated to accept for payment any Shares until (i) expiration of all applicable waiting periods under the HSR Act and (ii) satisfaction of the Minimum Condition, the Purchaser shall not be required to accept for payment or, subject to any applicable rules and 20 24 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 termination or withdrawal of the Offer), pay for, or may delay the acceptance for payment of or payment for, any Shares tendered pursuant to the Offer, or may, subject to the terms of the Merger Agreement, terminate or amend the Offer if at any time on or after the date of the Merger Agreement, and at or before the time of payment for any of such Shares, any of the following conditions exists: (a) there shall have occurred and be continuing as of the then scheduled Expiration Date (i) any general suspension of, or limitation on prices for, trading in securities on the New York Stock Exchange, or the Nasdaq National Market, (ii) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (iii) a commencement or escalation of a war, armed hostilities or other international or national calamity directly involving the United States, (iv) any material limitation (whether or not mandatory) by any governmental or regulatory authority, agency or commission, domestic or foreign ("Governmental Entity"), on the extension of credit by banks or other lending institutions in the United States, or (v) in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof; (b) the Company shall have breached or failed to perform any of its obligations, covenants or agreements under the Merger Agreement, or any representation or warranty of the Company set forth in the Merger Agreement (disregarding all qualifications and exceptions contained therein relating to knowledge, materiality or Material Adverse Effect (as defined below)) shall not have been true and correct as of the date of the Merger Agreement and as of the then scheduled Expiration Date as though made on and as of the then scheduled Expiration Date, provided that all such breaches, failures to perform and untrue representations or warranties, taken in the aggregate, shall have or shall be reasonably likely to have a Material Adverse Effect; (c) any court or Governmental Entity shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, injunction or other order which is in effect and which (i) restricts (other than restrictions which in the aggregate do not have a Material Adverse Effect on Parent, the Purchaser or the Company or which do not materially restrict the ability of Parent and the Purchaser to consummate the Offer and the Merger as originally contemplated by Parent and the Purchaser), prevents, prohibits or makes materially more costly the consummation of the Offer or the Merger, (ii) makes the acceptance for payment of, or payment for or purchase of some or all of the Shares pursuant to the Offer illegal, (iii) results in a significant delay in or restricts the ability of the Purchaser to accept for payment, pay for or purchase some or all of the Shares pursuant to the Offer or to effect the Merger, (iv) renders the Purchaser unable to accept for payment or pay for or purchase some or all of the Shares pursuant to the Offer, (v) prohibits or limits (other than limits which in the aggregate do not have a Material Adverse Effect on Parent, the Purchaser or the Company or which do not materially limit the ability of Parent to own and operate all of the business and assets of Parent and the Company after the consummation of the transactions contemplated by the Offer and the Merger Agreement) the ownership or operation by the Company, Parent or any of their subsidiaries of all or any material portion of the business or assets of the Company, or as a result of the Offer or the Merger compels the Company, Parent or any of their subsidiaries to dispose of or hold separate all or any material portion of their respective business or assets, (vi) imposes limitations on the ability of Parent or any subsidiary of Parent to hold, transfer or dispose of or exercise effectively full rights of ownership of any Shares, including, without limitation, the right to vote any Shares acquired by the Purchaser pursuant to the Offer or otherwise on all matters properly presented to the Company's shareholders including, without limitation, the approval and adoption of the Merger Agreement and the transactions contemplated thereby, (vii) requires divestiture by Parent or any affiliate of Parent of any Shares or (viii) otherwise materially adversely affects the financial condition, business or results of operations of Parent, the Purchaser or the Company or otherwise makes consummation of the Offer or the Merger unduly burdensome; (d) there shall have been threatened, instituted or pending any action, proceeding or counterclaim by or before any Governmental Entity, challenging the making of the Offer or the acquisition by the Purchaser of the Shares pursuant to the Offer or the consummation of the Merger, or seeking to obtain 21 25 any material damages, or seeking to, directly or indirectly, result in any of the consequences referred to in clauses (i) through (viii) of paragraph (c) above; (e) Any person or "group" (as such term is used in Section 13(d)(3) of the Exchange Act) other than Parent or the Purchaser or any of their affiliates shall have become the beneficial owner (as that term is used in Rule 13d-3 under the Exchange Act) of more than 25% of the outstanding Shares; (f) all consents, registrations, approvals, permits, authorizations, notices, reports or other filings required to be obtained or made by the Company, Parent or the Purchaser 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 made or obtained as of the then scheduled Expiration Date (other than the failure to receive any consent, registration, approval, permit or authorization or to make any notice, report or other filing that, in the aggregate, is not reasonably likely to have a Material Adverse Effect on Parent, the Purchaser or the Company, or would not prevent the consummation of the Offer or the Merger); (g) there shall have occurred any one or more changes or developments in the financial condition, properties, business or results of operations of the Company that, individually or in the aggregate, has had or is reasonably likely to have a Material Adverse Effect; (h) the Board of Directors of the Company (or any committee thereof) shall have withdrawn or amended, or modified in a manner adverse to Parent and the Purchaser, its recommendation of the Offer or the Merger, or shall have endorsed, approved or recommended any other Acquisition Proposal, or the Company shall have entered into any agreement with respect to an Acquisition, or the Board of Directors of the Company (or any committee thereof) shall have resolved to take any of the foregoing actions; or (i) the Merger Agreement shall have been terminated by the Company, or by Parent or the Purchaser, in accordance with its terms, or Parent or the Purchaser shall have reached an agreement or understanding in writing with the Company providing for termination or amendment of the Offer or delay in payment for the Shares; which, in the reasonable judgment of Parent and the Purchaser, in any such case, and regardless of the circumstances (excluding any direct action or inaction by Parent or the Purchaser which to Parent's and the Purchaser's knowledge is reasonably likely to cause any of the above conditions to exist) giving rise to any such conditions, make it inadvisable to proceed with the Offer and/or with such acceptance for payment of or payment for the Shares. "Material Adverse Effect" shall mean a material adverse effect on the condition, business, assets, results of operations or prospects of the Company, taken individually or as a whole, or of Parent and the Purchaser, taken individually or as a whole, as the case may be. The foregoing conditions are for the sole benefit of Parent and the Purchaser and may be asserted by Parent or the Purchaser regardless of the circumstances (excluding any direct action or inaction by Parent or the Purchaser which to Parent's and the Purchaser's knowledge is reasonably likely to cause any of the above conditions to exist) giving rise to such condition or may be waived by Parent or the Purchaser, in whole or in part at any time and from time to time, in its sole discretion. The failure by Parent or the Purchaser 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. A public announcement shall be made of a material change in, or waiver of, such conditions, and the Offer may, in certain circumstances, be extended in connection with any such change or waiver. Any determination by the Purchaser concerning the events described in this Section 14 will be final and binding upon all parties. 22 26 15. CERTAIN REGULATORY AND LEGAL MATTERS. General. Except as otherwise disclosed herein, based upon an examination of publicly available information filed by the Company with the Commission and the disclosures made by the Company pursuant to the Merger Agreement, Parent and the Purchaser are not aware of any licenses or other regulatory permits which appear to be material to the business of the Company and which might be adversely affected by the acquisition of Shares by the Purchaser pursuant to the Offer or of any approval or other action by any governmental, administrative or regulatory agency or authority which would be required for the acquisition or ownership of Shares by the Purchaser pursuant to the Offer. Should any such approval or other action be required, it is currently contemplated that such approval or action would be sought or taken. There can be no assurance that any such approval or action, if needed, would be obtained or, if obtained, that it will be obtained without substantial conditions or that adverse consequences might not result to the Company's or Parent's business or that certain parts of the Company's or Parent's business might not have to be disposed of in the event that such approvals were not obtained or such other actions were not taken, any of which could cause the Purchaser to elect to terminate the Offer without the purchase of the Shares thereunder. The Purchaser's obligation under the Offer to accept for payment and pay for Shares is subject to certain conditions. See Section 14. Antitrust Compliance. Under the HSR Act and the rules that have been promulgated thereunder by the Federal Trade Commission (the "FTC"), certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the "Antitrust Division") and the FTC and certain waiting period requirements have been satisfied. The acquisition of Shares by the Purchaser is subject to these requirements. See Section 2 as to the effect of the HSR Act on the timing of the Purchaser's obligation to accept Shares for payment. Pursuant to the HSR Act, Parent expects to file a Notification and Report Form with respect to the acquisition of Shares pursuant to the Offer with the Antitrust Division and the FTC on or about February 22, 2000. The Company has informed Parent that it expects to file its Notification and Report Form under the HSR Act on or about the same day. Under the provisions of the HSR Act applicable to the purchase of Shares pursuant to the Offer, such purchases may not be made until the expiration of a 15-day waiting period following the filing by Parent, unless a request for early termination of the waiting period is granted or unless the waiting period is extended by Parent's receipt of a request for additional information or documentary material prior thereto. If either the FTC or the Antitrust Division were to issue a request for additional information or documentary material prior to the expiration of the 15-day waiting period, the waiting period would be extended to expire at 11:59 p.m., Eastern time, on the tenth day after the date of substantial compliance by Parent with such request. Thereafter, the waiting period could be extended only by agreement or by court order. If the acquisition of Shares is delayed pursuant to a request by the FTC or the Antitrust Division for additional information or documentary material pursuant to the HSR Act, the purchase of and payment for Shares will be deferred until ten days after the request is substantially complied with unless the waiting period is sooner terminated by the FTC or the Antitrust Division. See Section 2. Only one extension of the waiting period pursuant to a request for additional information is authorized by the rules promulgated under the HSR Act, although the waiting period may also be extended by agreement or by court order. Any such extension of the waiting period will not give rise to any withdrawal rights not otherwise provided for by applicable law. See Section 4. Although the Company is required to file certain information and documentary material with the Antitrust Division and the FTC in connection with the Offer, neither the Company's failure to make such filings nor a request from the Antitrust Division or the FTC for additional information or documentary material made to the Company will extend the waiting period. The Antitrust Division and the FTC frequently scrutinize the legality under the antitrust laws of transactions such as the proposed acquisition of Shares by the Purchaser pursuant to the Offer and the Merger. At any time before or after the Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of Shares pursuant to the Offer or seeking divestiture of Shares acquired by the Purchaser or the divestiture of substantial assets of Parent, the Company or any of their respective subsidiaries. Private parties and state attorneys general may also bring legal action under the 23 27 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 a challenge is made, what the result will be. See Section 14 for certain conditions to the Offer that could become applicable in the event of such a challenge. Delaware Business Combination Law. Section 203 of the DGCL ("Section 203") provides that a Delaware corporation such as the Company may not engage in any "Business Combination" (defined to include a variety of transactions, including a merger) with any "Interested Stockholder" (defined generally as any person that, directly or indirectly, beneficially owns 15% or more of the outstanding voting stock of the corporation), or any affiliate of an Interested Stockholder, for three years after the date on which the Interested Stockholder became an Interested Stockholder. The three-year prohibition on Business Combinations with Interested Stockholders (the "Business Combination Prohibition") does not apply if certain conditions, described below, are satisfied. Section 203 provides that a beneficial owner of voting stock includes any person who, individually or together with any of its affiliates or associates, has (i) the right to acquire voting stock (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options or otherwise, (ii) the right to vote such stock pursuant to any agreement, arrangement or understanding, or (iii) any agreement, arrangement or understanding for the purposes of acquiring, holding, voting or disposing of such stock with any other person that beneficially owns, directly or indirectly, such stock. The Business Combination Prohibition does not apply to a particular Business Combination between a corporation and a particular Interested Stockholder if (i) prior to the date such Interested Stockholder became an Interested Stockholder, the board of directors of such corporation approves either the Business Combination or the transaction which resulted in the stockholder becoming an Interested Stockholder, or (ii) upon consummation of the transaction which resulted in the stockholder becoming an Interested Stockholder, the Interested Stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned by (x) persons who are directors and also officers and (y) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer, or (iii) on or subsequent to the date the stockholder becomes an Interested Stockholder, the Business Combination is approved by the board of directors of such corporation and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the Interested Stockholder. The Board of Directors of the Company has unanimously approved the Shareholder Option Agreements, the Offer and the Merger. As a result, Section 203 will not apply to the Purchaser's acquisition of Shares pursuant to the Shareholder Option Agreements or the Offer or the consummation of the Merger thereafter. Other State Laws. A number of other states have adopted laws and regulations applicable to attempts to acquire securities of corporations which are incorporated, or have substantial assets, shareholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects, in such states. In 1982, in Edgar v. MITE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover Statute, which, as a matter of state securities law, made take-overs of corporations meeting certain requirements more difficult. However, in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the Indiana Control Share Acquisition Act was constitutional. Such Act, by its terms, is applicable only to corporations that have a substantial number of shareholders in Indiana and are incorporated there. Subsequently, a number of federal courts have ruled that various state take-over statutes are unconstitutional insofar as they apply to corporations incorporated outside the state of enactment. The Purchaser does not know whether any state laws other than Section 203 will, by their terms, apply to the Offer, and the Purchaser has not attempted to comply with any state take-over statutes in connection with the Offer or the Merger, except as set forth above with respect to Section 203. The Purchaser reserves the right to challenge the validity or applicability of any state law allegedly applicable to the Offer or the Merger, and nothing in this Offer to Purchase nor any action taken in connection herewith is intended as a waiver of 24 28 that right. In the event that an assertion is made that one or more take-over statutes apply to the Offer or the Merger, and an appropriate court does not determine that such statute or statutes do not apply or are invalid as applied to the Offer or the Merger, as applicable, the Purchaser may be required to file certain documents with, or receive approvals from, the relevant state authorities, and the Purchaser might be unable to accept for payment or purchase Shares tendered pursuant to the Offer or be delayed in continuing or consummating the Offer. In any such case, the Purchaser may not be obligated to accept for payment or purchase any Shares tendered. See Section 14. "Going Private" Transactions. The Commission has adopted Rule 13e-3 under the Exchange Act which is applicable to certain "going private" transactions and which may under certain circumstances be applicable to a transaction such as the Merger. However, Rule 13e-3 would be inapplicable if (i) the Shares are deregistered under the Exchange Act prior to the Merger or (ii) the Merger is consummated within one year after the purchase of the Shares pursuant to the Offer and the amount paid per Share in the Merger is at least equal to the amount paid per Share in the Offer, as the Merger Agreement provides. If applicable, Rule 13e-3 requires, among other things, that certain financial information concerning the fairness of the proposed transaction and the consideration offered to minority shareholders in such transaction be filed with the Commission and disclosed to shareholders prior to the consummation of the transaction. The Purchaser and Parent believe the provisions of Rule 13e-3 are not applicable to the Offer or the Merger. 16. FEES AND EXPENSES. Except as set forth below, neither Parent nor the Purchaser will pay any fees or commissions to any broker, dealer or other person for soliciting tenders of Shares pursuant to the Offer. The Purchaser and Parent have retained Georgeson Shareholder Communication Inc. to act as the Information Agent and Firstar Bank, National Association to serve as the Depositary in connection with the Offer. The Information Agent may contact holders of Shares by mail, telephone, telex, telegraph, the internet and personal interview, and may request brokers, dealers and other nominee shareholders to forward material relating to the Offer to beneficial owners of Shares. 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 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) in connection with the solicitation of tenders of Shares pursuant to the Offer. Brokers, dealers, banks, trust companies and other nominees will be reimbursed by the Purchaser upon request for customary mailing and handling expenses incurred by them in forwarding material 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. The Purchaser may, however, in its discretion, take such action as it may deem necessary to make the Offer in any jurisdiction and extend the Offer to holders of Shares in such jurisdiction. Neither the Purchaser nor Parent is aware of any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. In any jurisdiction the securities, blue sky or other laws of which require the Offer to be made by a licensed broker or dealer, the Offer will be made on behalf of the Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR 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. 25 29 The Purchaser and Parent have filed with the Commission a Tender Offer Statement on Schedule TO pursuant to Rule 14d-3 under the Exchange Act, together with exhibits, furnishing certain additional information with respect to the Offer, and may file amendments thereto. Such Schedule TO and any amendments thereto, including exhibits, may be examined and copies may be obtained from the principal office of the Commission in Washington, D.C. in the manner set forth in Section 7 and is also available on-line through the Commission's EDGAR electronic filing and retrieval system. IMTC ACQUISITION CORP. February 22, 2000 26 30 SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE PURCHASER DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The following table sets forth the name, business or residence address, principal occupation or employment at the present time and during the last five years, and the name, principal business and address of any corporation or other organization in which such employment is or was conducted for each of the directors and executive officers of Parent. All directors and executive officers listed below are citizens of the United States, except for Mr. Jaehnert, who is a German citizen. The business address of Parent is 6555 West Good Hope Road, Milwaukee, Wisconsin 53223 and its principal business is described in Section 8 of the Offer to Purchase. Unless otherwise indicated, all directors and executive officers of Parent have been in their present principal occupations for the last five years and the business address of each such person is the address of Parent.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT NAME, BUSINESS OR RESIDENCE ADDRESS AND MATERIAL OCCUPATION FOR PAST FIVE YEARS - ----------------------------------- ------------------------------------------- Katherine M. Hudson President and Chief Executive Officer of Parent since Director since: 1994 1994 Peter J. Lettenberger Partner of Quarles & Brady LLP, general counsel to Quarles & Brady LLP Parent, since 1973 411 East Wisconsin Ave Milwaukee, WI 53202 Director since: 1977 Robert C. Buchanan President of Fox Valley Corporation, a specialty paper Fox Valley Corporation manufacturer 100 W. Lawrence St Appleton, Wisconsin 54911 Director since: 1987 Roger D. Peirce Private investor and consultant and Secretary and The Jor-Mac Company, Inc. Treasurer of The Jor-Mac Company, Inc., a manufacturer of 704 10th Avenue metal goods; President and Chief Executive Officer of Grafton, Wisconsin 53024 Valuation Research Corporation from 1995 to 1996 (located Director since: 1988 at 330 East Kilbourn Avenue, Milwaukee, Wisconsin) Richard A. Bemis President and Chief Executive Officer of Bemis Bemis Manufacturing Company Manufacturing Company, a manufacturer of molded plastic 300 Mill Street products Sheboygan Falls, Wisconsin 53085 Director since: 1990 Frank W. Harris Distinguished Professor of Polymer Science and Biomedical Institute for Polymer Science Engineering at the Institute of Polymer Science, University of Akron University of Akron and a member of its faculty since 244 Summer Street 1983 Polymer Building 603 Akron, Ohio 44325 Director since: 1991
I-1 31
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT NAME, BUSINESS OR RESIDENCE ADDRESS AND MATERIAL OCCUPATION FOR PAST FIVE YEARS - ----------------------------------- ------------------------------------------- Gary E. Nei Chairman of B&B Publishing, a publishing company B&B Publishing 820 Wisconsin Street Walworth, Wisconsin 53184 Director since: 1992 Irwin Helford Retired; Former Chairman of Viking Office Products, Inc. Viking Office Products, Inc. and Vice Chairman of Office Depot, Inc., both of which 950 W. 190th Street are sellers of office products, from August 1998 to 1999; Torrance, California 90502 prior to 1998 Chairman of the Board and Chief Executive Director since: 1998 Officer of Viking Office Products, Inc. Richard L. Fisk Vice President of Parent's Direct Marketing Group since 1987 David R. Hawke Vice President of Parent's Graphics Group since 1995; Managing Director of Parent's European Operation prior to 1995 Frank M. Jaehnert Vice President and Chief Financial Officer of Parent since 1996; Finance Director of Parent's Identification Solutions & Specialty Tapes Group prior to 1996 David W. Schroeder Vice President of Parent's Identification Solutions and Specialty Tapes Group since 1995; General Manager of Parent's Industrial Products Division prior to 1995 Conrad G. Goodkind Secretary of Parent since 1999 and Partner of Quarles & Quarles & Brady LLP Brady LLP, general counsel to Parent, since 1981 411 East Wisconsin Ave Milwaukee, WI 53202
Directors and Executive Officers of the Purchaser. Each director and executive officer of the Purchaser was appointed in December 1999. Katherine M. Hudson, Conrad G. Goodkind and Frank M. Jaehnert are each directors and are the President, Secretary and Vice President and Treasurer, respectively, of the Purchaser. David W. Schroeder is Vice President of the Purchaser. Information about all of the directors and executive officers of the Purchaser is set forth above. I-2 32 Facsimiles of the Letter of Transmittal, properly completed and duly executed, will be accepted. The Letter of Transmittal, certificates evidencing Shares and any other required documents should be sent or delivered by each shareholder or his or her broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of its addresses set forth below. The Depositary for the Offer is: FIRSTAR BANK, NATIONAL ASSOCIATION By Mail: By Overnight Delivery: By Hand Delivery: Corporate Trust Services Corporate Trust Services Corporate Trust Services Box 2077 1555 North River Center Drive 1555 North River Center Drive Milwaukee, WI 53201 Suite 301 Suite 301 Milwaukee, WI 53212 Milwaukee, WI 53212
By Facsimile Transmission: (For Eligible Institutions only) (414) 905-5049 To Confirm Fax Only: (414) 905-5300 ------------------------ Any questions and requests for assistance may be directed to the Information Agent at its address and telephone numbers listed below. Additional copies of this Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may also be obtained from the Information Agent. A shareholder may also contact brokers, dealers, commercial banks or trust companies for assistance concerning the Offer. The Information Agent for the Offer is: LOGO 17 State Street 10th Floor New York, NY 10004 Banks and Brokers Call Collect: (212) 440-9800 All Others Call Toll-Free: (800) 223-2064 EX-99.(A).(2) 3 FORM OF LETTER OF TRANSMITTAL 1 LETTER OF TRANSMITTAL To Tender Shares of Common Stock of IMTEC INC. at $12.00 Net Per Share Pursuant to the Offer to Purchase Dated February 22, 2000 by IMTC ACQUISITION CORP., a wholly owned, indirect subsidiary of BRADY CORPORATION THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., EASTERN TIME, ON TUESDAY, MARCH 21, 2000, UNLESS THE OFFER IS EXTENDED. The Depository for the Offer is: FIRSTAR BANK, NATIONAL ASSOCIATION
By Mail: By Hand or Overnight Delivery: Corporate Trust Services Corporate Trust Services P.O. Box 2077 1555 N. RiverCenter Drive Milwaukee, WI 53201 Suite 301 Milwaukee, WI 53212 Facsimile for Eligible Institutions: (414) 905-5049 To Confirm Facsimile Transmission by Telephone: (414) 905-5300
DESCRIPTION OF SHARES TENDERED NAME(S) AND ADDRESS(ES) OF REGISTERED OWNERS (PLEASE PRINT) (PLEASE MAKE CORRECTIONS IF NECESSARY OR, IF CERTIFICATE(S) TENDERED BLANK, FILL IN EXACTLY AS NAME(S) APPEAR(S) ON (ATTACH ADDITIONAL LIST, IF NECESSARY) CERTIFICATE(S)) (SEE INSTRUCTIONS 3 AND 4) NUMBER OF SHARES CERTIFICATE REPRESENTED BY NUMBER OF SHARES NUMBER(S)* CERTIFICATE(S)* TENDERED** TOTAL SHARES * Need not be completed by Book-Entry Stockholders. ** Unless otherwise indicated it is assumed that all Shares described above are being tendered. See Instruction 4.
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE COMPLETING THIS LETTER OF TRANSMITTAL. 2 This Letter of Transmittal is to be completed by holders of Shares (as defined below) of Imtec Inc. (the "Stockholders") if certificates evidencing Shares ("Certificates") are to be forwarded with this Letter of Transmittal or if delivery of Shares is to be made by book-entry transfer to an account maintained by Firstar Bank, National Association (the "Depositary") at The Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures set forth in Section 3 of the Offer to Purchase (as defined below). Stockholders whose Certificates are not immediately available or who cannot deliver either their Certificates for, or a Book-Entry Confirmation (as defined in Section 3 of the Offer to Purchase) with respect to, their Shares and all other required documents to the Depositary prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase) must tender their Shares according to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. See Instruction 2 hereof. Delivery of documents to the Book- Entry Transfer Facility does not constitute delivery to the Depositary. [ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY, AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER). Name of Tendering Institution: ------------------------------------------------------------------------------- Account Number: ----------------------------------------------------------------------------- Transaction Code Number: ----------------------------------------------------------------------------- [ ]CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING. PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY. Name(s) of Registered Holder(s): -------------------------------------------------------------------------- Window Ticket Number (if any): --------------------------------------------------------------------------- Date of Execution of Notice of Guaranteed Delivery: ------------------------------------------------------- Name of Institution That Guaranteed Delivery: ------------------------------------------------------------- Account Number: ------------------------------------------------------------------------------ Transaction Code Number: ------------------------------------------------------------------------------ NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. 3 Ladies and Gentlemen: The undersigned hereby tenders to IMTC Acquisition Corp., a Delaware corporation ("Purchaser") and a wholly owned, indirect subsidiary of Brady Corporation, a Wisconsin corporation ("Parent"), the above-described shares of common stock, par value $.01 per share (the "Common Stock"), of Imtec Inc., a Delaware corporation (the "Company"), pursuant to the Offer to Purchase, dated February 22, 2000 (the "Offer to Purchase"), at a price of $12.00 per Share, net to the seller in cash, on the terms and subject to the conditions set forth in the Offer to Purchase, receipt of which is hereby acknowledged, and this Letter of Transmittal (which, together with the Offer to Purchase, constitute the "Offer"). The undersigned understands that Purchaser reserves the right to transfer or assign, from time to time, in whole or in part, to one or more of its affiliates, the right to purchase the Shares tendered herewith. On the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of such extension or amendment), 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, Purchaser, all right, title and interest in and to all of the Shares being tendered hereby and any and all cash dividends, distributions, rights, other Shares or other securities issued or issuable in respect of such Shares on or after February 22, 2000 (collectively, "Distributions"), and appoints Firstar Bank, National Association (the "Depositary") the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares (and any Distributions) with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to the fullest extent of such Stockholder's rights with respect to such Shares (and any Distributions) (a) to deliver such Share Certificates (as defined below) (and any Distributions) or transfer ownership of such Shares (and any Distributions) on the account books maintained by the Book-Entry Transfer Facility, together, in either such case, with all accompanying evidence of transfer and authenticity, to or upon the order of Purchaser, (b) to present such Shares (and any Distributions) for transfer on the books of the Company and (c) to receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and any Distributions), all in accordance with the terms and the conditions of the Offer. The undersigned hereby irrevocably appoints the designees of Purchaser, and each of them, the attorneys-in-fact and proxies of the undersigned, each with full power of substitution, to the full extent of such Stockholder's rights with respect to the Shares tendered hereby which have been accepted for payment and with respect to any Distributions. The designees of Purchaser will, with respect to the Shares (and any Distributions) for which the appointment is effective, be empowered to exercise all voting and any other rights of such Stockholder, as they, in their sole discretion, may deem proper at any annual, special or adjourned meeting of Stockholders, or by written consent in lieu of any such meeting or otherwise. This proxy and power of attorney shall be irrevocable and coupled with an interest in the tendered Shares. Such appointment is effective when, and only to the extent that, Purchaser deposits the payment for such Shares with the Depositary. Upon the effectiveness of such appointment, without further action, all prior powers of attorney, proxies and consents given by the undersigned with respect to such Shares (and any Distributions) will be revoked and no subsequent powers of attorney, proxies, consents or revocations may be given (and, if given, will not be deemed effective). Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon Purchaser's acceptance for payment of such Shares, Purchaser must be able to exercise full voting rights, to the extent permitted under applicable law, with respect to such Shares (and any Distributions), including voting at any meeting of Stockholders. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares (and any Distributions) tendered hereby and, when the same are accepted for payment by Purchaser, Purchaser will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and the same will not be subject to any adverse claim. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares (and any Distributions) tendered hereby. In addition, the undersigned shall promptly remit and transfer to the Depositary for the account of Purchaser any and all Distributions in respect of the Shares tendered hereby, accompanied by appropriate documentation of transfer and, pending such remittance or 4 appropriate assurance thereof, Purchaser shall be entitled to all rights and privileges as owner of any such Distributions and may withhold the entire purchase price or deduct from the purchase price the amount or value thereof, as determined by Purchaser in its sole discretion. All authority conferred or agreed to be conferred pursuant to this Letter of Transmittal shall not be affected by, and shall survive, the death or incapacity of the undersigned and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Except as stated in the Offer to Purchaser, this tender is irrevocable. The undersigned understands that the valid tender of Shares pursuant to one of the procedures described in Section 3 of the Offer to Purchaser will constitute a binding agreement between the undersigned and 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 owner(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 owner(s) appearing under "Description of Shares Tendered." In the event that either the Special Delivery Instructions and the Special Payment Instructions are completed, please issue the check for the purchase price and/or issue any certificates for Shares not tendered or accepted for payment (and any accompanying documents, as appropriate) to, the person or persons so indicated. The undersigned recognizes that Purchaser has no obligation pursuant to the Special Payment Instructions to transfer any Shares from the name of the registered owner thereof if Purchaser does not accept for payment any of the Shares so tendered. SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if certificate(s) 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 and/or [ ] Certificates to: Name(s) - -------------------------------------------- (Please Print) Address - --------------------------------------------- (Street Address or P.O. Box) - ------------------------------------------------------- (City) (State) (Zip Code) - ------------------------------------------------------- (Tax Identification or Social Security Number) IF YOU FILL OUT THIS BOX, YOU MUST HAVE YOUR SIGNATURE GUARANTEED BELOW. SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if certificate(s) 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 shown above. Deliver: [ ] Check and/or [ ] Certificates to: Name(s) -------------------------------------------- (Please Print) Address - --------------------------------------------- (Street Address or P.O. Box) - ------------------------------------------------------- (City) (State) (Zip Code) - ------------------------------------------------------- (Tax Identification or Social Security Number) IF YOU FILL OUT THIS BOX, YOU MUST HAVE YOUR SIGNATURE GUARANTEED BELOW. 5 IMPORTANT STOCKHOLDER(S): SIGN HERE (ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW) (SEE INSTRUCTION 5) Name(s): - -------------------------------------------------------------------------------- (Please Print) Date: - ------------------------------- , 2000 - -------------------------------------------------------------------------------- (Signature(s) of Stockholder(s)) (Must be signed by registered owner(s) exactly as name(s) appear(s) on stock certificate(s) or on a security position listing or by person(s) authorized to become registered owner(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 set forth full title and see Instruction 5.) Name(s): - -------------------------------------------------------------------------------- (Please Print) Capacity (full title): - -------------------------------------------------------------------------------- Address: - -------------------------------------------------------------------------------- ------------------------------------------------------------------------- (Include Zip Code) Area Code and Telephone Number: - --------------------------------------------------------------------------- Tax Identification or Social Security No.: - --------------------------------------------------------------------- GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5) Authorized signature: - -------------------------------------------------------------------------------- Name: - -------------------------------------------------------------------------------- (Please Type or Print) Address: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Include Zip Code) Name of Firm: - -------------------------------------------------------------------------------- Date: - ------------------------------- , 2000 6 TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS (SEE INSTRUCTION 9) Name: SUBSTITUTE FORM W-9 Address: DEPARTMENT OF THE TREASURY INTERNAL REVENUE SERVICE Check appropriate box: REQUEST FOR TAXPAYER IDENTIFICATION NUMBER (TIN) Individual [ ] Corporation [ ] AND CERTIFICATION Partnership [ ] Other (specify) [ ] - ----------------------------------------------------------------------------------------------------- SSN: PART I. Please provide your taxpayer identification number in ------------------------------ the space at right. If awaiting TIN, write "Applied For" in space at right and complete the Certificate of or Awaiting Taxpayer Identification Number below. EIN: ------------------------------ - ----------------------------------------------------------------------------------------------------- PART II.For Payees exempt from backup withholding, see the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9," and complete as instructed therein. - -----------------------------------------------------------------------------------------------------
PART III--CERTIFICATION--Under penalties of perjury, I certify that: (1) The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me) and (2) I am not subject to backup withholding either because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. CERTIFICATION INSTRUCTIONS--You must cross out Item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest or dividends on your tax return. However, if after being notified by the IRS that you are subject to backup withholding, you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out Item 2. SIGNATURE: ---------------------------------------------------------------- DATE: ------------------------, 2000 YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE "APPLIED FOR" IN PART 1 OF SUBSTITUTE FORM W-9 CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER (TIN) I certify under penalties of perjury that a TIN has not been issued to me, and either (a) I have mailed or delivered an application to receive a TIN to the appropriate IRS 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 TIN by the time of payment, 31% of all reportable payments made to me will be withheld; but that such amounts will be refunded to me if I then provide a TIN within sixty (60) days. SIGNATURE: _______________________________________________________ DATE: _____ NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE TENDER OFFER. PLEASE REVIEW THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS. 7 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a financial institution (including most 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, an "Eligible Institution"). Signatures on this Letter of Transmittal need not be guaranteed (a) if this Letter of Transmittal is signed by the registered owner(s) (which term, for purposes of this document, includes any participant in any of the Book-Entry Transfer Facility's systems whose name appears on a security position listing as the owner of the Shares) of Shares tendered herewith and such registered owner has not completed the box titled "Special Payment Instructions" or the box titled "Special Delivery Instructions" in this Letter of Transmittal or (b) if such Shares are tendered for the account of an Eligible Institution. See Instruction 5. 2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES OR BOOK-ENTRY CONFIRMATIONS. This Letter of Transmittal is to be used either if certificates are to be forwarded herewith or, unless an Agent's Message is utilized, if tenders are to be made pursuant to the procedures for tender by book-entry transfer set forth in Section 3 of the Offer to Purchaser. Certificates for all physically tendered Shares ("Share Certificates"), or confirmation of any book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility of Shares tendered by book-entry transfer ("Book Entry Confirmation"), as well as this Letter of Transmittal properly completed and duly executed with any required signature guarantees, unless an Agent's Message is utilized in the case of a book-entry transfer, and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth herein on or prior to the Expiration Date (as defined in Section 1 of the Offer to Purchaser). Stockholders whose certificates for Shares are not immediately available or who cannot deliver all other required documents to the Depositary on or prior to the Expiration Date or who cannot comply with the procedures for book-entry transfer on a timely basis, may nevertheless tender their Shares by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchaser. Pursuant to such procedure: (a) such tender must be made by or through an Eligible Institution; (b) a properly completed and duly executed Notice of Guaranteed Delivery substantially in the form provided by Purchaser must be received by the Depositary prior to the Expiration Date; and (c) Share Certificates for all tendered Shares, in proper form for transfer (or a Book Entry Confirmation with respect to such Shares), as well as a Letter of Transmittal (or facsimile thereof), properly completed and duly executed with any required signature guarantees (unless, in the case of a book-entry transfer, an Agent's Message is utilized), and all other documents required by this Letter of Transmittal, must be received by the Depositary within three New York Stock Exchange Inc. trading days after the date of execution of such Notice of Guaranteed Delivery. A properly completed and duly executed Letter of Transmittal (or facsimile thereof) must accompany each such delivery of Share Certificates to the Depositary. THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. DELIVERY OF ALL SUCH DOCUMENTS WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT ALL SUCH DOCUMENTS BE SENT BY PROPERLY INSURED REGISTERED MAIL WITH RETURN RECEIPT REQUESTED. 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. 8 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 and separately signed on each page thereof in the same manner as this Letter of Transmittal is signed. 4. PARTIAL TENDERS (APPLICABLE TO CERTIFICATE STOCKHOLDERS ONLY). If fewer than all the Shares evidenced by any Share Certificate submitted are to be tendered, fill in the number of Shares which are to be tendered in the box titled "Number of Shares Tendered." In such cases, new certificate(s) for the remainder of the Shares that were evidenced by the old Share Certificate(s) but not tendered will be sent to the registered owner, unless otherwise provided in the appropriate box on this Letter of Transmittal, as soon as practicable after the Expiration Date. All Shares represented by Share Certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If this Letter of Transmittal is signed by the registered owner(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the Share Certificate(s) without alteration, enlargement or any other change whatsoever. If any of the Shares tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any of the tendered Shares are registered in different names on several Share Certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal (or facsimiles thereof) as there are different registrations of Share Certificates. If this Letter of Transmittal or any Share Certificates or stock powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and proper evidence satisfactory to Purchaser of their authority so to act must be submitted. If this Letter of Transmittal is signed by the registered owner(s) of the Share Certificate(s) listed and transmitted hereby, no endorsements of Share 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 in the name of, 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 Share Certificate(s) listed, the Share Certificate(s) must be endorsed or accompanied by the appropriate stock powers, in either case, signed exactly as the name or names of the registered owner(s) or holder(s) appear(s) on the Share Certificate(s). Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution. 6. STOCK TRANSFER TAXES. Purchaser will pay any stock transfer taxes with respect to the transfer and sale of Shares to it or to its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or (in the circumstances permitted hereby) if certificates for Shares not tendered or accepted for payment are to be registered in the name of, any person other than the registered owner(s), or if tendered Share Certificates are registered in the name of any person other than the person signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered owner(s) or such person) payable on account of the transfer to such person will be deducted from the purchase price if satisfactory evidence of the payment of such taxes, or exemption therefrom, is not submitted. EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE 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 tendered or accepted for payment are to be issued or returned to, a person other than the signer(s) of this Letter of Transmittal or if a check and/or such certificates are to be mailed to a person other than the signer(s) of this Letter of Transmittal or to an address other than that shown above under 9 "Description of Shares Tendered -- Name(s) and Address(es) of Registered Owners," the appropriate box or boxes on this Letter of Transmittal should be completed. 8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions or requests for assistance may be directed to the Information Agent at its address set forth below or from your broker, dealer, commercial bank or trust company. Additional copies of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery and other tender offer materials may be obtained from the Information Agent as set forth below, and will be furnished at Purchaser's expense. 9. SUBSTITUTE FORM W-9. Each tendering Stockholder is required to provide the Depositary with a correct Taxpayer Identification Number ("TIN"), generally the Stockholder's social security or federal employer identification number, on Substitute Form W-9 above. Failure to provide the information on the form may subject the tendering Stockholder to 31% federal income tax backup withholding on the payment of the purchase price. The tendering Stockholder may write "Applied For" in Part I of the Substitute Form W-9 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 Stockholder has written "Applied for" in Part I of the Substitute Form W-9, the Stockholder must also complete the Certificate of Awaiting Taxpayer Identification Number. Notwithstanding that "Applied For" is written in Part I of the Substitute Form W-9 and that the Stockholder has completed the Certificate of Awaiting Taxpayer Identification Number, the Depositary will withhold 31% of all payments of the purchase price thereafter until a TIN is provided to the Depositary. See Important Tax Information below. 10. LOST, DESTROYED, MUTILATED OR STOLEN CERTIFICATES. If any Share Certificate(s) representing Shares has been lost, destroyed, mutilated or stolen, the Stockholder should promptly notify the Company's stock transfer agent, American Stock Transfer and Trust Company. The Stockholder will then be instructed as to the steps that must be taken in order to replace the Share Certificate(s). This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, mutilated or destroyed Share Certificates have been followed. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY HEREOF) OR AN AGENT'S MESSAGE, TOGETHER WITH SHARE CERTIFICATES OR BOOK-ENTRY CONFIRMATION OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE. IMPORTANT TAX INFORMATION Under the federal income tax law, a Stockholder whose tendered Shares are accepted for purchase is required by law to provide the Depositary with such Stockholder's correct TIN on Substitute Form W-9 above and to certify that such TIN is correct (or that such Stockholder is awaiting a TIN) or otherwise establish a basis for exemption from backup withholding. If such Stockholder is an individual, the TIN is his or her social security number. If a Stockholder fails to provide a correct TIN to the Depositary, such Stockholder may be subject to a $50.00 penalty imposed by the Internal Revenue Service. In addition, payments that are made to such Stockholder with respect to Shares purchased pursuant to the Offer may be subject to backup withholding of 31%. Certain Stockholders (including, among others, all corporations and certain foreign individuals) may not be subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, that Stockholder must generally submit a Form W-8, signed under penalties of perjury, attesting to that individual's exempt status. A Form W-8 can be obtained from the Depositary. If backup withholding applies, the Depositary is required to withhold 31% of any payments made to the Stockholder or payee. Backup withholding is not an additional tax. Rather, the federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. 10 If "Applied for" is written in Part I of the Substitute Form W-9 and the Stockholder has completed the Certificate of Awaiting Taxpayer Identification Number, the Depositary will retain 31% of any payment of the purchase price for tendered Shares during the 60-day period following the date of the Substitute Form W-9. If a Stockholder's TIN is provided to the Depositary within 60 days of the date of the Substitute Form W-9, payment of such retained amounts will be made to such Stockholder. If a Stockholder's TIN is not provided to the Depositary within such 60-day period, the Depositary will remit such retained amounts to the Internal Revenue Service as backup withholding and shall withhold 31% of any payment of the purchase price for the tendered Shares made to such Stockholder thereafter unless such Stockholder furnishes a TIN to the Depositary prior to such payment. PURPOSE OF SUBSTITUTE FORM W-9 To prevent backup withholding on payments made to a Stockholder whose tendered Shares are accepted for purchase, the Stockholder should complete and sign the Substitute Form W-9 included in this Letter of Transmittal and provide the Stockholder's correct TIN and certify, under penalties of perjury, that the TIN provided on such form is correct (or that such Stockholder is awaiting a TIN) and that (i) such Stockholder is exempt from backup withholding; (ii) such Stockholder has not been notified by the Internal Revenue Service that such Stockholder is subject to backup withholding as a result of failure to report all interest or dividends; or (iii) the Internal Revenue Service has notified the Stockholder that the Stockholder is no longer subject to backup withholding. The Stockholder must sign and date the Substitute Form W-9 where indicated, certifying that the information on such form is correct. WHAT NUMBER TO GIVE THE DEPOSITARY. The Stockholder is required to give the Depositary the social security number or employer identification number of the record owner of the Shares. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance on which number to report. 11 The Depository for the Offer is: FIRSTAR BANK, NATIONAL ASSOCIATION
By Mail: By Hand or Overnight Delivery: Corporate Trust Services Corporate Trust Services P.O. Box 2077 1555 N. RiverCenter Drive Milwaukee, WI 53201 Suite 301 Milwaukee, WI 53212
Facsimile for Eligible Institutions: (414) 905-5049 To Confirm Facsimile Transmission by Telephone: (414) 905-5300 The Information Agent for the Offer is: LOGO 17 State Street 10th Floor New York, New York 10004 Banks and brokers call collect: (212) 440-9800 All others call toll free: (800) 223-2064 February 22, 2000. EX-99.(A).(3) 4 FORM OF NOTICE OF GUARANTEED DELIVERY 1 NOTICE OF GUARANTEED DELIVERY OF ALL OUTSTANDING SHARES OF COMMON STOCK OF IMTEC INC. PURSUANT TO THE OFFER TO PURCHASE DATED FEBRUARY 22, 2000 AT $12.00 NET PER SHARE BY IMTC ACQUISITION CORP., AN INDIRECT, WHOLLY OWNED SUBSIDIARY OF BRADY CORPORATION As set forth in Section 3 of the Offer to Purchase (as defined below), this form, or one substantially the same as this form, must be used to accept the Offer (as defined below) if the certificates representing shares of common stock, par value $.01 per share (the "Shares"), of Imtec Inc., a Delaware corporation (the "Company"), are not immediately available or time will not permit all required documents to reach Firstar Bank, National Association (the "Depositary") prior to the Expiration Date (as defined in the Offer to Purchase) or the procedures for book-entry transfer cannot be completed on a timely basis. This form may be delivered by hand or transmitted by facsimile transmission or mailed to the Depositary and must include a guarantee by an Eligible Institution (as defined in the Offer to Purchase). See Section 3 of the Offer to Purchase. The Depositary for the Offer is: FIRSTAR BANK, NATIONAL ASSOCIATION
By Mail: By Hand or Overnight Delivery: Corporate Trust Services Corporate Trust Services P.O. Box 2077 1555 N. RiverCenter Drive Milwaukee, WI 53201 Suite 301 Milwaukee, WI 53212
Facsimile for Eligible Institutions: (414) 905-5049 To Confirm Facsimile Transmission By Telephone: (414) 905-5300 DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS TO A FACSIMILE NUMBER OTHER THAN AS LISTED ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an Eligible Institution as described in the instructions to the Letter of Transmittal, 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 IMTC Acquisition Corp., a Delaware corporation ("Purchaser") and an indirect, wholly owned subsidiary of Brady Corporation, a Wisconsin corporation, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated February 22, 2000 (the "Offer to Purchase"), and the related Letter of Transmittal (which, as amended or supplemented from time to time, together constitute the "Offer"), receipt of which are hereby acknowledged, the number of Shares indicated below pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. Number of Shares: -------------------------------- Share Certificate Numbers (if available): ----------------------------------------------------- ----------------------------------------------------- If Shares will be delivered by book-entry transfer: DTC Account Number: --------------------------- Date: --------------------------------------- , 2000 Names(s) of Record Holders(s): - ----------------------------------------------------- - ----------------------------------------------------- Please Type or Print Address(es): - --------------------------------------- - ----------------------------------------------------- Zip Code Telephone Number: - ----------------------------------------------------- Area Code 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 (each, an "Eligible Institution"), hereby guarantees that either the certificates representing the Shares tendered hereby in proper form for transfer or timely confirmation of a book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility (as defined in the Offer to Purchase and pursuant to procedures set forth in Section 3 of the Offer to Purchase), 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 (as defined in the Offer to Purchase)) and any other documents required by the Letter of Transmittal, will be received by the Depositary at one of its addresses set forth above within three (3) New York Stock Exchange Inc. trading days after the date of execution hereof. 2 3 The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal, certificates for Shares and/or any other required documents to the Depositary within the time period shown above. Failure to do so could result in a financial loss to such Eligible Institution. Name of Firm: - -------------------------------------------------------------------------------- Address: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Zip Code Area Code and Telephone Number: - -------------------------------------------------------------------------------- AUTHORIZED SIGNATURE Name: - -------------------------------------------------------------------------------- Please Type or Print Title: - -------------------------------------------------------------------------------- Dated: __, 2000 NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED DELIVERY. CERTIFICATES FOR SHARES ARE TO BE DELIVERED WITH THE LETTER OF TRANSMITTAL. 3 EX-99.(A).(4) 5 FORM OF LETTER TO BROKERS, DEALERS 1 OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF IMTEC INC. AT $12.00 NET PER SHARE BY IMTC ACQUISITION CORP., A WHOLLY OWNED, INDIRECT SUBSIDIARY OF BRADY CORPORATION THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., EASTERN TIME, ON TUESDAY, MARCH 21, 2000, UNLESS THE OFFER IS EXTENDED. February 22, 2000 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We have been engaged by IMTC Acquisition Corp., a Delaware corporation ("Purchaser") and a wholly owned, indirect subsidiary of Brady Corporation, a Wisconsin corporation ("Parent"), to act as Information Agent in connection with its offer to purchase all of the outstanding shares of common stock, par value $.01 per share, of Imtec Inc., a Delaware corporation (the "Company"), at $12.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated February 22, 2000 (the "Offer to Purchase"), of Purchaser and in the related Letter of Transmittal (which, as amended or supplemented from time to time, together 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. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE TIME OF EXPIRATION OF THE OFFER THAT NUMBER OF SHARES THAT, TOGETHER WITH ANY SHARES HELD BY OR ON BEHALF OF PARENT, REPRESENTS AT LEAST 75 PERCENT OF THE ISSUED AND OUTSTANDING SHARES ON A FULLY DILUTED BASIS AND (II) ANY WAITING PERIOD APPLICABLE UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, HAVING EXPIRED OR TERMINATED. Enclosed herewith are the following documents: 1. Offer to Purchase, dated February 22, 2000; 2. Letter of Transmittal to be used by stockholders of the Company in accepting the Offer; 3. Notice of Guaranteed Delivery; 4. Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9; 5. Letter to stockholders of the Company from the Chairman of the Company, accompanied by the Company's Solicitation/Recommendation Statement on Schedule 14D-9; and 6. A printed form of a letter that may be sent to your clients for whose account you hold Shares in your name or in the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Offer. 2 The Offer is being made pursuant to an Agreement and Plan of Merger (the "Merger Agreement"), dated as of February 11, 2000, by and among the Company, Parent and Purchaser, pursuant to which, after completion of the Offer, Purchaser will be merged with and into the Company and the Company will be the surviving corporation (the "Merger") and each issued and outstanding Share (other than Shares owned by Parent, Purchaser or any subsidiary of Parent, Purchaser or the Company or held in the treasury of the Company or held by stockholders who properly exercise dissenters' rights under Delaware law, if any) shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into and represent the right to receive the price per Share paid by Purchaser in the Offer, without interest. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT, APPROVED THE OFFER AND THE MERGER, DETERMINED THAT THE OFFER AND THE MERGER ARE IN THE BEST INTERESTS OF THE HOLDERS OF SHARES AND UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), Purchaser will be deemed to have accepted for payment, and will pay for, all Shares validly tendered and not properly withdrawn by the Expiration Date (as defined in the Offer to Purchase) as, if and when Purchaser gives oral or written notice to the Depositary of the Purchaser's acceptance of the tenders of such Shares for payment pursuant to the Offer. Payment for Shares purchased pursuant to the Offer will be made only after timely receipt by the Depositary of (i) certificates for (or a timely Book-Entry Confirmation (as defined in the Offer to Purchase) with respect to) such Shares, (ii) a properly completed and duly executed Letter of Transmittal (or facsimile thereof) 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. 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 FOR SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING PAYMENT PURSUANT TO THE OFFER. The Offer is not being made (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. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of the Purchaser by one or more registered brokers or dealers that are licensed under the laws of such jurisdiction. In order to tender Shares pursuant to the Offer, a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees, or an Agent's Message (in the case of any book-entry transfer), and any other documents required by the Letter of Transmittal, should be sent to the Depositary, and either certificates representing the tendered Shares should be delivered or such Shares must be delivered to the Depositary pursuant to the procedures for book-entry transfers, all in accordance with the instructions set forth in the Letter of Transmittal and the Offer to Purchase. Neither Parent nor Purchaser 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 clients. YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., EASTERN TIME, ON TUESDAY, MARCH 21, 2000, UNLESS THE OFFER IS EXTENDED. 2 3 Any inquiries you may have with respect to the Offer may be addressed to the undersigned at the address and telephone numbers set forth on the back cover page of the Offer to Purchase. Additional copies of enclosed materials may be obtained from the Information Agent and will be furnished at Purchaser's expense. Very truly yours, GEORGESON SHAREHOLDER COMMUNICATIONS INC. NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR ANY PERSON THE AGENT OF PURCHASER, PARENT, THE COMPANY, ANY AFFILIATE OF THE COMPANY, THE INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY REPRESENTATION ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER NOT CONTAINED IN THE OFFER TO PURCHASE OR THE LETTER OF TRANSMITTAL. 3 EX-99.(A).(5) 6 FORM OF LETTER TO CLIENTS 1 OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF IMTEC INC. AT $12.00 NET PER SHARE BY IMTC ACQUISITION CORP., A WHOLLY OWNED, INDIRECT SUBSIDIARY OF BRADY CORPORATION THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., EASTERN TIME, ON TUESDAY MARCH 21, 2000, UNLESS THE OFFER IS EXTENDED. February 22, 2000 To the Holders of Common Stock of Imtec Inc.: Enclosed for your information is an Offer to Purchase, dated February 22, 2000 ("Offer to Purchase"), and the related Letter of Transmittal (which, as amended or supplemented from time to time, together constitute the "Offer"), relating to the Offer by IMTC Acquisition Corp., a Delaware corporation ("Purchaser") and a wholly owned, indirect subsidiary of Brady Corporation, a Wisconsin corporation ("Parent"), to purchase all of the outstanding shares of common stock, par value $.01 per share, of Imtec Inc. (the "Company") (the "Shares"), at $12.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer. Also enclosed is a letter to stockholders of the Company from the Chairman 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 ACCOMPANYING THIS LETTER IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT. We request instructions as to whether you wish to tender any or all of 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 offer price is $12.00 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions of the Offer. 2. The Offer is being made for all of the outstanding Shares. 3. The Offer is being made pursuant to an Agreement and Plan of Merger (the "Merger Agreement"), dated as of February 11, 2000, by and among the Company, Parent and Purchaser, pursuant to which, after completion of the Offer, Purchaser will be merged with and into the Company and the Company will be the surviving corporation (the "Merger"), and each issued and outstanding Share (other than Shares owned by Parent, Purchaser or any subsidiary of Parent, Purchaser or the Company or held in the treasury of the Company or Shares which are held by stockholders who properly exercise dissenters' rights under Delaware law, if any) shall, by virtue of the Merger, and without any action on the part of the holder thereof, be converted into and represent the right to receive the price per Share paid by Purchaser in the Offer, without interest. 2 4. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT, APPROVED THE OFFER AND THE MERGER, DETERMINED THAT THE OFFER AND THE MERGER ARE IN THE BEST INTERESTS OF THE HOLDERS OF SHARES AND UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER. 5. The Offer is conditioned upon, among other things, there being validly tendered and not withdrawn prior to the Expiration Date (as defined in the Offer to Purchase) that number of Shares which together with Shares held by or on behalf of Parent represents at least 75 percent of the then issued and outstanding Shares on a fully diluted basis (the "Minimum Tender Condition"). Subject to the terms of the Merger Agreement, the Offer is also subject to other terms and conditions, including receipt of certain regulatory approvals, set forth in the Offer to Purchase. Any or all conditions to the Offer may be waived by Purchaser. 6. The Offer and withdrawal rights will expire at 5:00 p.m., Eastern time, on Tuesday, March 21, 2000, unless the Offer is extended. 7. Any stock transfer taxes applicable to the sale of Shares to Purchaser pursuant to the Offer will be paid by Purchaser, except as otherwise provided in Instruction 6 of the Letter of Transmittal. If you wish to have us tender any or all of the Shares held by us for your account, please so instruct us by completing, executing and returning to us the instruction form set forth below. Please forward your instructions to us in ample time to permit us to submit a tender on your behalf prior to the expiration of the Offer. If you authorize the tender of your Shares, all such Shares will be tendered unless otherwise specified on the instruction form set forth below. Payment for Shares accepted for payment pursuant to the Offer will be in all cases made only after timely receipt by Firstar Bank, National Association (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, 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 3 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 FOR SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING PAYMENT PURSUANT TO THE OFFER. 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. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed made on behalf of Purchaser by the registered brokers or dealers that are licensed under the laws of such jurisdiction. An envelope in which to return your instructions to us is enclosed. 2 3 INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF IMTEC INC. AT $12.00 NET PER SHARE BY IMTC ACQUISITION CORP. A WHOLLY OWNED, INDIRECT SUBSIDIARY OF BRADY CORPORATION The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated February 22, 2000, and the related Letter of Transmittal, in connection with the offer by IMTC Acquisition Corp., a Delaware corporation ("Purchaser") and a wholly owned, indirect subsidiary of Brady Corporation, a Wisconsin corporation ("Parent"), to purchase for cash all of the outstanding shares of common stock, par value $.01 per share (the "Shares"), of Imtec Inc., a Delaware corporation (the "Company"), at $12.00 per Share, net to the seller in cash, upon the terms and conditions set forth in the Offer. This will instruct you to tender the number of Shares indicated below (or if no number is indicated below, all Shares) that are held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer and the related Letter of Transmittal. Dated: , 2000 Number of Shares to be Tendered: ---------------------- SHARES* - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Signature(s) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Please Print Name(s) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Please Print Address(es) - -------------------------------------------------------------------------------- Area Code and Telephone Number(s) - -------------------------------------------------------------------------------- Tax Identification or Social Security Number(s) - ------------------------- * Unless otherwise indicated, it will be assumed that all your Shares are to be tendered. 3 EX-99.(A).(6) 7 FORM OF GUIDELINES FOR CERT. OF TAXPAYER ID NUMBER 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. - ------------------------------------------------------------ - ------------------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE SOCIAL SECURITY NUMBER OF-- - ---------------------------------------------------- 1. An individual's The individual account 2. Two or more The actual owner of the individuals (joint account or, if combined account) funds, the first individual on the account(1) 3. Custodian account of The minor(2) a minor (Uniform Gift to Minors Act) 4. a. The usual The grantor-trustee(1) revocable savings trust (grantor is also trustee) b. So-called trust The actual owner(1) account that is not a legal or valid trust under state law 5. Sole proprietorship The owner(4) account
- ----------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE EMPLOYER IDENTIFICATION NUMBER OF-- 6. A valid trust, The legal entity(5) estate, or pension trust 7. Corporate account The corporation 8. Religious, The organization charitable, or educational organization account 9. Partnership account The partnership held in the name of the business 10. Association, club, or The organization other tax-exempt organization 11. A broker or The broker or nominee registered nominee 12. Account with the The public entity Department of Agriculture in the name of a public entity (such as a State or local government, school district, or prison) that receives agricultural program payments
- ------------------------------------------------------------ - ------------------------------------------------------------ (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. Do not furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title. NOTE: If no name is circled when there is more than one name, 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 PAGE 2 OBTAINING A NUMBER If you don't have a taxpayer identification number or you don't know your number, obtain Form SS-5 (Application for a Social Security Number Card) or Form SS-4 (Application for Employer Identification Number) from your local office of the Social Security Administration or the Internal Revenue Service and apply for a number. PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from backup withholding on ALL payments include the following: - - An organization exempt from tax under section 501(a) of the Internal Revenue Code of 1986, as amended (the "Code"), or an individual retirement plan. - - 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. Other payees that may be exempt from backup withholding include: - - A corporation. - - A financial institution. - - A registered dealer in securities or commodities registered in the United States or a possession of the United States. - - A real estate investment trust. - - A common trust fund operated by a bank under section 584(a) of the Code. - - An exempt charitable remainder trust, or a non-exempt trust described in section 4947(a)(1) or the Code. - - 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 of the Code. - - Payments to partnerships not engaged in a trade or business in the United States and which have at least one non-resident partner. - - Payments of patronage dividends where the amount received is not paid in money. - - Payments made by certain foreign organizations. - - Payments made to a nominee. Payments 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 of the Code). - - Payments described in section 6049(b)(5) of the Code to non-resident aliens. - - Payments on tax-free covenant bonds under section 1451 of the Code. - - Payments made by certain foreign organizations. Exempt payees described above should file Substitute 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. IF YOU ARE A NONRESIDENT ALIEN OR A FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER A COMPLETED INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS). 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 Sections 6041, 6041(a), 6045, and 6050A of the Code. PRIVACY ACT NOTICE.--Section 6109 of the Code requires most recipients of dividend, interest, or other payments to give taxpayer identification numbers to payers who must report the payments to the Internal Revenue Service. The Internal Revenue Service uses the numbers for identification purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Beginning January 1, 1993, payers must generally withhold 31% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE EX-99.(D).(1) 8 AGREEMENT AND PLAN OF MERGER 1 AGREEMENT AND PLAN OF MERGER BY AND AMONG BRADY CORPORATION, IMTC ACQUISITION CORP. AND IMTEC INC. DATED AS OF FEBRUARY 11, 2000 2 TABLE OF CONTENTS
PAGE ---- RECITALS.................................................... 1 ARTICLE I DEFINITIONS............................................... 1 1.1 Acquisition and Acquisition Proposal.......... 1 1.2 Affiliate..................................... 1 1.3 Agreement..................................... 1 1.4 Buildings..................................... 1 1.5 CERCLA........................................ 1 1.6 Certificate of Merger......................... 1 1.7 Closing Date.................................. 1 1.8 Code.......................................... 1 1.9 Company....................................... 1 1.10 Company Certificates.......................... 1 1.11 Company Common Stock.......................... 2 1.12 Company SEC Reports........................... 2 1.13 Company Stockholders.......................... 2 1.14 Company Special Meeting....................... 2 1.15 Confidentiality Agreement..................... 2 1.16 Continuing Directors.......................... 2 1.17 Contracts..................................... 2 1.18 DGCL.......................................... 2 1.19 Disclosure Schedule........................... 2 1.20 Dissenting Shares............................. 2 1.21 Effective Time of Merger...................... 2 1.22 Employee Benefit Plans........................ 2 1.23 Environmental Claim, Environmental Hazardous Materials, Environmental Laws, Environmental Permits and Environmental Release............. 2 1.24 ERISA......................................... 2 1.25 Exchange Act.................................. 2 1.26 Exchange Agent................................ 2 1.27 Exchange Fund................................. 2 1.28 Existing Contracts............................ 2 1.29 Existing Liens................................ 3 1.30 Existing Litigation........................... 3 1.31 Existing Permits.............................. 3 1.32 Existing Stock Options........................ 3 1.33 Existing Plans................................ 3 1.34 HSR Act....................................... 3 1.35 Indebtedness.................................. 3 1.36 Indemnified Parties........................... 3 1.37 Insurance Policies............................ 3 1.38 Knowledge..................................... 3 1.39 Knowledge of the Company...................... 3 1.40 Law........................................... 3 1.41 Lien.......................................... 3 1.42 Material Adverse Effect....................... 3 1.43 Merger........................................ 3 1.44 Merger Consideration.......................... 3 1.45 Minimum Condition............................. 3 1.46 Newco......................................... 3
i 3
PAGE ---- 1.47 Offer......................................... 3 1.48 Offer Documents............................... 4 1.49 Option Consideration.......................... 4 1.50 Parent........................................ 4 1.51 Person........................................ 4 1.52 Product Liability Matters..................... 4 1.53 Proxy Statement............................... 4 1.54 Real Estate................................... 4 1.55 Representatives............................... 4 1.56 Schedule 14D-9................................ 4 1.57 SEC........................................... 4 1.58 Securities Act................................ 4 1.59 Shareholder Option Agreements................. 4 1.60 Special Event................................. 4 1.61 Stock Award................................... 4 1.62 Stock Option Plans............................ 4 1.63 Subsidiary.................................... 4 1.64 Superior Proposal............................. 4 1.65 Surviving Corporation......................... 4 1.66 Takeover Laws................................. 4 1.67 Termination Fee............................... 4 1.68 WBCL.......................................... 4 1.69 Year 2000 Compliant........................... 4 ARTICLE II THE OFFER................................................. 5 2.1 The Offer...................................... 5 2.2 Company Actions................................ 6 ARTICLE III THE MERGER................................................ 6 3.1 The Merger.................................... 6 3.2 Effect of the Merger.......................... 7 3.3 Effective Time of Merger...................... 7 3.4 Conversion of Company Common Stock............ 7 3.5 Newco Stock................................... 7 3.6 Exchange of Company Certificates.............. 7 3.7 Stock Transfer Books.......................... 8 3.8 Stockholder's Meeting......................... 9 3.9 Dissenting Shares............................. 9 3.10 Takeover Laws................................. 9 3.11 Stock Options................................. 9 ARTICLE IV OTHER AGREEMENTS.......................................... 10 4.1 Access........................................ 10 4.2 Disclosure Schedule........................... 10 4.3 Duties Concerning Representations and Covenants........................................... 11 4.4 Deliveries of Information; Consultation....... 11 4.5 Acquisition Proposals......................... 11 4.6 Legal Conditions to Merger.................... 13 4.7 Public Announcements.......................... 13 4.8 Indemnification of Company Directors and Officers............................................ 13 4.9 Company Board................................. 14
ii 4
PAGE ---- ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY............. 14 5.1 Organization; Business........................ 14 5.2 Capitalization................................ 14 5.3 Authorization; Enforceability................. 15 5.4 No Violation or Conflict...................... 15 5.5 Title to Assets............................... 15 5.6 Litigation.................................... 15 5.7 Company SEC Reports and Books and Records..... 15 5.8 Absence of Certain Changes.................... 16 5.9 Contingent and Undisclosed Liabilities........ 16 5.10 Existing Contracts............................ 16 5.11 Insurance Policies............................ 17 5.12 Compliance with Law; No Default............... 17 5.13 Brokers....................................... 18 5.14 Patents, Trademarks and Like Assets........... 18 5.15 Permits....................................... 18 5.16 Employee Benefit Plans........................ 18 5.17 Labor Matters................................. 19 5.18 Real Estate................................... 19 5.19 No Pending Acquisitions....................... 20 5.20 Taxes......................................... 20 5.21 Information Supplied.......................... 21 5.22 Takeover Statutes............................. 21 5.23 Environmental Protection...................... 21 5.24 Certain Transactions.......................... 23 5.25 Product Matters............................... 23 5.26 Year 2000..................................... 23 5.27 Required Vote of the Company Stockholders..... 23 5.28 Representations Complete...................... 23 ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PARENT AND NEWCO........ 23 6.1 Organization.................................. 23 6.2 Authorization; Enforceability................. 24 6.3 No Violation or Conflict...................... 24 6.4 Litigation.................................... 24 6.5 Financing..................................... 24 6.6 Brokers....................................... 24 6.7 Governmental Approvals........................ 24 6.8 Offer Documents; Proxy Statement.............. 24 6.9 Representations Complete...................... 24 ARTICLE VII CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER..... 25 7.1 Carry on in Regular Course.................... 25 7.2 Use of Assets................................. 25 7.3 Contracts..................................... 25 7.4 Insurance Policies............................ 25 7.5 Employment Matters............................ 25 7.6 Contracts and Commitments..................... 25 7.7 Indebtedness.................................. 25 7.8 Preservation of Relationships................. 25
iii 5
PAGE ---- 7.9 Compliance with Laws.......................... 25 7.10 Taxes......................................... 25 7.11 Amendments.................................... 25 7.12 Dividends; Redemptions; Issuance of Stock..... 25 7.13 No Dispositions............................... 25 7.14 Dissolution; Reorganization................... 25 7.15 Litigation.................................... 25 ARTICLE VIII CONDITIONS TO CONSUMMATION OF THE MERGER.................. 26 8.1 Injunction.................................... 26 8.2 Governmental Approvals........................ 26 8.3 The Offer..................................... 26 8.4 Approval of Company Stockholders; Certificate of Merger........................................... 26 ARTICLE IX TERMINATION; MISCELLANEOUS................................ 26 9.1 Termination................................... 26 9.2 Rights on Termination; Waiver................. 27 9.3 Survival of Representations, Warranties and Covenants........................................... 27 9.4 Entire Agreement; Amendment................... 27 9.5 Expenses...................................... 27 9.6 Governing Law................................. 27 9.7 Assignment.................................... 27 9.8 Notices....................................... 27 9.9 Counterparts; Headings........................ 28 9.10 Interpretation................................ 28 9.11 Severability.................................. 28 9.12 Specific Performance.......................... 28 9.13 No Reliance................................... 28 SIGNATURES PAGE............................................. 29 ANNEX A..................................................... A-1
iv 6 AGREEMENT AND PLAN OF MERGER THIS AGREEMENT AND PLAN OF MERGER is made as of the 11th day of February, 2000 by and among BRADY CORPORATION, a Wisconsin corporation ("Parent"), IMTC ACQUISITION CORP., a Delaware corporation ("Newco"), and IMTEC INC., a Delaware corporation (the "Company"). RECITALS WHEREAS, the respective Boards of Directors of Parent, Newco and the Company have each determined that it is advisable and in the best interests of each such respective entity and their stockholders for Newco to commence a cash tender offer to purchase all outstanding shares of Company Common Stock (as defined below) at a price of $12.00 per share (the "Offer") and, following the consummation of the Offer, to merge Newco with and into the Company (the "Merger"); and WHEREAS, the Board of Directors of the Company has unanimously (i) approved the Offer and the Merger, (ii) determined that the Offer and the Merger are in the best interests of the Company Stockholders, and (iii) approved and adopted this Agreement and the transactions contemplated hereby. NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements set forth herein, the parties hereto agree as follows: ARTICLE I DEFINITIONS When used in this Agreement, the following terms shall have the meanings specified: 1.1 "ACQUISITION" AND "ACQUISITION PROPOSAL" shall have the meanings specified in Section 4.5(a) of this Agreement. 1.2 "AFFILIATE" shall have the meaning given to such term in Rule 12b-2 under the Exchange Act. 1.3 "AGREEMENT" shall mean this Agreement and Plan of Merger, together with the Exhibits and the Disclosure Schedule attached hereto, as the same may be amended from time to time in accordance with the terms hereof. 1.4 "BUILDINGS" shall mean all buildings, fixtures, structures and improvements used by the Company and located on the Real Estate. 1.5 "CERCLA" shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C.A. sec. 9601, et seq., and the rules, regulations and orders promulgated thereunder. 1.6 "CERTIFICATE OF MERGER" shall mean the appropriate Certificate of Merger to be filed with the Delaware Secretary of State in connection with the Merger. 1.7 "CLOSING DATE" shall mean: (a) That date following consummation of the Offer which is the first business day after satisfaction (or waiver) of all of the conditions set forth in Article VIII; or (b) Such other date as the parties may mutually agree to in writing. 1.8 "CODE" shall mean the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder, as the same may be in effect from time to time. 1.9 "COMPANY" shall mean Imtec Inc., a Delaware corporation. 1.10 "COMPANY CERTIFICATES" shall have the meaning specified in Section 3.6(b)(i). 1 7 1.11 "COMPANY COMMON STOCK" shall mean all of the issued and outstanding shares of common stock, $.01 par value per share, of the Company. 1.12 "COMPANY SEC REPORTS" shall mean the Company's: (a) Annual Reports on Form 10-K for the years ended June 30, 1996, 1997, 1998 and 1999 (including any amendments thereto) and related Annual Reports to Stockholders; (b) Quarterly Reports on Form 10-Q for the quarters ended September 30, 1996, December 31, 1996, March 31, 1997, September 30, 1997, December 31, 1997, March 31, 1998, September 30, 1998, December 31, 1998, March 31, 1999 and September 30, 1999; (c) Proxy Statements dated October 15, 1996, September 15, 1997 and 1998 and September 24, 1999; (d) Current Reports on Form 8-K dated February 21, 1997 (as amended) and August 26, 1997; (e) registration statements on Form S-8, filed on September 6, 1995 and October 2, 1998; and (f) all documents filed by the Company with the SEC after the date of this Agreement and prior to the Effective Time of Merger. 1.13 "COMPANY STOCKHOLDERS" shall mean all Persons owning shares of Company Common Stock on the relevant date. 1.14 "COMPANY SPECIAL MEETING" shall mean a special meeting of the Company Stockholders for the purpose of considering the Merger, this Agreement and the transactions contemplated hereby and for such other purposes as may be necessary or desirable. 1.15 "CONFIDENTIALITY AGREEMENT" shall mean the non-disclosure agreement between Parent and the Company dated as of November 2, 1999. 1.16 "CONTINUING DIRECTORS" shall have the meaning specified in Section 4.9(b) of this Agreement. 1.17 "CONTRACTS" shall mean all of the material contracts, agreements, leases, relationships and commitments, written or oral, to which the Company is a party or by which the Company is bound. 1.18 "DGCL" shall mean the Delaware General Corporation Law, as the same may be in effect from time to time. 1.19 "DISCLOSURE SCHEDULE" shall mean the Disclosure Schedule, dated the date of this Agreement, delivered by the Company to Parent contemporaneously with the execution and delivery of this Agreement. 1.20 "DISSENTING SHARES" shall have the meaning specified in Section 3.9. 1.21 "EFFECTIVE TIME OF MERGER" shall have the meaning specified in Section 3.3 of this Agreement. 1.22 "EMPLOYEE BENEFIT PLANS" shall mean any pension plan, profit sharing plan, bonus plan, incentive compensation plan, stock ownership plan, stock purchase plan, stock option plan, stock appreciation plan, employee benefit or welfare plan, employee benefit policy, retirement plan, deferred compensation plan, fringe benefit program, insurance plan, severance plan, disability plan, health care plan, sick leave plan, death benefit plan, defined contribution plan or any other plan or program to provide retirement income, fringe benefits or other benefits to former or current employees of the Company. 1.23 "ENVIRONMENTAL CLAIM," "ENVIRONMENTAL HAZARDOUS MATERIALS," "ENVIRONMENTAL LAWS," "ENVIRONMENTAL PERMITS" AND "ENVIRONMENTAL RELEASE" shall have the meanings specified in Section 5.23 of this Agreement. 1.24 "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as the same may be in effect from time to time. 1.25 "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as the same may be in effect from time to time. 1.26 "EXCHANGE AGENT" shall have the meaning specified in Section 3.6(a). 1.27 "EXCHANGE FUND" shall have the meaning specified in Section 3.6(a). 1.28 "EXISTING CONTRACTS" shall mean those Contracts which are listed and briefly described on the Disclosure Schedule. 2 8 1.29 "EXISTING LIENS" shall mean all Liens affecting any of the assets or properties of the Company on the date of this Agreement, all of which are listed and briefly described on the Disclosure Schedule. 1.30 "EXISTING LITIGATION" shall mean all pending or, to the Knowledge of the Company, threatened suits, audit inquiries, charges, workers compensation claims, product warranty claims, litigation, arbitrations, proceedings, governmental investigations, labor grievances, citations and actions of any kind against the Company, all of which are listed and briefly described on the Disclosure Schedule. 1.31 "EXISTING PERMITS" shall mean all licenses, permits, approvals, franchises, qualifications, certificates, permissions, agreements and other orders and governmental or regulatory authorizations required for the conduct of the business of the Company. All Existing Permits which are material to the Company are listed and briefly described on the Disclosure Schedule. 1.32 "EXISTING STOCK OPTIONS" shall have the meaning specified in Section 3.11(a) of this Agreement. 1.33 "EXISTING PLANS" shall mean all Employee Benefit Plans of the Company, all of which are listed and briefly described on the Disclosure Schedule. 1.34 "HSR ACT" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as the same may be in effect from time to time. 1.35 "INDEBTEDNESS" shall mean all liabilities or obligations of the Company, whether primary or secondary or absolute or contingent: (a) for borrowed money; (b) evidenced by notes, bonds, debentures or similar instruments; or (c) secured by Liens on any assets of the Company. All Indebtedness is listed and briefly described on the Disclosure Schedule. 1.36 "INDEMNIFIED PARTIES" shall have the meaning specified in Section 4.8(b). 1.37 "INSURANCE POLICIES" shall mean all of the insurance policies currently in effect and owned by the Company, all of which are listed and briefly described on the Disclosure Schedule. 1.38 "KNOWLEDGE" An individual shall be deemed to have "Knowledge" of a particular fact or other matter if such individual is actually aware of such fact or if such individual should be aware of such fact after a reasonable investigation concerning the existence of such fact or other matter. 1.39 "KNOWLEDGE OF THE COMPANY," "the Company's Knowledge" or similar terms shall mean the Knowledge of Steven D. Anton, George S. Norfleet III, James Searcy, William MacDougall and/or John Kiernan. 1.40 "LAW" shall mean any foreign, federal, state, local or other law, rule, regulation or governmental requirement or restriction of any kind, and the rules, regulations and orders promulgated thereunder by any regulatory agency, court or other Person. 1.41 "LIEN" shall mean, with respect to any asset: (a) any mortgage, pledge, lien, charge, claim, restriction, reservation, condition, easement, covenant, lease, encroachment, title defect, imposition, security interest or other encumbrance of any kind; and (b) the interest of a vendor or lessor under any conditional sale agreement, financing lease or other title retention agreement relating to such assets. 1.42 "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on the condition, business, assets, results of operations or prospects of the entity to which it refers, taken as a whole. 1.43 "MERGER" shall mean the merger of Newco with and into the Company pursuant to this Agreement and the Certificate of Merger. 1.44 "MERGER CONSIDERATION" shall have the meaning specified in Section 2.1(a) of this Agreement. 1.45 "MINIMUM CONDITION" shall have the meaning specified in Section 2.1(a) of this Agreement. 1.46 "NEWCO" shall mean IMTC Acquisition Corp., a Delaware corporation and an indirect, wholly owned Subsidiary of Parent. 1.47 "OFFER" shall have the meaning specified in Section 2.1(a) of this Agreement. 3 9 1.48 "OFFER DOCUMENTS" shall have the meaning specified in Section 2.1(c) of this Agreement. 1.49 "OPTION CONSIDERATION" shall have the meaning specified in Section 3.11(a) of this Agreement. 1.50 "PARENT" shall mean Brady Corporation, a Wisconsin corporation. 1.51 "PERSON" shall mean a natural person, corporation, trust, partnership, limited liability company, association, unincorporated organization, governmental entity, agency or branch or a department thereof, or any other legal entity. 1.52 "PRODUCT LIABILITY MATTERS" shall mean any and all product recalls, and liabilities or obligations or damages of any kind for death, disease, or injury to Persons, businesses or property relating to the products designed, produced, distributed, sold or shipped by the Company. 1.53 "PROXY STATEMENT" shall have the meaning specified in Section 5.21 of this Agreement. 1.54 "REAL ESTATE" shall mean the parcels of real property owned or leased by the Company, all of which are identified in the Disclosure Schedule. 1.55 "REPRESENTATIVES" shall have the meaning specified in Section 4.1(a) of this Agreement. 1.56 "SCHEDULE 14D-9" shall have the meaning specified in Section 2.2(b) of this Agreement. 1.57 "SEC" shall mean the Securities and Exchange Commission. 1.58 "SECURITIES ACT" shall mean the Securities Act of 1933, as the same may be in effect from time to time. 1.59 "SHAREHOLDER OPTION AGREEMENTS" shall mean the agreement dated as of December 9, 1999 between Parent and each director and all but one holder of greater than five percent (5%) of Company Common Stock obligating each such Person to tender all shares of Company Common Stock beneficially owned by such Person, and any amendments thereto, and an agreement dated as of December 9, 1999 between Parent and a holder of greater than five percent (5%) of Company Common Stock obligating such Person to tender a portion of its Company Common Stock beneficially owned by such Person pursuant to the Offer, and any amendments thereto. 1.60 "SPECIAL EVENT" shall have the meaning specified in Section 4.5(a)(iii) of this Agreement. 1.61 "STOCK AWARD" shall have the meaning specified in Section 3.11(b) of this Agreement. 1.62 "STOCK OPTION PLANS" shall have the meaning specified in Section 3.11(a) of this Agreement. 1.63 "SUBSIDIARY" shall mean, when used with reference to an entity, any other entity of which securities or other ownerships interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions, or a majority of the outstanding voting securities of which, are owned directly or indirectly by such entity. 1.64 "SUPERIOR PROPOSAL" shall have the meaning specified in Section 4.5(a) of this Agreement. 1.65 "SURVIVING CORPORATION" shall have the meaning specified in Section 3.1 of this Agreement. 1.66 "TAKEOVER LAWS" shall have the meaning specified in Section 3.10 of this Agreement. 1.67 "TERMINATION FEE" shall have the meaning specified in Section 4.5(a)(iv) of this Agreement. 1.68 "WBCL" shall mean the Wisconsin Business Corporation Law, as the same may be in effect from time to time. 1.69 "YEAR 2000 COMPLIANT" shall have the meaning specified in Section 5.26 of this Agreement. 4 10 ARTICLE II THE OFFER 2.1 THE OFFER. (a) Provided that this Agreement shall not have been terminated in accordance with Section 9.1 hereof and none of the conditions set forth in paragraphs (a) through (i) of Annex A hereto shall have occurred or be existing, as promptly as reasonably practicable (but in any event within five (5) business days from the initial public announcement of the execution of this Agreement), Parent shall cause Newco to commence an offer to purchase all outstanding shares of Company Common Stock, at a price of $12.00 per share net to the seller in cash (the "Merger Consideration"), which shall remain open for at least twenty (20) business days (the "Offer") and, subject to the conditions of the Offer, shall use its reasonable best efforts to consummate the Offer. Newco shall accept for payment shares of Company Common Stock which have been validly tendered and not withdrawn pursuant to the Offer at the earliest time following expiration of the Offer as provided in Section 2.1(b) hereof. The obligations of Newco to consummate the Offer, to accept for payment and to pay for any shares of Company Common Stock tendered shall be subject only to those conditions set forth in Annex A hereto, in addition to the condition that there be validly tendered and not properly withdrawn prior to the expiration of the Offer a number of shares of Company Common Stock which constitutes at least seventy-five percent (75%) of the then outstanding shares of Company Common Stock entitled to vote, measured on a fully diluted basis (the "Minimum Condition"). (b) Parent and Newco expressly reserve the right to waive any condition set forth in Annex A hereto (including the Minimum Condition) without the consent of the Company, and to make any other changes in the terms and conditions of the Offer; provided, however, that neither Parent nor Newco will, without the prior written consent of the Board of Directors of the Company, decrease the amount or change the form of the consideration payable in the Offer, decrease the number of shares of Company Common Stock sought pursuant to the Offer, impose additional conditions to the Offer or amend any term of the Offer in any manner adverse to the Company Stockholders. Assuming the prior satisfaction or waiver of the conditions to the Offer, Parent and Newco covenant and agree to accept for payment and pay for, in accordance with the terms of the Offer, shares of Company Common Stock tendered pursuant to the Offer as soon as permitted to do so under applicable Law. Notwithstanding the foregoing, but subject to the provisions of Section 9.1(e) of this Agreement, Parent and Newco shall have the right to (i) extend the Offer, if at the then scheduled expiration date of the Offer any of the conditions to Newco's obligation to accept for payment and pay for the shares of Company Common Stock shall not be satisfied or waived, until such time as such conditions are satisfied or waived, (ii) extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC, United States Department of Justice or United States Federal Trade Commission or the staff of any such Governmental Entities applicable to the Offer, and (iii) extend the Offer for any reason on one or more occasions for an aggregate period of not more than 30 business days (for all such extensions) beyond the latest expiration date that would otherwise be permitted under clause (i) or (ii) of this sentence. (c) As soon as reasonably practicable on the date of commencement of the Offer, Parent and Newco shall file with the SEC a Tender Offer Statement on Schedule TO with respect to the Offer which will contain the offer to purchase and form of the related letter of transmittal (together with any supplements or amendments thereto, the "Offer Documents"). The Offer Documents will comply in all material respects with the provisions of applicable federal securities Laws. Each of Parent, Newco and the Company agrees promptly to correct any information provided by it for use in the Offer Documents if and to the extent that it shall have become false or misleading in any material respect, and Parent and Newco each further agree to take all steps necessary to cause the Offer Documents as so corrected to be filed with the SEC and disseminated to the Company Stockholders, in each case as and to the extent required by applicable federal securities Laws. The Company and its counsel shall be given a reasonable opportunity to review and comment on the Offer Documents and any amendments thereto prior to the filing thereof with the SEC. 5 11 2.2 COMPANY ACTIONS. (a) The Company hereby approves of and consents to the Offer and represents that the Board of Directors of the Company, at a meeting duly called and held, has unanimously (i) determined that the Offer and the Merger, taken together, are fair to and in the best interests of the Company Stockholders, (ii) approved and adopted this Agreement and the transactions contemplated hereby, including the Offer and the Merger, and that such approval constitutes the requisite approval of the Offer, this Agreement and the Merger for purposes of Section 203(a)(1) of the DGCL, and (iii) resolved to recommend that the Company Stockholders accept the Offer, tender their shares of Company Common Stock thereunder to Newco and approve and adopt this Agreement and the Merger; provided that such recommendation may be withdrawn, modified or amended if the Board of Directors reasonably determines in good faith, based on the written advice of outside legal counsel to the Company, that such action is necessary in order for the Board of Directors of the Company to comply with its fiduciary duties under applicable Law. The Company consents to the inclusion of such recommendation and approval in the Offer Documents. The Company has been advised of the execution of the Shareholder Option Agreements and that prior to such execution the Company's Board of Directors unanimously approved such agreements for purposes of Section 203(a) of the DGCL. (b) The Company hereby agrees to file with the SEC as soon as reasonably practicable on the date of commencement of the Offer a Solicitation/Recommendation Statement on Schedule 14D-9 (together with any amendments or supplements thereto, the "Schedule 14D-9") containing the recommendations described in Section 2.2(a). The Schedule 14D-9 will comply in all material respects with the provisions of applicable federal securities Laws. The Company, Parent and Newco each agree promptly to correct any information provided by it for use in the Schedule 14D-9 if and to the extent that it shall have become false or misleading in any material respect, and the Company further agrees to take all steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the SEC and disseminated to the Company Stockholders, in each case as and to the extent required by applicable federal securities Laws. Parent and its counsel shall be given a reasonable opportunity to review and comment on the Schedule 14D-9 and any amendments thereto prior to the filing thereof with the SEC. The Company hereby consents to the inclusion in the Offer of the recommendations described in Section 2.2(a). (c) In connection with the Offer, the Company will promptly furnish Parent and Newco with mailing labels, security position listings and any available listing or computer file containing the names and addresses of the record holders of Company Common Stock as of a recent date and will furnish Parent and Newco with such information and assistance (including without limitation updated lists of the Company Stockholders, mailing labels and lists of securities positions) as Parent, Newco or their agents may reasonably request in communicating the Offer to the Company Stockholders. Subject to the requirements of applicable Law, and except for such steps as are necessary to disseminate the documents constituting the Offer and any other documents necessary to consummate the Merger, Parent and Newco and each of their Affiliates, associates and advisers shall use such information only in connection with the Offer and the Merger and, if this Agreement is terminated, will keep such information confidential with such care as is equivalent to the care exercised by such parties with respect to their respective proprietary or confidential information, and will deliver to the Company all such information (and copies thereof) then in their possession. ARTICLE III THE MERGER 3.1 THE MERGER. Subject to the terms and conditions of this Agreement, as of the Effective Time of Merger, Newco and the Company shall consummate the Merger in which (a) Newco will be merged with and into the Company and the separate corporate existence of Newco shall thereupon cease; (b) the Company shall be the successor or surviving corporation in the Merger and shall continue to be governed by the Laws of the State of Delaware; and (c) the separate corporate existence of the Company with all its rights, privileges, immunities, powers and franchises shall continue unaffected and unimpaired by the Merger. The corporation 6 12 surviving the Merger is sometimes hereinafter referred to as the "Surviving Corporation." The Merger shall be pursuant to the provisions of, and shall be with the effect provided in, the applicable provisions of the DGCL. 3.2 EFFECT OF THE MERGER. (a) The Certificate of Incorporation of Newco, as in effect immediately prior to the Effective Time of Merger, shall be the Certificate of Incorporation of the Surviving Corporation until amended in accordance with Law. (b) The Bylaws of Newco, as in effect immediately prior to the Effective Time of Merger, shall be the Bylaws of the Surviving Corporation until amended in accordance with Law. (c) The directors of Newco at the Effective Time of Merger shall, from and after the Effective Time of Merger, be the initial directors of the Surviving Corporation until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Surviving Corporation's Certificate of Incorporation and Bylaws then in effect. (d) The officers of Newco at the Effective Time of Merger shall, from and after the Effective Time of Merger, be the initial officers of the Surviving Corporation until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Surviving Corporation's Certificate of Incorporation and Bylaws. 3.3 EFFECTIVE TIME OF MERGER. The parties hereto will cause the Certificate of Merger to be executed and filed on the Closing Date as provided in the DGCL. The Merger shall become effective on the date and time of the filing of the Certificate of Merger with the Delaware Secretary of State, or such other date as is agreed upon by the parties and specified in the Certificate of Merger. The date and time upon which the Merger shall become effective is referred to in this Agreement as the "Effective Time of Merger." 3.4 CONVERSION OF COMPANY COMMON STOCK. (a) At the Effective Time of Merger, and without any action on the part of the holders thereof: (i) Each share of Company Common Stock issued and outstanding at the Effective Time of Merger (other than shares owned by Parent, Newco or any Affiliate thereof or held in the treasury of the Company or Dissenting Shares), shall be converted into the right to receive the Merger Consideration, payable to the holder thereof, without interest thereon, less any required withholding of taxes, upon surrender of the certificate formerly representing such share, and thereupon such share of Company Common Stock shall be canceled and retired and cease to exist. (ii) Any shares of capital stock of the Company that are held by the Company as treasury stock and any shares of Company Common Stock owned by Parent, Newco or any Affiliate thereof at the Effective Time of Merger shall be canceled and retired and cease to exist. 3.5 NEWCO STOCK. Each outstanding share of capital stock of Newco issued and outstanding at the Effective Time of Merger shall, by virtue of the Merger and without any action on the part of the holders thereof, be converted into one validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation. 3.6 EXCHANGE OF COMPANY CERTIFICATES. (a) EXCHANGE AGENT. As of the Effective Time of Merger, Parent shall deposit, or shall cause to be deposited, with such bank or trust company as may be designated by Parent (the "Exchange Agent") for the benefit of the holders of shares of Company Common Stock, the funds necessary to make the payments pursuant to Section 3.4 hereof (the "Exchange Fund"), and to make the appropriate payments, if any, to holders of Dissenting Shares. The Exchange Agent shall, pursuant to irrevocable instructions, make the payments provided for in the preceding sentence out of the Exchange Fund. The Exchange Agent shall invest portions of the Exchange Fund as the Parent directs, provided that all such investments shall be in obligations of or guaranteed by the United States of America, in commercial paper obligations receiving the highest rating from either Moody's Investor's Service Inc. or Standard & Poor's, or in 7 13 certificates of deposit, bank repurchase agreements or banker's acceptances of commercial banks with capital exceeding $100 million (or in a money market mutual fund comprised of the foregoing). The Exchange Fund shall not be used for any other purpose, except as provided in this Agreement. (b) EXCHANGE PROCEDURES. (i) As soon as reasonably practicable after the Effective Time of Merger, the Exchange Agent shall mail to each holder of record of a certificate or certificates which immediately prior to the Effective Time of Merger represented outstanding shares of Company Common Stock (the "Company Certificates"): (A) a letter of transmittal which shall specify that delivery shall be effected, and risk of loss and title to the Company Certificates shall pass, only upon delivery of the Company Certificates to the Exchange Agent and which shall be in such form and have such other provisions as Parent may reasonably specify; and (B) instructions to effect the surrender of the Company Certificates for payment therefor. (ii) Upon surrender of a Company Certificate for cancellation to the Exchange Agent together with such letter of transmittal, duly executed, and with such other documents as the Exchange Agent may reasonably require, the holder of such Company Certificate shall be entitled to receive in exchange therefor cash in an amount equal to the Merger Consideration multiplied by the number of shares of Company Common Stock formerly represented by such Company Certificate, and such Company Certificate shall forthwith be canceled. No interest will be paid or accrued on the cash payable upon the surrender of the Company Certificates. If payment is to be made to a Person other than the Person in whose name the Company Certificate surrendered is registered, it shall be a condition of payment that the Company Certificate so surrendered shall be properly endorsed or otherwise in proper form for transfer and that the Person requesting such payment shall pay any transfer or other taxes required by reason of the payment to a Person other than the registered holder of the Company Certificate surrendered (or establish to the satisfaction of Parent that such tax has been paid or is not applicable), and the Company Certificate so surrendered shall forthwith be canceled. (iii) Until surrendered as contemplated by this Section 3.6, each Company Certificate shall be deemed at all times after the Effective Time of Merger to represent only the right to receive the Merger Consideration in cash multiplied by the number of shares of Company Common Stock evidenced by the Company Certificate, without any interest thereon. (c) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund which remains undistributed to the Company Stockholders as of a date which is six (6) months after the Effective Time of Merger shall be delivered to Parent, upon demand, and any Company Stockholders who have not theretofore complied with this Article III shall thereafter look only to Parent for payment of their claim for the Merger Consideration. (d) NO LIABILITY. Neither the Exchange Agent nor any party to this Agreement shall be liable to any Company Stockholder for any shares of Company Common Stock or cash delivered to a public official pursuant to any abandoned property, escheat or similar Law. (e) WITHHOLDING RIGHTS. Parent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any Company Stockholder such amounts as Parent is required to deduct and withhold 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 Parent, (i) such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Company Stockholder in respect of which such deduction and withholding is made by Parent and (ii) Parent shall pay, when due, any such amounts so withheld to the appropriate taxing authority. 3.7 STOCK TRANSFER BOOKS. At the Effective Time of Merger, the stock transfer books of the Company shall be closed and there shall be no further registration of transfers of shares of Company Common Stock thereafter on the records of the Company. From and after the Effective Time of Merger, the holders of Company Certificates representing shares outstanding immediately prior to the Effective Time of Merger shall 8 14 cease to have any rights with respect to the shares of Company Common Stock represented thereby except as otherwise provided in this Agreement or by Law. 3.8 STOCKHOLDER'S MEETING. If approval by the Company Stockholders is required by applicable Law in order to consummate the Merger, the Company, acting through its Board of Directors, shall, in accordance with applicable Law: (a) Duly call, give notice of, convene and hold the Company Special Meeting as soon as reasonably practicable following the consummation of the Offer for the purpose of considering and taking action on this Agreement; (b) Include in the Proxy Statement the recommendation of the Board of Directors that the Company Stockholders vote in favor of the approval and adoption of this Agreement and the transactions contemplated hereby; and (c) Use its reasonable best efforts to (i) obtain and furnish the information required to be included by it in the Proxy Statement, and, after consultation with Parent, respond promptly to any comments made by the SEC with respect to the Proxy Statement and any preliminary version thereof and cause the Proxy Statement to be mailed to the Company Stock holders at the earliest practicable time following the consummation of the Offer, and (ii) obtain the necessary approvals of the Merger and this Agreement by the Company Stockholders. Parent agrees that, at the Company Special Meeting, all of the shares of Company Common Stock acquired pursuant to the Offer or otherwise by Parent, Newco or any other majority-owned Subsidiary of Parent will be voted in favor of the Merger and this Agreement. (d) Notwithstanding the foregoing, if, following the completion of the Offer, the Merger may be consummated under the DGCL without a vote of the Company Stockholders by virtue of the fact that Newco shall have acquired at least 90% of the then outstanding shares of Company Common Stock and if requested by Parent, the parties hereto agree to take all necessary and appropriate action to cause the Merger to become effective as soon as reasonably practicable after the acquisition of shares of Company Common Stock pursuant to the Offer without the holding of the Company Special Meeting. 3.9 DISSENTING SHARES. Notwithstanding anything in this Agreement to the contrary, in the event that appraisal rights are available in connection with the Merger pursuant to the DGCL, shares of Company Common Stock which are issued and outstanding immediately prior to the Effective Time of Merger and which are held by Company Stockholders who did not vote in favor of the Merger and who comply with all of the relevant provisions of Section 262 of the DGCL (the "Dissenting Shares") shall not be converted into the right to receive the Merger Consideration, unless and until such holders shall have failed to perfect or shall have effectively withdrawn or lost their rights to appraisal under the DGCL. If any such holder shall have failed to perfect or shall have effectively withdrawn or lost such right, such holder's shares of Company Common Stock shall thereupon be deemed to have been converted into the right to receive as of the Effective Time of Merger the Merger Consideration without any interest thereon. 3.10 TAKEOVER LAWS. The Company also has taken and will continue to take all necessary action to ensure that Section 203 of the DGCL and any other provision of any "moratorium," "control share acquisition," "business combination," "fair price," or other form of anti-takeover Laws (collectively, "Takeover Laws") of any jurisdiction that may purport to be applicable to this Agreement or the Shareholder Option Agreements are inapplicable to this Agreement, the Offer, the Shareholder Option Agreements and the Merger. The Company shall provide evidence satisfactory to Parent that it has taken all such actions. 3.11 STOCK OPTIONS. (a) Prior to the consummation of the Offer, the Company shall take all actions necessary or desirable (including obtaining all required consents from optionees) to provide for the cancellation, effective at the Effective Time of Merger, of all of the outstanding stock options (the "Existing Stock Options") heretofore granted under any stock option, employment or similar plan or arrangement of the Company or any such similar plan or agreement which benefits any person providing services to the Company (the "Stock Option Plans"), without any payment therefor except as otherwise provided in this 9 15 Section 3.11. At the Effective Time of Merger (or at such earlier time as Parent shall designate), each holder of any Existing Stock Option shall, in settlement thereof, be entitled to receive from the Surviving Corporation, an amount (subject to any applicable withholding tax) in cash equal to the product of (i) the excess of the Merger Consideration over the per share exercise or purchase price of such Existing Stock Option and (ii) the number of Shares subject to such Existing Stock Option (such amount being hereinafter referred to as the "Option Consideration"). Except as otherwise agreed to by the parties, as of the Effective Time of Merger, the Stock Option Plans shall terminate and any and all rights under any provisions in any other plan, program or arrangement providing for the issuance or grant of any other interest in respect of the capital stock of the Company shall be canceled. Notwithstanding the foregoing, no holder of an Existing Stock Option shall be entitled to any payment hereunder unless he or she delivers to Newco a consent to the cancellation of such Existing Stock Option in a form to be prescribed by Newco. (b) Prior to the Effective Time of Merger, the Company shall take all necessary and appropriate actions (including obtaining all applicable consents) to provide that, upon the Effective Time of Merger, each then outstanding restricted stock award in respect of shares of Company Common Stock and any other stock based awards (collectively, the "Stock Awards") which is subject to any vesting requirement and which was issued pursuant to a Stock Option Plan or any other plan or arrangement shall, whether or not then exercisable or vested, become 100% vested. At the Effective Time of Merger, a holder of shares of Company Common Stock underlying such Stock Award shall be entitled to receive the Merger Consideration (subject to any applicable withholding tax), upon the surrender of the Company Certificate representing such shares of Company Common Stock as provided in Section 3.6. Notwithstanding the foregoing, no holder of a Stock Award shall be entitled to any payment hereunder unless he or she delivers to Newco a consent to the cancellation of such Stock Award in a form to be prescribed by Newco. (c) From and after the date of this Agreement, the Company shall not grant any options or other rights to acquire shares of Company Common Stock. ARTICLE IV OTHER AGREEMENTS 4.1 ACCESS. (a) Upon reasonable prior notice, the Company shall (i) afford to the officers, employees, accountants, legal counsel and other representatives of Parent ("Representatives") full access, during normal business hours, to all of its properties, personnel, books, contracts, commitments and records and (ii) cooperate with Parent or its Representatives for the purpose of obtaining any consents of third parties or Governmental Entities necessary or desired by Parent or Newco for the consummation of the Offer and the Merger. Access granted to Parent or its Representatives shall also include permitting Parent and its environmental consultants to conduct Phase I environmental assessments at the Real Estate and Buildings and, if deemed appropriate by Parent based on the advice of its environmental consultants, Phase II environmental investigations and other follow-up work on the Real Estate and Buildings. All costs and expenses of such environmental assessments or investigations and other follow-up work shall be borne by Parent. Parent shall reimburse the Company for, and indemnify the Company from, any costs or expenses resulting from any damage to the Real Estate occurring in the course of such environmental assessments, investigations or follow-up work. (b) The Company, Parent and Newco agree that the provisions of the Confidentiality Agreement shall remain in full force and effect; provided that, at the Effective Time of Merger, the Confidentiality Agreement shall be deemed to have terminated without further action by the parties. 4.2 DISCLOSURE SCHEDULE. (a) DISCLOSURE SCHEDULE. Contemporaneously with the execution and delivery of this Agreement, the Company is delivering to Parent the Disclosure Schedule. The Disclosure Schedule is deemed to 10 16 constitute an integral part of this Agreement and to modify the representations, warranties, covenants or agreements of the Company contained in this Agreement to the extent that such representations, warranties, covenants or agreements expressly refer to the Disclosure Schedule. (b) UPDATES. Prior to the Closing Date, the Company shall update the Disclosure Schedule promptly by written notice to Parent to reflect any matters which have occurred from and after the date of this Agreement which, if existing on the date of this Agreement, would have been required to be described in the Disclosure Schedule. If requested by Parent, the Company shall meet and discuss with Parent any change in the Disclosure Schedule made by the Company which is, in the reasonable judgment of Parent, materially adverse to the Merger, Parent or the Company. No update of the Disclosure Schedule shall have the effect of curing any prior breach of a representation or warranty made by the Company pursuant to this Agreement unless accepted or waived by Parent. 4.3 DUTIES CONCERNING REPRESENTATIONS AND COVENANTS. Each party to this Agreement shall: (a) to the extent within its control, use its reasonable best efforts to cause all of its representations and warranties contained in this Agreement to be true and correct in all respects at the Effective Time of Merger with the same force and effect as if such representations and warranties had been made on and as of the Effective Time of Merger; (b) use its reasonable best efforts to obtain any governmental or third party consents or approvals required by this Agreement, to prevent any preliminary or permanent injunction or other order by a court of competent jurisdiction or governmental entity relating to the transactions contemplated by this Agreement and to cause all of the conditions precedent set forth in Article VIII of this Agreement to be satisfied; and (c) use its reasonable best efforts to take, or cause to be taken, all action, and to do, or cause to be done, all other things necessary, proper or advisable under applicable Laws and regulations to consummate and make effective the transactions contemplated by this Agreement, including without limitation, the Offer and the Merger. Each party shall promptly inform the other parties after it becomes aware that any condition precedent set forth in Article VIII hereof or any condition in Annex A hereto will not, or is not reasonably likely to, be satisfied. 4.4 DELIVERIES OF INFORMATION; CONSULTATION. (a) DELIVERIES. Prior to the Effective Time of Merger, the Company shall furnish promptly to Parent: (i) a copy of each report, schedule and other document filed by it or received by it pursuant to the requirements of federal or state securities Laws or any other applicable Laws promptly after such documents are available; (ii) the monthly financial statements of the Company and financial statements by unit or business segment (as prepared in accordance with its normal accounting procedures) promptly after such financial statements are available; (iii) a summary of any action taken by the Company's Board of Directors, or any committee thereof; and (iv) all other information concerning the business, properties and personnel of the Company as Parent may reasonably request. (b) CONSULTATION. Prior to the Effective Time of Merger, the Company shall advise Representatives of Parent on a regular and frequent basis with respect to operational matters and the general status of ongoing business operations of the Company. (c) PERMITS. Prior to the Effective Time of Merger, the Company shall use all reasonable efforts to maintain in effect all Existing Permits. The Company shall notify Parent promptly in the event that it becomes aware of any complaint or proceeding which could result in the termination or non-renewal of any material Existing Permit. 4.5 ACQUISITION PROPOSALS. (a) DEFINITIONS. As used in this Agreement, the following terms shall have the meanings specified: (i) "Acquisition" shall mean any or all of the following, other than the Offer and the Merger: (A) a merger, share exchange, consolidation, reorganization, combination or similar transaction involving the Company; (B) a purchase, exchange or tender offer for 20% or more of the outstanding shares of Company Common Stock; (C) a purchase, lease or other acquisition of all or any significant portion of the assets or any equity interest (or any option (other than Existing Stock 11 17 Options), warrant or security convertible into any equity interest), of the Company; or (D) any other transaction the consummation of which could reasonably be expected to impede, interfere with, prevent or delay the Offer or the Merger. (ii) "Acquisition Proposal" shall mean any inquiry, request for information, expression of interest, indication of a desire to have discussions, or the making of any proposal, by any Person concerning an Acquisition. (iii) "Special Event" shall mean any of the following to occur on or prior to December 9, 2000; (A) a Person unrelated to Parent shall have consummated, or shall have publicly announced or proposed and subsequently consummated, a tender or exchange offer for shares of Company Common Stock representing, on a fully diluted basis, 20% or more of the outstanding shares of Company Common Stock; (B) a Person unrelated to Parent shall have consummated an Acquisition or the Company shall have entered into an agreement with respect to an Acquisition; (C) the Company shall have terminated this Agreement as provided in Section 9.1(c) (i) of this Agreement or otherwise for the purpose of pursuing an Acquisition Proposal; (D) Parent shall have terminated this Agreement as provided in Section 9.1(b)(i) or 9.1(b)(ii) of this Agreement; (E) the Board of Directors of the Company shall have withdrawn or materially modified or changed its favorable recommendation of the Offer, the Merger or this Agreement, or shall have approved or recommended any Acquisition Proposal or Acquisition; (F) Parent and Newco shall have terminated this Agreement pursuant to Section 9.1(b)(iii) (but only if Parent and Newco terminated the Offer pursuant to paragraphs (b), (e), (g) or (h) of Annex A); or (G) the Company shall have terminated this Agreement pursuant to Section 9.1(c)(ii)(y) when the Offer is terminated by Parent and Newco under the circumstances contemplated by Section 9.1(b)(iii) of this Agreement (but only if Parent and Newco terminated the Offer pursuant to paragraphs (b), (e), (g) or (h) of Annex A). (iv) "Termination Fee" shall mean $25,000.00 (v) "Superior Proposal" shall mean a written bona fide, unsolicited Acquisition Proposal by any Person (other than Parent) which the Board of Directors determines in good faith, and in the exercise of reasonable judgment, to be more favorable to the Company and the Company Stockholders than the Offer and the Merger from a financial point of view, which proposal is capable of being consummated without undue delay and has the requisite financing committed to it or, as determined in good faith, and in the exercise of reasonable judgment, is reasonably capable of being financed by such Person. (b) ACQUISITION PROPOSALS. The Company shall not, and shall cause all of its officers, directors, employees, agents, Affiliates or Representatives (including, without limitation, any investment banker, financial adviser, attorney or accountant retained or engaged by the Company) to not, directly or indirectly: (i) initiate, solicit or encourage any inquiries concerning an Acquisition or an Acquisition Proposal; (ii) engage in any negotiations concerning, or provide any confidential information or data to, or have any discussions with, any Person relating to an Acquisition or an Acquisition Proposal; (iii) facilitate any effort or attempt to make or implement an Acquisition Proposal; or (iv) consummate, agree or commit to consummate any Acquisition or Acquisition Proposal. The Company shall immediately cease or cause to be terminated any existing activities, discussions or negotiations with any Person with respect to any of the foregoing activities. Notwithstanding the foregoing, the Board of Directors of the Company may furnish information about the Company to the Person making a Superior Proposal pursuant to a confidentiality agreement in customary form and participate in discussions and negotiations regarding such Superior Proposal if the Board of Directors of the Company determines in good faith, upon the written advice of outside legal counsel, that the failure to take such action would violate its fiduciary duties to the Company Stockholders under applicable Law. In addition, the Company will be permitted to take and disclose to the Company Stockholders a position contemplated by Rules 14d-9 and 14e-2(a) under the Exchange Act with respect to an Acquisition Proposal by means of a tender offer. The Company shall notify Parent orally and in writing of any Acquisition Proposal, within 24 hours from 12 18 the receipt thereof, specifying all of the material terms and conditions of such Acquisition Proposal and identifying the Person making such Acquisition Proposal, shall keep Parent informed of the status and all material developments and information regarding the Acquisition Proposal, and shall give Parent five (5) business days' prior notice and an opportunity to negotiate with the Company before entering into, executing or agreeing to any Acquisition or Acquisition Proposal. (c) TERMINATION FEE. In order to induce Parent to enter into this Agreement and to compensate Parent for the time and expenses incurred in connection with this Agreement and the transactions contemplated by this Agreement and the losses suffered by Parent from foregone opportunities, upon the occurrence of a Special Event, the Company shall pay the Termination Fee to Parent and shall reimburse Parent for all documented out-of-pocket fees and expenses incurred by Parent and Newco in connection with the preparation and negotiation of this Agreement and the consummation of the transactions contemplated hereby. Such amount shall be paid in immediately available funds within three (3) business days following the occurrence of the Special Event. If the Company fails to pay the Termination Fee and make such reimbursement when due, the unpaid portion of the Termination Fee (including interest thereon) and such reimbursement shall accrue interest at the lesser of the rate of fifteen percent (15%) per annum or the maximum amount allowed by law until paid. 4.6 LEGAL CONDITIONS TO MERGER. Each of the Company and Parent will: (a) take all reasonable actions necessary to comply promptly with all legal requirements which may be imposed on it with respect to the Offer and the Merger (including furnishing all information required in connection with approvals of or filings with any governmental entity as described in Section 8.2 of this Agreement); (b) promptly cooperate with and furnish information to each other in connection with any such requirements imposed upon any of them in connection with the Offer and the Merger; and (c) take all reasonable actions necessary to obtain (and cooperate with each other in obtaining) any consent, authorization, order or approval of, or any exemption by, any governmental entity or other Person, required to be obtained or made by the Company and Parent in connection with the Offer, the Merger or the taking of any action contemplated thereby or by this Agreement. 4.7 PUBLIC ANNOUNCEMENTS. The Company and Parent will not, without the prior written consent of the other party, develop or distribute any news release and other public information disclosure with respect to this Agreement or any of the transactions contemplated hereby, except that a party may make such disclosure if in the written opinion of a party's outside legal counsel, such disclosure is necessary to avoid committing a violation of Law, court order or applicable stock exchange regulation. In such event, the disclosing party shall use its reasonable efforts to give advance notice to the other party. 4.8 INDEMNIFICATION OF COMPANY DIRECTORS AND OFFICERS. (a) The Certificate of Incorporation and Bylaws of the Surviving Corporation shall contain provisions with respect to indemnification substantially as set forth in the Certificate of Incorporation and Bylaws of the Company on the date of this Agreement, which provisions shall not be amended, repealed or otherwise modified for a period of three (3) years after the Effective Time of Merger in any manner that would adversely affect the rights thereunder of individuals who at any time prior to the Effective Time of Merger were directors or officers of the Company in respect of actions or omissions occurring at or prior to the Effective Time of Merger, unless such modification is required by Law; provided, that in the event any claim or claims are asserted or made within such three-year period, all rights to indemnification in respect of any such claim or claims shall continue until disposition of any and all such claims. (b) Parent shall cause to be maintained in effect for the Indemnified Parties (as defined below) for not less than three (3) years the current policies of directors and officers liability insurance and fiduciary liability insurance maintained by the Company with respect to matters occurring at or prior to the Effective Time of Merger; provided, that Parent may substitute therefor policies of substantially the same coverage containing terms and conditions which are no less advantageous to the Company's present or former directors or officers or other employees covered by such insurance policies prior to the Effective Time of Merger (the "Indemnified Parties"). Notwithstanding the foregoing, in no case shall Parent or the Surviving Corporation be required to pay an annual premium for such insurance greater than 125% of 13 19 the last annual premium paid prior to the date hereof. Should payment of the maximum amount of premium provided for in the previous sentence not allow the purchase of an amount of such insurance equal to the amount provided under the current policies, Parent shall purchase the maximum amount of insurance available for 125% of the last annual premium. 4.9 COMPANY BOARD. (a) Promptly upon the purchase by Newco pursuant to the Offer or otherwise of such number of shares of Company Common Stock as represents at least a majority of the outstanding shares thereof, and from time to time thereafter, Newco shall be entitled to designate such number of directors, rounded up to the next whole number, on the Board of Directors of the Company as will give Newco representation on the Board of Directors of the Company equal to the product of the number of directors on the Board of Directors of the Company and the percentage that such number of shares of Company Common Stock so purchased bears to the number of shares of Company Common Stock outstanding, and the Company shall, upon request by Newco, promptly increase the size of the Board of Directors of the Company or use its best efforts to secure the resignations of such number of directors as is necessary to provide Newco with such level of representation and shall cause Newco designees to be so elected. The Company will also use its best efforts to cause persons designated by Newco to constitute the same percentage as is on the entire Board of Directors of the Company to be on each committee of the Board of Directors of the Company. The Company's obligations to appoint designees to its Board of Directors shall be subject to Section 14(f) of the Exchange Act. At the request of Newco, the Company shall take all actions necessary to effect any such election or appointment of Newco's designees, including mailing to its stockholders the information required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder which, unless Parent otherwise elects, shall be so mailed together with the Schedule 14D-9. Parent and Newco will promptly supply to the Company all information with respect to themselves and their respective officers, directors and Affiliates required by such Section and Rule. (b) Following the election or appointment of Newco's designees pursuant to Section 4.9(a) and prior to the Effective Time of Merger, and so long as there shall be at least one Continuing Director (as defined below), any amendment of this Agreement requiring action by the Board of Directors of the Company, any extension of time for the performance of any of the obligations or other acts of Parent or Newco under this Agreement and any waiver of compliance with any of the agreements or conditions under this Agreement for the benefit of the Company will require the concurrence of a majority of the directors of the Company then in office who are directors of the Company on the date hereof (the "Continuing Directors"). ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY Except as set forth in the relevant section of the Disclosure Schedule, the Company hereby represents and warrants to Parent and Newco that: 5.1 ORGANIZATION; BUSINESS. The Company is a corporation duly organized, validly existing and in good standing under the Laws of the state of Delaware and is qualified and in good standing as a foreign corporation in each jurisdiction where the failure to qualify would have a Material Adverse Effect on the Company. The Company has all requisite corporate power and authority to own its properties and to carry on its business as it is now being conducted. The Company has heretofore made available to Parent complete and correct copies of its Certificate of Incorporation and Bylaws. The Company does not have and has not ever had a Subsidiary. 5.2 CAPITALIZATION. The entire authorized capital stock of the Company consists of 5,000,000 shares of common stock, $.01 par value per share, of which 1,635,313 shares are issued and outstanding. All of the issued and outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable. The Disclosure Schedule lists all outstanding options and other rights to acquire shares of the Company's capital stock, which lists include the holder's name, number of shares underlying the options or other rights, the exercise price, grant date and applicable vesting provisions. Except 14 20 as set forth on the Disclosure Schedule, there are no outstanding or authorized options, warrants, calls, rights (including preemptive rights), commitments or any other agreements of any character to which the Company is a party, or to which it may be bound, requiring it to issue, transfer, sell, purchase, redeem or acquire any shares of capital stock or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of capital stock of the Company. There are no outstanding obligations of the Company to repurchase, redeem or otherwise acquire any shares of capital stock or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of capital stock of the Company. There are no voting trusts of other agreements or understandings to which the Company is a party with respect to the voting of capital stock of the Company. 5.3 AUTHORIZATION; ENFORCEABILITY. The Company has all requisite corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been duly authorized by unanimous vote of the Board of Directors of the Company and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement or to consummate the transactions contemplated hereby (other than, with respect to the Merger, if required, the approval and adoption of this Agreement by the Company Stockholders). The Board of Directors has unanimously determined that the Offer and the Merger are fair to and in the best interests of the Company Stockholders and has unanimously determined to recommend that the Company Stockholders approve the Merger and this Agreement. This Agreement is, and the other documents and instruments required by this Agreement to be executed and delivered by the Company will be, when executed and delivered by the Company, the valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as the enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws generally affecting the rights of creditors and subject to general equity principles. 5.4 NO VIOLATION OR CONFLICT. The execution, delivery and performance of this Agreement by the Company do not and will not: (a) conflict with or violate any Law or order, writ, injunction or decree applicable to the Company or any of its assets; (b) conflict with or violate the Certificate of Incorporation or Bylaws of the Company; or (c) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration or Lien) under any Contract. The execution, delivery and performance of this Agreement by the Company do not and will not require any consent, approval, authorization or permit of, or filing with or notification to, any governmental or regulatory authority, except (i) in connection with the applicable requirements of the HSR Act, (ii) pursuant to the applicable requirements of the Exchange Act, (iii) the filing of the Certificate of Merger pursuant to the DGCL, (iv) as may be required by any applicable state securities or "blue sky" Laws or state Takeover Laws, (v) where the failure to obtain such consent, approval, authorization or permit, or to make such filing or notification is not material and would not prevent, materially delay or materially impair the ability of the Company to consummate the transactions contemplated by this Agreement, or (vi) as set forth in the Disclosure Schedule. 5.5 TITLE TO ASSETS. The Company owns good and valid title to the assets and properties which it owns or purports to own, free and clear of any and all Liens, except the Existing Liens. 5.6 LITIGATION. Except for the Existing Litigation: (a) there is no litigation, arbitration, proceeding, governmental investigation, citation or action of any kind pending or, to the Knowledge of the Company, threatened, against or relating to the Company, and, to the Company's Knowledge, there is no basis for any such action; and (b) there are no actions, suits or proceedings pending or, to the Knowledge of the Company, threatened, against the Company by any Person which question the legality, validity or propriety of the transactions contemplated by this Agreement. 5.7 COMPANY SEC REPORTS AND BOOKS AND RECORDS. (a) The Company SEC Reports: include all reports, registration statements, definitive proxy statements, prospectuses and amendments thereto filed or required to be filed by the Company with the 15 21 SEC since June 30, 1996; did not or will not, as the case may be, contain as of their respective dates any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and otherwise complied or will comply, as the case may be, in all material respects with the then applicable requirements of the Exchange Act and the Securities Act, as the case may be, and the then applicable rules and regulations of the SEC thereunder. (b) The audited financial statements and unaudited interim financial statements of the Company included in the Company SEC Reports have been or will be, as the case may be, prepared in accordance with generally accepted accounting principles applied on a consistent basis (except as may be indicated therein or in the notes thereto) and fairly present the financial position of the Company as of the dates thereof and the results of its operations and changes in financial position for the periods then ended, subject, in the case of the unaudited interim financial statements, to normal year-end and audit adjustments and any other adjustments described therein. 5.8 ABSENCE OF CERTAIN CHANGES. Except as disclosed in the Company SEC Reports and the Disclosure Schedule, since September 30, 1999: (a) There has not been any change with respect to the Company which has had or is reasonably likely to have a Material Adverse Effect; (b) There has not been any damage, destruction or loss (whether or not covered by insurance) to the properties or assets of the Company which has had or is reasonably likely to have a Material Adverse Effect; (c) There has not been any transaction or commitment by the Company outside the ordinary course of business, except for the transactions contemplated by this Agreement or as set forth in the Disclosure Schedule; (d) The business of the Company has been carried on only in the ordinary course and in the manner consistent with past practice; (e) The Company has not incurred any material Liens or Indebtedness; (f) There has not been any increase in the compensation (including bonuses) payable or to become payable by the Company to any of its officers, or any increase in the compensation payable to other employees or agents of the Company other than in the ordinary course of business and in such amounts and at such times as are consistent with the Company's past practice or any adoption or amendment of any bonus, pension, retirement, profit sharing or stock option plan, arrangement or agreement made to or with any of such officers or employees; (g) There has not been any declaration or payment or setting aside the payment of any dividend or any distribution in respect of the capital stock of the Company or any direct or indirect redemption, purchase or other acquisition of any such stock by the Company; (h) The Company has not made any change to its accounting practices or methods, and has not made any tax elections; and (i) There has not been any other transaction outside of the ordinary course of business. 5.9 CONTINGENT AND UNDISCLOSED LIABILITIES. The Company has not guaranteed or become a surety and it is not otherwise contingently liable for the obligations of any other Person. The Company has no material liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) except for those which: (a) are disclosed in the Company SEC Reports, the Disclosure Schedule or this Agreement; or (b) arose in the ordinary course of business since September 30, 1999. 5.10 EXISTING CONTRACTS. The Existing Contracts are the only Contracts which constitute: (a) A lease of, or agreement to purchase or sell, any capital assets, Real Estate or Building, other than agreements in the ordinary course of business; 16 22 (b) Any collective bargaining or union labor contracts; (c) Any Employee Benefit Plan; or any management, consulting, employment, personal service, agency or other contractor contracts providing for employment or rendition of services which: (i) create other than an at will employment relationship or (ii) provide for any commission, bonus, profit sharing, incentive, retirement, severance, termination, consulting or additional compensation; (d) Any agreements or notes evidencing any Indebtedness; (e) Any agreement with a customer or supplier of the Company, other than regular invoices, sales confirmations and purchase orders; (f) An agreement for the storage, transportation, treatment or disposal of any Environmental Hazardous Material; (g) A power of attorney (revocable or irrevocable) given to any Person by the Company that is in force; (h) An agreement by the Company not to engage or compete in any business or in any geographical area; (i) An agreement restricting the right of the Company to use or disclose any information in its possession; (j) A partnership, joint venture or similar arrangement; (k) A license, royalty agreement, distributor agreement, manufacturer's or sales representative agreement or reseller agreement; (l) A Contract with any officer, director, employee or Affiliate of the Company; or (m) Any other agreement which (i) involves an amount in excess of $50,000 or (ii) is not in the ordinary course of business of the Company or is not cancelable on 60 days or less notice to the other parties thereto. True and complete copies of the Existing Contracts have been delivered to Parent, and the Company has fully performed each material term, covenant and condition of each Existing Contract which is to be performed by it at or before the date hereof. Each of the Existing Contracts is in full force and effect and constitutes a legal and binding obligation of the Company and, to the Knowledge of the Company, constitutes the legal and binding obligation of the other parties thereto. 5.11 INSURANCE POLICIES. All real and personal property owned or leased by the Company has been and is being insured against in amounts adequate for the assets insured, and the Company maintains liability insurance against, such insurable risks and in such amounts as are set forth in the Insurance Policies. The Insurance Policies constitute all insurance coverage owned by the Company and are in full force and effect, and the Company has not received notice, and has no Knowledge of any cancellation or threat of cancellation of such insurance. All assets of the Company have been and are being used in all material respects in a normal business-like manner. Except as described in the Disclosure Schedule, no property damage, personal injury or liability claims are pending or, to the Company's Knowledge, threatened, against the Company that are not covered by insurance. Within the past three (3) years, no insurance company has canceled any insurance (of any type) maintained by the Company. To the Knowledge of the Company, the cost of any insurance currently maintained by the Company will not increase upon renewal other than increases consistent with the general upward trend in the cost of obtaining insurance. 5.12 COMPLIANCE WITH LAW; NO DEFAULT. The Company is not in conflict with, in default with respect to or in violation of, (i) any Law applicable to the Company or by which any property or asset of the Company is bound or affected or (ii) any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the Company is a party or by which the Company, or any property or asset of the Company, is bound or affected, in each case except for any such conflicts, defaults or 17 23 violations that have not had and are not reasonably expected to have a Material Adverse Effect or a material adverse effect on the ability of the parties to consummate the Offer or the Merger. 5.13 BROKERS. The Company has not incurred any brokers', finders', investment banking, advisory or any similar fee in connection with the transactions contemplated by this Agreement. 5.14 PATENTS, TRADEMARKS AND LIKE ASSETS. All trademarks, trade names, copyrights, service marks, domain names, Internet addresses, patents and registrations and applications therefor owned by or used by the Company in its business are listed and briefly described in the Disclosure Schedule. All of such assets that have been registered have been properly registered, all pending registrations and applications have been properly filed and all maintenance, renewal and other fees relating to such registrations are current. No proceedings have been instituted or are pending or, to the Knowledge of the Company, threatened, which challenge the validity or the ownership of any of the foregoing except as set forth in the Disclosure Schedule. The Company has no Knowledge of the use or infringement of any such trademarks, trade names, copyrights, service marks, domain names, Internet addresses, patents and applications by any other Person except as set forth in the Disclosure Schedule. The Company has not entered into any patent or trademark license, technology transfer, non-disclosure or non-competition agreement relating to its business except as set forth in the Disclosure Schedule. The Company owns (or possesses adequate and enforceable licenses or other rights to use) all trademarks, trade names, copyrights, patents, inventions, processes and other intellectual property rights used in the conduct of its business. The Company does not infringe on the intellectual property rights of others. The Company has taken reasonable and necessary steps to protect its rights in all trademarks, trade names, service marks, domain names, Internet addresses, copyrights, patents, inventions and processes used in the conduct of its business and, to the Knowledge of the Company, no such rights have been lost or are in jeopardy of being lost through failure to act by the Company. 5.15 PERMITS. The Existing Permits listed on the Disclosure Schedule constitute all material licenses, permits, approvals, franchises, qualifications, permissions, agreements and other authorizations which the Company currently has and needs for the conduct of its business. Each Existing Permit is in full force and effect, the Company is in compliance with all material obligations, restrictions or requirements thereof, and no facts or circumstances exist which are reasonably likely to cause any of the material Existing Permits to be terminated, suspended or further qualified or restricted. 5.16 EMPLOYEE BENEFIT PLANS. (a) Except for the Existing Plans, the Company does not maintain, and is not bound by, any Employee Benefit Plan. Each Existing Plan that is an "employee benefit plan" as defined in ERISA is in compliance in all material respects with ERISA. All of the Existing Plans which are intended to meet the requirements of Section 401(a) of the Code have been determined by the Internal Revenue Service to be "qualified" within the meaning of the Code, and there are no facts which would adversely affect the qualified status of any of the Existing Plans. Each Existing Plan has been administered in accordance with its terms and is in material compliance with all applicable Laws. Any past Employee Benefit Plan that has been terminated was done so in compliance in all material respects with all applicable Laws, and there is no basis for further liability or obligation of the Company pursuant to any past Employee Benefit Plan. There is no litigation, action or proceeding pending or, to the knowledge of the Company, threatened or proposed, relating to any Employee Benefit Plan. (b) There is no accumulated funding deficiency, within the meaning of ERISA or the Code, in connection with the Existing Plans, and all material contributions required to be made by the Company to any Existing Plan have been made on or before their due dates and the Company has accrued the amount of contributions to each Existing Plan to be made for its current plan year. No reportable event, as defined in ERISA, has occurred in connection with the Existing Plans. The Existing Plans have not, and the trustees or administrators of the Existing Plans have not, engaged in any prohibited transaction as defined in ERISA or the Code. All reports and information relating to each Existing Plan required to be disclosed or provided to participants have been timely disclosed or provided. 18 24 (c) Except as set forth on the Disclosure Schedule, neither the Company nor any Existing Plan provides or has any obligation to provide (or contribute to the cost of) post-retirement (or post-termination of service) welfare benefits with respect to current or former employees of the Company, including without limitation post-retirement medical, dental, life insurance, severance or any similar benefit, whether provided on an insured or self-insured basis. (d) The Company is not required to contribute to any multi-employer plan, as defined in ERISA. The Company has not withdrawn from a multi-employer plan where such withdrawal has resulted or would result in any "withdrawal liability" within the meaning of ERISA that has not been fully paid. (e) Each Existing Plan that is an "employee welfare benefit plan" as defined in ERISA may be amended or terminated at any time after the Effective Time of Merger without liability to the Company. (f) With respect to each Existing Plan, the Company has complied with the applicable health care continuation and notice provisions of the Consolidation Omnibus Budget Reconciliation Act of 1985 and the proposed regulations thereunder, and the applicable requirements of the Family Leave Act of 1993 and the regulations thereunder. (g) The Offer, the Merger and the consummation of the transactions contemplated by this Agreement will not entitle any current or former employee of the Company to severance benefits or any other payment, except as set forth in the Disclosure Schedule, or accelerate the time of payment or vesting, or increase the amount of compensation due any such employee. (h) Correct and complete copies of all Existing Plans, together with recent summary plan descriptions, IRS determination letters, Forms 5500, and actuarial reports (if applicable), material employee communications regarding Existing Plans, all trust agreements, insurance contracts, accounts or other documents which establish funding vehicles for any Existing Plan and the latest financial statements thereof have been delivered to Parent. 5.17 LABOR MATTERS. (a) The Company is not and has never been a party to any collective bargaining or other labor union contract or agreement. There is no pending or, to the Company's Knowledge, threatened labor dispute, strike or work stoppage against the Company and since July 1, 1994, except as disclosed in the Disclosure Schedule, the Company has not experienced any labor dispute, strike or work stoppage. (b) There is no pending or, to the Company's Knowledge, threatened charge or complaint against the Company by or before the National Labor Relations Board or any representative thereof, or any comparable state agency or authorities. There is no present or former employee of the Company who has any claim against the Company (whether under Law, any employment agreement or otherwise) on account of or for: (i) overtime pay, other than overtime pay for the current payroll period; (ii) wages or salaries, other than wages or salaries for the current payroll period; or (iii) vacations, sick leave, time off or pay in lieu of vacation, sick leave or time off, other than vacation, sick leave or time off (or pay in lieu thereof) earned in the 12-month period immediately preceding the date of this Agreement or incurred in the ordinary course of business and appearing as a liability on the most recent financial statements included in the Company SEC Reports. (c) There are no pending and unresolved claims by any Person against the Company arising out of any statute, ordinance or regulation relating to discrimination to employees or employee practices or occupational or safety and health standards. (d) No union organizing activities are in process or, to the Knowledge of the Company, contemplated and no petitions have been filed for union organization or representation of employees. The Company has not committed any unfair labor practices which have not been remedied. 5.18 REAL ESTATE. The Real Estate: (a) constitutes all real property and improvements leased or owned by the Company; (b) except as set forth on the Disclosure Schedule, is not subject to any sub-leases or tenancies of any kind (other than the Company); (c) is not in the possession of any adverse possessors; 19 25 (d) has direct access to and from a public road or street; (e) is used in a manner which is consistent with applicable Law; (f) is, and has been since the date of possession thereof by the Company, in the peaceful possession of the Company; and (g) is served by all water, sewer, electrical, telephone, drainage and other utilities required for the normal operations of the Buildings and Real Estate. The Company has previously delivered to Parent correct and complete copies of all title insurance policies or commitments maintained by the Company with respect to the Real Estate. 5.19 NO PENDING ACQUISITIONS. Except for this Agreement, the Company is not a party to or bound by any agreement, undertaking or commitment with respect to an Acquisition. 5.20 TAXES. (a) The Company has timely and properly filed all federal, state, local and foreign tax returns which were required to be filed and such returns are true, complete and accurate in all material respects. The Company has paid or made adequate provision, in reserves reflected in its financial statements included in the Company SEC Reports in accordance with generally accepted accounting principles, for the payment of all taxes (including interest and penalties) and withholding amounts shown to be due on such returns. No tax deficiencies have been proposed or assessed against the Company, and, to the Company's Knowledge, there is no basis in fact for the assessment of any tax or penalty tax against the Company. No issue has been raised in any prior tax audit which, by application of the same or similar principles, could reasonably be expected upon a future tax audit to result in a proposed deficiency for any period. (b) No tax return of the Company is under audit or examination by any taxing authority, and no written or, to the Company's Knowledge, unwritten notice of such an audit or examination has been received by the Company. Each deficiency (if any) resulting from any audit or examination relating to taxes by any taxing authority has been paid, except for deficiencies being contested in good faith and which are described in the Disclosure Schedule. The income tax returns of the Company have been closed by audit by the Internal Revenue Service or by operation of the applicable statute of limitations for all fiscal years through and including June 30, 1996, and the state income, sales and use or gross proceeds tax returns of the Company have been closed by audit or by operation of the applicable statute of limitations for all fiscal years, except as described on the Disclosure Schedule. The Company has not consented to any extension of the statute of limitations with respect to any open tax returns. The Company has not made any elections under Section 341(f) of the Code. (c) There are no tax Liens upon any property or assets of the Company except for Liens for current taxes not yet due and payable. (d) Except as set forth on the Disclosure Schedule, the Company is not a party to and is not bound by any tax sharing agreement, tax indemnity obligation or similar agreement, arrangement or practice with respect to taxes. All elections with respect to taxes affecting the Company as of the date hereof are set forth on the Disclosure Schedule. (e) The disallowance of a deduction under Section 162(m) of the Code for employee remuneration will not apply to any amount paid or payable by the Company under any Contract, company stock or option plan, Employee Benefit Plan, program, arrangement or understanding currently in effect. (f) Any amount or any entitlement that could be received (whether in cash or property or the vesting of property) as a result of any transaction contemplated by this Agreement by any employee, officer or director of the Company who is a "disqualified individual" (as such term is defined in proposed Treasury Regulation Section 1.280G-1) under any employment, severance or termination agreement, other compensation arrangement or Employee Benefit Plan currently in effect would not be characterized as an "excess parachute payment" (as such term is defined in Section 280G(b)(1) of the Code). (g) The Company has delivered to Parent correct and complete copies of all tax returns and reports of the Company filed for all periods not barred by the applicable statute of limitations. 20 26 5.21 INFORMATION SUPPLIED. (a) None of the information supplied or to be supplied by or on behalf of the Company or any Affiliate of the Company for inclusion in the Offer Documents will, at the times such documents are filed with the SEC and are mailed to the Company Stockholders, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading, or to correct any statement made in any communication with respect to the Offer previously filed with the SEC or disseminated to the Company Stockholders. The Schedule 14D-9 will not, at the time the Schedule 14D-9 is filed with the SEC and at all times prior to the purchase of Company Common Stock by Newco pursuant to the Offer, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading, except that no representation or warranty is made by the Company with respect to information supplied in writing by Parent, Newco or any Affiliate of Parent or Newco expressly for inclusion therein. The Schedule 14D-9 will comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations of the SEC thereunder. (b) The Proxy Statement, and any other schedule or document required to be filed by the Company in connection with the Merger, will not, at the time the Proxy Statement is first mailed and at the time of the Special Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading, or to correct any statement made in any earlier communications with respect to the solicitation of any proxy or approval for the Merger in connection with which the Proxy Statement shall be mailed, except that no representation or warranty is made by the Company with respect to information supplied in writing by Parent, Newco or an Affiliate of Parent or Newco expressly for inclusion therein. The Proxy Statement will comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations of the SEC promulgated thereunder. The letter to the Company Stockholders, notice of meeting, proxy statement and form of proxy, or the information statement, as the case may be, that may be provided to the Company Stockholders in connection with the Merger (including any amendments or supplements), and any schedules required to be filed with the SEC in connection therewith, as from time to time amended or supplemented, are collectively referred to as the "Proxy Statement." 5.22 TAKEOVER STATUTES. The Board of Directors of the Company has taken all actions required to render the provisions of Section 203 of the DGCL, and any other provision of any Takeover Laws of any jurisdiction that may purport to be applicable to this Agreement or the Shareholder Option Agreements, inapplicable to this Agreement, the Offer, Shareholder Option Agreements and the Merger. 5.23 ENVIRONMENTAL PROTECTION. (a) As used in this Section 5.23 of this Agreement: (i) "Environmental Claim" shall mean any and all administrative, regulatory or judicial actions, suits, demands, demand letters, directives, claims, Liens, investigations, proceedings or notices of noncompliance or violation (written or oral) by any Person alleging potential liability (including, without limitation, potential liability for enforcement, investigatory costs, cleanup costs, governmental response costs, removal costs, remedial costs, natural resources damages, property damages, personal injuries, or penalties) arising out of, based on or resulting from: (A) the presence, or release into the environment, of any Environmental Hazardous Materials at any location, whether or not owned by the Company; or (B) circumstances forming the basis of any violation or alleged violation, of any Environmental Law; or (C) any and all claims by any Person seeking damages, contribution, indemnification, cost, recovery, compensation or injunctive relief resulting from the presence or Environmental Release of any Environmental Hazardous Materials. 21 27 (ii) "Environmental Hazardous Materials" shall mean: (A) any petroleum or petroleum products, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, and transformers or other equipment that contain dielectric fluid containing levels of polychlorinated biphenyls (PCBs) and radon gas; and (B) any chemicals, materials or substances which are now defined as or included in the definition of "hazardous substances," "hazardous wastes," "hazardous materials," "extremely hazardous wastes," "restricted hazardous wastes," "toxic substances," "toxic pollutants," or words of similar import, under any Environmental Law; and (C) any other chemical, material, substance or waste, exposure to which is now prohibited, limited or regulated by any governmental authority. (iii) "Environmental Laws" shall mean all Laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata), including, without limitation, Laws and regulations relating to Environmental Releases or threatened Environmental Releases of Environmental Hazardous Materials, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Environmental Hazardous Materials. (iv) "Environmental Release" shall mean any release, spill, emission, leaking, injection, deposit, disposal, discharge, dispersal, leaching or mitigation from or into the atmosphere, soil, surface water, groundwater or property. (b) Except as set forth in the Disclosure Schedule, the Company: (i) is in compliance in all material respects with all applicable Environmental Laws; and (ii) has not received any communication (written or oral), from a governmental authority, that alleges that the Company is not in compliance with applicable Environmental Laws. (c) Except as set forth in the Disclosure Schedule, the Company has obtained all material environmental, health and safety permits and governmental authorizations (collectively, the "Environmental Permits") necessary for its operations, and all such permits are in good standing and the Company is in compliance in all material respects with all terms and conditions of the Environmental Permits. (d) Except as set forth in the Disclosure Schedule, there is no Environmental Claim pending or, to the Knowledge of the Company, threatened against the Company or against any Person whose liability for any Environmental Claim the Company has or may have retained or assumed either contractually or by operation of Law, or against any real or personal property or operations which the Company owns, leases or manages and, to the Knowledge of the Company, there is no basis for any Environmental Claim. (e) Except as set forth in the Disclosure Schedule, there have been no Environmental Releases of any Environmental Hazardous Material by the Company, by any Person on real property owned, used, leased or operated by the Company or by a Person on real property owned, used, leased or operated by such Person that constitutes an Environmental Release on the real property owned, used, leased or operated by the Company in violation of any Environmental Law. (f) No real property at any time owned, operated, used or controlled by the Company is currently listed on the National Priorities List or the Comprehensive Environmental Response, Compensation and Liability Information System, both promulgated under CERCLA, or on any comparable state list, and the Company has not received any written notice from any Person under or relating to CERCLA or any comparable state or local Law. (g) To the Company's Knowledge, no off-site location at which the Company has disposed or arranged for the disposal of any waste is listed on the National Priorities List or on any comparable state list and the Company has not received any written notice from any Person with respect to any off-site location, of potential or actual liability or a written request for information from any Person under or relating to CERCLA or any comparable state or local Law. 22 28 5.24 CERTAIN TRANSACTIONS. No director, officer, partner, employee, Affiliate or associate of the Company (a) has borrowed any monies from or has outstanding any indebtedness or other similar obligations to the Company, (b) owns any direct or indirect interest of any kind (other than the ownership of less than 5% of the stock of a publicly traded company) in, or is a director, officer, employee, partner, Affiliate or associate of, or consultant or lender to, or borrower from, or has the right to participate in the management, operations or profits of, any Person or entity which is (i) a competitor, supplier, customer, distributor, lessor, tenant, creditor or debtor of the Company, (ii) engaged in a business related to the business of the Company or (iii) participated in any transaction to which the Company is a party; or (c) is otherwise a party to any contract, arrangement or understanding with the Company. 5.25 PRODUCT MATTERS. All instances of Product Liability Matters that have occurred and for which notice has been received by the Company within the past three (3) years are listed on the Disclosure Schedule, including without limitation any product recall, re-work or post-sale warning or similar action conducted with respect to the Company's products. 5.26 YEAR 2000. All internal computer systems that are material to the business, finances or operations of the Company are (a) able to receive, record, store, process, calculate, manipulate and output dates from and after January 1, 2000, time periods that include January 1, 2000 and information that is dependent on or relates to such dates or time periods, in the same manner and with the same accuracy, functionality, data integrity and performance as when dates or time periods prior to January 1, 2000 are involved and (b) able to store and output date information in a manner that is unambiguous as to century ("Year 2000 Compliant"). To the knowledge of the Company and upon due inquiry, the systems of the Company's material suppliers are Year 2000 Compliant. 5.27 REQUIRED VOTE OF THE COMPANY STOCKHOLDERS. Unless the Merger is consummated in accordance with Section 253 of the DGCL as contemplated by Section 3.8(d), the only vote of the Company Stockholders required to adopt the plan of merger contained in this Agreement and approve the Merger is the affirmative vote of the holders of not less than a majority of the outstanding Company Common Stock. No other vote of the Company Stockholders is required by Law, the Certificate of Incorporation or Bylaws of the Company as currently in effect or otherwise to adopt the plan of merger contained in this Agreement and approve the Merger. Newco will have full voting power with respect to any Company Common Stock purchased pursuant to the Offer. 5.28 REPRESENTATIONS COMPLETE. None of the representations or warranties made by the Company herein or in the Disclosure Schedule, in any certificate furnished by the Company pursuant to this Agreement or in the Company SEC Reports, when all such documents are read together in their entirety, contains or will contain at the Effective Time of Merger any untrue statement of a material fact, or omits or will omit at the Effective Time of Merger to state any material fact necessary in order to make the statements contained herein or therein, in light of the circumstances under which they are made, not misleading. ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PARENT AND NEWCO Parent and Newco hereby represent and warrant to the Company that: 6.1 ORGANIZATION. (a) Parent is a corporation duly and validly organized and existing under the Laws of the State of Wisconsin. Newco is a corporation duly and validly organized and existing under the Laws of the State of Delaware, and is a wholly owned Subsidiary of Parent recently formed for the purpose of engaging in the transactions described in the Agreement and has no operating history. (b) Each of Parent and Newco has full corporate power and authority and all material franchises, permits, licenses, approvals, authorizations, registrations, certificates, grants and orders necessary to carry on its business as it is now conducted and to own, lease and operate its assets and properties. 23 29 6.2 AUTHORIZATION; ENFORCEABILITY. The execution, delivery and performance of this Agreement by Parent and Newco and all of the documents and instruments required by this Agreement to be executed and delivered by Parent and Newco are within the corporate power of Parent and Newco and have been duly authorized by all necessary corporate action by Parent and Newco. This Agreement is, and the other documents and instruments required by this Agreement to be executed and delivered by Parent and Newco will be, when executed and delivered by Parent and Newco, the valid and binding obligations of Parent and Newco, enforceable against Parent and Newco in accordance with their respective terms, except as the enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws generally affecting the rights of creditors and subject to general equity principles. 6.3 NO VIOLATION OR CONFLICT. The execution, delivery and performance of this Agreement by Parent and Newco do not and will not conflict with or violate any Law, the Articles of Incorporation or Bylaws of Parent, the Certificate of Incorporation or Bylaws of Newco or any material contract or agreement to which Parent or Newco is a party or by which either of them is bound, except for violations which would not, individually or in the aggregate, have a Material Adverse Effect on the ability of Parent or Newco to consummate the transactions contemplated hereby. 6.4 LITIGATION. There are no actions, suits or proceedings against Parent or Newco, or both, pending or, to the Knowledge of Parent or Newco or both, threatened by any Person which question the validity, legality or propriety of the transactions contemplated by this Agreement. 6.5 FINANCING. Parent and Newco have or will have at the time required sufficient funds available to consummate the Offer and the Merger and the other transactions contemplated hereby, including the payment of related fees and expenses. 6.6 BROKERS. Neither Parent nor Newco has incurred any brokers', finders', investment banking, advisory or any similar fee in connection with the transactions contemplated by this Agreement. 6.7 GOVERNMENTAL APPROVALS. No permission, approval, determination, consent or waiver by, or any declaration, filing or registration with, any governmental or regulatory authority is required in connection with the execution, delivery and performance of this Agreement by Parent and Newco except (i) in connection with the applicable requirements of the HSR Act; (ii) pursuant to the applicable requirements of the Exchange Act; (iii) the filing of the Certificate of Merger pursuant to the DGCL, (iv) as may be required by any applicable state securities or "blue sky" Laws or state Takeover Laws, (v) where the failure to obtain such consent, approval, permission, or waiver, or to make such declaration, filing or registration is not material and would not affect their respective abilities to consummate the transactions contemplated by this Agreement. 6.8 OFFER DOCUMENTS; PROXY STATEMENT. The Offer Documents will comply in all material respects with applicable federal securities Laws, except that no representation is made by Parent or Newco with respect to information supplied by the Company in writing for inclusion in the Offer Documents or any amendments or supplements thereto. None of the information supplied by Parent, Newco or their Affiliates in writing for inclusion in the Proxy Statement or any amendments or supplements thereto will, at the respective times the Proxy Statement or any amendments or supplements thereto are filed with the SEC, at the time the Proxy Statement or any amendments or supplements thereto are mailed to the Company Stockholders, or at the time of the Company Special Meeting or at the Effective Time of Merger, 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. 6.9 REPRESENTATIONS COMPLETE. None of the representations or warranties made by Parent herein, in any certificate furnished by Parent pursuant to this Agreement or in the Offer Documents, when all such documents are read together in their entirety, contains or will contain at the Effective Time of Merger any untrue statement of a material fact, or omits or will omit at the Effective Time of Merger to state any material fact necessary in order to make the statements contained herein or therein, in light of the circumstances under which they are made, not misleading. 24 30 ARTICLE VII CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER From and after the date of this Agreement and until the Effective Time of Merger, the Company shall: 7.1 CARRY ON IN REGULAR COURSE. Diligently carry on its business in the regular course and substantially in the same manner as heretofore and shall not make or institute any unusual or novel methods of purchase, sale, lease, management, accounting or operation. 7.2 USE OF ASSETS. Use, operate, maintain and repair all of its assets and properties consistent with its normal business practices. 7.3 CONTRACTS. Not modify or amend any Existing Contract in any material respect and not do any act or omit to do any act, or permit any act or omission to act, which will cause a breach or termination of any of the Contracts. 7.4 INSURANCE POLICIES. Maintain all of the Insurance Policies in full force and effect. 7.5 EMPLOYMENT MATTERS. Not: (a) except as described in the Disclosure Schedule, grant any increase in the rate of pay of any of its employees, directors or officers; (b) institute or amend any Employee Benefit Plan; or (c) enter into or modify any written employment, severance, bonus, benefit, termination or related arrangement with any Person. 7.6 CONTRACTS AND COMMITMENTS. Not enter into any contract or commitment or engage in any transaction not in the usual and ordinary course of business and consistent with its normal business practices, and not, without Parent's consent which consent shall not be unreasonably withheld, purchase, lease, sell or dispose of any capital assets. 7.7 INDEBTEDNESS. Not create, incur or assume any Indebtedness, Lien, except in the ordinary course of business, or permit the imposition of any Lien. 7.8 PRESERVATION OF RELATIONSHIPS. Use its reasonable best efforts to preserve its business organization intact, to retain the services of its present officers and key employees and to preserve the goodwill of suppliers, customers, creditors and others having business relationships with the Company. 7.9 COMPLIANCE WITH LAWS. Comply in all material respects with all applicable Laws. 7.10 TAXES. Timely and properly file all federal, state, local and foreign tax returns which are required to be filed, and pay or make provision for the payment of all taxes owed by it. 7.11 AMENDMENTS. Not amend its Certificate of Incorporation or Bylaws. 7.12 DIVIDENDS; REDEMPTIONS; ISSUANCE OF STOCK. Not: (a) issue any additional shares of stock of any class (except for the issuance of shares upon exercise of options outstanding as of the date of this Agreement) or grant any warrants, options or rights to subscribe for or acquire any additional shares of stock of any class; (b) declare or pay any dividend or make any capital or surplus distributions of any nature (including special dividends); or (c) directly or indirectly redeem, purchase or otherwise acquire, split, combine, recapitalize or reclassify any of its capital stock or liquidate in whole or in part. 7.13 NO DISPOSITIONS. Not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any of its assets, except in the ordinary course of business consistent with past practice. 7.14 DISSOLUTION; REORGANIZATION. Not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company. 7.15 LITIGATION. Not settle or compromise any material claims, litigation or governmental or administrative proceedings. 25 31 ARTICLE VIII CONDITIONS TO CONSUMMATION OF THE MERGER The respective obligations of each party to effect the Merger are subject to the satisfaction or waiver, where permissible, at or prior to the Effective Time of Merger of the following conditions: 8.1 INJUNCTION. There shall not be in effect any statute, rule, regulation, executive order, decree, ruling or injunction or other order of a court or governmental or regulatory agency of competent jurisdiction directing that the transactions contemplated herein not be consummated; provided, however, that prior to invoking this condition each party shall use its reasonable best efforts to have any such decree, ruling, injunction or order vacated. 8.2 GOVERNMENTAL APPROVALS. (a) All governmental consents, orders and approvals legally required for the consummation of the Merger and the transactions contemplated hereby shall have been obtained and be in effect at the Effective Time of Merger. (b) All necessary requirements of the HSR Act shall have been complied with and any "waiting periods" applicable to the Merger and to the transactions described in this Agreement, including any secondary acquisitions, which are imposed by the HSR Act shall have expired prior to the Closing Date or shall have been terminated by the appropriate agency. 8.3 THE OFFER. Newco shall have purchased in accordance with the terms of the Offer all shares of Company Common Stock validly tendered and not withdrawn pursuant to the Offer. 8.4 APPROVAL OF COMPANY STOCKHOLDERS; CERTIFICATE OF MERGER. To the extent required by applicable Law, this Agreement, the Merger and the transactions contemplated by this Agreement shall have received the requisite approval and authorization of the Company Stock holders; provided that Parent, Newco and their Affiliates shall vote all of their shares of Company Common Stock in favor of the Merger. ARTICLE IX TERMINATION; MISCELLANEOUS 9.1 TERMINATION. This Agreement may be terminated and the Offer and the Merger may be abandoned at any time prior to the Effective Time of Merger as follows: (a) By mutual written agreement duly authorized by the Boards of Directors of Parent, Newco and the Company; (b) By Parent and Newco if (i) the Board of Directors of the Company shall have withdrawn or materially modified or changed its favorable recommendation of the Offer, the Merger or this Agreement, or shall have approved or recommended any Acquisition Proposal or Acquisition; (ii) the Company shall have breached Section 4.5(b) of this Agreement or shall have resolved to effect any of the actions referred to in Section 4.5(b); or (iii) Newco shall have otherwise terminated the Offer in accordance with the terms of this Agreement, including Annex A, without purchasing shares of Company Common Stock pursuant to the Offer; (c) By the Company if (i) the Board of Directors of the Company shall have determined in good faith, upon the written advice of outside legal counsel, that its fiduciary duties require the termination of this Agreement in order to pursue a Superior Proposal; or (ii) Newco shall have (x) failed to commence the Offer within five business days following the date of this Agreement or (y) terminated the Offer without purchasing shares of Company Common Stock pursuant to the Offer; (d) By either Parent (including Newco) or the Company if the other party shall have breached in any material respect any of its representations, warranties, covenants or other agreements contained in this Agreement (other than a breach by the Company of Section 4.5(b) hereof, in which case Parent 26 32 shall have the right to terminate this Agreement as provided in Section 9.1(b)(ii) above), which breach is incapable of being cured or shall not have been cured within 30 days after the giving of written notice to the breaching party; or (e) By either Parent (including Newco) or the Company (i) if Newco shall not have purchased shares of Company Common Stock pursuant to the Offer on or before June 30, 2000 (provided, however, that the right to terminate this Agreement under this Section 9.1(e) shall not be available to any party whose action or failure to act has been the cause of or resulted in such failure to purchase); or (ii) if any court of competent jurisdiction or any other governmental body or regulatory authority shall have issued an order, decree or ruling or taken any other action permanently restraining, enjoining or otherwise prohibiting the Offer or the Merger and such order, decree, ruling or other action shall have become final and non-appealable. 9.2 RIGHTS ON TERMINATION; WAIVER. If this Agreement is terminated pursuant to Section 9.1 of this Agreement, all further obligations of the parties under or pursuant to this Agreement shall terminate without further liability of any party to the others, provided that: (a) the obligations of Parent and Newco contained in Sections 4.1(b), 4.7, 9.2 and 9.5 of this Agreement shall survive any such termination; (b) the obligations of the Company contained in Sections 4.1(b), 4.5(c), 4.7, 9.2 and 9.5 of this Agreement shall survive any such termination; and (c) each party to this Agreement shall retain any and all remedies which it may have for breach of contract provided by Law. 9.3 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All representations and warranties of the parties contained in this Agreement or made pursuant to this Agreement shall terminate and be of no further force and effect beyond the Effective Time of Merger. This Section 9.3 shall not limit any covenant or agreement of the parties hereto which by its terms contemplates performance after the Effective Time of Merger or the purchase of shares of Company Common Stock by Newco pursuant to the Offer. 9.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the documents referred to in this Agreement and required to be delivered pursuant to this Agreement constitute the entire agreement among the parties pertaining to the subject matter of this Agreement, and supersede all prior and contemporaneous agreements, understandings, negotiations and discussions of the parties, whether oral or written, and there are no warranties, representations or other agreements between the parties in connection with the subject matter of this Agreement, except as specifically set forth in this Agreement. This Agreement may be amended by the parties at any time prior to the Effective Time of Merger, but no amendment, supplement, modification, waiver or termination of this Agreement shall be binding unless executed in writing by the parties to be bound thereby. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision of this Agreement, whether or not similar, nor shall such waiver constitute a continuing waiver unless otherwise expressly provided. 9.5 EXPENSES. Except as provided in Section 4.5(c) hereof, all costs and expenses incurred in connection with this Agreement and the transactions contemplated by this Agreement shall be paid by the party incurring such expenses, whether or not the Offer and the Merger are consummated. 9.6 GOVERNING LAW. This Agreement shall be construed and interpreted according to the Laws of the State of Delaware without regard to applicable conflicts of law. 9.7 ASSIGNMENT. Prior to the Effective Time of Merger, this Agreement shall not be assigned by any party without the prior written consent of the other parties, provided that Parent or Newco may assign any of their respective rights and obligations to any direct or indirect subsidiary of Parent, but no such assignment shall relieve Parent or Newco, as the case may be, of its obligations hereunder. 9.8 NOTICES. All communications or notices required or permitted by this Agreement shall be in writing and shall be deemed to have been given at the earlier of the date when actually delivered to an officer of a party by personal delivery or telephonic facsimile transmission or when deposited in the United States mail, 27 33 certified or registered mail, postage prepaid, return receipt requested, and addressed as follows, unless and until any of such parties notifies the others in accordance with this Section of a change of address: If to Parent or Newco: Brady Corporation or IMTC Acquisition Corp. Attn: Gary L. Johnson 6555 W. Good Hope Road Milwaukee, WI 53223 Fax No.: 414-438-6801 with a copy to: Quarles & Brady LLP Attention: Conrad G. Goodkind 411 East Wisconsin Avenue Milwaukee, WI 53202 Fax No.: 414-271-3552 If to the Company: Imtec Inc. Attention: Ralph Crump One Imtec Lane Bellows Falls, VT 05101 Fax No.: 802-463-4334 with a copy to: Cooperman Levitt Winikoff Lester & Newman, P.C. Attention: Ira I. Roxland 800 Third Avenue New York, New York 10022-7601 Fax No.: 212-755-2839
9.9 COUNTERPARTS; HEADINGS. This Agreement may be executed in several counterparts, each of which shall be deemed an original, but such counterparts shall together constitute but one and the same Agreement. The Table of Contents and Article and Section headings in this Agreement are inserted for convenience of reference only and shall not constitute a part hereof. 9.10 INTERPRETATION. Unless the context requires otherwise, all words used in this Agreement in the singular number shall extend to and include the plural, all words in the plural number shall extend to and include the singular, and all words in any gender shall extend to and include all genders. 9.11 SEVERABILITY. If any provision, clause, or part of this Agreement, or the application thereof under certain circumstances, is held invalid, the remainder of this Agreement, or the application of such provision, clause or part under other circumstances, shall not be affected thereby unless such invalidity materially impairs the ability of the parties to consummate the transactions contemplated by this Agreement. 9.12 SPECIFIC PERFORMANCE. The parties agree that the assets and business of the Company as a going concern constitute unique property. There is no adequate remedy at Law for the damage which any party might sustain for failure of the other parties to consummate the Offer and the Merger and the transactions contemplated by this Agreement, and accordingly, each party shall be entitled, at its option, to the remedy of specific performance to enforce the Offer and the Merger pursuant to this Agreement. 9.13 NO RELIANCE. Except for the parties to this Agreement and any permitted assignees, no Person is entitled to rely on any of the representations, warranties and agreements of the parties contained in this Agreement, and the parties assume no liability to any Person because of any reliance on the representations, warranties and agreements of the parties contained in this Agreement. 28 34 IN WITNESS WHEREOF, the parties have caused this Agreement and Plan of Merger to be duly executed as of the date first above written. BRADY CORPORATION By: /s/ KATHERINE M. HUDSON ------------------------------------ Title: President and CEO IMTC ACQUISITION CORP. By: /s/ KATHERINE M. HUDSON ------------------------------------ Title: President IMTEC INC. By: /s/ RALPH E. CRUMP ------------------------------------ Title: Chairman 29 35 ANNEX A Capitalized terms used in this Annex A and not otherwise defined herein have the meanings assigned to them in the Agreement to which it is attached. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision of the Offer or the Agreement and provided that Newco shall not be obligated to accept for payment any shares of Company Common Stock until (i) expiration of all applicable waiting periods under the HSR Act and (ii) satisfaction of the Minimum Condition, Newco 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 Newco's obligation to pay for or return tendered shares after the termination or withdrawal of the Offer), pay for, or may delay the acceptance for payment of or payment for, any shares of Company Common Stock tendered pursuant to the Offer, or may, subject to the terms of the Agreement, terminate or amend the Offer if at any time on or after the date of the Agreement, and at or before the time of payment for any of such shares, any of the following conditions exist: (a) There shall have occurred and be continuing as of the then scheduled expiration date of the Offer (i) any general suspension of, or limitation on prices for, trading in securities on the New York Stock Exchange or the Nasdaq National Market, (ii) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (iii) a commencement or escalation of a war, armed hostilities or other international or national calamity directly involving the United States, (iv) any material limitation (whether or not mandatory) by any governmental or regulatory authority, agency or commission, domestic or foreign ("Governmental Entity"), on the extension of credit by banks or other lending institutions in the United States, (v) or in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof; (b) The Company shall have breached or failed to perform any of its obligations, covenants or agreements under the Agreement or any representation or warranty of the Company as set forth in the Agreement (disregarding all qualifications and exceptions contained therein relating to knowledge, materiality or Material Adverse Effect) shall not have been true and correct as of the date of the Agreement and as of the then scheduled expiration date of the Offer as though made on and as of the then scheduled expiration date of the Offer, provided that all such breaches, failures to perform and untrue representations or warranties, taken in the aggregate, shall have or shall be reasonably likely to have a Material Adverse Effect; (c) Any court or Governmental Entity shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, injunction or other order which is in effect and which (i) restricts (other than restrictions which in the aggregate do not have a Material Adverse Effect on Parent, Newco or the Company or which do not materially restrict the ability of Parent and Newco to consummate the Offer and the Merger as originally contemplated by Parent and Newco), prevents, prohibits or makes materially more costly the consummation of the Offer or the Merger, (ii) makes the acceptance for payment of, or payment for or purchase of some or all of Company Common Stock pursuant to the Offer illegal, (iii) results in a significant delay in or restricts the ability of Newco to accept for payment, pay for or purchase some or all of Company Common Stock pursuant to the Offer or to effect the Merger, (iv) renders Newco unable to accept for payment or pay for or purchase some or all of Company Common Stock pursuant to the Offer, (v) prohibits or limits (other than limits which in the aggregate do not have a Material Adverse Effect on Parent, Newco or the Company or which do not materially limit the ability of Parent to own and operate all of the business and assets of Parent and the Company after the consummation of the transactions contemplated by the Offer and the Agreement) the ownership or operation by the Company, Parent or any of their Subsidiaries of all or any material portion of the business or assets of the Company, or as a result of the Offer or Merger compels the Company, Parent or any of their Subsidiaries to dispose of or hold separate all or any material portion of their respective business or assets, (vi) imposes limitations on the ability of Parent or any Subsidiary of Parent to hold, transfer or dispose of or exercise effectively full rights of ownership of any shares of Company Common Stock, including, without limitation, the right to vote any shares of Company Common Stock A-1 36 acquired by Newco pursuant to the Offer or otherwise on all matters properly presented to the Company Stockholders including, without limitation, the approval and adoption of the Agreement and the transactions contemplated thereby, (vii) requires divestiture by Parent or any Affiliate of Parent of any shares of Company Common Stock, or (viii) otherwise materially adversely affects the financial condition, business or results of operations of Parent, Newco or the Company or otherwise makes consummation of the Offer or the Merger unduly burdensome; (d) There shall have been threatened, instituted or pending any action, proceeding or counterclaim by or before any Governmental Entity, challenging the making of the Offer or the acquisition by Newco of Company Common Stock pursuant to the Offer or the consummation of the Merger, or seeking to obtain any material damages, or seeking to, directly or indirectly, result in any of the consequences referred to in clauses (i) through (viii) of paragraph (c) above; (e) Any person or "group" (as such term is used in Section 13(d)(3) of the Exchange Act) other than Parent or Newco or any of their Affiliates shall have become the beneficial owner (as that term is used in Rule 13d-3 under the Exchange Act) of more than 25% of the outstanding Company Common Stock; (f) All consents, registrations, approvals, permits, authorizations, notices, reports or other filings required to be obtained or made by the Company, Parent or Newco in connection with the execution and delivery of the Agreement, the Offer and the consummation of the transactions contemplated by this Agreement shall not have been made or obtained as of the then scheduled expiration date of the Offer (other than the failure to receive any consent, registration, approval, permit or authorization or to make any notice, report or other filing that, in the aggregate, is not reasonably likely to have a Material Adverse Effect on Parent, Newco or the Company, or would not prevent the consummation of the Offer or the Merger); (g) There shall have occurred any one or more changes or developments in the financial condition, properties, business or results of operations of the Company that, individually or in the aggregate, has had or is reasonably likely to have a Material Adverse Effect; (h) The Board of Directors of the Company (or any committee thereof) shall have withdrawn or amended, or modified in a manner adverse to Parent and Newco its recommendation of the Offer or the Merger, or shall have endorsed, approved or recommended any other Acquisition Proposal, or the Company shall have entered into any agreement with respect to an Acquisition, or the Board of Directors of the Company (or any committee thereof) shall have resolved to take any of the foregoing actions; or (i) The Agreement shall have been terminated by the Company, or by Parent or Newco, in accordance with its terms or Parent or Newco shall have reached an agreement or understanding in writing with the Company providing for termination or amendment of the Offer or delay in payment for the shares of Company Common Stock; which, in the reasonable judgment of Parent and Newco, in any such case, and regardless of the circumstances (excluding any direct action or inaction by Parent or Newco which to Parent's and Newco's knowledge is reasonably likely to cause any of the above conditions to exist) giving rise to any such conditions, make it inadvisable to proceed with the Offer and/or with such acceptance for payment of or payment for shares of Company Common Stock. The foregoing conditions are for the sole benefit of Parent and Newco and may be asserted by Parent or Newco regardless of the circumstances (excluding any direct action or inaction by Parent or Newco which to Parent's and Newco's knowledge is reasonably likely to cause any of the above conditions to exist) giving rise to such condition or may be waived by Parent or Newco, in whole or in part at any time and from time to time in its sole discretion. The failure by Parent or Newco 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. A-2 EX-99.(D).(4) 9 CONFIDENTIALITY AGREEMENT 1 [BRADY LOGO] [BRADY CORPORATION LETTERHEAD] CONFIDENTIAL November 9, 1999 Mr. Steve Anton President & CEO IMTBC, Inc. One Imtec Lane Bellows Falls, VT 05101-0809 Dear Mr. Anton: In connection with our mutual review of a possible acquisition (a "Transaction") of IMTEC, Inc. ("IMTEC") by Brady Corporation or a subsidiary thereof ("Brady") both IMTEC and Brady will provide each other with certain information. As a condition to such information being furnished to each party and its directors, officers, employees, agents or advisors (including, without limitation, attorneys, accountants, consultants, bankers and financial advisors) (collectively, "Representatives"), each party agrees to treat any nonpublic information concerning the other party (whether prepared by the disclosing party, its advisors or otherwise and irrespective of the form of communication) which is furnished hereunder to a party or to its Representative now or in the future by or on behalf of the disclosing party (herein collectively referred to as the "Evaluation Material") in accordance with the provisions of this letter agreement, and to take or abstain from taking certain other actions hereinafter set forth. (1) EVALUATION MATERIAL. The term "Evaluation Material" shall be deemed to include all notes analyses, compilations, studies, interpretations or other documents prepared by each party or its Representatives which contain, reflect or are based upon, in whole or in part, the information furnished to such party or its Representatives pursuant hereto which is not available to the general public. The term "Evaluation Material" does not include information which (i) is or becomes generally available to the public (other than as a result of a breach of this Agreement by the receiving party or its Representatives), (ii) was within the receiving party's possession prior to its being furnished to the receiving party by or on behalf of the disclosing party (provided that the source of such information was not bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to the disclosing party), (iii) is or becomes available to the receiving party on a nonconfidential basis from a source other than the disclosing party or any of its Representatives (provided that such source was not known by the receiving party to be bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to the disclosing party or any other party with respect to such information), (iv) is disclosed by the disclosing party to a third party without a duty of confidentiality, (v) is independently developed by the recipient without use of Evaluation Material, (vi) is disclosed under operation of law, or (vii) is disclosed by the recipient or its Representatives with the disclosure's prior written approval. 2 November 9, 1999 Brady Corporation IMTEC, Inc. Page 2 of 4 (2) PURPOSE OF DISCLOSURE OF EVALUATION MATERIAL. It is understood and agreed to by each party that any exchange of information under this agreement shall be solely for the purpose of evaluating a Transaction between the parties and not to affect in any way, each party's relative competitive position to each party or to other entities. It is further agreed, that the information to be disclosed to each other shall only be that information which is reasonably necessary to a Transaction and that information which is not reasonably necessary for such purposes shall not be disclosed or exchanged. In addition, competitively sensitive information such as information concerning product development or marketing plans, product prices or pricing plans, cost data, customers or similar information which has been determined to be reasonably necessary to a Transaction, shall be limited only to those senior executives and Representatives who are involved in evaluating or negotiating a Transaction or approving the value of a Transaction. (3) USE OF EVALUATION MATERIAL. Each party hereby agrees that it and its Representatives shall use the other's Evaluation Material solely for the purpose of evaluating a possible Transaction between the parties, and that the disclosing party's Evaluation Material will be kept confidential and each party and its Representatives will not disclose or use for purposes other than the evaluation of a Transaction any of the other's Evaluation Material in any manner whatsoever; provided, however, that (i) the receiving party may make any disclosure of such information which the disclosing party gives its prior written consent; (ii) any of such information may be disclosed to the receiving party's Representatives who need to know such information for the sole purpose of evaluating a possible Transaction between the parties, who are provided with a copy of this letter agreement and who are directed by the receiving party to treat such information confidentially; or any evaluation material which is disclosed in accordance with section (1) above. (4) NON DISCLOSURE. In addition, each party agrees that, without the prior written consent of the other party, its Representatives will not disclose to any other person the fact that any Evaluation material has been made available hereunder, that discussions or negotiations are taking place concerning a Transaction involving the parties or any of the terms, conditions or other facts with respect thereto (including the status thereof) provided, that a party may make such disclosure if in the written opinion of a party's outside counsel, such disclosure is necessary to avoid committing a violation of law, court order or applicable stock exchange regulation. In such event, the disclosing party shall use its reasonable efforts to give advance notice to the other party. (5) TERMINATION OF DISCUSSIONS. If either party decides that it does not wish to proceed with a Transaction with the other party, the party so deciding will promptly inform the other party of that decision. In that case, or at any time upon the request of either disclosing party for any reason, each receiving party will promptly destroy or return all written Evaluation Material (and all copies thereof and extracts therefrom) furnished to the receiving party or its Representatives by or on behalf of the disclosing party pursuant hereto. In the event of such a decision or request, all other Evaluation Material prepared by the requesting party shall be destroyed and no copy thereof shall be retained, and in no event shall either party be obligated to disclose or provide the Evaluation Material prepared by it or its Representatives to the other party. Notwithstanding the destruction of the Evaluation Material, each party and its Representatives will continue to be bound by its obligations of confidentiality and other obligations hereunder. 3 November 9, 1999 Brady Corporation IMTEC,Inc. Page 3 of 4 (6) NO REPRESENTATION OF ACCURACY. Each party understands and acknowledges that neither party nor any of its Representatives makes any representation or warranty, express or implied, as to the accuracy or completeness of the Evaluation Material made available by it or to it. Each party agrees that neither party nor any of its Representatives shall have any liability to the other party or to any of its Representatives relating to or resulting from the use of or reliance upon such other party's Evaluation Material or any errors therein or omissions therefrom. Only those representations or warranties which are made in a final definitive agreement regarding the Transaction, when, as and if executed, and subject to such limitations and restrictions as may be specified therein, will have any legal effect. (7) DEFINITIVE AGREEMENTS. Each party understands and agrees that no contract or agreement providing for any Transaction involving the parties shall be deemed to exist between the parties unless and until a final definitive agreement has been executed and delivered. Each party also agrees that unless and until a final definitive agreement regarding a Transaction between the parties has been executed and delivered, neither party will be under any legal obligation of any kind whatsoever with respect to such a Transaction by virtue of this letter agreement except for the matters specifically agreed to herein. For purposes of this paragraph, the term "definitive agreement" does not include an executed letter of intent or any other preliminary written agreement. Both parties further acknowledge and agree that each party reserves the right, in its sole discretion, to provide or not provide Evaluation Material to the receiving party under this Agreement, to reject any and all proposals made by the other party or any of its Representatives with regard to a Transaction between the parties, and to terminate discussions and negotiations at any time. (8) WAIVER. It is understood and agreed that no failure or delay by either party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or future exercise thereof or the exercise of any other right, power or privilege hereunder. (9) NON-SOLICITATION. Beginning on the date of this letter and continuing for a period of twelve (12) months after the date of a notice of termination under Section (5) above, each party and its subsidiaries will not (and each party and its subsidiaries will not assist or encourage others to), and any of its affiliates, having had access to Evaluation Material as defined above, will not (and each of its affiliates will not assist or encourage others to), directly or indirectly, in any manner whatsoever, request, influence, or induce any employee to leave his or her employment with the other party, provided that advertisements in trace journals, newspapers or discussions with individuals that have left his or her employ or who initiate such discussions with the other party shall not be in violation of this provision. (10) MISCELLANEOUS. Each party agrees to be responsible for any willful and material breach of this agreement by any of its Representatives. In case any provision of this agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of the agreement shall not in any way be affected or impaired thereby. (11) EQUITABLE RELIEF. It is further understood and agreed that money damages may not be a sufficient remedy for any willful and material breach of this letter agreement by either party or any of its 4 November 9, 1999 Brady Corporation IMTEC, Inc. Page 4 of 4 Representatives and that the nonbreaching party may be entitled to equitable relief. Any such relief shall be in addition to all other remedies available at law or equity. (12) STANDSTILL. The obligations of both IMTEC and Brady under this letter agreement shall begin on the date of this letter and cease entirely twelve (12) months from the date of a notice of termination under Section (5). (13) GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of Vermont that are pertinent and applicable to such agreements. Please confirm your agreement with the foregoing by signing and returning one copy of this letter to the undersigned, whereupon this letter agreement shall become a binding agreement between IMTEC and Brady. Very truly yours, Brady Corporation /s/ Gary L. Johnson Gary L. Johnson Vice President - Corporate Development Accepted and Agreed as of the date first written above: IMTEC, Inc. /s/ Steve Anton - --------------------------------------- Name President/CEO - --------------------------------------- Title 11-2-99 - --------------------------------------- Date -----END PRIVACY-ENHANCED MESSAGE-----