-----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, QdFiT8XjfupVYpaJr0IquAxhQOT+ywYNlUwTWj6Q4l4ac4lXFFGcym+7kzRvr0Xg M3u7BY/+jDziO8TWt7JMZQ== 0001005477-96-000564.txt : 19961202 0001005477-96-000564.hdr.sgml : 19961202 ACCESSION NUMBER: 0001005477-96-000564 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19961127 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PENRIL DATACOMM NETWORKS INC CENTRAL INDEX KEY: 0000077328 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER COMMUNICATIONS EQUIPMENT [3576] IRS NUMBER: 341028216 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-11069 FILM NUMBER: 96673003 BUSINESS ADDRESS: STREET 1: 1300 QUINCE ORCHARD BLVD CITY: GAITHERSBURG STATE: MD ZIP: 20878 BUSINESS PHONE: 3014170552 MAIL ADDRESS: STREET 1: 1300 QUINCE ORCHARD BLVD CITY: GAITHERSBURG STATE: MD ZIP: 20878 FORMER COMPANY: FORMER CONFORMED NAME: PENRIL CORP DATE OF NAME CHANGE: 19910429 FORMER COMPANY: FORMER CONFORMED NAME: PENRIL DATA COMMUNICATIONS INC DATE OF NAME CHANGE: 19740529 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HOWARD RONALD A CENTRAL INDEX KEY: 0000906041 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 1300 QUINCE ORCHARD BLVD CITY: GAITHERSBURG STATE: MD ZIP: 20878 BUSINESS PHONE: 2124736745 SC 13D/A 1 AMENDMENT NO. 2 TO SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 S C H E D U L E 13D Under the Securities Exchange Act of 1934 (Amendment No. 2)* PENRIL DATACOMM NETWORKS, INC. - -------------------------------------------------------------------------------- (Name of Issuer) COMMON STOCK, $0.01 PAR VALUE - -------------------------------------------------------------------------------- (Title of Class of Securities) 709352108 -------------------- (CUSIP Number) Copy to: Stephen I. Budow, Esq. Mr. Ronald A. Howard Morrison Cohen Singer & Weinstein, LLP 1300 Quince Orchard Boulevard 750 Lexington Avenue Gaithersburg, Maryland 20878 New York, New York 10022 Telephone (800) 473-6745 Telephone (212) 735-8600 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Persons Authorized to Receive Notices and Communications) November 18, 1996 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following space __. NOTE: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). (Continued on following page(s)) - 1 of 6 - CUSIP No. 709352108 13D ================================================================================ 1 Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person Ronald A. Howard - -------------------------------------------------------------------------------- 2 Check the Appropriate Box if a Member of a Group* (a) |_| (b) |_| - -------------------------------------------------------------------------------- 3 SEC Use Only - -------------------------------------------------------------------------------- 4 Source of Funds* SC - -------------------------------------------------------------------------------- 5 Check Box if Disclosure of Legal Proceedings is Required |_| - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization United States - -------------------------------------------------------------------------------- 7 Sole Voting Power Number of 0 shares 0% Shares ----------------------------------------------------------------- Beneficially 8 Shared Voting Power Owned By 0 shares 0% Each ----------------------------------------------------------------- Reporting 9 Sole Dispositive Power Person 0 shares 0% With ----------------------------------------------------------------- 10 Shared Dispositive Power 0 shares 0% - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned By Each Reporting Person 0 shares - -------------------------------------------------------------------------------- 12 Check Box if the Aggregate Amount in Row (11) excludes Certain Shares*|_| - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11) 0% - -------------------------------------------------------------------------------- 14 Type of Reporting Person* IN ================================================================================ *SEE INSTRUCTIONS BEFORE FILLING OUT! - 2 of 6 - This Statement, dated November 18, 1996, constitutes Amendment No. 2 to the Schedule 13D, dated May 6, 1993, regarding the reporting person's ownership of shares of common stock of Penril DataComm Networks, Inc. (the "Issuer"). The Schedule 13D is hereinafter referred to as the "Schedule." All capitalized terms used herein and otherwise undefined shall have the meanings ascribed in the Schedule. This Amendment No. 2 to the Schedule is filed in accordance with Rule 13d-2 of the Securities Exchange Act of 1934, as amended, by the reporting persons. It shall restate the entire text of the Schedule except for information which has materially changed since the filing of the Schedule. ITEM 1. SECURITY AND ISSUER Issuer: Penril DataComm Networks, Inc. 1300 Quince Orchard Boulevard Gaithersburg, Maryland 20878 This statement relates to shares of common stock of the Issuer, $0.01 par value ("Common Stock"). ITEM 2. IDENTITY AND BACKGROUND (a) Ronald A. Howard (b) Business address: 1300 Quince Orchard Boulevard Gaithersburg, Maryland 20878 (c) Principal Occupation: President, Access Beyond, Inc. (d) No (e) No (f) Citizenship: United States - 3 of 6 - ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION The reporting person acquired all of the shares reported in the Schedule upon consummation of the merger of a subsidiary of the issuer with and into Datability, Inc., in exchange for the reporting person's stock of Datability, Inc. and upon exercise of options granted by the issuer. ITEM 4. PURPOSE OF THE TRANSACTION The original acquisition was the consideration payable in connection with the acquisition of Datability, Inc. by Penril DataComm Networks, Inc. All of the reporting person's shares of Common Stock of the Issuer were converted into shares of common stock, par value $.01 per share, of Bay Networks, Inc. ("Bay") pursuant to a formula set forth in the Plan and Agreement of Merger, dated June 16, 1996, as amended on August 5, 1996, among the Issuer, Bay, and a subsidiary of Bay. Immediately prior to the effectiveness of such merger, the Issuer spun off its subsidiary, Access Beyond, Inc. and all shareholders of the Issuer, including the reporting person, received one share of Access Beyond, Inc. for each share of Common Stock of the Issuer. ITEM 5. INTERESTS IN SECURITIES OF THE ISSUER (a) The following list sets forth the aggregate number and percentage (based on 11,993,000 shares of Common Stock estimated to be outstanding as reported in the Registration Statement Form S-1, as amended, of Access Beyond, Inc.) of outstanding shares of Common Stock owned beneficially by the reporting person named in Item 2, as of the close of business on November 18, 1996: Number of Shares: 0 Percentage: 0% (b) Ronald A. Howard has sole power to vote and to dispose of 0 shares of Common Stock, representing 0% of the outstanding Common Stock. (c) The reporting person originally received 920,115 shares of the Issuer's Common Stock pursuant to an Agreement and Plan of Merger dated May 1, 1993 among the Issuer, Datability, Inc., Penril DataComm Networks, Inc., and certain stockholders of Datability, Inc. As a result of a purchase price adjustment such number were reduced by 92,012 to 828,103. Since the filing of Amendment No.1 to the Schedule, the reporting person has acquired shares of Common Stock pursuant to the exercise of options and made open market sales of shares of Common Stock. As a result of such acquisitions and dispositions, the reporting person owned, as of November 17, 1996, 925,603 shares of Common Stock. -4 of 6- (d) No other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of such securities. (e) As of November 18, 1996, the reporting person ceased to be the beneficial owner of more than five percent (5%) of the Common Stock. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE Issuer Pursuant to the Agreement and Plan of Merger dated as of May 1, 1993, the reporting person was required for at least 18 months but not longer than the shorter of 30 months after Closing or the date on which the then Chairman of the Board and President of Penril holds neither office, not to, among other things, acquire any additional shares of Penril securities (subject to certain exceptions), seek representation on the Board of Directors, solicit proxies in opposition to a recommendation of a majority of the Penril directors, become part of a "group" within the meaning of Regulations 13D-G or subject his shares to a voting agreement, trust or similar arrangement. Pursuant to an amendment to the reporting person's employment agreement such provision was extended. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS Exhibit A - Cover page, signature page and relevant portions of the Agreement and Plan of Merger, dated as of May 1, 1993, among Penril DataComm Networks, Inc., Datability, Inc., P.D. Acquisition Corp., Ronald A. Howard and Richard Rupp, relating to voting or disposition of the shares of Penril DataComm Networks, Inc. owned by the reporting person. Exhibit B - Cover page, signature page, and relevant portions of the Plan and Agreement of Merger, dated June 16, 1996, as amended on August 5, 1996, among the Issuer, Bay, and a subsidiary of Bay, relating to the exchange of Issuer's shares for shares of Bay. Exhibit C - Cover page, signature page and relevant portions of the Amendment to the employment agreement of Ronald A. Howard, relating to voting or disposition of the shares of the Issuer owned by the reporting person. - 5 of 6 - SIGNATURE After reasonable inquiry and to the best of his knowledge and belief, the undersigned hereby certifies that the information set forth in this Schedule is true, complete, and correct. Date: November 20, 1996 /s/ Rona1d A. Howard --------------------------------- RONALD A. HOWARD ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001). - 6 of 6 - EX-99.A 2 AGREEMENT AND PLAN OF MERGER EXHIBIT 99.A AGREEMENT AND PLAN OF MERGER Dated as of May 1, 1993 Among Penril DataComm Networks, Inc., Datability, Inc., PD Acquisition Corp., and the Stockholders of Datability listed on Appendix I. - 12 - Exhibit C, subject in each case to the performance by Penril of its obligations contained therein. Such Employment Agreements are being executed at the Closing. 3.04 Covenants of the Stockholders. (a) Each Stockholder agrees, for himself and his respective personal representatives, heirs, distributees, successors, assigns, agents, affiliates, associates and other related persons, that for the period commencing on the Closing Date and continuing for a period of eighteen (18) months after the Closing and for an additional period thereafter ending on the earlier to occur of (i) the date thirty (30) months after the Closing or (ii) the date Henry David Epstein is neither Chairman of the Board nor President of Penril, no such person, singly, as a partnership or as part of a group (as such term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended [the "Exchange Act"]), directly or indirectly, through one or more intermediaries, affiliates or associates (as the terms "affiliate" and "associate" are defined by the rules and regulations under the Exchange Act), or otherwise, except with the prior written approval of the Board of Directors of Penril, shall: (i) Purchase, acquire or own, or offer or agree to purchase, acquire or own, any securities of Penril other than, in the case of a Stockholder, the number of Penril Shares set forth opposite such Stockholder's name on Schedule I hereto (except upon exercise of employee stock options granted to such Stockholder by Penril or pursuant to a stock split or stock dividend or other pro rata distribution by Penril to holders of Penril Common Stock); - 13 - (ii) Sell shares of Penril Common Stock owned by such Stockholder otherwise than pursuant to (A) "brokers' transactions" within the meaning of Rule 144(g) promulgated under the Securities Act of 1933, as amended (the "Securities Act") or transactions directly with a market maker meeting the requirements of Rule 144(f) promulgated under the Securities Act, and/or (B) private transactions which shall not exceed 100,000 shares in the aggregate per twelve-month period; (iii) Pledge, hypothecate or otherwise encumber any shares of Common Stock, except in a bona fide transaction not undertaken as a means of evading this Section 3.04; (iv) Seek representation on the Board of Directors of Penril or solicit, or encourage any other person to solicit, proxies or participate or otherwise engage in any "solicitation" as such term is defined in Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), in opposition to a recommendation of a majority of the directors of Penril with respect to any matter, whether or not such solicitation is subject to any of Sections 14a-3 through 14a-14 of Regulation A or any successor provisions, or otherwise make or permit to be published in any media any public statement indicating such opposition; (v) Initiate, propose or otherwise solicit shareholders for the approval of one or more shareholder proposals with respect to Penril, as described in Rule 14a-8 under the Exchange Act; (vi) Acquire or affect the control of Penril, or directly or indirectly participate in or encourage formation of any group seeking to acquire or affect control - 14 - of Penril whether by making a business combination proposal with respect to Penril or otherwise; provided that this clause (vi) shall not preclude a Stockholder from communicating to the Chairman of the Board of Penril a third party proposal which he did not, directly or indirectly, initiate, formulate, solicit or encourage; (vii) Become part of any "group" as such term is used in Section 13(d)(3) of the Exchange Act with respect to securities of Penril; (viii) Deposit any securities of Penril in a voting trust or subject them to a voting agreement or other arrangement of similar effect; or (ix) Encourage any person, firm, corporation, group or other entity to engage in any of the actions covered by clauses (i) through (viii) of this Section. (b) Each Stockholder, for himself and his personal representatives, heirs, distributees, successors, assigns, agents, affiliates, associates and other related persons, acknowledges and agrees that in the event of any breach of any provision of this Section 3.04 by any such person, Penril would be irreparably harmed and could not be made whole by monetary damages. It is accordingly agreed that in addition to any other remedy to which it may be entitled at law or in equity, Penril shall be entitled to seek injunctive relief and to compel specific performance of this Section 3.04, and each such person consents to the entry of such relief and waives the making of a bond as a condition for obtaining such relief. Moreover. each person subject to this Section 3.04 agrees that any other provision of this Agreement or principle of law to the contrary notwithstanding, no breach of any representation. warranty or covenant of Penril set forth in this Agreement or any agreement - 57 - 6.02 Agreements by the Stockholders. (a) In addition to the covenants set forth in Section 3.04 hereof, and not in derogation thereof, each Stockholder agrees that he will not offer, sell, transfer, assign, mortgage, pledge or otherwise dispose of, distribute or encumber any Penril Shares delivered pursuant to this Agreement, except for bona fide pledges of Penril Shares to secure up to $1,700,000 of existing indebtedness of the Stockholders, which shares shall be included in those registered pursuant to Section 6.04(a) hereof, unless, (i) in the opinion of counsel to Penril or the opinion of counsel satisfactory to Penril's counsel, registration of such shares under the Securities Act and the rules and regulations of the Commission thereunder, as then in effect, is not required in connection with such transaction, or (ii) sale of the Penril Shares is permissible pursuant to Rule 144 under the Securities Act, in which event the Stockholder shall furnish Penril with an opinion of counsel reasonably satisfactory to counsel for Penril to the effect that sale of the Penril Shares proposed to be sold is permissible pursuant to Rule 144, or (iii) a registration statement under the Securities Act is then in effect with respect to such shares and the purchaser or transferee has been furnished with a prospectus meeting the requirements of Section 10 of the Securities Act. (b) Anything in subparagraph (a) of this Section 6.02 to the contrary notwithstanding, no Stockholder will offer, sell, transfer, assign, mortgage, pledge or otherwise dispose of, distribute or encumber any Penril Shares if any such transaction would render the consummation of the transactions contemplated by this Agreement, to be deemed to be an "offer," "offer to sell," "offer for sale," or "sale" of the Penril Shares to any - 58 - person other than the Stockholders, within the meaning of Rule 145 of the Rules and Regulations of the Commission under the Securities Act, as in effect on the date hereof. 6.03 Legend, Etc. Each of the Stockholders agrees that Penril may endorse on any certificate for Penril Shares to be delivered pursuant to this Agreement an appropriate legend referring to the provisions of Sections 6.01 and 6.02 hereof and that Penril may instruct its transfer agents not to transfer any such Penril Shares unless advised by Penril that such provisions have been complied with. 6.04 Registration Rights. Subject to the provisions of Section 3.04 and this Section 6.04, the Stockholders shall have the following registration rights with respect to the Penril Shares: (a) As soon as practicable after Penril is permitted under the applicable rules, regulations and instructions of the Commission to file a registration statement on Form S-3 with respect to the Penril Shares, Penril shall file a registration statement on Form S-3 under the Securities Act with respect to one-half of the Penril Shares issued to the Stockholders (which shall not include the Penril Shares being held as collateral under the Escrow Agreement), and shall use its best efforts to cause such registration statement to become effective as soon thereafter as practicable. Penril shall only be required to file one registration statement pursuant to this Section 6.04(a) and shall not be required to register the Penril Shares on any form other than Form S-3; provided, however, that if after the filing of Penril's Form 10-K for the fiscal year ending July 31, 1994, Penril is still unable to file a registration statement on Form S-3, it shall as promptly as possible thereafter file a registration statement on any available form. - 81 - IN WITNESS WHEREOF, the parties hereto have executed this Agreement, each of Penril, Subsidiary and Datability by its duly authorized officer, all as of the day and year first above written. PENRIL DATACOMM NETWORKS, INC. By: /s/ Henry David Epstein ------------------------------------ Title: Chairman of the Board and President PD ACQUISITION CORP. By: /s/ Henry David Epstein ------------------------------------ Title: Chairman of the Board DATABILITY, INC. By: /s/ Ronald Howard ------------------------------------ Title: President /s/ Ronald Howard ---------------------------------------- Ronald A. Howard /s/ Richard Rupp ---------------------------------------- Richard Rupp EX-99.B 3 PLAN AND AGREEMENT OF MERGER EXHIBIT 99.B PLAN AND AGREEMENT OF MERGER This Plan and Agreement of Merger entered into as of June 16, 1996 by and among Bay Networks, Inc., a Delaware corporation (the "Buyer"), Beta Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of the Buyer (the "Transitory Subsidiary"), and Penril DataComm Networks, Inc., a Delaware corporation (the "Company"). The Buyer, the Transitory Subsidiary and the Company are referred to collectively in this Agreement as the "Parties". This Agreement contemplates a merger of the Transitory Subsidiary into the Company, which merger will qualify as a tax-free reorganization described in Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the "Code"). In such merger, the stockholders of the Company will receive solely voting capital stock of the Buyer in exchange for their capital stock of the Company. The Parties acknowledge that in the event that the transactions contemplated by this Agreement are not consummated, the Company would experience a substantial loss and hardship; therefore, to minimize the potential for such (i) failure to consummate the transactions and (ii) loss and hardship, the Parties have knowingly agreed not to include in this Agreement many otherwise normal conditions to closing the transaction, including but not limited to, a condition that there shall be no material adverse change prior to the Effective Time (as defined below) to the Company, its business, financial condition, results of operations, or prospects, to the Company's industry or to the general business conditions. Now, therefore, in consideration of the representations, warranties and covenants in this Agreement contained, the Parties agree as follows. ARTICLE I THE MERGER 1.1 The Merger. Upon and subject to the terms and conditions of this Agreement, the Transitory Subsidiary shall merge with and into the Company (with such merger referred to in this Agreement as the "Merger") at the Effective Time (as defined below). From and after the Effective Time, the separate corporate existence of the Transitory Subsidiary shall cease and the Company shall continue as the surviving corporation in the Merger (the "Surviving Corporation"). The "Effective Time" shall be the time at which the Company and the Transitory Subsidiary file the certificate of merger or other appropriate documents prepared and executed in accordance with the relevant provisions of the Delaware General Corporation Law (the "Certificate of Merger") with the Secretary of State of the State of Delaware. The Merger shall have the effects set forth in Section 259 of the Delaware General Corporation Law. 1.2 The Closing. The closing of the transactions contemplated by this Agreement (the "Closing") shall take place at a mutually agreed upon location, commencing at 9:00 a.m. local time on a mutually agreeable date as soon as practicable after the date on which all of the conditions to the obligations of the Parties to consummate the transactions contemplated by this Agreement have been satisfied or waived (the "Closing Date"), but in no event later than 150 days from the date hereof. 1.3 Actions at the Closing. At the Closing, (a) the Company shall deliver to the Buyer and the Transitory Subsidiary the various certificates, instruments and documents referred to in Section 5.2, (b) the Buyer and the Transitory Subsidiary shall deliver to the Company the various certificates, instruments and documents referred to in Section 5.3, (c) the Company and the Transitory Subsidiary shall file with the Secretary of State of the State of Delaware the Certificate of Merger, and (d) the Buyer shall deliver a certificate for the Merger Shares (as defined below) to a bank, trust company or other entity reasonably satisfactory to the Company appointed by the Buyer to act as the exchange agent (the "Exchange Agent") in accordance with Section 1.7. 1.4 Additional Action. The Surviving Corporation may, at any time after the Effective Time, take any action, including executing and delivering any document, in the name and on behalf of either the Company or the Transitory Subsidiary, in order to consummate the transactions contemplated by this Agreement. 1.5 Conversion of Shares. At the Effective Time, by virtue of the Merger and without any action on the part of any Party or the holder of any of the following securities: (a) Each share of common stock, $0.01 par value per share, of the Company ("Company Shares") issued and outstanding immediately prior to the Effective Time (other than Company Shares owned beneficially by the Buyer or the Transitory Subsidiary, Dissenting Shares (as defined below) and Company Shares held in the Company's treasury) shall be converted into and represent the right to receive (subject to the provisions of Section 1.9) such number of shares of common stock, $0.01 par value per share, of the Buyer ("Buyer Common Stock") as is equal to the Conversion Ratio (as defined below). The "Conversion Ratio" shall mean the number determined by dividing (i) $10.00 (ii) by the Buyer Stock Market Price. The "Buyer Stock Market Price" shall mean the average of the closing prices of the Buyer's Common Stock on the New York Stock Exchange (the "NYSE") five (5) consecutive trading days immediately preceding the second business day immediately preceding to the Closing Date. Stockholders of record of the Company ("Company Stockholders") shall be entitled to receive immediately all of the shares of Buyer Common Stock into which their Company Shares were converted pursuant to this Section 1.5(a) (the "Merger Shares"). (b) Each Company Share held in the Company's treasury immediately prior to the Effective Time and each Company Share owned beneficially by the Buyer or the Transitory Subsidiary shall be cancelled and retired without payment of any consideration therefor. (c) Each share of common stock, $0.01 par value per share, of the Transitory Subsidiary issued and outstanding immediately prior to the Effective Time shall be converted into and thereafter evidence one share of common stock, $0.01 par value per share, of the Surviving Corporation. 1.6 Dissenting Shares. (a) For purposes of this Agreement, "Dissenting Shares" means Company Shares held as of the Effective Time by a Company Stockholder who has not voted such Company Shares in favor of the adoption of this Agreement and the Merger and with respect to which appraisal shall have been duly demanded and perfected in accordance with Section 262 of the Delaware General Corporation Law and not effectively withdrawn or forfeited prior to the Effective Time. Dissenting Shares shall not be converted into or represent the right to receive Merger Shares, unless such Company Stockholder shall have forfeited his right to appraisal under the Delaware General Corporation Law or withdrawn, with the consent of the Company, his demand for appraisal. If such Company Stockholder has so forfeited or withdrawn his right to appraisal of Dissenting Shares, then (i) as of the occurrence of such event, such holder's Dissenting Shares shall cease to be Dissenting Shares and shall be converted into and represent the right to receive the Merger Shares issuable in respect of such Company Shares pursuant to Section 1.5 (a), and (ii) promptly following the occurrence of such event, the Buyer shall deliver to the Exchange Agent a certificate representing the Merger Shares to which such holder is entitled pursuant to Section 1.5(a). (b) The Company shall give the Buyer (i) prompt notice of any written demands for appraisal of any Company Shares, withdrawals of such demands, and any other instruments that relate to such demands received by the Company and (ii) the opportunity to direct all negotiations and proceedings with respect to demands for appraisal under the Delaware General Corporation Law. The Company shall not, except with the prior written consent of the Buyer, make any payment with respect to any demands for appraisal of Company Shares or offer to settle or settle any such demands. 1.7 Exchange of Shares (a) Prior to the Effective Time, the Buyer shall appoint the Exchange Agent to effect the exchange for the Merger Shares of certificates that, immediately prior to the Effective Time, represented Company Shares converted into Merger Shares pursuant to Section 1.5 (including any Company Shares referred to in the last 2 sentence of Section 1.6(a)) ("Certificates"). On the Closing Date, the Buyer shall deliver to the Exchange Agent, in trust for the benefit of holders of Certificates, a stock certificate (issued in the name of the Exchange Agent or its nominee) representing the Merger Shares, as described in Section 1.5(a). As soon as practicable after the Effective Time, the Buyer shall cause the Exchange Agent to send a notice and a transmittal form to each holder of a Certificate (other than those surrendered and paid for at the Closing) advising such holder of the effectiveness of the Merger and the procedure for surrendering to the Exchange Agent such Certificate in exchange for the Merger Shares issuable pursuant to Section 1.5(a). Each holder of a Certificate, upon proper surrender thereof to the Exchange Agent in accordance with the instructions in such notice, shall be entitled to receive in exchange therefor (subject to any taxes required to be withheld) the Merger Shares issuable pursuant to Section 1.5(a). Until properly surrendered, each such Certificate shall be deemed for all purposes to evidence only the right to receive the Merger Shares issuable pursuant to Section 1.5(a). Holders of Certificates shall not be entitled to receive certificates for the Merger Shares to which they would otherwise be entitled until such Certificates are properly surrendered. (b) If any Merger Shares are to be issued in the name of a person other than the person in whose name the Certificate surrendered in exchange therefor is registered, it shall be a condition to the issuance of such Merger Shares that (i) the Certificate so surrendered shall be transferable, and shall be properly assigned, endorsed or accompanied by appropriate stock powers, (ii) such transfer shall otherwise be proper and (iii) the person requesting such transfer shall pay to the Exchange Agent any transfer or other taxes payable by reason of the foregoing or establish to the satisfaction of the Exchange Agent that such taxes have been paid or are not required to be paid. Notwithstanding the foregoing, neither the Exchange Agent nor any Party shall be liable to a holder of Company Shares for any Merger Shares issuable to such holder pursuant to Section 1.5(a) that are delivered to a public official pursuant to applicable abandoned property, escheat or similar laws. (c) In the event any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed, the Buyer shall issue in exchange for such lost, stolen or destroyed Certificate the Merger Shares issuable in exchange therefor pursuant to Section 1.5(a). The Board of Directors of the Buyer may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed Certificate to give the Buyer a bond in such sum as it may reasonably direct as indemnity against any claim that may be made against the Buyer with respect to the Certificate alleged to have been lost, stolen or destroyed. (d) Promptly following the date which is six months after the Closing Date, the Exchange Agent shall return to the Buyer all Merger Shares in its possession, and the Exchange Agent's duties shall terminate. Thereafter, each holder of a Certificate may surrender such Certificate to the Buyer and, subject to applicable abandoned property, escheat and similar laws, receive in exchange therefor the Merger Shares issuable with respect thereto pursuant to Section 1.5(a). 1.8 Dividends. No dividends or other distributions that are payable to the holders of record of Buyer Common Stock as of a date on or after the Closing Date shall be paid to former Company Stockholders entitled by reason of the Merger to receive Merger Shares until such holders surrender their Certificates in accordance with Section 1.7. Upon such surrender, the Buyer shall pay or deliver to the persons in whose name the certificates representing such Merger Shares are issued any dividends or other distributions that are payable to the holders of record of Buyer Common Stock as of a date on or after the Closing Date and which were paid or delivered between the Effective Time and the time of such surrender; provided that no such person shall be entitled to receive any interest on such dividends or other distributions. 1.9 Fractional Shares. No certificates or scrip representing fractional Merger Shares shall be issued to former Company Stockholders upon the surrender for exchange of Certificates, and such former Company Stockholders shall not be entitled to any voting rights, rights to receive any dividends or distributions or other rights as a stockholder of the Buyer with respect to any fractional Merger Shares that would otherwise be issued to such former Company Stockholders. In lieu of any fractional Merger Shares that would otherwise be issued, each former Company Stockholder that would have been entitled to receive a fractional Merger Share 3 shall, upon proper surrender of such person's Certificates, receive a cash payment equal to the closing price per share of the Buyer Common Stock on the NYSE, on the business day immediately preceding the business day prior to the Closing Date, multiplied by the fraction of a share that such Company Stockholder would otherwise be entitled to receive. The fractional share interests of each Company Stockholder will be aggregated. and no Company Stockholder will receive cash in an amount equal to or greater than the value of one full share of Buyer Common Stock. 1.10 Options and Rights. (a) As of the Effective Time, all obligations of the Company with respect to options to purchase Company Shares issued by the Company to the employees of the Company listed on Schedule 1.10 pursuant to its stock option plans ("Options"), whether vested or unvested, shall be assumed by the Buyer. (b) Immediately after the Effective Time, each Option outstanding immediately prior to the Effective Time shall he deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Option at the Effective Time, such number of shares of Buyer Common Stock as is equal to the number of Company Shares subject to the unexercised portion of such Option multiplied by the Conversion Ratio (with any fraction resulting from such multiplication to be rounded up or down to the nearest whole number or, in the case of .5, to the nearest odd number). The exercise price per share of each such Option shall be equal to the exercise price of such Option immediately prior to the Effective Time, divided by the Conversion Ratio. The term, exercisability, vesting schedule, status as an "incentive stock option" under Section 422 of the Code, if applicable, and all of the other terms of the Options shall otherwise remain unchanged. In addition to the foregoing, the applicable provisions of each award agreement for Options to be outstanding after the Effective Time will be equitably adjusted after the Spin-off Transaction and prior to the Closing by the Company's Board of Directors to reflect the Spin-off Transaction (as defined herein). (c) As soon as practicable after the Effective Time, the Buyer or the Surviving Corporation shall deliver to the holders of Options appropriate notices setting forth such holders' rights pursuant to such Options, as amended by this Section 1.10, and the agreements evidencing such Options shall continue in effect on the same terms and conditions (subject to the amendments provided for in this Section 1.10 and such notice). (d) The Buyer shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Buyer Common Stock for delivery upon exercise of the Options. As soon as practicable after the Effective Time, the Buyer shall file a Registration Statement on Form S-8 (or any successor form) under the Securities Act of 1933, as amended (the "Securities Act") with respect to all shares of Buyer Common Stock subject to such Options that may be registered on a Form S-8, and shall use its best efforts to maintain the effectiveness of such Registration Statement for so long as such Options remain outstanding. (e) The Company shall obtain, prior to the Closing, the consent from each holder of an Option to the adjustment or amendment, as the case may be, of such Option or Right pursuant to this Section 1.10 (unless such consent is not required under the terms of the applicable agreement, instrument or plan). 1.11 Certificate of Incorporation. The Certificate of Incorporation of the Surviving Corporation shall be the same as the Certificate of Incorporation of the Transitory Subsidiary immediately prior to the Effective Time, except that the name of the corporation set forth therein shall be changed to the name of the Company. 1.12 By-laws. The By-laws of the Surviving Corporation shall be the same as the By-laws of the Transitory Subsidiary immediately prior to the Effective Time, except that the name of the corporation set forth therein shall be changed to the name of the Company. 1.13 Directors and Officers. The directors of the Transitory Subsidiary shall become the directors of the Surviving Corporation as of the Effective Time. The officers of the Company shall remain as officers of the Surviving Corporation after the Effective Time, retaining their respective positions, except as specified by the Buyer pursuant to Section 5.2(g). 4 8.14 Construction. The language used in this Agreement shall be deemed to be the language chosen by the Parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any Party. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. 8.15 Incorporation of Exhibits and Schedules. The Exhibits and Schedules identified in this Agreement are incorporated in this Agreement by reference and made a part hereof. 8.16 Non-Survival of Representations, Warranties and Agreements. No representations, warranties or agreements in this Agreement shall survive the Closing, except for those contained in Article I and Sections 4.10 (the last sentence only), 4.12, 4.13, 4.14, 4.15 and 4.17 and, to the extent relating to such specified provisions, those contained in this Article VIII. IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written. THE BUYER: BAY NETWORKS, INC. By: /s/ Bruce I. Sachs ------------------------------------- Title: Executive Vice President THE TRANSITORY SUBSIDIARY: BETA ACQUISITION CORP. By: /s/ Bruce I. Sachs ------------------------------------- Title: Executive Vice President THE COMPANY: PENRIL DATACOMM NETWORKS, INC. By: /s/ Henry David Epstein ------------------------------------- Title: President, Chief Executive Officer 29 EX-99.C 4 LETTER TO RONALD A. HOWARD EXHIBIT 99.C Penril DataComm Networks, Inc. 1300 Quince Orchard Blvd. Gaithersburg, MD 20878 October 25, 1995 Mr. Ronald A. Howard 9010 Falls Road Potomac, MD 20854 Re: Amendment to Employment Agreement Dear Ron: Reference is made to the Employment Agreement dated as of May 1, 1993 (the "Employment Agreement") between Penril DataComm Networks, Inc. and Ronald A. Howard. Unless otherwise indicated, capitalized terms used herein shall have the same meaning as in the Employment Agreement. 1. Amendments to Employment Agreement. In consideration of the mutual covenants set forth herein, the parties agree that the Employee Agreement is hereby amended, effective immediately, in the following respects. (a) Section 3 of the Employment Agreement is hereby amended to delete the date "April 30, 1996" and to substitute for it the date "April 30, 1997." (b) Subsection 4(a) of the Employment Agreement is hereby amended to delete the dollar figure "$200,000" and to substitute for it the dollar figure "$225,000." (c) Section 4 of the Employment Agreement is hereby amended by to add a new subsection 4(f) thereto to read as follows: "(f) If the Company is sold or acquired during the term of this Agreement, whether by sale of shares, merger, consolidation, share exchange, sale of all or substantially all assets or otherwise, then immediately upon the closing of such sale or acquisition, Executive shall receive a bonus equal to 30 months salary at the rate specified in subsection 4(a) hereof." Mr. Ronald A. Howard Page 2 October 25, 1995 (d) Section 9 of the Employment Agreement is hereby amended to add a new subsection (g) thereto to read as follows: "(g) Sections 3.02 and 3.04 of the Merger Agreement are hereby incorporated herein by reference and made part hereof and shall be binding on Executive to the same extent as if fully set forth herein, with the following changes: (i) the covenants set forth in subsections (b) and (c) of Section 3.02 of the Merger Agreement shall be binding on Executive through April 30, 1997; (ii) the covenants set forth in Section 3.04 of the Merger Agreement shall be binding on Executive through April 30, 1997; and (iii) the covenant set forth in subsection 3.04(a)(iv) of the Merger Agreement shall not prevent Executive from being appointed or elected to the Board of Directors of the Company." 2. Section Headings. The section headings in this letter agreement are inserted for convenience only and shall not be part of this instrument. 3. Governing Law. This letter agreement shall be governed by and construed in accordance with the laws of the State of New York. 4. Effect of Amendment. Except as amended and supplemented hereby, all of the terms, conditions, covenants and provisions of the Employment Agreement shall remain and continue in full force and effect and are hereby ratified, repeated and confirmed in all respects. 5 Entire Agreement. This letter agreement and the Employment Agreement as amended and supplemented hereby constitute the entire agreement and understanding between the parties hereto with respect to Executive's employment relationship with the Company and supersede any and all prior agreements and understandings relating thereto. Mr. Ronald A. Howard Page 3 October 25, 1995 6. Counterparts; Effectiveness. This letter agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This letter agreement shall not be effective and binding upon either party hereto until signed by both of them. Please confirm your agreement to the foregoing by signing where indicated on the counterpart of this letter agreement provided and returning it to the undersigned. Very truly yours, PENRIL DATACOMM NETWORKS, INC. By: /s/ Henry David Epstein ------------------------------------- Henry David Epstein Chairman, President and Chief Executive Officer AGREED TO: /s/ Ronald A. Howard - -------------------------------- Ronald A. Howard Dated: October 25, 1995 -----END PRIVACY-ENHANCED MESSAGE-----