-----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, LFpZS3Dbq/T2e3NOLMv0CxzefxtdgdR0AkBhmBYY48yXGbP4rScDQLu/alpDJa5f 4/VyCzPE7Ilkrw3LZEln3Q== 0000950124-00-000856.txt : 20000223 0000950124-00-000856.hdr.sgml : 20000223 ACCESSION NUMBER: 0000950124-00-000856 CONFORMED SUBMISSION TYPE: SC 14D9 PUBLIC DOCUMENT COUNT: 3 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 14D9 SEC ACT: SEC FILE NUMBER: 005-41457 FILM NUMBER: 550560 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: 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 14D9 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 SC 14D9 1 SCHEDULE 14D9 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------- SCHEDULE 14D-9 (Rule 14d-101) Solicitation/Recommendation Statement Under Section 14(d)(4) of the Securities Exchange Act of 1934 --------------------- IMTEC INC. (Name of Subject Company) --------------------- IMTEC INC. (Name of Person Filing Statement) COMMON STOCK, PAR VALUE $.01 PER SHARE (Title of Class of Securities) 452909 10 4 (CUSIP Number of Class of Securities) STEVEN D. ANTON President IMTEC Inc. One Imtec Lane Bellows Falls, Vermont 05101 (802) 463-9502 (Name, Address and Telephone Number of Person Authorized to Receive Notice and Communications on Behalf of the Person Filing Statement) --------------------- With a copy to: IRA ROXLAND, ESQ. Cooperman Levitt Winikoff Lester & Newman, P.C. 800 Third Avenue New York, New York 10022 (212) 688-7000 Fax: (212) 755-2839 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 ITEM 1. SUBJECT COMPANY INFORMATION The name of the subject company is IMTEC Inc., a Delaware corporation (the "Company"). The address and telephone number of the principal executive offices of the Company are One Imtec Lane, Bellows Falls, Vermont 05101; telephone (802) 463-9502. The title of the class of equity securities to which this Statement relates is the shares of common stock, par value $.01 per share, of the Company (the "Shares"). As of February 11, 2000, there were 1,635,313 Shares outstanding. ITEM 2. IDENTITY AND BACKGROUND OF FILING PERSON The name, address and telephone number of the Company, which is the person filing this Statement, are set forth in Item 1 above. This Statement relates to a tender offer by IMTC Acquisition Corp., a Delaware corporation ("Purchaser") and an indirect, wholly owned subsidiary of Brady Corporation, a Wisconsin corporation ("Parent"), disclosed in a Tender Offer Statement on Schedule TO (the "Schedule TO") dated February 22, 2000 to purchase all outstanding Shares at a price of $12.00 per Share, net to the seller in cash, without interest thereon upon the terms and subject to the conditions set forth in the Offer to Purchase dated February 22, 2000 (the "Offer to Purchase") and the related Letter of Transmittal (which together constitute the "Offer"). 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 Purchaser, pursuant to which, after the completion of the Offer and the satisfaction or waiver of certain conditions, Purchaser will be merged with and into the Company and the Company will be the surviving corporation (the "Merger"). On the effective date of the Merger, each 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 shareholders who properly exercise dissenters' rights, if any), will by virtue of the Merger and without action by the holder thereof be canceled and converted into the right to receive an amount in cash equal to the per Share price paid pursuant to the Offer payable to the holder thereof, without interest thereon, upon the surrender of the certificate formerly respecting such Share. 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 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 to purchase the Option Shares held by such Shareholder at $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 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). According to the Offer to Purchase, the principal executive offices of Purchaser and Parent are located at 6555 W. Good Hope Road, Milwaukee, Wisconsin 53223. 2 3 ITEM 3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS Except as set forth in this Item 3, to the knowledge of the Company, as of the date hereof, there are no material contracts, agreements or arrangements or understandings or actual or potential conflicts of interest between the Company, its executive officers, directors or affiliates and (i) the Company, its executive officers, directors or affiliates or (ii) Parent, its executive officers, directors or affiliates. Each material contract, agreement, arrangement or understanding between the Company or its affiliates and its executive officers, directors or affiliates is set forth below. THE MERGER AGREEMENT A summary of the Merger Agreement is contained in Section 10 ("Background of the Offer; Contacts with the Company; the Merger Agreement; Shareholder Option Agreements") of the Offer to Purchase and is incorporated herein by reference. A copy of the Merger Agreement is filed as Exhibit (c)(1) hereto and is hereby incorporated by reference. SHAREHOLDER OPTION AGREEMENTS A summary of the Shareholder Option Agreements is contained in Section 10 ("Background of the Offer; Contacts with the Company; the Merger Agreement; Shareholder Option Agreements") of the Offer to Purchase and is incorporated herein by reference. Copies of the Shareholder Option Agreements are filed as Exhibits (c)(2)(i) and (c)(2)(ii) hereto and are hereby incorporated by reference. CONFIDENTIALITY AGREEMENT A summary of the Confidentiality Agreement between the Company and Parent is contained in Section 10 ("Background of the Offer; Contacts with the Company; the Merger Agreement; Shareholder Option Agreements") of the Offer to Purchase and is incorporated herein by reference. A copy of the Confidentiality Agreement is filed as Exhibit (c)(3) hereto and is hereby incorporated by reference. TRANSACTIONS BETWEEN THE COMPANY AND PARENT During Parent's 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 have continued in the present fiscal year. All such purchases were at then-current market prices. OPTION GRANTS The Company granted options to the following executive officers of the Company upon the commencement of their respective employment relationships with the Company.
NUMBER DATE OF OF NAME POSITION OPTIONS GRANT ---- -------- ------- ----- Steven D. Anton..................... Company President 50,000 4/5/99 James L. Searcy..................... Company Chief Financial Officer 25,000 10/22/99
CHANGE IN CONTROL AGREEMENTS In November 1999, the Company entered into a change of control agreement with Mr. Anton, providing for a payment, upon termination for any reason following a change in control of the Company, of a lump sum equal to one year's compensation computed in accordance with Section 280G of the Internal Revenue Code of 1986, as amended. For purposes of this agreement, "change of control" is defined as set forth in the Information Statement, attached hereto as Annex A, under the heading "Change of Control Agreements". 3 4 In October 1999, the Company tendered an offer of employment to Mr. Searcy which, among other terms, provided for a payment, upon termination for any reason following a change in control of the Company, of six months of base salary. In February 2000, the Company accorded George S. Norfleet III, the Company's Secretary, the right to receive six months of base salary upon termination of his employment, either by elimination or reduction of his position or without cause, following a change of control of the Company. Completion of the Offer will constitute a change of control under the respective agreements or arrangements with each of Messrs. Anton, Searcy and Norfleet, described above. ITEM 4. THE SOLICITATION OR RECOMMENDATION RECOMMENDATION OF THE BOARD OF DIRECTORS At a special meeting held on February 10, 2000, the Board of Directors of the Company (the "Board") unanimously approved the Merger Agreement, approved the Offer and the Merger (each as defined in the Merger Agreement), determined that the Offer and the Merger are in the best interests of the holders of Shares and unanimously recommended that shareholders accept the Offer and tender their Shares pursuant to the Offer. A copy of a letter to the Company's shareholders communicating such approval and recommendation is filed as Exhibit (a)(3) to this Statement and is incorporated herein by reference. REASONS FOR THE RECOMMENDATION OF THE COMPANY'S BOARD OF DIRECTORS In light of the Board's review of the Company's competitive and financial position, recent operating results and prospects, the Board determined that the Offer and the Merger are fair to, and in the best interests of, the Company and its shareholders. In making such recommendation and in approving the Merger Agreement and the transactions contemplated thereby, the Board considered a number of factors, including, but not limited to, the following: (i) the terms and conditions of the Offer and the Merger Agreement; (ii) the financial condition, results of operations, business and prospects of the Company, including the prospects of the Company if the Company were to remain independent; (iii) the fact that the $12.00 per Share to be paid in the Offer and the Merger represents a premium of approximately 118.2% over the $5.50 closing sale price for the Shares on December 9, 1999, the last trading day prior to the public announcement of the Offer, and a premium of approximately 89.2% over the $6.34 average closing sale price for the Shares for the three month period ended December 8, 1999; (iv) the views expressed by management and the Board's conclusion that it was not likely that any other party would enter into a transaction that was more favorable to the Company and its shareholders; (v) the fact that the Merger Agreement, while prohibiting the Company from actively soliciting a competitive proposal, permits the Company upon receipt of a Superior Proposal (as defined in the Merger Agreement), subject to compliance with the terms and conditions of the Merger Agreement and if and to the extent required by the fiduciary duties of the Board, to furnish information to or enter into discussions or negotiations with such person who has made the Superior Proposal; (vi) the fact that the Merger Agreement permits the Board, in the exercise of its fiduciary duties, to terminate the Merger Agreement in favor of a Superior Proposal, subject to the Company's compliance with the terms and conditions of the Merger Agreement; upon such termination, the Company shall reimburse Parent for out-of-pocket fees and expenses of Parent and Purchaser related to the Offer and the Merger Agreement and pay Parent a termination fee of $25,000; 4 5 (vii) the fact that certain significant shareholders of the Company, including all of the directors of the Company, had previously entered into option agreements with Purchaser pursuant to which, among other things, such shareholders have agreed to validly tender an aggregate of approximately 57.9% of the outstanding Shares; and (viii) the fact that the transactions contemplated by the Merger Agreement provide for an all cash payment to shareholders, with no financing condition. The Board did not assign relative weights to the above factors or determine that any factor was of particular importance. Rather, the Board viewed its position and recommendation as being based on the totality of the information presented to and considered by it. In addition, individual members of the Board may have given different weight to different factors. The Board recognized that, while the consummation of the Offer gives the Company's shareholders the opportunity to realize a significant premium over the price at which the Shares were traded prior to the public announcement of the Offer, tendering in the Offer would eliminate the opportunity for the Company's shareholders to participate in the future growth and profits of the Company. The Board believes that the loss of the opportunity to participate in the growth and profits of the Surviving Corporation was reflected in the Offer price of $12.00 per Share. It is expected that, if the Shares are not purchased by Parent in accordance with the terms of the Offer or if the Merger is not consummated, the Company's current management, under the general direction of the Board, will continue to manage the Company as an ongoing business. Based on the foregoing factors, the Board determined to recommend that shareholders accept the Offer and tender their shares pursuant to the Offer. To the best of the Company's knowledge, except for Shares the sale of which may trigger liability for the holder(s) under Section 16(b) of the Exchange Act, all executive officers and directors of the Company intend to tender to Purchaser all Shares held by such persons. In addition, as of the date hereof, seven (7) of the Company's shareholders, inclusive of one officer and all of the directors of the Company, have entered into Shareholder Option Agreements with Purchaser pursuant to which such shareholders have agreed, among other things, to validly tender (and not withdraw) an aggregate of 984,703 Shares, representing approximately 57.9% of the outstanding Shares in the Offer, to vote the Shares owned by such shareholders in favor of the Merger and against certain other extraordinary transactions and to grant an option to Purchaser to purchase the Shares held by such shareholders at $12.00 per Share (subject to adjustment in certain circumstances). This summary is qualified in its entirety by reference to the Shareholder Option Agreements, copies of which are attached hereto as Exhibits (c)(2)(i) and (c)(2)(ii) and are incorporated herein by reference. ITEM 5. PERSON/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED Neither the Company nor any person acting on its behalf has employed, retained or agreed to compensate any person to express any opinion as to the fairness of the Offer, from a financial point of view, to the shareholders of the Company or to make solicitations or recommendations to the shareholders concerning the Offer. ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY No transactions in the Shares have been effected during the past 60 days by the Company or, to the best of the Company's knowledge, by any executive officer, director or affiliate of the Company. ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS (a) Except as set forth above, the Company is not engaged in any negotiation in response to the Offer which relates to or would result in (i) any extraordinary transaction, such as a merger, reorganization or liquidation, involving the Company; or (ii) any purchase, sale or transfer of a material amount of assets of the 5 6 Company; or (iii) any material change in the present dividend rate or policy, or indebtedness or capitalization of the Company. (b) Except as described in Items 3(b) and 4 above, there are no transactions, Board resolutions, agreements in principle or signed contracts in response to the Offer that relate to or would result in one or more of the events referred to in Item 7(a) above. ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED The Information Statement attached hereto as Annex A is being furnished in connection with the contemplated designation by Purchaser, pursuant to the Merger Agreement, of certain persons to be appointed to the Board other than at a meeting of the Company's shareholders following the purchase by Purchaser of the number of Shares pursuant to the Offer necessary to satisfy the Minimum Condition (as defined in the Merger Agreement). DELAWARE BUSINESS COMBINATION LAW A summary of selected provisions of the Delaware Business Combination Law is contained in Section 15 ("Certain Regulatory and Legal Matters") under the caption "Delaware Business Combination Law" of the Offer to Purchase and is incorporated herein by reference. ANTITRUST A summary of antitrust concerns related to the Offer is contained in Section 15 ("Certain Regulatory and Legal Matters") under the caption "Antitrust Compliance" of the Offer to Purchase and is incorporated herein by reference. 6 7 ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
EXHIBIT NUMBER EXHIBIT NAME ------- ------------ (a)(1) Offer to Purchase, dated February 22, 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 22, 2000.) (a)(2) Form of Letter of Transmittal (Incorporated herein by reference to Exhibit (a)(2) of Schedule TO filed with the Commission by Brady Corporation and IMTC Acquisition Corp. on February 22, 2000.) (a)(3) Letter to Shareholders of Imtec Inc., dated February 22, 2000. (a)(4) Text of press release issued by Parent and the Company on 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.) (c)(1) Agreement and Plan of Merger, dated as of February 11, 2000, among Parent, Purchaser and the Company (Incorporated herein by reference to Exhibit (d)(1) of Schedule TO filed with the Commission by Brady Corporation and IMTC Acquisition Corp. on February 22, 2000.) (c)(2)(i) Shareholder Option Agreement, dated December 9, 1999, among Purchaser and certain shareholders of the Company named therein (Incorporated herein by reference to Exhibit 1 of Schedule 13D filed with the Commission by Brady Corporation on December 20, 1999.) (c)(2)(ii) Shareholder Option Agreement, dated December 9, 1999, between Purchaser 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.) (c)(3) Confidentiality Agreement, dated November 2, 1999, between the Company and Parent (Incorporated herein by reference to Exhibit (d)(4) of Schedule TO filed with the Commission by Brady Corporation and IMTC Acquisition Corp. on February 22, 2000.) (c)(4) "Change of Control" Agreement between the Company and Mr. Steven D. Anton, dated as of November 15 1999.
7 8 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. IMTEC Inc. By: /s/ STEVEN D. ANTON ------------------------------------ Name: Steven D. Anton Title: President Dated: February 22, 2000 8 9 ANNEX A IMTEC INC. ONE IMTEC LANE BELLOWS FALLS, VERMONT 05101 ------------------------- INFORMATION STATEMENT PURSUANT TO SECTION 14(F) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 14F-1 THEREUNDER ------------------------- NO VOTE OR OTHER ACTION OF THE COMPANY'S SHAREHOLDERS IS REQUIRED IN CONNECTION WITH THIS INFORMATION STATEMENT. NO PROXIES ARE BEING SOLICITED AND YOU ARE REQUESTED NOT TO SEND THE COMPANY A PROXY. ------------------------- This Information Statement, which is being mailed on or about February 22, 2000 to the holders of shares of common stock, par value $.01 per share (collectively "Shares" or "Common Shares") of Imtec Inc., a Delaware corporation (the "Company"), is being furnished in connection with the possible designation by Purchaser of persons to the Board of Directors of the Company (the "Board"). Such designation is to be made pursuant to an Agreement and Plan of Merger dated as of February 11, 2000 (the "Merger Agreement") among the Company, Parent and the Purchaser. The terms of the Merger Agreement, a summary of the events leading up to the Offer and the execution of the Merger Agreement and other information concerning the Offer and the Merger are contained in the Offer to Purchase and in the Solicitation/Recommendation Statement on Schedule 14D-9 of the Company (the "Schedule 14D-9") with respect to the Offer, copies of which are being delivered to shareholders of the Company contemporaneously herewith. Certain other documents (including the Merger Agreement) were filed with the Securities and Exchange Commission (the "SEC") as exhibits to the Schedule 14D-9 and as exhibits to the Tender Offer Statement on Schedule TO of the Purchaser and Parent (the "Schedule TO"). The exhibits to the Schedule 14D-9 and the Schedule TO may be examined at, and copies thereof may be obtained from, the regional offices of and public reference facilities maintained by the SEC (except that the exhibits thereto cannot be obtained from the regional offices of the SEC) in the manner set forth in Section 7 of the Offer to Purchase. No action is required by the shareholders of the Company in connection with the election or appointment of the Purchaser Designees (as defined below) to the Board. However, Section 14(f) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires the mailing to the Company's shareholders of the information set forth in this Information Statement prior to a change in a majority of the Company's directors otherwise than at a meeting of the Company's shareholders. The information contained in this Information Statement concerning the Parent, the Purchaser and the Purchaser Designees has been furnished to the Company by such persons, and the Company assumes no responsibility for the accuracy or completeness of such information. The Schedule TO indicates that the principal executive office of the Parent and Purchaser is located at 6555 W. Good Hope Road, Milwaukee, Wisconsin 53223. GENERAL The Common Shares are the only class of voting securities of the Company entitled to vote for the election of directors. Each Share is entitled to one vote. As of February 11, 2000, there were 1,635,313 Shares outstanding. The Board of Directors of the Company currently consists of four members. Each director holds office until his successor is elected and qualified or until his earlier death, resignation or removal. A-1 10 THE BOARD OF DIRECTORS RIGHT TO DESIGNATE DIRECTORS; THE PURCHASER DESIGNEES The Merger Agreement provides that, if requested by the Purchaser, the Company will, promptly following the purchase by Purchaser of at least 75% of the outstanding Shares of the Company pursuant to the Offer, take all necessary action to cause a number of persons designated by the Purchaser (the "Purchaser Designees") rounded up to the next whole number, to constitute a percentage of the members of the Board of Directors equal to the percentage of Shares outstanding owned by Purchaser and its affiliates, including by accepting resignations of those incumbent directors designated by the Company or increasing the size of the Board and causing the Purchaser designees to be elected. Purchaser has informed the Company that each of the Purchaser Designees listed below has consented to act as a director. To the best knowledge of the Company, none of the Purchaser Designees owns any equity securities of the Company. It is expected that the Purchaser Designees may assume office at any time following the purchase by Purchaser of such number of Common Shares that satisfies the Minimum Condition, which purchase cannot be earlier than March 21, 2000, and that, upon assuming office, the Purchaser Designees will thereafter constitute at least three-fourths of the Board. Biographical information concerning each of the Purchaser Designees and the current directors and executive officers of the Company is presented below. PURCHASER DESIGNEES With respect to the Purchaser Designees, the following table, prepared from information furnished to the Company by Purchaser, sets forth the name, age, present principal occupation or employment and five-year employment history for each of the persons who may be designated by Purchaser as Purchaser Designees. If necessary, Purchaser may choose additional or other Purchaser Designees, subject to the requirements of Rule 14f-1. The business address of each person is c/o Brady Corporation, 6555 W. Good Hope Road, Milwaukee, Wisconsin 53223. Except for Mr. Jaehnert, who is a citizen of Germany, each such person is a citizen of the United States.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT MATERIAL POSITIONS HELD NAME AGE DURING THE PAST FIVE YEARS ---- --- -------------------------- Katherine M. Hudson... 53 President and Chief Executive Officer of Parent since 1994 Frank M. Jaehnert..... 42 Vice President and Chief Financial Officer of Parent since 1996; Finance Director of Parent's Identification Solutions and Specialty Tapes Group prior to 1996 Conrad G. Goodkind.... 55 Secretary of Parent since 1999 and Partner of Quarles & Brady LLP, general counsel to Parent David W. Schroeder.... 44 Vice President of Parent's Identification Solutions and Specialty Tapes Group since 1995; General Manager of Parent's Industrial Products Division prior to 1995
Purchaser has advised the Company that to the best knowledge of Purchaser, none of the Purchaser Designees currently is a director of, or holds any position with, the Company, and except as disclosed in the Offer to Purchase, none of the Purchaser Designees beneficially owns any securities (or rights to acquire any securities) of the Company or has been involved in any transactions with the Company or any or its directors, executive officers or affiliates that are required to be disclosed pursuant to the rules of the SEC, except as may be disclosed in the Offer to Purchase. To the knowledge of Parent and Purchaser, none of the Purchaser Designees has any family relationship with any current director or executive officer of the Company. A-2 11 Purchaser has advised the Company that each of the persons listed in the table above has consented to act as a director, and that none of such persons has during the last five years been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors) or was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was, or is, subject to a judgement, decree or final order enjoining future violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation of such laws or is involved in any other legal proceeding which is required to be disclosed under Item 401(f) of Regulation S-K promulgated by the SEC. It is expected that the Purchaser Designees may assume office promptly upon the purchase by Purchaser of Shares pursuant to the Offer, which cannot be earlier than March 21, 2000. CURRENT DIRECTORS OF THE COMPANY
DIRECTOR NAME AGE PRINCIPAL OCCUPATION SINCE ---- --- -------------------- -------- Ralph E. Crump..... 76 Co-founder and currently a director of Osmonics, Inc. 1983 (New York Stock Exchange), Chairman of Structural Instrumentation, Inc. (Nasdaq SmallCap Market), a director of Mitylite Inc. (Nasdaq National Market) and a director of Stratesys Corp. (Nasdaq SmallCap Market). Between November 1981 and October 1986, Mr. Crump was Chairman of Med-Chem Products, Inc. Prior to November 1986, Mr. Crump was Chairman, President and a director of Frigitronics, Inc., a manufacturer of eye care products, which he co-founded in 1962. Frigitronics' Common Stock was listed on the New York Stock Exchange until its acquisition by Revlon in November 1986. David Sturdevant... 50 Founder and since October 1981 a principal of AVI 1990 Management Partners, the general partner of three venture capital partnerships whose collective assets aggregate approximately $18 million dollars with an investment concentration in early stage, high- technology companies. He is a co-founder and, since September 1994, a principal of Managed Investments, Inc., a NASD registered broker dealer and investment advisor. Robert W. Ham...... 64 Management consultant specializing in sales 1993 organization, sales management and customer focus strategies since 1992. Between 1964 and 1992, Mr. Ham held various sales management positions with Dennison Manufacturing Corp., a Fortune 500 company, leading to Division Vice President of Dennison. During his tenure at Dennison, he led a sales organization with sales of $90MM, he chaired task teams to merge divisions, achieving reorganization with minimal disruption to customers' and organizations' morale. In addition, he had total profit and loss responsibility for two foreign subsidiary companies and supported customers and company operations in the United States, Mexico, Canada, and Hong Kong. Doug Granat........ 30 Founder and President of Trigran Investments, Inc., a 1997 position he has held since August 1991. Trigran Investments, Inc. is the general partner and manager of Trigran Investments, L.P. and manages several other private partnerships. These entities make investments in publicly traded and privately held businesses. Trigran Investments, L.P.'s main focus is investment in publicly traded companies with market capitalization's under $150 million.
A-3 12 INFORMATION CONCERNING THE BOARD The Board held five meetings during the fiscal year ended June 30, 1999, with no director attending fewer than 80% of such meetings. The audit committee of the Board reviews the activities of the Company's independent auditors (including fees, services and scope of the audit). The Audit Committee is presently composed of Messrs. Crump and Sturdevant. The Audit Committee held one meeting during the fiscal year ended June 30, 1999 at which all members were present. The Company has no standing nominating or compensation committees of its Board of Directors, nor any committees performing similar functions. The Board as a whole searches for potential nominees for Board positions and periodically reviews the compensation of the Company's officers and employees and, makes appropriate adjustments. DIRECTORS' COMPENSATION All directors of the Company receive $6,000 per annum for their services in such capacities, as well as reimbursement for direct expenses incurred in attending meetings of the Board of Directors. A-4 13 EXECUTIVE COMPENSATION AND CERTAIN TRANSACTIONS WITH MANAGEMENT SUMMARY COMPENSATION Set forth below is a table summarizing the compensation of the Company's Chief Executive Officer and its former Chief Executive Officer for each of the three preceding fiscal years. No other executive officer received salary and bonus in excess of $100,000 during the year ended June 30, 1999. Although the Company maintains certain stock option plans, it has no other long-term incentive plan. The Company has not issued, and there are not currently outstanding, any restricted stock awards or stock appreciation rights. SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION AWARDS ------------ ANNUAL COMPENSATION SECURITIES -------------------------------------------------- UNDERLYING NAME AND OTHER OPTIONS/ PRINCIPAL ANNUAL SAR (NO. ALL OTHER POSITION YEAR SALARY BONUS($)(1)(3) COMPENSATION OF SHARES) COMPENSATION($) --------- ---- ------ -------------- ------------ ---------- --------------- Steven D. Anton........ 1999 $ 37,500 -- $1,800 50,000 -- President and Chief Executive Officer Richard L. Kalich...... 1999 $110,000 $50,000 $5,400 -- -- Former President 1998 $114,066 $18,334 $7,200 -- -- and Chief Executive 1997 $113,516 -- $7,200 -- -- Officer(1)
- ------------------------- (1) Mr. Kalich left the Company on April 2, 1999 and will be compensated at the rate of $100,000 per year through March 31, 2000. CHANGE OF CONTROL AGREEMENTS In November 1999, Mr. Anton entered into a change in control agreement with the Company pursuant to which the Company has agreed to pay Mr. Anton a lump sum equal to one year's compensation computed in accordance with Section 280G of the Internal Revenue Code of 1986, as amended, upon a change of control. This agreement also provides for reimbursement of relocation expenses, accelerated vesting of options and continuation of health benefits currently received by Mr. Anton. In addition, the Company entered into arrangements with two other officers, in October 1999 and February 2000, respectively, pursuant to which the Company has agreed to make certain payments upon a change in control. For purposes herein, generally, a "change in control" is: (i) a sale of over 50% of the voting stock of the Company; or (ii) the sale by the Company of over 50% of its assets; or (iii) a merger or consolidation of the Company with or into any other corporation or corporations such that the shareholders of the Company prior to the merger or consolidation do not own at least 50% of the surviving entity measured in terms of voting power; or (iv) the acquisition by any means of more than 20% of the voting power or Common Stock of the Company by any person or group of persons; or (v) the election of directors constituting a majority of the Company's board of directors pursuant to a proxy solicitation not recommended by the Company's Board. A-5 14 OPTIONS GRANTS IN LAST FISCAL YEAR Set forth below is information with respect to grants of stock options during the fiscal year ended June 30, 1999 by the Company to each of the executive officers named in the Summary Compensation table:
PERCENT OF NUMBER OF TOTAL OPTIONS SECURITIES GRANTED UNDERLYING TO EMPLOYEES EXERCISE OPTIONS IN FISCAL PRICE PER EXPIRATION PRESENT NAME GRANTED YEAR SHARE DATE VALUE(1) ---- ---------- ------------- --------- ---------- -------- Steven D. Anton............................ 50,000 58.7% $6.00 4/05/09 $5.29 Richard L. Kalich.......................... -- --% $ -- -- --
- ------------------------- (1) Computed in accordance with the Black-Scholes option pricing model utilizing the following assumptions: volatility of 39.9%, risk free interest rate of 6.0%, no dividend yield and an expected life of six years. AGGREGATED OPTION AND WARRANT EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION AND WARRANT VALUES Set forth below is information with respect to options and warrants exercised during the fiscal year ended June 30, 1999 and options and warrants held at June 30, 1999 by the executive officers named in the Summary Compensation table:
VALUE OF UNEXERCISED NUMBER OF UNEXERCISED IN-THE MONEY OPTIONS NUMBER OF OPTIONS AND WARRANTS AT AND WARRANTS AT SHARES JUNE 30, 1999 JUNE 30, 1999 ACQUIRED ON VALUE ---------------------------- ------------------------------- NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE ---- ----------- -------- ----------- ------------- ----------- ------------- Steven D. Anton......... -- $-- -- 50,000 $ -- $50,000 Richard L. Kalich....... -- $-- 37,500 -- $159,375 $ --
STOCK OPTION PLANS The Company's stock option plans provide for the granting of options which are intended to qualify as incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended. Options to purchase shares may be granted under the plans to persons who are executive officers or other employees of the Company. The exercise price of all options granted under the plans must be at least equal to the fair market value of shares on the date of the grant or, in the case of options granted to the holder of ten percent or more of the Company's Common Stock, at least 110% of the fair market value of shares on the date of the grant. The maximum term for which the options may be granted is ten years from the date of grant. The aggregate fair market value (determined at the date of the option grant) of shares with respect to which options are exercisable for the first time by the holder of the option during any calendar year shall not exceed $100,000. A-6 15 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth, as of February 22, 2000, information regarding the Company's Common Stock beneficially owned (i) by each person who is known by the Company to own beneficially, or who exercises voting or dispositive control, over more than five (5%) percent of the Company's Common Stock, and (ii) by all directors and executive officers as a group:
NUMBER OF SHARES BENEFICIALLY PERCENTAGE OF NAME AND ADDRESS OWNED(1) CLASS(1) ---------------- ---------------- ------------- Ralph E. Crump........................................... 299,431(2) 18.31%(2) 28 Twisted Oak Circle Trumbull, CT 06611 Marjorie L. Crump........................................ 299,431(3) 18.31%(3) 28 Twisted Oak Circle Trumbull, CT 06611 Richard L. Kalich........................................ 138,600(4) 8.29%(4) 16 North Shore Road Spofford, NH 03462 Trigran Investments, L.P................................. 273,120(5) 16.70% 155 Pfingsten Road Suite 360 Deerfield, IL 60015 Laifer Capital Management, Inc........................... 331,400(5) 20.27% Hilltop Partners, L.P. 45 West 45th Street New York, NY 10036 All directors and executive officers as a group (7 persons)............................................... 689,731(2)-(4)(6) 41.73%(2)-(4)(6)
- ------------------------- (1) Includes all shares issuable pursuant to presently exercisable options and warrants and all options and warrants that will become exercisable within sixty (60) days of February 22, 2000. (2) Includes 147,965 shares owned of record by Mr. Crump's spouse, as to which shares he disclaims beneficial ownership. (3) Includes 151,466 shares owned of record by Mrs. Crump's spouse, as to which shares she disclaims beneficial ownership. (4) Includes 28,700 shares owned of record by Mr. Kalich's spouse, as to which shares he disclaims beneficial ownership. (5) Based on the most recent Schedule 13D filed with the Securities and Exchange Commission. (6) Includes shares owned by Trigran Investments, L.P. of which Mr. Granat is founder and president. The above beneficial ownership information is based upon information furnished by the specified persons and determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended, as required for purposes of this filing, which is not necessarily the same as beneficial ownership for other purposes, and includes shares as to which beneficial ownership may be disclaimed. A-7 EX-99.(A).(3) 2 LETTER TO SHAREHOLDERS OF IMTEC INC. 1 [IMTEC CORPORATION LOGO] IMTEC, Inc. One Imtec Lane, P.O. Box 809 Bellows Falls, Vermont 05101-0809 USA Phone:(802) 463-9502 Fax:(802) 463-4334 February 22, 2000 Dear Shareholders, I am pleased to inform you that on February 11, 2000, Imtec Inc. entered into an Agreement and Plan of Merger with Brady Corporation. Under this merger agreement, a subsidiary of Brady is today commencing a cash tender offer to purchase all of the outstanding shares of Imtec's common stock at a price of $12.00 per share. Following completion of the tender offer, and upon the terms and subject to the conditions of the merger agreement, the Brady subsidiary will merge with Imtec and each share of Imtec's common stock not purchased in the tender offer (other than treasury shares, shares owned by Brady and shares owned by any dissenting shareholders) will be converted into the right to receive $12.00 per share in cash without interest. Imtec's Board of Directors has unanimously approved the merger agreement, approved the tender offer and the merger, determined that the tender offer and the merger are in the best interests of Imtec's shareholders and unanimously recommends that shareholders accept the offer and tender their shares thereunder. Attached to this letter is a copy of the Schedule 14D-9 filed by Imtec with the Securities and Exchange Commission. The Schedule 14D-9 describes the reasons for the Board's recommendation. Also enclosed is the Offer to Purchase of the Brady subsidiary making the tender offer together with related materials, including a Letter of Transmittal to be used for tendering your shares. These documents contain the terms and conditions of the offer and the merger, provide detailed information about these transactions and include information as to how to tender your shares. I urge you to read these documents carefully. Very truly yours, Ralph E. Crump Chairman of the Board EX-99.(C).(4) 3 CHANGE OF CONTROL AGREEMENT 1 AGREEMENT dated as of the 15th day of November, 1999 by and between IMTEC, INC., a Delaware corporation (the "Company"), and STEVE ANTON (the "Employee"). The Employee has requested the Company to assure the Employee of continued employment in the event of the occurrence of a Change of Control of the Company (as hereinafter defined) or, alternatively, of reasonable compensation if, after a Change of Control, (A) the Company shall terminate the Employee's employment or (B) the Employee elects not to continue his employment with the Company. The Company desires to alleviate the Employee's concerns with respect to the possible consequences of a Change of Control upon the continued employment of the Employee by the Company. NOW, THEREFORE, the parties hereto agree as follows: 1. If the Employee's employment is terminated by the Company at any time subsequent to a Change of Control for any reason including "cause" or if the Employee voluntarily terminates such employment within one hundred eighty (180) days subsequent to a Change of Control (the "Evaluation Period"), then (A) in either such event, the Company shall pay to the Employee within ten (10) days after such termination a lump sum payment in cash in an amount equal to 1.00 times the Employee's base amount (as the term base amount is defined in Section 280G of the Internal Revenue Code of 1986, as amended, and applicable regulations thereunder) at the time of such Change of Control; provided, however, that at the option of the Employee, exercisable upon written notice to the Company within ten (10) days of termination of employment, such payment may be paid in equal monthly installments over a twelve (12) month period commencing on the first day of the month immediately following that in which the Employee's employment was terminated; and (B) the Company shall provide to the Employee a relocation allowance of $20,000 for relocation of Employee, his family and his household furnishings to the Denver, Colorado area. For purposes hereof, in the event the Employee (during or after the Evaluation Period) shall resign from his employment with the Company subsequent to any change in his title, nature of duties, employee benefits, location or place of employment or working conditions, in each instance without his prior consent, such resignation shall be deemed to be a termination of employment by the Company. 2. All options, warrants and other rights (collectively, the "Options") to acquire securities of the Company (including those of its subsidiaries and affiliates) 2 ("Securities"), which shall have been granted to the Employee prior to a Change of Control shall fully vest and become immediately exercisable upon the occurrence of any such Change of Control. If subsequent to a Change of Control, the Employee's employment is terminated by the Company for any reason including "cause" or if such employment is voluntarily terminated by the Employee during the Evaluation Period, then in any such event, all Options shall be exercisable by the Employee in accordance with their respective terms, as herein above modified. 3. In lieu of exercising or retaining his right to exercise any outstanding Options then held by Employee, Employee may elect to surrender to the Company his rights in such outstanding Options (whether or not then exercisable) then held by Employee, and, upon such surrender, the Company shall pay to Employee an amount in cash per share equal to the aggregate of the difference between (a) the option prices of the Securities subject to such surrendered Options and the greater of (b) the average price per share paid in connection with such acquisition of control if such control was acquired by the payment of cash or the then fair market value per option share of the consideration paid for such Securities if such control was acquired for consideration other than cash, (c) the price per share paid in connection with any tender offer for Securities leading to control, or (d) the mean between the high and low bid price of such Securities on NASDAQ or any other national securities exchange upon which the Securities shall then be listed on the date of termination of the Employee's employment. 4. As used herein, a "Change of Control" shall be deemed to have occurred upon any of: (A) the passage of (i) ten (10) days following a public announcement that a person or group of affiliated or associated persons have acquired, or obtained the right to acquire, beneficial ownership of twenty (20%) percent or more of the outstanding Common Stock of the Company ("Shares"); or (ii) ten (10) days following the commencement of, or announcement of an intention to make a tender offer or exchange offer, the consummation of which would result in the beneficial ownership by a person or group of affiliated or associated persons of twenty (20%) percent or more of such outstanding Shares; or (iii) ten (10) days after a person or group of affiliated or associated persons (x) has become the owner of at least 10% of the Shares or has filed a Schedule 13D or 13G with the Securities and Exchange Commission and (y) whose ownership interest is deemed by the Company's Board of Directors to cause a material adverse impact on the business or the prospects of the Company. 2 3 (B) individuals who, as of the date of this Agreement (the "Effective Date"), constitute the Board of Directors of the Company (the "Incumbent Board") cease for any reason to constitute at least a majority of the Incumbent Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Incumbent Board; or (C) Consummation of a reorganization, merger, consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, of the outstanding Common Stock of the Company immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then outstanding Common Stock of the Company or the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the outstanding Common Stock of the Company, (ii) no person or group of affiliated or associated persons (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of the then outstanding shares of common stock of the corporation resulting from such Business Combination except to the extent that such ownership existed prior to the Business Combination, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Incumbent Board, providing for such Business Combination. 3 4 5. The Company shall pay or reimburse the Employee for all fees and disbursements of counsel, if any, incurred by the Employee as a result of the termination of his employment by the Company following a Change of Control or his voluntary termination of such employment during the Evaluation Period (including, without limitation, those which may be incurred by the Employee in seeking to obtain or enforce any right or benefit provided by this Agreement). 6. Upon the occurrence of a Change in Control, the Employee will be entitled to receive benefits due him under or contributed by the Company on his behalf pursuant to any retirement, incentive, profit sharing, bonus, performance, disability or other employee benefit plan maintained by the Company on the Employee's behalf to the extent such benefits are not otherwise paid to the Employee under a separate provision of this Employment Agreement. 7. Upon the occurrence of a Change in Control followed by the Employee's termination of employment, the Company will cause to be continued, and the Company shall pay for, life, medical, dental and disability coverage substantially identical to the coverage maintained by the Company for the Employee prior to the termination of employment, except to the extent that such coverage may be changed in its application for all Company employees on a nondiscriminatory basis. Such coverage and payments shall cease upon the expiration of eighteen (18) full calendar months following the date of termination of employment. 8. This Agreement shall inure to and be binding upon the respective heirs, legatees, successors, assigns and legal representatives of the parties hereto including, in the case of the Company, those successors, if any, by reason of merger or by acquisition of its capital stock or all or substantially all of its assets. 9. This Agreement may not be modified or amended except in writing signed by the party or parties against whom enforcement is sought. The terms of this Agreement may be waived only by a written instrument signed by the party or parties waiving compliance. The rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies which the parties hereto may otherwise have at law or in equity. 10. This Agreement contains the entire understanding of the parties relating to the subject matter hereof and supersedes all prior written or oral agreements and understandings relating to the subject matter hereof. 11. This Agreement will be governed by and construed and interpreted in accordance with the substantive laws of the State of Delaware, without giving effect to any conflicts of law rule or principle that might require the application of the laws 4 5 of another jurisdiction. 12. In the event that any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement. 13. This Agreement may be executed in one or more counterparts for the convenience of the parties hereto, each of which shall be deemed an original and all of which together will constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth above. IMTEC, INC. By:/s/ Ralph E.Crump --------------------------- Name: Ralph E. Crump Title:Chairman /s/ Steve Anton --------------------------- Steve Anton 5 -----END PRIVACY-ENHANCED MESSAGE-----