-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, PuUF53c0aKw9p7j4/NOImUNdxqK6ofuZSkK/INVGPhPRSPxPOYmX55+ywy130QUW Pel8c3TuuiAjKrK5+4a0/Q== 0000950130-95-000128.txt : 19950608 0000950130-95-000128.hdr.sgml : 19950608 ACCESSION NUMBER: 0000950130-95-000128 CONFORMED SUBMISSION TYPE: SC 14D1 PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 19950127 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PYRAMID TECHNOLOGY CORP CENTRAL INDEX KEY: 0000714865 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571] IRS NUMBER: 942781589 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-37353 FILM NUMBER: 95503473 BUSINESS ADDRESS: STREET 1: 3860 N FIRST ST CITY: SAN JOSE STATE: CA ZIP: 95134 BUSINESS PHONE: 4084288000 MAIL ADDRESS: STREET 1: 3860 N FIRST STREET CITY: SAN JOSE STATE: CA ZIP: 95134 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PYRAMID TECHNOLOGY CORP CENTRAL INDEX KEY: 0000714865 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571] IRS NUMBER: 942781589 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 14D1 SEC ACT: 1934 Act SEC FILE NUMBER: 005-37353 FILM NUMBER: 95503474 BUSINESS ADDRESS: STREET 1: 3860 N FIRST ST CITY: SAN JOSE STATE: CA ZIP: 95134 BUSINESS PHONE: 4084288000 MAIL ADDRESS: STREET 1: 3860 N FIRST STREET CITY: SAN JOSE STATE: CA ZIP: 95134 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SIEMENS NIXDORF INFORMATIONS SYSTEME AG /FI CENTRAL INDEX KEY: 0000818858 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1 BUSINESS ADDRESS: STREET 1: HEINZ NIXDORF RING1 CITY: 33102 PADERBORN STATE: I8 MAIL ADDRESS: STREET 1: 1301 AVENUE OF THE AMERICAS STREET 2: ATTN E ROBERT LUPONE ESQ CITY: NEW YORK STATE: NY ZIP: 10019-6022 FORMER COMPANY: FORMER CONFORMED NAME: SIEMENS NIXDORF INFORMATIONS SYSTEME AG /FI DATE OF NAME CHANGE: 19950106 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SIEMENS NIXDORF INFORMATIONS SYSTEME AG /FI CENTRAL INDEX KEY: 0000818858 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1 BUSINESS ADDRESS: STREET 1: HEINZ NIXDORF RING1 CITY: 33102 PADERBORN STATE: I8 MAIL ADDRESS: STREET 1: 1301 AVENUE OF THE AMERICAS STREET 2: ATTN E ROBERT LUPONE ESQ CITY: NEW YORK STATE: NY ZIP: 10019-6022 FORMER COMPANY: FORMER CONFORMED NAME: SIEMENS NIXDORF INFORMATIONS SYSTEME AG /FI DATE OF NAME CHANGE: 19950106 SC 14D1 1 TENDER OFFER STATEMENT PURSUANT TO 14(D)(1) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- SCHEDULE 14D-1 TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 AND SCHEDULE 13D (AMENDMENT NO. 5) UNDER THE SECURITIES EXCHANGE ACT OF 1934 ---------------- PYRAMID TECHNOLOGY CORPORATION (NAME OF SUBJECT COMPANY) ---------------- SIEMENS NIXDORF MID-RANGE ACQUISITION CORP. SIEMENS NIXDORF INFORMATIONSSYSTEME AG SIEMENS AKTIENGESELLSCHAFT (BIDDERS) ---------------- COMMON STOCK, $.01 PAR VALUE (TITLE OF CLASS OF SECURITIES) ---------------- 747236107 (CUSIP NUMBER OF CLASS OF SECURITIES) ---------------- E. ROBERT LUPONE, ESQ. SIEMENS CORPORATION 1301 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10019-6022 (212) 258-4000 (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER) ---------------- COPY TO: PETER D. LYONS, ESQ. SHEARMAN & STERLING 599 LEXINGTON AVENUE NEW YORK, NEW YORK 10022 TELEPHONE: (212) 848-4000 ---------------- JANUARY 20, 1995 [DATE OF EVENT WHICH REQUIRES FILING OF THE STATEMENT] ---------------- CALCULATION OF FILING FEE - --------------------------------------------------------------------------------
TRANSACTION VALUATION AMOUNT OF FILING FEE $261,772,336.00* $52,354.46** - ------------------------------------------------------------------------------
* Note: The Transaction Value is calculated by multiplying $16.00, the per share tender offer price, by 16,360,771, the sum of the number of shares of Common Stock outstanding not already owned by the Bidders and the 3,449,923 shares of Common stock subject to options outstanding. ** 1/50 of 1% of Transaction Value. [_]Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: Filing Party: Form or Registration No.: Date Filed: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- CUSIP NO. 747236107 1. Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person Siemens Nixdorf Mid-Range Acquisition Corp. - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of Group (a) [_] (b) [_] - -------------------------------------------------------------------------------- 3. SEC Use only - -------------------------------------------------------------------------------- 4. Sources of Funds AF - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Item [_] 2(d) or 2(f) - -------------------------------------------------------------------------------- 6. Citizen or Place of Organization Delaware - -------------------------------------------------------------------------------- 7. Aggregate Amount Beneficially Owned by Each Reporting Person 4,047,743 - -------------------------------------------------------------------------------- 8. Check if the Aggregate Amount in Row (7) Excludes [_] Certain Shares - -------------------------------------------------------------------------------- 9. Percent of Class Represented by Amount in Row (7) 23.9% - -------------------------------------------------------------------------------- 10. Type of Reporting Person CO Page 2 of 9 CUSIP NO. 747236107 1. Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person Siemens Nixdorf Informationssysteme AG - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of Group (a) [_] (b) [_] - -------------------------------------------------------------------------------- 3. SEC Use only - -------------------------------------------------------------------------------- 4. Sources of Funds AF - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Item [_] 2(d) or 2(f) - -------------------------------------------------------------------------------- 6. Citizen or Place of Organization Federal Republic of Germany - -------------------------------------------------------------------------------- 7. Aggregate Amount Beneficially Owned by Each Reporting Person 4,047,743 - -------------------------------------------------------------------------------- 8. Check if the Aggregate Amount in Row (7) Excludes [_] Certain Shares - ------------------------------------------------------------------------------- 9. Percent of Class Represented by Amount in Row (7) 23.9% - -------------------------------------------------------------------------------- 10. Type of Reporting Person CO Page 3 of 9 CUSIP NO. 747236107 1. Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person Siemens Aktiengesellschaft - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of Group (a) [_] (b) [_] - -------------------------------------------------------------------------------- 3. SEC Use only - -------------------------------------------------------------------------------- 4. Sources of Funds WC - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Item [_] 2(d) or 2(f) - -------------------------------------------------------------------------------- 6. Citizen or Place of Organization Federal Republic of Germany - -------------------------------------------------------------------------------- 7. Aggregate Amount Beneficially Owned by Each Reporting Person 4,047,743 - -------------------------------------------------------------------------------- 8. Check if the Aggregate Amount in Row (7) Excludes [_] Certain Shares - -------------------------------------------------------------------------------- 9. Percent of Class Represented by Amount in Row (7) 23.9% - -------------------------------------------------------------------------------- 10. Type of Reporting Person CO Page 4 of 9 This Tender Offer Statement on Schedule 14D-1 and Amendment No. 5 to Schedule 13D (this "Statement") relates to the offer by Siemens Nixdorf Mid-Range Acquisition Corp., a Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of Siemens Nixdorf Informationssysteme AG, a corporation organized under the laws of the Federal Republic of Germany ("SNI AG") and a direct wholly owned subsidiary of Siemens Aktiengesellschaft, a corporation organized under the laws of the Federal Republic of Germany ("Siemens AG"), to purchase all outstanding shares of Common Stock, par value $.01 per share (the "Shares"), of Pyramid Technology Corporation, a Delaware corporation (the "Company") at a price of $16.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in Purchaser's Offer to Purchase dated January 27, 1995 (the "Offer to Purchase") and in the related Letter of Transmittal (which together constitute the "Offer"), copies of which are attached hereto as Exhibits (a)(1) and (a)(2), respectively. ITEM 1. SECURITY AND SUBJECT COMPANY. (a) The name of the subject company is Pyramid Technology Corporation, a Delaware corporation (the "Company"), which has its principal executive offices at 3860 N. First Street, San Jose, California 95134. (b) The class of equity securities being sought is all the outstanding shares of Common Stock, par value $.01 per share, of the Company. The information set forth in the Introduction and Section 1 ("Terms of the Offer; Expiration Date") of the Offer to Purchase is incorporated herein by reference. (c) The information concerning the principal market in which the Shares are traded and certain high and low sales prices for the Shares in such principal market set forth in Section 6 ("Price Range of Shares; Dividends") of the Offer to Purchase is incorporated herein by reference. ITEM 2. IDENTITY AND BACKGROUND. (a)-(d) and (g) This Statement is filed by Purchaser, SNI AG and Siemens AG. The information concerning the name, state or other place of organization, principal business and address of the principal office of each of Purchaser, SNI AG and Siemens AG, and the information concerning the name, business address, present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment or occupation is conducted, material occupations, positions, offices or employments during the last five years and citizenship of each of the executive officers and directors of Purchaser, SNI AG and Siemens AG are set forth in the Introduction, Section 8 ("Certain Information Concerning Purchaser, SNI AG and Siemens AG") and Schedule I of the Offer to Purchase and are incorporated herein by reference. (e) and (f) During the last five years, none of Purchaser, SNI AG or Siemens AG, and, to the best knowledge of Purchaser, SNI AG and Siemens AG, none of the persons listed in Schedule I of the Offer to Purchase has been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation of such laws. ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY. (a) The information set forth in Section 8 ("Certain Information Concerning Purchaser, SNI AG and Siemens AG") and Section 10 ("Background of the Offer; Contacts with the Company; the Merger Agreement") of the Offer to Purchase is incorporated herein by reference. (b) The information set forth in the Introduction, Section 7 ("Certain Information Concerning the Company"), Section 8 ("Certain Information Concerning Purchaser, SNI AG and Siemens AG"), Section 10 Page 5 of 9 ("Background of the Offer; Contacts with the Company; the Merger Agreement") and Section 11 ("Purpose of the Offer; Plans for the Company After the Offer and the Merger") of the Offer to Purchase is incorporated herein by reference. ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a)-(c) The information set forth in Section 9 ("Financing of the Offer and the Merger") of the Offer to Purchase is incorporated herein by reference. ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER. (a)-(e) The information set forth in the Introduction, Section 10 ("Background of the Offer; Contacts with the Company; the Merger Agreement") and Section 11 ("Purpose of the Offer; Plans for the Company After the Offer and the Merger") of the Offer to Purchase is incorporated herein by reference. (f) and (g) The information set forth in Section 13 ("Effect of the Offer on the Market for Shares, Exchange Listing and Exchange Act Registration") of the Offer to Purchase is incorporated herein by reference. ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY. (a) and (b) The information set forth in Section 8 ("Certain Information Concerning Purchaser, SNI AG and Siemens AG") of the Offer to Purchase is incorporated herein by reference. ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE SUBJECT COMPANY'S SECURITIES. The information set forth in the Introduction, Section 8 ("Certain Information Concerning Purchaser, SNI AG and Siemens AG"), Section 10 ("Background of the Offer; Contacts with the Company; the Merger Agreement") and Section 11 ("Purpose of the Offer; Plans for the Company After the Offer and the Merger") of the Offer to Purchase is incorporated herein by reference. ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED. The information set forth in the Introduction and Section 16 ("Fees and Expenses") of the Offer to Purchase is incorporated herein by reference. ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS. The information set forth in Section 8 ("Certain Information Concerning Purchaser, SNI AG and Siemens AG") of the Offer to Purchase is incorporated herein by reference. ITEM 10. ADDITIONAL INFORMATION. (a) Not applicable. (b) and (c) The information set forth in Section 15 ("Certain Legal Matters and Regulatory Approvals") of the Offer to Purchase is incorporated herein by reference. (d) Not applicable. (e) The information set forth in Section 15 ("Certain Legal Matters and Regulatory Approvals") of the Offer to Purchase is incorporated herein by reference. (f) The information set forth in the Offer to Purchase is incorporated herein by reference. Page 6 of 9 ITEM 11. MATERIAL TO BE FILED AS EXHIBITS. (a)(1) Form of Offer to Purchase dated January 27, 1995. (a)(2) Form of Letter of Transmittal. (a)(3) Form of Notice of Guaranteed Delivery. (a)(4) Form of Letter from Goldman, Sachs & Co. to Brokers, Dealers, Commercial Banks, Trust Companies and Nominees. (a)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies and Nominees to Clients. (a)(6) Form of Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(7) Summary Advertisement as published in The Wall Street Journal on January 27, 1995. (a)(8) Press Release issued by SNI AG and the Company on January 23, 1995. (a)(9) Press Release issued by SNI AG and the Company on January 27, 1995. (a)(10) Consolidated Financial Statements of Siemens AG for the fiscal year ended September 30, 1994.* (b) None. (c)(1) Agreement and Plan of Merger, dated as of January 20, 1995, among SNI AG, Purchaser and the Company. (c)(2) Management Retention Agreement, dated as of January 20, 1995, between John S. Chen and the Company. (d) None. (e) Not applicable. (f) None.
- -------- * To be filed as an exhibit to an amendment to this Statement. Page 7 of 9 SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct. January 27, 1995 Siemens Nixdorf Mid-Range Acquisition Corp. /s/ Gerhard Schulmeyer By: _________________________________ Name: Gerhard Schulmeyer Title: President Siemens Nixdorf Informationssysteme AG /s/ Gerhard Schulmeyer By: _________________________________ Name: Gerhard Schulmeyer Title: President, CEO Siemens Aktiengesellschaft /s/ Adrienne Whitehead By: _________________________________ Name: Adrienne Whitehead Title: Attorney-in-Fact Page 8 of 9 EXHIBIT INDEX
EXHIBIT NO. EXHIBIT NAME PAGE NO. ------- ------------ -------- (a)(1) Form of Offer to Purchase dated January 27, 1995............ (a)(2) Form of Letter of Transmittal............................... (a)(3) Form of Notice of Guaranteed Delivery....................... (a)(4) Form of Letter from Goldman, Sachs & Co. to Brokers, Dealers, Commercial Banks, Trust Companies and Nominees.... (a)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies and Nominees to Clients.................... (a)(6) Form of Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9............... (a)(7) Summary Advertisement as published in The Wall Street Journal on January 27, 1995................................ (a)(8) Press Release issued by SNI AG and the Company on January 23, 1995................................................... (a)(9) Press Release issued by SNI AG and the Company on January 27, 1995................................................... (a)(10) Consolidated Financial Statements of Siemens AG for the fiscal year ended September 30, 1994*...................... (c)(1) Agreement and Plan of Merger, dated as of January 20, 1995, among SNI AG, Purchaser and the Company.................... (c)(2) Management Retention Agreement, dated as of January 20, 1995, between John S. Chen and the Company.................
- -------- * To be filed as an exhibit to an amendment to this Statement. Page 9 of 9 EX-99.(A)(1) 2 FORM OF OFFER TO PURCHASE EXHIBIT 99.(A)(1) OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF PYRAMID TECHNOLOGY CORPORATION AT $16.00 NET PER SHARE BY SIEMENS NIXDORF MID-RANGE ACQUISITION CORP. AN INDIRECT WHOLLY OWNED SUBSIDIARY OF SIEMENS NIXDORF INFORMATIONSSYSTEME AG A DIRECT WHOLLY OWNED SUBSIDIARY OF SIEMENS AKTIENGESELLSCHAFT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 24, 1995, UNLESS THE OFFER IS EXTENDED. THE OFFER IS CONDITIONED UPON (I) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST THAT NUMBER OF SHARES THAT, WHEN ADDED TO THE SHARES OWNED OF RECORD BY SIEMENS NIXDORF INFORMATIONSSYSTEME AG OR ANY OF ITS SUBSIDIARIES ON THE DATE HEREOF (OTHER THAN SHARES ISSUABLE UPON EXERCISE OF THE WARRANT (AS DEFINED BELOW)), SHALL CONSTITUTE A MAJORITY OF THE THEN OUTSTANDING SHARES ON A FULLY DILUTED BASIS (OTHER THAN ANY SHARES ISSUABLE UPON THE EXERCISE OF THE WARRANT AND OTHER THAN THE RIGHTS (AS DEFINED BELOW)) AND (II) THE EXPIRATION OR TERMINATION OF ALL WAITING PERIODS IMPOSED UPON CONSUMMATION OF THE OFFER BY THE HART-SCOTT- RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR ACT"), AND THE REGULATIONS THEREUNDER AND ANY APPLICABLE FOREIGN COMPETITION AND ANTITRUST STATUTES AND REGULATIONS, AS WELL AS THE OTHER CONDITIONS DESCRIBED HEREIN. THE BOARD OF DIRECTORS OF PYRAMID TECHNOLOGY CORPORATION HAS DETERMINED THAT EACH OF THE OFFER AND THE MERGER IS FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF PYRAMID TECHNOLOGY CORPORATION, AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER. -------------- IMPORTANT Any stockholder desiring to tender all or any portion of such stockholder's shares of common stock, par value $.01 per share (the "Shares"), of Pyramid Technology Corporation should either (1) complete and sign the Letter of Transmittal (or a facsimile thereof) in accordance with the instructions in the Letter of Transmittal and mail or deliver it together with the certificate(s) evidencing tendered Shares, and any other required documents, to the Depositary or tender such Shares pursuant to the procedure for book- entry transfer set forth in Section 3 or (2) request such stockholder's broker, dealer, commercial bank, trust company or other nominee to effect the transaction for such stockholder. Any stockholder whose Shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such broker, dealer, commercial bank, trust company or other nominee if such stockholder desires to tender such Shares. A stockholder who desires to tender Shares and whose certificates evidencing such Shares are not immediately available, or who cannot comply with the procedure for book-entry transfer on a timely basis, may tender such Shares by following the procedure for guaranteed delivery set forth in Section 3. Questions or requests for assistance may be directed to the Information Agent at its address and telephone numbers set forth on the back cover of this Offer to Purchase. Questions or requests for assistance may also be directed to the Dealer Managers at their address on the back cover of this Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may also be obtained from the Information Agent or from brokers, dealers, commercial banks or trust companies. -------------- The Dealer Managers for the Offer are: GOLDMAN, SACHS & CO. -------------- January 27, 1995 TABLE OF CONTENTS
PAGE ---- INTRODUCTION............................................................ 1 1. Terms of the Offer; Expiration Date............................... 4 2. Acceptance for Payment and Payment for Shares..................... 5 3. Procedures for Accepting the Offer and Tendering Shares........... 6 4. Withdrawal Rights................................................. 9 5. Certain Federal Income Tax Consequences........................... 9 6. Price Range of Shares; Dividends.................................. 10 7. Certain Information Concerning the Company........................ 10 8. Certain Information Concerning Purchaser, SNI AG and Siemens AG... 12 9. Financing of the Offer and the Merger............................. 14 10. Background of the Offer; Contacts with the Company; the Merger Agreement......................................................... 14 11. Purpose of the Offer; Plans for the Company After the Offer and the Merger........................................................ 27 12. Dividends and Distributions....................................... 29 13. Effect of the Offer on the Market for Shares, Exchange Listing and Exchange Act Registration......................................... 30 14. Certain Conditions of the Offer................................... 31 15. Certain Legal Matters and Regulatory Approvals.................... 33 16. Fees and Expenses................................................. 38 17. Miscellaneous..................................................... 38 Schedule I. Directors and Executive Officers of Siemens AG, SNI AG and Purchaser.............................................................. I-1
To the Holders of Common Stock of Pyramid Technology Corporation: INTRODUCTION Siemens Nixdorf Mid-Range Acquisition Corp. ("Purchaser"), a Delaware corporation and an indirect wholly owned subsidiary of Siemens Nixdorf Informationssysteme AG ("SNI AG"), a company organized under the laws of the Federal Republic of Germany and a direct wholly owned subsidiary of Siemens Aktiengesellschaft ("Siemens AG"), a company organized under the laws of the Federal Republic of Germany, hereby offers to purchase all outstanding shares of common stock, par value $.01 per share (the "Common Stock"), of Pyramid Technology Corporation, a Delaware corporation (the "Company"), at a price of $16.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which together constitute the "Offer"). Purchaser is a direct wholly owned subsidiary of Siemens Nixdorf Information Systems, Inc., a Massachusetts corporation ("SNI U.S."), which is itself a direct wholly owned subsidiary of SNI AG. Tendering stockholders will not be obligated to pay brokerage fees or commissions or, except as otherwise provided in Instruction 6 of the Letter of Transmittal, stock transfer taxes with respect to the purchase of Shares by Purchaser pursuant to the Offer. Purchaser will pay all charges and expenses of Goldman, Sachs & Co. ("Goldman Sachs"), which are acting as Dealer Managers for the Offer (in such capacity, the "Dealer Managers"), Chemical Bank (the "Depositary") and Georgeson & Company, Inc. (the "Information Agent") incurred in connection with the Offer. See Section 16. THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") UNANIMOUSLY (WITH ONE DIRECTOR RECUSING HIMSELF) HAS DETERMINED THAT EACH OF THE OFFER AND THE MERGER (AS DEFINED BELOW) IS FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY, AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER. Dr. Rudolf Bodo, a director of the Company, recused himself from the Board meetings in which the Board discussed the Merger Agreement (as defined below) and the transactions contemplated thereby. Dr. Bodo is SNI AG's designee on the Board pursuant to the Purchase Agreement (as defined below). See Section 10. Smith Barney Inc. ("Smith Barney"), the Company's financial advisor, has delivered to the Board its written opinion to the effect that, as of the date of such opinion, the consideration to be received by the stockholders of the Company pursuant to each of the Offer and the Merger is fair from a financial point of view. A copy of the opinion of Smith Barney is contained in the Company's Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9"), which is being mailed to stockholders herewith. THE OFFER IS CONDITIONED UPON (I) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST THAT NUMBER OF SHARES THAT, WHEN ADDED TO THE SHARES OWNED OF RECORD BY SNI AG OR ANY OF ITS SUBSIDIARIES ON THE DATE HEREOF (OTHER THAN SHARES ISSUABLE UPON EXERCISE OF THE WARRANT (AS DEFINED BELOW)), SHALL CONSTITUTE A MAJORITY OF THE THEN OUTSTANDING SHARES ON A FULLY DILUTED BASIS (INCLUDING, WITHOUT LIMITATION, ALL SHARES ISSUABLE UPON THE EXERCISE OF ANY OPTIONS, WARRANTS OR RIGHTS (OTHER THAN ANY SHARES ISSUABLE UPON THE EXERCISE OF THE WARRANT AND OTHER THAN THE RIGHTS (AS DEFINED BELOW))) (THE "MINIMUM CONDITION") AND (II) THE EXPIRATION OR TERMINATION OF ALL WAITING PERIODS IMPOSED UPON CONSUMMATION OF THE OFFER BY THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE REGULATIONS THEREUNDER AND ANY APPLICABLE FOREIGN COMPETITION AND ANTITRUST STATUTES AND REGULATIONS, AS WELL AS THE OTHER CONDITIONS DESCRIBED HEREIN. SEE SECTION 14, WHICH SETS FORTH IN FULL THE CONDITIONS TO THE OFFER. The Offer is being made pursuant to an Agreement and Plan of Merger dated as of January 20, 1995 (the "Merger Agreement") among SNI AG, Purchaser and the Company. The Merger Agreement provides that, among other things, as soon as practicable after the purchase of Shares pursuant to the Offer and the satisfaction of the other conditions set forth in the Merger Agreement and in accordance with the relevant provisions of the General Corporation Law of the State of Delaware ("Delaware Law"), Purchaser will be merged with and into the Company (the "Merger"). Following consummation of the Merger, the Company will continue as the surviving corporation (the "Surviving Corporation") and will become an indirect wholly owned subsidiary of SNI AG. At the effective time of the Merger (the "Effective Time"), each Share issued and outstanding immediately prior to the Effective Time (other than Shares held in the treasury of the Company or owned by Purchaser, SNI AG or any direct or indirect wholly owned subsidiary of SNI AG or the Company, and other than Shares held by stockholders who shall have demanded and perfected appraisal rights, if any, under Delaware Law) will be cancelled and converted automatically into the right to receive $16.00 in cash, or any higher price that may be paid per Share in the Offer, without interest (the "Merger Consideration"). The Merger Agreement is more fully described in Section 10. The Merger Agreement provides that, promptly upon the purchase by Purchaser of Shares pursuant to the Offer and from time to time thereafter, Purchaser shall be entitled to designate up to such number of directors, rounded up to the next whole number, on the Board as will give Purchaser representation on the Board equal to the product of the number of directors on the Board multiplied by the percentage that the aggregate number of Shares then beneficially owned by Purchaser and its affiliates following such purchase bears to the total number of Shares then outstanding. In the Merger Agreement, the Company has agreed to take all actions necessary to cause Purchaser's designees to be elected as directors of the Company, including increasing the size of the Board or securing the resignations of incumbent directors or both. The consummation of the Merger is subject to the satisfaction or waiver of certain conditions, including the approval and adoption of the Merger Agreement by the requisite vote of the stockholders of the Company, if such vote is required under Delaware Law. See Section 11. Under the Company's Certificate of Incorporation and Delaware Law, the affirmative vote of the holders of a majority of the outstanding Shares is required to approve and adopt the Merger Agreement and the Merger. Consequently, if Purchaser acquires (pursuant to the Offer or otherwise) at least a majority of the outstanding Shares, Purchaser will have sufficient voting power to approve and adopt the Merger Agreement and the Merger without the vote of any other stockholder. As described below, SNI AG intends to transfer the 2,717,743 Shares it owns on the date hereof to Purchaser prior to, or concurrently with, the purchase of Shares by Purchaser pursuant to the Offer. Under Delaware Law, if Purchaser acquires, pursuant to the Offer or otherwise, such number of Shares which, when added to the Shares owned of record by Purchaser on such date, constitutes at least 90% of the then outstanding Shares, Purchaser will be able to approve and adopt the Merger Agreement and the transactions contemplated thereby, including the Merger, without a vote of the Company's stockholders. In such event, SNI AG, Purchaser and the Company have agreed to take, at the request of Purchaser, all necessary and appropriate action to cause the Merger to become effective as soon as reasonably practicable after such acquisition, without a meeting of the Company's stockholders. If, however, Purchaser does not acquire such number of Shares which, when added to the Shares owned of record by Purchaser on such date, constitutes at least 90% of the then outstanding Shares pursuant to the Offer or otherwise and a vote of the Company's stockholders is 2 required under Delaware Law, a significantly longer period of time will be required to effect the Merger. See Section 11. The Company has advised Purchaser that as of January 18, 1995, 15,628,591 Shares were issued and outstanding. The Company has advised Purchaser that as of January 18, 1995, the Company had duly reserved a total of 3,449,923 Shares for future issuance pursuant to outstanding employee stock options or stock incentive rights granted pursuant to the Company's Stock Option and Purchase Plans (as defined below), 405,034 Shares were reserved for future issuance pursuant to future grants of employee stock options or stock incentive rights pursuant to the Company's Stock Option and Purchase Plans, and a total of 1,330,000 Shares were reserved for issuance upon exercise of the Warrant (as defined below). SNI AG currently owns 2,717,743 Shares, which it acquired in a series of transactions. In 1985, the Company entered into a Convertible Subordinated and Preferred Stock Purchase Agreement (the "Nixdorf Stock Agreement") with Nixdorf Computer AG ("Nixdorf"). Under the Nixdorf Stock Agreement, Nixdorf purchased approximately 5% of the Company's Shares. The Nixdorf Stock Agreement also gave Nixdorf the right to purchase its pro rata share of certain equity financings of the Company as long as Nixdorf held a minimum 5% stock interest. In March 1990, Nixdorf exercised its right to purchase approximately 140,000 Shares as part of the Company's secondary public offering of its common stock, to maintain Nixdorf's pro rata equity ownership at approximately 5% of the Company's Shares. In 1990, Nixdorf became majority-owned by Siemens AG, which renamed Nixdorf as Siemens Nixdorf Informationssysteme AG ("SNI AG" herein). Subsequently, on August 21, 1994, the Company and SNI U.S. entered into the Common Stock and Warrant Purchase Agreement (the "Purchase Agreement") pursuant to which, on September 13, 1994, SNI U.S. purchased (i) 2,000,000 Shares and (ii) a warrant (the "Warrant") to purchase up to 1,330,000 Shares, for an aggregate purchase price of $17,250,000. Subsequently, SNI U.S. transferred to SNI AG the 2,000,000 Shares and the Warrant. In connection with such transfer, SNI AG assumed all of SNI U.S.'s rights and obligations under the Purchase Agreement and the Registration Rights Agreement, dated as of September 13, 1994, between the Company and SNI U.S. The Shares beneficially owned by SNI AG on the date hereof (excluding any Shares issuable upon exercise of the Warrant) constitute 17.38% of the issued and outstanding Shares as of January 18, 1995. SNI AG intends to transfer the 2,717,743 Shares it owns on the date hereof to Purchaser prior to, or concurrently with, the purchase of Shares by Purchaser pursuant to the Offer. SNI AG does not currently intend to exercise the Warrant in connection with the Offer and the Merger. Consequently, as of the date hereof, the Minimum Condition would be satisfied if Purchaser acquired 6,821,515 Shares. Pursuant to the Merger Agreement, the Company has amended the Common Shares Rights Agreement dated as of December 12, 1988, as amended (the "Rights Agreement"), between the Company and Bank of America, NT & SA, as Rights Agent, so that none of the execution of the Merger Agreement, the making of the Offer, the purchase of Shares pursuant to the Offer, the Merger or any other transaction contemplated by the Merger Agreement will cause or in any way trigger the obligation of the Company to issue the common share purchase rights (the "Rights") to its stockholders. Additionally, the amendment to the Rights Agreement provides that the Rights Agreement will terminate immediately prior to the purchase of Shares by Purchaser pursuant to the Offer. The Securities and Exchange Commission (the "Commission") has adopted Rule 13e-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which is applicable to certain "going private" transactions. Rule 13e-3 requires, among other things, that certain financial information concerning the Company and certain information relating to the fairness of the proposed transaction and the consideration offered to minority stockholders in such transaction be filed with the Commission and disclosed to stockholders prior to consummation of the transaction. Purchaser believes that Rule 13e-3 will not be applicable to the Offer or the Merger. However, no assurances can be given that the Commission will not take the position that Rule 13e-3 is applicable to the Offer or the Merger. 3 THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ IN ITS ENTIRETY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. 1. Terms of the Offer; Expiration Date. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of such extension or amendment), Purchaser will accept for payment and pay for all Shares validly tendered prior to the Expiration Date (as hereinafter defined) and not withdrawn as permitted by Section 4. The term "Expiration Date" means 12:00 midnight, New York City time, on Friday, February 24, 1995, unless and until Purchaser, in its sole discretion (but subject to the terms and conditions of the Merger Agreement), shall have extended the period during which the Offer is open, in which event the term "Expiration Date" shall mean the latest time and date at which the Offer, as so extended by Purchaser, shall expire. Purchaser expressly reserves the right, in its sole discretion (but subject to the terms and conditions of the Merger Agreement), at any time and from time to time, to extend for any reason the period of time during which the Offer is open, including the occurrence of any of the conditions specified in Section 14, by giving oral or written notice of such extension to the Depositary. During any such extension, all Shares previously tendered and not withdrawn will remain subject to the Offer, subject to the rights of a tendering stockholder to withdraw his or her Shares. See Section 4. Subject to the applicable regulations of the Commission, Purchaser also expressly reserves the right, in its sole discretion (but subject to the terms and conditions of the Merger Agreement), at any time and from time to time, (i) to delay acceptance for payment of, or, regardless of whether such Shares were theretofore accepted for payment, payment for, any Shares pending receipt of any regulatory approval specified in Section 15, (ii) to terminate the Offer and not accept for payment any Shares upon the occurrence of any of the conditions specified in Section 14 and (iii) to waive any condition or otherwise amend the Offer in any respect (subject to the limitations described below), by giving oral or written notice of such delay, termination, waiver or amendment to the Depositary and by making a public announcement thereof. However, the Merger Agreement provides that Purchaser will not (i) decrease the price per Share payable pursuant to the Offer, (ii) reduce the maximum number of Shares to be purchased in the Offer, (iii) impose conditions to the Offer in addition to those set forth in Section 14, (iv) change the form of consideration payable in the Offer or (v) amend any other terms of the Offer in a manner adverse to the Company's stockholders. Purchaser acknowledges that (i) Rule 14e-1(c) under the Exchange Act requires Purchaser to pay the consideration offered or return the Shares tendered promptly after the termination or withdrawal of the Offer and (ii) Purchaser may not delay acceptance for payment of, or payment for (except as provided in clause (i) of the first sentence of this paragraph), any Shares upon the occurrence of any of the conditions specified in Section 14 without extending the period of time during which the Offer is open. Any such extension, delay, termination, waiver or amendment will be followed as promptly as practicable by public announcement thereof, such announcement in the case of an extension to be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. Subject to applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require that material changes be promptly disseminated to stockholders in a manner reasonably designed to inform them of such changes) and without limiting the manner in which Purchaser may choose to make any public announcement, Purchaser shall have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a press release to the Dow Jones News Service. If Purchaser makes a material change in the terms of the Offer or the information concerning the Offer, or if it waives a material condition of the Offer, Purchaser will extend the Offer to the extent required by Rules 14d- 4(c) and 14d-6(d) under the Exchange Act. 4 Subject to the terms of the Merger Agreement, if, prior to the Expiration Date, Purchaser should decide to increase the consideration being offered in the Offer, such increase in the consideration being offered will be applicable to all stockholders whose Shares are accepted for payment pursuant to the Offer and, if at the time notice of any such increase in the consideration being offered is first published, sent or given to holders of such Shares, the Offer is scheduled to expire at any time earlier than the period ending on the tenth business day from and including the date that such notice is first so published, sent or given, the Offer will be extended at least until the expiration of such ten business day period. For purposes of the Offer, a "business day" means any day other than a Saturday, Sunday or federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, New York City time. The Company has provided Purchaser with the Company's stockholder list and security position listings for the purpose of disseminating the Offer to holders of Shares. This Offer to Purchase and the related Letter of Transmittal will be mailed to record holders of Shares whose names appear on the Company's stockholder list and will be furnished, for subsequent transmittal to beneficial owners of Shares, to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency's security position listing. 2. Acceptance for Payment and Payment for Shares. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), Purchaser will accept for payment, and will pay for, all Shares validly tendered prior to the Expiration Date and not properly withdrawn promptly after the later to occur of (i) the Expiration Date, (ii) the expiration or termination of any applicable waiting periods under the HSR Act and any applicable foreign competition and antitrust statutes and regulations, and (iii) the satisfaction or waiver of the conditions to the Offer set forth in Section 14. Subject to applicable rules of the Commission, Purchaser expressly reserves the right to delay acceptance for payment of, or payment for, Shares pending receipt of any regulatory approvals specified in Section 15 or in order to comply in whole or in part with any other applicable law. In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) the certificates evidencing such Shares (the "Share Certificates") or timely confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such Shares into the Depositary's account at The Depository Trust Company, the Midwest Securities Trust Company or the Philadelphia Depository Trust Company (each, a "Book-Entry Transfer Facility" and, collectively, the "Book-Entry Transfer Facilities") pursuant to the procedures set forth in Section 3, (ii) the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees, or an Agent's Message (as defined below) in connection with a book-entry transfer and (iii) any other documents required by the Letter of Transmittal. The term "Agent's Message" means a message, transmitted by a Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has received an express acknowledgment from the participant in such Book-Entry Transfer Facility tendering the Shares, that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Purchaser may enforce such agreement against such participant. On January 24, 1995, SNI AG filed with the Federal Trade Commission (the "FTC") and the Antitrust Division of the Department of Justice (the "Antitrust Division") a Pre-merger Notification and Report Form under the HSR Act with respect to the Offer. Accordingly, it is anticipated that the waiting period under the HSR Act applicable to the Offer will expire at 11:59 p.m., New York City time, on Wednesday, February 8, 1995. Prior to the expiration or termination of such waiting period, the FTC or the Antitrust Division may extend such waiting period by requesting additional information from SNI 5 AG with respect to the Offer. If such a request is made with respect to the purchase of Shares in the Offer, the waiting period will expire at 11:59 p.m., New York City time, on the tenth calendar day after substantial compliance by SNI AG with such a request. Thereafter, the waiting period may only be extended by court order. The waiting period under the HSR Act may be terminated prior to its expiration by the FTC and the Antitrust Division. SNI AG has requested early termination of the waiting period, although there can be no assurance that this request will be granted. See Section 15 for additional information regarding the HSR Act. On January 24, 1995, SNI AG filed with the German Federal Cartel office (the "FCO") a pre-merger notification (a "Pre-Merger Notification"). Under German law, the Offer may not be consummated until antitrust review has been completed and no objections raised. See Section 15 for additional information regarding the German Pre-Merger Notification requirements and other regulatory filings. For purposes of the Offer, Purchaser will be deemed to have accepted for payment (and thereby purchased) Shares validly tendered and not properly withdrawn as, if and when Purchaser gives oral or written notice to the Depositary of Purchaser's acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payments from Purchaser and transmitting such payments to tendering stockholders whose Shares have been accepted for payment. Under no circumstances will interest on the purchase price for Shares be paid, regardless of any delay in making such payment. If any tendered Shares are not accepted for payment for any reason pursuant to the terms and conditions of the Offer, or if Share Certificates are submitted evidencing more Shares than are tendered, Share Certificates evidencing unpurchased Shares will be returned, without expense to the tendering stockholder (or, in the case of Shares tendered by book-entry transfer into the Depositary's account at a Book-Entry Transfer Facility pursuant to the procedure set forth in Section 3, such Shares will be credited to an account maintained at such Book-Entry Transfer Facility), as promptly as practicable following the expiration or termination of the Offer. Purchaser reserves the right to transfer or assign, in whole or from time to time in part, to one or more of its affiliates, the right to purchase all or any portion of the Shares tendered pursuant to the Offer, but any such transfer or assignment will not relieve Purchaser of its obligations under the Offer and will in no way prejudice the rights of tendering stockholders to receive payment for Shares validly tendered and accepted for payment pursuant to the Offer. 3. Procedures for Accepting the Offer and Tendering Shares. In order for a holder of Shares validly to tender Shares pursuant to the Offer, the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, together with any required signature guarantees, or an Agent's Message in connection with a book-entry delivery of Shares, and any other documents required by the Letter of Transmittal, must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase and either (i) the Share Certificates evidencing tendered Shares must be received by the Depositary at such address or such Shares must be tendered pursuant to the procedure for book-entry transfer described below and a Book-Entry Confirmation must be received by the Depositary, in each case prior to the Expiration Date, or (ii) the tendering stockholder must comply with the guaranteed delivery procedures described below. THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. 6 Book-Entry Transfer. The Depositary will establish accounts with respect to the Shares at the Book-Entry Transfer Facilities for purposes of the Offer within two business days after January 27, 1995. Any financial institution that is a participant in the system of any Book-Entry Transfer Facility may make a book-entry delivery of Shares by causing such Book-Entry Transfer Facility to transfer such Shares into the Depositary's account at such Book- Entry Transfer Facility in accordance with such Book-Entry Transfer Facility's procedures for such transfer. However, although delivery of Shares may be effected through book-entry transfer at a Book-Entry Transfer Facility, the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, together with any required signature guarantees, or an Agent's Message in connection with a book-entry transfer, and any other required documents, must, in any case, be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Date, or the tendering stockholder must comply with the guaranteed delivery procedure described below. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. Signature Guarantees. Signatures on all Letters of Transmittal must be guaranteed by a firm which is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc., or by a commercial bank or trust company having an office or correspondent in the United States (each of the foregoing being referred to as an "Eligible Institution"), except in cases where Shares are tendered (i) by a registered holder of Shares who has not completed either the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" on the Letter of Transmittal or (ii) for the account of an Eligible Institution. If a Share Certificate is registered in the name of a person other than the signer of the Letter of Transmittal, or if payment is to be made, or a Share Certificate not accepted for payment or not tendered is to be returned, to a person other than the registered holder(s), then the Share Certificate must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear on the Share Certificate, with the signature(s) on such Share Certificate or stock powers guaranteed by an Eligible Institution. See Instructions 1 and 5 of the Letter of Transmittal. Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to the Offer and such stockholder's Share Certificates evidencing such Shares are not immediately available or such stockholder cannot deliver the Share Certificates and all other required documents to the Depositary prior to the Expiration Date, or such stockholder cannot complete the procedure for delivery by book-entry transfer on a timely basis, such Shares may nevertheless be tendered, provided that all the following conditions are satisfied: (i) such tender is made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by Purchaser, is received prior to the Expiration Date by the Depositary as provided below; and (iii) the Share Certificates (or a Book-Entry Confirmation) evidencing all tendered Shares, in proper form for transfer, in each case together with the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message), and any other documents required by the Letter of Transmittal are received by the Depositary within five National Association of Securities Dealers Automated Quotation-- National Market System ("NASDAQ") trading days after the date of execution of such Notice of Guaranteed Delivery. The Notice of Guaranteed Delivery may be delivered by hand or mail or transmitted by telegram, telex or facsimile transmission to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in the form of Notice of Guaranteed Delivery made available by Purchaser. In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of the Share Certificates evidencing such Shares, or a 7 Book-Entry Confirmation of the delivery of such Shares, and the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message), and any other documents required by the Letter of Transmittal. Determination of Validity. All questions as to the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by Purchaser in its sole discretion, which determination shall be final and binding on all parties. Purchaser reserves the absolute right to reject any and all tenders determined by it not to be in proper form or the acceptance for payment of which may, in the opinion of its counsel, be unlawful. Purchaser also reserves the absolute right to waive any condition of the Offer or any defect or irregularity in the tender of any Shares of any particular stockholder, whether or not similar defects or irregularities are waived in the case of other stockholders. No tender of Shares will be deemed to have been validly made until all defects and irregularities have been cured or waived. None of Purchaser, SNI AG, the Dealer Manager, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. Purchaser's interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the instructions thereto) will be final and binding. Other Requirements. By executing the Letter of Transmittal as set forth above, a tendering stockholder irrevocably appoints designees of Purchaser as such stockholder's proxies, each with full power of substitution, in the manner set forth in the Letter of Transmittal, to the full extent of such stockholder's rights with respect to the Shares tendered by such stockholder and accepted for payment by Purchaser (and with respect to any and all other Shares or other securities issued or issuable in respect of such Shares on or after January 20, 1995). All such proxies shall be considered coupled with an interest in the tendered Shares. Such appointment will be effective when, and only to the extent that, Purchaser accepts such Shares for payment. Upon such acceptance for payment, all prior proxies given by such stockholder with respect to such Shares (and such other Shares and securities) will be revoked without further action, and no subsequent proxies may be given nor any subsequent written consent executed by such stockholder (and, if given or executed, will not be deemed to be effective) with respect thereto. The designees of Purchaser will, with respect to the Shares (and such other Shares and securities) for which the appointment is effective, be empowered to exercise all voting and other rights of such stockholder as they in their sole discretion may deem proper at any annual or special meeting of the Company's stockholders or any adjournment or postponement thereof, by written consent in lieu of any such meeting or otherwise. Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon Purchaser's payment for such Shares, Purchaser must be able to exercise full voting rights with respect to such Shares (and such other Shares and securities). 8 The acceptance for payment by Purchaser of Shares pursuant to any of the procedures described above will constitute a binding agreement between the tendering stockholder and Purchaser upon the terms and subject to the conditions of the Offer. TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING WITH RESPECT TO PAYMENT TO CERTAIN STOCKHOLDERS OF THE PURCHASE PRICE OF SHARES PURCHASED PURSUANT TO THE OFFER, EACH SUCH STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH SUCH STOCKHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER AND CERTIFY THAT SUCH STOCKHOLDER IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9 IN THE LETTER OF TRANSMITTAL. SEE INSTRUCTION 9 OF THE LETTER OF TRANSMITTAL. 4. Withdrawal Rights. Tenders of Shares made pursuant to the Offer are irrevocable except that tendered Shares may be withdrawn by the tendering stockholder at any time prior to the Expiration Date and, unless theretofore accepted for payment by Purchaser pursuant to the Offer, may also be withdrawn by such stockholder at any time after March 27, 1995. If Purchaser extends the Offer, is delayed in its acceptance for payment of Shares or is unable to accept Shares for payment pursuant to the Offer for any reason, then, without prejudice to Purchaser's rights under the Offer, the Depositary may, nevertheless, on behalf of Purchaser, retain tendered Shares, and such Shares may not be withdrawn except to the extent that tendering stockholders are entitled to withdrawal rights as described in this Section 4. Any such delay will be by an extension of the Offer to the extent required by law. For a withdrawal to be effective, a written, telegraphic, telex or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover page of this Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of such Shares, if different from that of the person who tendered such Shares. If Share Certificates evidencing Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such Share Certificates, the serial numbers shown on such Share Certificates must be submitted to the Depositary and the signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution, unless such Shares have been tendered for the account of an Eligible Institution. If Shares have been tendered pursuant to the procedure for book-entry transfer as set forth in Section 3, any notice of withdrawal must specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares, in which case a notice of withdrawal will be effective if delivered to the Depositary by any method of delivery described in the first sentence of this paragraph. All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by Purchaser, in its sole discretion, whose determination will be final and binding. None of Purchaser, SNI AG, Siemens AG, the Dealer Managers, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. Any Shares properly withdrawn will thereafter be deemed not to have been validly tendered for purposes of the Offer. However, withdrawn Shares may be re-tendered at any time prior to the Expiration Date by following one of the procedures described in Section 3. 5. Certain Federal Income Tax Consequences. The receipt of cash for Shares pursuant to the Offer or in the Merger will be a taxable transaction for federal income tax purposes and may also be a taxable transaction under applicable state, local or foreign tax laws. In general, a stockholder will recognize gain or loss for federal income tax purposes equal to the difference between the amount of cash received in exchange for the Shares sold and such stockholder's adjusted tax basis in such 9 Shares. Assuming the Shares constitute capital assets in the hands of the stockholder, such gain or loss will be capital gain or loss. If, at the time of the Offer or the Merger, the Shares then exchanged have been held for more than one year, such gain or loss will be long-term capital gain or loss. Under current law, long-term capital gains of individuals are, under certain circumstances, taxed at lower rates than items of ordinary income including short-term capital gains. THE FOREGOING DISCUSSION MAY NOT BE APPLICABLE TO CERTAIN TYPES OF STOCKHOLDERS, INCLUDING STOCKHOLDERS WHO ACQUIRED SHARES PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS COMPENSATION, INDIVIDUALS WHO ARE NOT CITIZENS OR RESIDENTS OF THE UNITED STATES AND FOREIGN CORPORATIONS. THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY AND IS BASED UPON PRESENT LAW. STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF THE OFFER AND THE MERGER TO THEM, INCLUDING THE APPLICATION AND EFFECT OF THE ALTERNATIVE MINIMUM TAX, AND STATE, LOCAL AND FOREIGN TAX LAWS. 6. Price Range of Shares; Dividends. The Shares are listed and principally traded on NASDAQ. The following table sets forth, for the quarters indicated, the high and low sales prices per Share on NASDAQ as reported by the Dow Jones News Service.
HIGH LOW ---- ---- Fiscal Year ending September 30, 1993: First Quarter............................................ $ 11 $ 6 Second Quarter........................................... 17 9 3/4 Third Quarter............................................ 20 3/4 11 1/4 Fourth Quarter........................................... 23 1/4 17 1/2 Fiscal Year ending September 30, 1994: First Quarter............................................ $21 1/4 $12 3/4 Second Quarter........................................... 16 1/4 7 7/8 Third Quarter............................................ 9 5 5/8 Fourth Quarter........................................... 9 3/16 5 1/2 Fiscal Year ending September 30, 1995: First Quarter (through December 31, 1994)................. $13 1/4 $ 8 1/8
The Company historically does not declare dividends. On January 6, 1995, the last full trading day prior to the announcement of discussions between SNI AG and the Company concerning a possible merger transaction, the closing price per Share as reported on NASDAQ was $12 1/4. On January 20, 1995, the last full trading day prior to the announcement of the execution of the Merger Agreement and of Purchaser's intention to commence the Offer, the closing price per Share as reported on NASDAQ was $14 7/8. On January 26, 1995, the last full trading day prior to the commencement of the Offer, the closing price per Share as reported on NASDAQ was $15 3/4. STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES. 7. Certain Information Concerning the Company. Except as otherwise set forth herein, the information concerning the Company contained in this Offer to Purchase, including financial information, has been furnished by the Company or has been taken from or based upon publicly available documents and records on file with the Commission and other public sources. Neither Purchaser, SNI AG, Siemens AG nor any of their respective affiliates assumes any responsibility for the accuracy or completeness of the information concerning the Company furnished by the Company or 10 contained in such documents and records or for any failure by the Company to disclose events which may have occurred or may affect the significance or accuracy of any such information but which are unknown to Purchaser, SNI AG, Siemens AG or their respective affiliates. General. The Company is a Delaware corporation with its principal executive offices located at 3860 N. First Street, San Jose, California 95134. The Company designs, manufactures, markets, and supports high-end, large-scale servers that deliver mainframe-class performance for the open enterprise client/server environment. These servers are aimed at the global 2000 marketplace which is comprised of certain Fortune 2000 businesses in the United States, representative corporations in other countries, and government agencies worldwide. The Company's high-availability, fault-resilient systems run large UNIX relational databases, and are based on a symmetrical multiprocessing (SMP) architecture that combines an enhanced UNIX operating system with reduced instruction set computing (RISC) processor technology. The Company's systems support up to 2,160 MIPS (millions of instructions-per- second), thousands of transactions-per-second, and more than 10,000 concurrent users in clustered configurations. Financial Information. Set forth below is certain selected consolidated financial information relating to the Company and its subsidiaries which has been excerpted or derived from the audited financial statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1994 (the "Form 10-K"). More comprehensive financial information is included in the Form 10-K and other documents filed by the Company with the Commission. The financial information that follows is qualified in its entirety by reference to such reports and other documents, including the financial statements and related notes contained therein. Such reports and other documents may be examined and copies may be obtained from the offices of the Commission in the manner set forth below. PYRAMID TECHNOLOGY CORPORATION SELECTED CONSOLIDATED FINANCIAL INFORMATION (IN THOUSANDS, EXCEPT PER SHARE DATA)
FISCAL YEAR ENDED SEPTEMBER 30, --------------------------------- 1994 1993 1992 ---------- ---------- ---------- INCOME STATEMENT DATA: Revenues.................................. 218,515 233,698 192,226 Gross Profit.............................. 79,932 101,577 68,697 Operating Income (Loss)................... (19,300) 9,335 (66,495) Income (Loss) Before Income Taxes......... (19,478) 9,593 (66,636) Net Income (Loss)......................... (22,413) 8,634 (59,707) Average Number of Shares Outstanding (as adjusted to give effect to stock dividends or stock splits)............... 13,467 12,890 11,962 Net Income (Loss) Per Share............... (1.66) 0.67 (4.99)
AT SEPTEMBER 30, ----------------- 1994 1993 -------- -------- BALANCE SHEET DATA: Current Assets.............................................. 132,629 130,335 Total Assets................................................ 190,713 191,658 Current Liabilities......................................... 50,712 53,555 Deferred Income Taxes....................................... 2,400 -- Noncurrent Portion of Long-Term Debt........................ 1,563 487 Stockholders' Equity........................................ 136,038 137,616
11 On January 18, 1995, the Company issued a press release in which it reported revenues of $62,119,000, and net income and net income per share of $1,300,000 and $.08, respectively, for its first fiscal quarter ended December 31, 1994. Results reported for the comparable period in fiscal year 1994 are revenues of $60,018,000, net income of $635,000 and net income per share of $.05. In connection with SNI AG's review of the Company and in the course of the negotiations between the Company and SNI AG described in Section 10, the Company provided SNI AG with certain business and financial information which SNI AG and Purchaser believe is not publicly available. The Company provided SNI AG with financial forecasts in which the Company projected that it would record total sales of approximately $280 million, $337 million and $424 million in the fiscal years ending September 30, 1995, 1996 and 1997, respectively, operating income of approximately $9 million, $18 million and $32 million in the same periods, respectively, net income of approximately $10 million, $15 million and $27 million in the same periods, respectively, and earnings per Share of $0.61, $0.85 and $1.35 in the same periods, respectively. PROJECTED INFORMATION OF THIS TYPE IS BASED ON ESTIMATES AND ASSUMPTIONS THAT ARE INHERENTLY SUBJECT TO SIGNIFICANT ECONOMIC AND COMPETITIVE UNCERTAINTIES AND CONTINGENCIES, ALL OF WHICH ARE DIFFICULT TO PREDICT AND MANY OF WHICH ARE BEYOND THE COMPANY'S CONTROL. ACCORDINGLY, THERE CAN BE NO ASSURANCE THAT THE PROJECTED RESULTS WOULD BE REALIZED OR THAT ACTUAL RESULTS WOULD NOT BE SIGNIFICANTLY HIGHER OR LOWER THAN THOSE SET FORTH ABOVE. IN ADDITION, THESE PROJECTIONS WERE NOT PREPARED WITH A VIEW TO PUBLIC DISCLOSURE OR COMPLIANCE WITH THE PUBLISHED GUIDELINES OF THE COMMISSION OR THE GUIDELINES ESTABLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS REGARDING PROJECTIONS AND FORECASTS AND ARE INCLUDED IN THIS OFFER TO PURCHASE ONLY BECAUSE SUCH INFORMATION WAS MADE AVAILABLE TO SNI AG BY THE COMPANY. NONE OF SIEMENS AG, SNI AG, PURCHASER, THE COMPANY, ANY OF THEIR RESPECTIVE AFFILIATES OR ANY OTHER PARTY ASSUMES ANY RESPONSIBILITY FOR THE ACCURACY OR VALIDITY OF THE FOREGOING PROJECTIONS. MOREOVER, NEITHER SIEMENS AG, SNI AG, PURCHASER NOR ANY OF THEIR AFFILIATES RELIED UPON THE FOREGOING FORECASTS PREPARED BY THE COMPANY IN ANY WAY IN FORMULATING THEIR OFFER TO ACQUIRE THE COMPANY. The Company is subject to the informational filing requirements of the Exchange Act and, in accordance therewith, is required to file periodic reports, proxy statements and other information with the Commission relating to its business, financial condition and other matters. Information as of particular dates concerning the Company's directors and officers, their remuneration, stock options granted to them, the principal holders of the Company's securities and any material interest of such persons in transactions with the Company is required to be disclosed in proxy statements distributed to the Company's stockholders and filed with the Commission. Such reports, proxy statements and other information should be available for inspection at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and also should be available for inspection at the Commission's regional offices located at 7 World Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials may also be obtained by mail, upon payment of the Commission's customary fees, by writing to its principal office at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The information should also be available for inspection at the National Association of Securities Dealers, Inc., 1735 K Street N.W., Washington, D.C. 20006. 8. Certain Information Concerning Purchaser, SNI AG and Siemens AG. Purchaser is a newly incorporated Delaware corporation organized in connection with the Offer and the Merger and has not carried on any activities other than in connection with the Offer and the Merger. The principal offices of Purchaser are located at 1301 Avenue of the Americas, New York, New York 10019-6022. Purchaser is a direct wholly owned subsidiary of SNI U.S., which is direct wholly owned subsidiary of SNI AG. SNI AG is a direct wholly owned subsidiary of Siemens AG. 12 Until immediately prior to the time that Purchaser will purchase Shares pursuant to the Offer, it is not anticipated that Purchaser will have any significant assets or liabilities or engage in activities other than those incident to its formation and capitalization and the transactions contemplated by the Offer and the Merger. Because Purchaser is newly formed and has minimal assets and capitalization, no meaningful financial information regarding Purchaser is available. SNI AG is a company organized under the laws of the Federal Republic of Germany, with its principal office at Heinz-Nixdorf-Ring 1, 33102 Paderborn, Federal Republic of Germany. SNI AG's principal business is the design, development, manufacture, purchase, marketing, leasing and selling of a wide range of information technology equipment. Siemens AG is a company organized under the laws of the Federal Republic of Germany, with its principal office at Wittelsbacherplatz 2, D-80333 Munich, Federal Republic of Germany. Siemens AG's principal business is the design, development, manufacture and marketing of a wide range of electrical and electronics products and systems. The name, citizenship, business address, principal occupation or employment, and five-year employment history for each of the directors and executive officers of Purchaser, SNI AG and Siemens AG and certain other information are set forth in Schedule I hereto. Based upon the consolidated financial statements of Siemens AG for the fiscal year ended September 30, 1994 (the "Siemens AG Financial Statements"), Siemens AG had (i) at September 30, 1994, consolidated total assets of 78.4 billion Deutschmarks ("DM") (including DM 24 billion in liquid assets), consolidated total liabilities of DM 56.6 billion and consolidated shareholders' equity of DM 21.8 billion and (ii) for the fiscal year ended September 30, 1994, consolidated sales of DM 84.6 billion and net income of DM 1,993 million. The exchange rate for DM into U.S. dollars (as determined from publicly available sources) was DM 1.55 per U.S. dollar on September 30, 1994 and DM 1.51 per U.S. dollar on January 25, 1995, and the average daily exchange rate for the fiscal year ended September 30, 1994 was DM 1.65 per U.S. dollar. More comprehensive financial information is included in the Siemens AG Financial Statements. The summary of such financial information included above is qualified in its entirety by reference to the Siemens AG Financial Statements, a copy of which has been filed as an exhibit to the Tender Offer Statement on Schedule 14D-1/13D (the "Schedule 14D-1") filed by Purchaser, SNI AG and Siemens AG with the Commission in connection with the Offer. As of the date hereof, SNI AG owns 2,717,743 Shares, which it acquired in a series of transactions. In 1985, the Company entered into a Convertible Subordinated and Preferred Stock Purchase Agreement (the "Nixdorf Stock Agreement") with Nixdorf Computer AG ("Nixdorf"). Under the Nixdorf Stock Agreement, Nixdorf purchased approximately 5% of the Shares. The Nixdorf Stock Agreement also gave Nixdorf the right to purchase its pro rata share of certain equity financings of the Company as long as Nixdorf held a minimum of 5% of the Shares. In March 1990, Nixdorf exercised its right to purchase approximately 140,000 Shares as part of the Company's secondary public offering of Shares, to maintain Nixdorf's pro rata equity ownership at approximately 5% of the Shares. In 1990, Nixdorf became majority-owned by Siemens AG, which renamed Nixdorf as SNI AG. Subsequently, on September 13, 1994, SNI U.S. purchased pursuant to the Purchase Agreement (i) 2,000,000 Shares and (ii) the Warrant to purchase up to 1,330,000 Shares, for an aggregate purchase price of $17,250,000. Subsequently, SNI U.S. transferred to SNI AG the 2,000,000 Shares and the Warrant. In connection with such transfer, SNI AG assumed all of SNI U.S.'s rights and obligations under the Purchase Agreement and the Registration Rights Agreement, both dated as of September 13, 1994, between the Company and SNI U.S. If SNI AG were to exercise the Warrant so as to acquire all of the 1,330,000 shares subject to the Warrant, it would then beneficially own 4,047,743 Shares, or approximately 23.9% of the then outstanding Shares. However, SNI AG does not currently intend to exercise the Warrant in connection with the Offer and the Merger. 13 Except as described in this Offer to Purchase, (i) none of Siemens AG, SNI AG or Purchaser nor, to the best knowledge of Purchaser and Siemens AG, any of the persons listed in Schedule I to this Offer to Purchase or any associate or majority-owned subsidiary of Purchaser, SNI AG, Siemens AG or any of the persons so listed beneficially owns or has any right to acquire, directly or indirectly, any Shares and (ii) none of Siemens AG, SNI AG or Purchaser nor, to the best knowledge of Purchaser and Siemens AG, any of the persons or entities referred to above nor any director, executive officer or subsidiary of any of the foregoing has effected any transaction in the Shares during the past 60 days. Pursuant to the terms of the Purchase Agreement, SNI AG agreed to vote all Shares owned by it, except with respect to certain extraordinary corporate transactions, in accordance with the recommendations of the Board of Directors of the Company on all matters to be voted on by holders of Shares in not less than the same proportion as the votes cast by the other holders of Shares with respect to such matters. Except as provided in the Merger Agreement and as otherwise described in this Offer to Purchase, none of Siemens AG, SNI AG, Purchaser, any other subsidiary of Siemens AG nor, to the best knowledge of SNI AG, Purchaser and Siemens AG, any of the persons listed in Schedule I to this Offer to Purchase, has any contract, arrangement, understanding or relationship with any other person with respect to any securities of the Company, including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or voting of such securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss, guarantees of profits, division of profits or loss or the giving or withholding of proxies. Except as set forth in this Offer to Purchase, since October 1, 1992, neither Purchaser, SNI AG nor Siemens AG nor, to the best knowledge of SNI AG, Purchaser and Siemens AG, any of the persons listed on Schedule I hereto, has had any business relationship or transaction with the Company or any of its executive officers, directors or affiliates that is required to be reported under the rules and regulations of the Commission applicable to the Offer. Except as set forth in this Offer to Purchase, since October 1, 1992, there have been no contacts, negotiations or transactions between any of Purchaser, SNI AG, Siemens AG, or any of their respective subsidiaries or, to the best knowledge of SNI AG, Purchaser and Siemens AG, any of the persons listed in Schedule I to this Offer to Purchase, on the one hand, and the Company or its affiliates, on the other hand, concerning a merger, consolidation or acquisition, tender offer or other acquisition of securities, an election of directors or a sale or other transfer of a material amount of assets. 9. Financing of the Offer and the Merger. The total amount of funds required by Purchaser to consummate the Offer and the Merger is estimated to be approximately $221 million, including approximately $3 million to pay related fees and expenses. Purchaser will obtain all of such funds from Siemens AG or one of Siemens AG's affiliates. Siemens AG and its affiliates will provide such funds from working capital. 10. Background of the Offer; Contacts with the Company; the Merger Agreement. Between 1985 and 1990, Nixdorf Computer AG (the predecessor to SNI AG) acquired 717,743 Shares. On August 21, 1994, the Company and SNI U.S. entered into the Purchase Agreement pursuant to which, on September 13, 1994, SNI purchased for an aggregate purchase price of $17,250,000 (i) 2,000,000 Shares and (ii) the Warrant, which permits the holder to purchase up to 1,330,000 Shares for $10 per Share. In connection with the transactions contemplated by the Purchase Agreement, SNI AG and the Company entered into Licensing and OEM Agreements pursuant to which SNI AG agreed to license the Company's UNIX operating system for massively parallel processing ("MPP") and was enabled to purchase the related MPP hardware product known as MESHine. Pursuant to the Purchase Agreement, the Company appointed Dr. Rudolf Bodo, Vice President and General Manager of SNI AG's Mid-Range Systems Unit, to the Company's Board of Directors. On November 22, 1994, SNI U.S. transferred to SNI AG 2,000,000 Shares and the Warrant, and in connection therewith, SNI AG assumed all of SNI U.S.'s rights and obligations under the Purchase Agreement. Following the closing of the transactions under the Purchase Agreement, the parties began to explore possible commercial arrangements designed to intensify the cooperation between SNI AG and the Company. In this context, representatives of the management of SNI AG and the Company met at 14 various times between late September and early December to discuss, among other things, the requirements of the high-end UNIX market, the high-end SMP systems of SNI AG and the Company, their respective mid-range systems product lines, marketing and sales strategies, and possible cooperative commercial arrangements relating to their mid-range businesses. On December 4, 1994, Gerhard Schulmeyer, President and Chief Executive Officer of SNI AG, and Dr. Bodo met in London with Richard Lussier, Chairman and Chief Executive Officer of the Company, John Chen, President of the Company, Kent Robertson, Chief Financial Officer of the Company, and David Martin, a consultant to the Company, to continue the discussion of possible commercial arrangements between SNI AG and the Company. During that meeting, the parties discussed on a preliminary basis the form that such arrangements might take, either on the basis of SNI AG continuing in its current ownership position in the Company or under a possible scenario where SNI AG would increase its ownership level. On December 15, 1994, Dr. Bodo and Mr. Martin had further discussions of the possible commercial arrangements to be entered into on the basis of SNI AG continuing in its current ownership position in the Company. On December 21, 1994, Mr. Schulmeyer informed Mr. Lussier in a telephone call that the Managing Board of Siemens AG had authorized Mr. Schulmeyer to engage in exploratory discussions with the Company in order to determine the feasibility of acquiring the Company. The next day, Mr. Lussier and Mr. Schulmeyer agreed to meet on December 28, 1994 to begin those discussions. On December 23, Mr. Schulmeyer telephoned Mr. Lussier to cancel the scheduled meeting, stating that such discussions would not be feasible in light of the then volatile market trading of the Shares. Early in the evening of January 6, 1995, SNI AG delivered to the Company the following letter: Gerhard Schulmeyer President and Chief Executive Officer Siemens Nixdorf Informations Systems AG January 6, 1995 VIA FACSIMILE AND COURIER Mr. Richard H. Lussier Chairman and Chief Executive Officer Pyramid Technology Corporation 3860 N. First Street San Jose, California 95134 Dear Richard: Since our additional investment and related agreements concluded in the summer of 1994, we have discussed different options for enhancing the cooperation between our companies. Based on these discussions, it is my understanding that Pyramid Technology Corporation ("Pyramid" or the "Company") believes a 100% acquisition by Siemens Nixdorf to be the preferred option for achieving the potential synergies that we all recognize exist. Having carefully considered the matter further, we have now concluded that the combination of Siemens Nixdorf's mid-range activities with the Company maximizes these synergies and results in a much more effective competitor than either could be on a stand-alone basis. Accordingly, we are writing to request the written consent of the Company to permit Siemens Nixdorf to make an offer to acquire Pyramid in a merger transaction in which your stockholders 15 would receive $15 in cash for each outstanding Share of the Company's common stock. As you know, Section 7.1 of the Common Stock and Warrant Purchase Agreement dated as of August 21, 1994 between Pyramid and Siemens Nixdorf prohibits the making of an acquisition offer by Siemens Nixdorf without the prior written consent of Pyramid. More importantly, we are only interested in pursuing a transaction that has the endorsement of the Company's Board of Directors. Based on our familiarity with the Company and our knowledge of the industry and the marketplace, we believe, and our financial advisors concur, that such a $15 offer price would represent a full and fair value for the Company and should be enthusiastically supported by both your Board of Directors and stockholders. In fact, such an offer price would represent a premium of over 40% above the weighted average closing price of the Company's common stock both for the last calendar quarter and calendar year 1994. If the Company's Board of Directors were to grant its consent, our offer would not be conditioned upon our obtaining financing (although, of course, it would be subject to required regulatory approvals and other customary conditions). We would like very much to enter into immediate discussions with both you and John Chen concerning our request. I stand ready to meet with the two of you and your advisors over this weekend in Chicago to begin these discussions. Our legal and financial advisors will also be available as necessary. As part of these discussions, we look forward to exploring ways to preserve the Company's strong entrepreneurial culture and to recognize the past and future contribution of your talented engineering team and other key employees to the Company's success. We have given some thought to the kinds of compensation plans that would create the right incentives for your employees and preserve the Company's culture of innovation and excellence. Obviously, we will want to work together with the Company's management in formulating suitable compensation plans and targets. If you and John think it would be helpful, I would also be pleased to meet on short notice with members of your engineering team and other key employees to discuss our vision for the combined operation and their role in it. Although we would have preferred not to disclose publicly the contents of this letter, our lawyers advise us that we are obligated under applicable securities laws to do so. As a result, we will be filing a copy of this letter on Monday with the Securities and Exchange Commission. We ask that you and your Board of Directors consider our request promptly so that we may also make our offer, which we believe would position the Company and its employees for an exciting future while maximizing value for its stockholders. Sincerely, /s/ Gerhard Schulmeyer Later that evening, Mr. Lussier informed Mr. Schulmeyer that the Board of Directors of the Company would meet on Sunday, January 8 to consider the request of SNI AG set forth in the letter. Subsequent to that meeting of the Board of Directors, Mr. Lussier, together with other representatives of the Company and the Company's legal and financial advisors, telephoned 16 Mr. Schulmeyer, who was meeting with other representatives of SNI AG and SNI AG's financial and legal advisors, to inform Mr. Schulmeyer that the Board of Directors of the Company had consented to SNI AG's making an offer to the Company solely for the purpose of allowing the parties to engage in discussions concerning a negotiated merger transaction, but had not agreed to the terms of the January 6 letter. On January 9, the Company and SNI AG jointly issued a press release describing those events, and counsel to SNI AG delivered to the Company's counsel a preliminary draft of the Merger Agreement. Between January 11 and January 14, various representatives of SNI AG and the Company and their respective financial and legal advisors had a number of meetings and telephone conversations to discuss financial valuation issues and the draft Merger Agreement. On January 16, the Company's Board of Directors met to review the proposed transaction and received presentations from the Company's management and its legal and financial advisors. Subsequent to that meeting, Mr. Lussier advised Mr. Schulmeyer that the Board of Directors had instructed the Company's management to continue the discussions with SNI AG but to seek a higher price. On January 17, representatives of SNI AG and the Company and their respective financial advisors met to continue discussions of financial valuation issues. During the evening of January 17, Mr. Schulmeyer telephoned Mr. Lussier and informed him that SNI AG was prepared to increase marginally its original $15.00 per Share price. The Company's Board of Directors had a meeting the following morning to continue their review of the transaction. During the course of a conversation between Mr. Schulmeyer and Mr. Lussier later that day, Mr. Schulmeyer indicated that he would be willing to increase the price to $16.00 per Share, subject to satisfactory resolution of the outstanding issues under the proposed Merger Agreement and the negotiation of satisfactory employment arrangements with key members of the Company's management. Mr. Lussier indicated to Mr. Schulmeyer that he was prepared to recommend to the Company's Board of Directors an acquisition at that price, subject to satisfactory resolution of the outstanding issues under the proposed Merger Agreement. On January 19 and 20, various representatives of SNI AG and the Company and their respective legal advisors had telephone conversations to resolve various issues relating to the proposed Merger Agreement and representatives of SNI AG met with certain key employees of the Company to discuss employment arrangements in the event that SNI AG were to acquire the Company. Late in the afternoon of January 20, the Company's Board of Directors met to review the terms of the proposed transaction and received presentations from the Company's management and legal and financial advisors. At that meeting, Smith Barney delivered to the Company's Board of Directors its written opinion dated January 20, 1995 that, as of such date, the consideration to be received by the stockholders in the Offer and the Merger was fair from a financial point of view. The Company's Board of Directors was advised that SNI AG's proposal to acquire the Company at $16.00 per Share was conditioned on a satisfactory employment contract with John Chen to serve as chief executive officer of the Company following the consummation of the proposed transaction. At that meeting, the Board of Directors approved the Merger Agreement, the Offer and the Merger, subject to the satisfaction of the foregoing condition imposed by SNI AG. On January 21, representatives of SNI AG and its legal advisors met with Mr. Chen and his attorney to finalize the terms of his employment agreement and with Mr. Lussier to discuss the terms of his future employment. Later that day, Mr. Chen entered into an employment agreement with the Company, which will become effective at the Effective Time; SNI AG, Purchaser and the Company entered into the Merger Agreement; and the Company and Mr. Lussier had discussions regarding the terms of Mr. Lussier's employment within the Siemens group after the consummation of the Merger. On January 23, the Company and SNI AG jointly issued a press release relating to these events. On January 27, Purchaser commenced the Offer. 17 Dr. Rudolf Bodo, a director of the Company, recused himself from those Board meetings or portions of meetings in which the Company's Board discussed the Merger Agreement. Dr. Bodo is SNI AG's designee on the Company's Board of Directors pursuant to Section 6.2 of the Purchase Agreement. THE MERGER AGREEMENT The following is a summary of the Merger Agreement, a copy of which is filed as an Exhibit to the Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1") filed by Purchaser, Siemens AG and SNI AG with the Commission in connection with the Offer. Such summary is qualified in its entirety by reference to the Merger Agreement. Capitalized terms not otherwise defined in the following description of the Merger Agreement have the respective meanings ascribed to them in the Merger Agreement. The Offer. The Merger Agreement provides for the commencement of the Offer as promptly as reasonably practicable, but in no event later than five business days after the initial public announcement of Purchaser's intention to commence the Offer. The obligation of Purchaser to accept for payment Shares tendered pursuant to the Offer is subject to the satisfaction of the Minimum Condition and certain other conditions that are described in Section 14 hereof. Purchaser and SNI AG have agreed that no change in the Offer may be made which decreases the price per Share payable in the Offer, reduces the maximum number of Shares to be purchased in the Offer, imposes conditions to the Offer in addition to those set forth in Section 14 hereof, changes the form of consideration payable in the Offer or amends any other terms of the Offer in a manner adverse to the Company's stockholders. The Merger. The Merger Agreement provides that, upon the terms and subject to the conditions thereof, and in accordance with Delaware Law, at the Effective Time, Purchaser shall be merged with and into the Company. As a result of the Merger, the separate corporate existence of Purchaser will cease and the Company will continue as the Surviving Corporation (the "Surviving Corporation") and will become an indirect wholly owned subsidiary of SNI AG. Upon consummation of the Merger, each issued and then outstanding Share (other than any Shares held in the treasury of the Company, or owned by Purchaser, SNI AG or any direct or indirect wholly owned subsidiary of SNI AG or of the Company and any Shares which are held by stockholders who have not voted in favor of the Merger or consented thereto in writing and who shall have demanded properly in writing appraisal for such Shares in accordance with Delaware Law) shall be automatically converted into, and exchanged for, the right to receive the Merger Consideration. Pursuant to the Merger Agreement, each share of common stock, par value $.01 per share, of Purchaser issued and outstanding immediately prior to the Effective Time shall be converted into and exchanged for one share of common stock, par value $.01 per share, of the Surviving Corporation. The Merger Agreement provides that the directors of Purchaser immediately prior to the Effective Time will be the initial directors of the Surviving Corporation and that the officers of the Company immediately prior to the Effective Time will be the initial officers of the Surviving Corporation. The Merger Agreement provides that, at the Effective Time, unless otherwise determined by SNI AG prior to the Effective Time, the Certificate of Incorporation of Purchaser will be the Certificate of Incorporation of the Surviving Corporation. The Merger Agreement also provides that the By-laws of Purchaser, as in effect immediately prior to the Effective Time, will be the By-laws of the Surviving Corporation. Agreements of SNI AG, Purchaser and the Company. Pursuant to the Merger Agreement, the Company will, if required by applicable law in order to consummate the Merger, duly call, give notice of, convene and hold an annual or special meeting of its stockholders as soon as practicable following consummation of the Offer for the purpose of considering and taking action on the Merger Agreement and the Transactions (the "Stockholders' Meeting"). If Purchaser acquires at least a majority of the 18 outstanding Shares, Purchaser will have sufficient voting power to approve the Merger, even if no other stockholder votes in favor of the Merger. The Merger Agreement provides that the Company will, if required by applicable law, as soon as practicable following consummation of the Offer, file with the Commission under the Exchange Act, and use its best efforts to have cleared by the Commission, a proxy statement and related proxy materials (the "Proxy Statement") with respect to the Stockholders' Meeting and will cause the Proxy Statement to be mailed to stockholders of the Company at the earliest practicable time. The Company has agreed, subject to its fiduciary duties under applicable law as advised by counsel, to include in the Proxy Statement the recommendation of the Board that the stockholders of the Company approve and adopt the Merger Agreement and the transactions contemplated thereby and to use its best efforts to obtain such approval and adoption. SNI AG and Purchaser have agreed to cause all Shares then owned by them and their subsidiaries to be voted in favor of approval and adoption of the Merger Agreement and the transactions contemplated thereby. The Merger Agreement provides that, in the event that Purchaser shall acquire at least 90 percent of the then outstanding Shares, SNI AG, Purchaser and the Company agree, at the request of Purchaser, to take all necessary and appropriate action to cause the Merger to become effective as promptly as reasonably practicable after such acquisition, without a meeting of the Company's stockholders, in accordance with Delaware Law. Pursuant to the Merger Agreement, the Company has covenanted and agreed that, between the date of the Merger Agreement and the Effective Time, unless SNI AG shall otherwise agree in writing, the businesses of the Company and its subsidiaries (the "Subsidiaries" and, individually, a "Subsidiary") will be conducted only in, and the Company and the Subsidiaries will not take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company will use its reasonable best efforts to preserve substantially intact the business organization of the Company and the Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. The Merger Agreement provides that by way of amplification and not limitation, and except as contemplated therein, neither the Company nor any Subsidiary will, between the date of the Merger Agreement and the Effective Time, directly or indirectly do, or propose to do, any of the following, without the prior written consent of SNI AG: (a) amend or otherwise change its Certificate of Incorporation or By-laws or equivalent organizational documents; (b) issue, sell, pledge, dispose of, grant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of (i) any shares of capital stock of any class of the Company or any Subsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary (except for the issuance of a maximum of 3,449,923 Shares issuable pursuant to employee stock options outstanding on the date of the Merger Agreement, and except for the grant of stock options under the Company's Stock Option and Purchase Plans (and the resulting issuance of shares thereunder) consistent with established practice to certain new employees of the Company hired after December 7, 1994 or (ii) any assets of the Company or any Subsidiary, except for sales of products in the ordinary course of business and in a manner consistent with past practice; (c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock; (d) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock; (e) (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any corporation, partnership, other business organization or any division thereof or any material amount of assets, (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except in the ordinary course of business and consistent with past practice, (iii) enter into any contract or agreement other than in the 19 ordinary course of business, consistent with past practice, (iv) other than in the ordinary course of business, consistent with past practice, authorize any single capital expenditure which is in excess of $250,000 or capital expenditures which are, in the aggregate, in excess of $500,000 for the Company and the Subsidiaries taken as a whole, or (v) enter into or amend any contract, agreement, commitment or arrangement with respect to any of the foregoing matters; (f) other than pursuant to disclosed policies or agreements of the Company or any of its Subsidiaries in effect on or prior to the date of the Merger Agreement increase the compensation payable or to become payable to its officers or employees, except for increases in accordance with past practices in salaries or wages of employees of the Company or any Subsidiary who are not officers of the Company, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company or any Subsidiary, or establish, adopt, enter into or amend any collective bargaining, bonus, profit/sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee; (g) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures; (h) make any tax election or settle or compromise any material federal, state, local or foreign income tax liability; (i) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities incurred in the ordinary course of business and consistent with past practice; (j) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries (other than the Merger); (k) settle or compromise any pending or threatened suit, action or claim which is material or which relates to any of the Transactions; or (l) take or offer or propose to take, or agree to take in writing, or otherwise, any of the actions described above or any action which would make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect as of the date when made if such action had then been taken, or would result in any of the offer conditions not being satisfied. The Merger Agreement provides that, promptly upon the purchase by Purchaser of Shares pursuant to the Offer, and from time to time thereafter, Purchaser will be entitled to designate up to such number of directors, rounded up to the next whole number, on the Board as shall give Purchaser representation on the Board equal to the product of the total number of directors on the Board (giving effect to the directors elected pursuant to this sentence), multiplied by the percentage that the aggregate number of Shares beneficially owned by Purchaser or any affiliate of Purchaser following such purchase bears to the total number of Shares then outstanding, and the Company will, at such time, promptly take all actions necessary to cause Purchaser's designees to be elected as directors of the Company, including increasing the size of the Board or securing the resignations of incumbent directors, or both. The Merger Agreement also provides that, at such times, the Company will cause persons designated by Purchaser to constitute the same percentage as persons designated by Purchaser shall constitute of the Board of (i) each committee of the Board, (ii) each board of directors of each domestic Subsidiary and (iii) each committee of each such board, in each case only to the extent permitted by applicable law. Until the earlier of (i) the time Purchaser acquires a majority of the then outstanding Shares on a fully diluted basis and (ii) the Effective Time, the Company has agreed to use its best efforts to ensure that all the members of the Board and each committee of the Board and such boards and committees of the domestic Subsidiaries as of the date of the Merger Agreement who are not employees of the Company shall remain members of the Board and of such boards and committees. The Merger Agreement provides that following the election or appointment of Purchaser's designees in accordance with the immediately preceding paragraph and prior to the Effective Time, any amendment of the Merger Agreement or the Certificate of Incorporation or By-laws of the 20 Company, any termination of the Merger Agreement by the Company, any extension by the Company of the time for the performance of any of the obligations or other acts of SNI AG or Purchaser or waiver of any of the Company's rights thereunder, will require the concurrence of a majority of those directors of the Company then in office who were neither designated by Purchaser nor are employees of the Company. Pursuant to the Merger Agreement, from the date of the Merger Agreement until the Effective Time, the Company will, and will cause the Subsidiaries and the officers, directors, employees, auditors and agents of the Company and the Subsidiaries to, afford the officers, employees and agents of SNI AG and Purchaser complete access at all reasonable times to the officers, employees, agents, properties, offices, plants and other facilities, books and records of the Company and each Subsidiary, and will furnish SNI AG and Purchaser with all financial, operating and other data and information as SNI AG or Purchaser, through its officers, employees or agents, may reasonably request and SNI AG and Purchaser have agreed to keep such information confidential, except in certain circumstances. The Company has agreed that neither it nor any Subsidiary will, and neither the Company nor any Subsidiary will permit any officer, director or agent to solicit, initiate or encourage the submission of any proposal or offer from any person relating to any acquisition or purchase of all or (other than in the ordinary course of business) any portion of the assets of, or any equity interest in, the Company or any Subsidiary or any business combination with the Company or any Subsidiary (whether by a tender offer, exchange offer, merger, consolidation or otherwise), participate in any negotiations regarding, or furnish to any other person any information with respect to, any of the foregoing (an "Acquisition Proposal"). The Merger Agreement requires the Company immediately to cease and cause to be terminated any existing discussions or negotiations with any parties conducted prior to the date of the Merger Agreement with respect to any of the foregoing. The Company has also agreed to notify SNI AG promptly if any such proposal or offer, or any inquiry or contact with any person with respect thereto, is made and, in any such notice to SNI AG, to indicate in reasonable detail the identity of the person making such proposal, offer, inquiry or contact and the terms and conditions of such proposal, offer, inquiry or contact. The Company has also agreed not to release any third party from, or waive any provision of, any confidentiality or standstill agreement to which the Company is a party, except to the extent required by fiduciary obligations under applicable law as advised by independent counsel. Notwithstanding the foregoing, the Merger Agreement provides that, to the extent required by fiduciary obligations under applicable law as advised by independent counsel, the Company may, in response to an Acquisition Proposal which was not solicited after the date of this Agreement, participate in discussions or negotiations with, or furnish information with respect to the Company pursuant to a confidentiality agreement in reasonably customary form, to any person. The Merger Agreement further provides that following the receipt of an Acquisition Proposal, which the Board of Directors of the Company, after consultation with and based on the advice of independent legal counsel and its financial advisor, determines in good faith to be more favorable to the Company's stockholders than the Offer and the Merger (a "Superior Proposal"), the Company may, upon payment of the Fee and Expenses (as defined hereafter) as required by Section 8.01(d)(ii) of the Merger Agreement, terminate the Merger Agreement and accept such Superior Proposal, and the Board of Directors of the Company may approve or recommend such Superior Proposal and, in connection therewith, withdraw or modify its approval or recommendation of the Offer, the Merger Agreement or the Merger. None of the foregoing shall prohibit the Company or its Board of Directors from (i) taking, and disclosing to the Company's stockholders, a position with respect to an Acquisition Proposal pursuant to Rules 14d-9 and 14e-2(a) under the Exchange Act or (ii) making any disclosure to the Company's stockholders that, in the judgment of the Board of Directors of the Company, is required under applicable law. The Merger Agreement provides that, in accordance with the terms of the Company's Executive Officers Nonstatutory Stock Option Plan and Amended and Restated Directors' Option Plan and Share Option Scheme for U.K. Executives (collectively, the "non-1982 Stock Option Plans"), each 21 outstanding employee or director stock option to purchase Shares granted under any non-1982 Stock Option Plan will be made exercisable on the date this Merger Agreement is signed, regardless of whether they would otherwise be exercisable under the terms of such non-1982 Stock Option Plan. Any non-1982 Plan Option not exercised by the Effective Time will be cancelled by the Company and no payment shall be made therefor. The Merger Agreement provides that each outstanding employee or director stock option to purchase Shares (a "1982 Plan Option") granted under the Company's amended 1982 Incentive Stock Option Plan will be made exercisable on the date that Purchaser accepts for payment Shares tendered pursuant to the Offer regardless of whether such stock options would otherwise be exercisable under the terms of the Amended 1982 Incentive Stock Option Plan. The Merger Agreement provides further that, on such date, each 1982 Plan Option, other than any 1982 Plan Option that was granted to any "officer" (as that term is defined in Rule 16a-1(f) promulgated by the SEC) of the Company (a "Section 16 Insider Option") will be cancelled without further action required on the part of the holder of such option, in exchange for the right to receive, as soon as practicable following Purchaser's acceptance for payment of Shares tendered pursuant to the Offer, a cash payment by the Purchaser to the holder in an amount equal to the excess, if any, of $16.00 over the exercise price per share of the 1982 Plan Option minus applicable withholding. Each outstanding Section 16 Insider Option shall be treated in one of two ways. First, with respect to Section 16 Insider Options that were granted at any time before the date that is six months prior to the Effective Time (the "Old Insider Options"), such options must be exercised immediately following their vesting acceleration; to the extent that such Old Insider Options are not so exercised, they will be cancelled by the Company and no payment will be made therefor. Second, with respect to Section 16 Insider Options that were granted at any time on or after the date that is six months prior to the Effective Time (the "Recent Insider Options"), such options will remain outstanding in accordance with their terms (amended as provided below) and will not be affected in any way by the consummation of the Merger, except for their becoming exercisable in full pursuant to the first sentence of this subsection. As soon as practicable following the Effective Time, but at least six months after the grant date of any Recent Insider Option, Parent, in its capacity as sole stockholder of the Surviving Corporation, will approve amendments to the Amended 1982 Incentive Stock Option Plan to provide (a) that upon exercise of a Recent Insider Option, the holder will receive an amount in cash per Share equal to the excess, if any, of $16.00 over the exercise price per share of the Recent Insider Option, minus applicable withholding, and (b) that each Recent Insider Option that has not been exercised as of July 31, 1995 will be cancelled by the Surviving Corporation on such date and no payment shall be made therefor. With respect to the Company's 1987 Employee Stock Purchase Plan (the "Purchase Plan"), the Merger Agreement provides that the offering period currently in progress will be shortened by setting a new exercise date which will be the date immediately preceding the Effective Time (the "New Exercise Date"). The Purchase Plan will terminate immediately following the purchase of Shares on the New Exercise Date. The Merger Agreement provides that SNI AG will cause the Surviving Corporation, for a period of at least two years following the acceptance of Shares by Purchaser pursuant to the Offer, to continue to provide the employees of the Surviving Corporation with the employee pension, welfare and fringe benefits currently in effect (except that as soon as practicable following the Effective Time, SNI AG will cause the Surviving Corporation to amend the Surviving Corporation 401(k) plan to effect an appropriate increase to the rate of employer matching contributions and/or discretionary contributions so as to compensate the employees for the termination of the Purchase Plan) or substitute benefits that are substantially comparable to, and in the aggregate no less favorable than, such employee pension, welfare and fringe benefits. Pursuant to the Merger Agreement, as soon as practicable following the Effective Time, SNI AG will cause the Surviving Corporation to implement a phantom equity or long-term incentive program instead of the stock option plans as currently in effect to reward revenue growth and profitability over a 22 three year period, which program will be designed by SNI AG following good faith consultation with the Surviving Corporation's senior management and under which program potential payments shall be at a level consistent with the objective of preserving the entrepreneurial character of the Surviving Corporation. Such program will also contain provisions providing for the conversion of awards into common equity of the Surviving Corporation in the event of an initial public offering of the common equity of the Surviving Corporation. The Merger Agreement provides that SNI AG will cause the Surviving Corporation to retain the Management Incentive Plan (the "MIP") until September 30, 1995, as modified as provided below, with the same employees remaining eligible for bonuses thereunder. The amounts payable to each of the Surviving Corporation's executive officers participating in the MIP will be increased by 30%. Each other participant in the MIP will be given the right to elect, no later than 30 days following the Effective Time, either (i) the 30% increase described in the immediately proceeding sentence or (ii) a guaranteed minimum bonus equal to 50% of such participant's bonus at 100% target performance. The Merger Agreement provides further that appropriate adjustments will be made to the plan target levels to eliminate the effect of legal, investment banking and other extraordinary fees and expenses incurred by the Surviving Corporation as a consequence of the transactions effected pursuant to the Merger Agreement and the preparation and negotiations leading thereto. Pursuant to the Merger Agreement, SNI AG will cause the Surviving Corporation to establish a bonus system for selected non-MIP, non-sales employees which will reward milestones, for example, in the development of products. As soon as practicable following the Effective Time, SNI AG will cause the Surviving Corporation to enter into retention bonus agreements with up to 30 employees of the Surviving Corporation to be identified by mutual agreement of SNI AG and senior management of the Company. Such retention bonus agreements will be in a form to be established by SNI AG following good faith consultation with senior management of the Surviving Corporation and will provide each covered employee with the opportunity to receive a retention bonus (in addition to any bonus payable under the MIP or other annual bonus plan) of up to 100% of such employee's base salary on the second anniversary of the Effective Time, subject to such employee being employed by the Surviving Corporation on such anniversary date. Pursuant to the Merger Agreement, the Surviving Corporation and SNI AG agree that for a period ending not sooner than the sixth anniversary of the Effective Time, the Surviving Corporation will maintain all rights to indemnification (including with respect to the advancement of expenses incurred in the defense of any action or suit) existing on the date of this Agreement in favor of the present and the former directors, officers, employees and agents of the Company as provided in the Company's Certificate of Incorporation and Bylaws and as set forth in the Indemnification Agreements listed in Section 6.07 of the Disclosure Schedule to the Merger Agreement (true and correct copies of which have been made available to Purchaser), in each case as in effect on the date of the Merger Agreement, and that during such period, the Certificate of Incorporation and Bylaws of the Surviving Corporation will not be amended to reduce or limit the rights of indemnity afforded to the present and former directors, officers, employees and agents of the Company, or the ability of the Surviving Corporation to indemnify them, nor to hinder, delay or make more difficult the exercise of such rights or indemnity or the ability to indemnify. The Merger Agreement provides that SNI AG and the Surviving Corporation will use their respective reasonable best efforts to maintain in effect for three years from the Effective Time, if available, the current directors' and officers' liability insurance policies maintained by the Company (provided that the Surviving Corporation may substitute therefor policies of at least the same coverage containing terms and conditions which are not materially less favorable) with respect to matters occurring prior to the Effective Time; provided, however, that in no event will the Surviving Corporation 23 be required to expend more than an amount per year equal to 150% of the current annual premiums paid by the Company for such insurance (which premiums the Company has represented to SNI AG and Purchaser to be $533,000 in the aggregate). The Merger Agreement provides that, subject to its terms and conditions, each of the parties thereto will (i) make promptly its respective filings, and thereafter make any other required submissions, under the HSR Act and any other applicable statutes or regulations with respect to the Transactions and (ii) use all reasonable best efforts to take, or cause to be taken, all appropriate action, and to do or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by the Merger Agreement, including, without limitation, using all reasonable best efforts to obtain all licenses, permits (including, without limitation, Environmental Permits), consents, approvals, authorizations, qualifications and orders of governmental authorities and parties to contracts with the Company and the Subsidiaries as are necessary for the consummation of the Transactions and to fulfill the conditions to the Offer and the Merger. SNI AG will give notice promptly to the Chairman of the Committee on Foreign Investment in the United States pursuant to Section 721 of the Defense Production Act of 1950, as amended, and the regulations promulgated thereunder (the "Exon-Florio Provision") of the Transactions, and each of the parties to the Merger Agreement agree to make additional filings and submissions as may be reasonably necessary under the Exon-Florio Provision in respect of the Transactions. Pursuant to the Merger Agreement, SNI AG and the Company agree to consult and cooperate with one another, and consider in good faith the views of one another, in connection with any analyses, appearances, presentations, memoranda, briefs, arguments, opinions or proposals made or submitted by or on behalf of any party hereto in connection with proceedings under or relating to the HSR Act, the Exon-Florio Provision, the pre-notification requirements of any foreign jurisdiction, or any other federal or state antitrust or fair trade law. In case at any time after the Effective Time any further action is necessary or desirable to carry out the purposes of the Merger Agreement, the proper officers and directors of each party to the Merger Agreement are required to use their reasonable best efforts to take all such action. The Merger Agreement provides that, no later than five days after the execution of the Merger Agreement, the Company will notify the New Jersey Department of Environmental Protection and Energy (the "NJDEPE") of the Offer and the other Transactions (including, without limitation, the Merger) pursuant to the requirements of ISRA. Immediately thereafter, the Company will make application to the NJDEPE for a negative declaration or a remediation agreement as appropriate under ISRA. SNI AG will cooperate with and assist the Company in any reasonable manner in connection with obtaining such negative declaration or remediation agreement. The Company shall not enter into any remediation agreement without the prior written consent of SNI AG. SNI AG and Purchaser agree to offer to enter into any remediation agreement with the NJDEPE pursuant to the requirements of ISRA as may be necessary to permit the consummation of the Transactions unless such remediation agreement would have a Material Adverse Effect. See Section 15. Representations and Warranties. The Merger Agreement contains various customary representations and warranties of the parties thereto including representations by the Company and Seller as to the absence of certain changes or events concerning the Company's business, compliance with law, litigation, employee benefit plans, real property and leases, trademarks, patents and copyrights, environmental matters, material contracts and insurance. Conditions to the Merger. Under the Merger Agreement, the respective obligations of each party to effect the Merger are subject to the satisfaction at or prior to the Effective Time of the following conditions: (a) the Merger Agreement and the transactions contemplated thereby shall have been approved and adopted by the affirmative vote of the stockholders of the Company to the extent 24 required by Delaware Law and the Company's Certificate of Incorporation; (b) any waiting period (and any extension thereof) applicable to the consummation of the Merger under the HSR Act and any other applicable statutes or regulations shall have expired or been terminated and the Company shall have obtained a negative declaration or executed a remediation agreement with the NJDEPE pursuant to the requirements of ISRA; (c) no foreign, United States or state governmental authority or other agency or commission or foreign, United States or state court of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any law, rule, regulation, executive order, decree, injunction or other order (whether temporary, preliminary or permanent) which is then in effect and has the effect of making the acquisition of Shares by SNI AG or Purchaser or any affiliate of either of them illegal or otherwise restricting, preventing or prohibiting consummation of the Transactions; and (d) Purchaser or its permitted assignee shall have purchased all Shares validly tendered and not withdrawn pursuant to the Offer; provided, however, that this condition shall not be applicable to the obligations of SNI AG or Purchaser if, in breach of the Merger Agreement or the terms of the Offer, Purchaser fails to purchase any Shares validly tendered and not withdrawn pursuant to the Offer. Termination; Fees and Expenses. The Merger Agreement provides that it may be terminated and the Merger and the other Transactions may be abandoned at any time prior to the Effective Time, notwithstanding any requisite approval and adoption of the Merger Agreement and the Transactions by the stockholders of the Company (provided, however, that if Shares are purchased pursuant to the Offer, SNI AG or Purchaser may not in any event terminate the Merger Agreement): (a) by mutual written consent duly authorized by the Boards of Directors of SNI AG, Purchaser and the Company; (b) by SNI AG, Purchaser or the Company if (i) the Effective Time shall not have occurred on or before July 31, 1995; provided, however, that the right to terminate the Merger Agreement shall not be available to any party whose failure to fulfill any obligation under the Merger Agreement has been the cause of, or resulted in, the failure of the Effective Time to occur on or before such date, or (ii) any court of competent jurisdiction or other governmental authority shall have issued an order, decree or ruling or shall have taken any other action restraining, enjoining or otherwise prohibiting the Merger and such order, decree, ruling or other action shall have become final and nonappealable; (c) by SNI AG if (i) as the result of a failure of any condition set forth in Section 14 hereof, (A) Purchaser shall have failed to commence the Offer within 60 days following the date of the Merger Agreement, (B) the Offer shall have terminated or expired in accordance with its terms without Purchaser having accepted any Shares for payment thereunder or (C) Purchaser shall have failed to pay for Shares pursuant to the Offer within 90 days following the commencement of the Offer (or where applicable under the conditions to the Offer set forth in Section 14, within the 120-day period specified therein), unless the occurrence of the event set forth in any of clause (A), (B) or (C) above shall have been caused by or resulted from the failure of SNI AG or Purchaser to perform in any material respect any material covenant or agreement of either of them contained in the Merger Agreement or the material breach by SNI AG or Purchaser of any material representation or warranty of either of them contained in the Merger Agreement (including where such occurrence results from an action by the Company permitted under the Merger Agreement's non-solicitation provision that results from such failure or material breach by SNI AG or Purchaser) or (ii) prior to the purchase of Shares pursuant to the Offer, the Board or any committee thereof shall have withdrawn or modified in a manner adverse to Purchaser or SNI AG its approval or recommendation of the Offer, the Merger Agreement, the Merger or any other Transaction or shall have recommended another Acquisition Proposal, or shall have resolved to do any of the foregoing; or (d) by the Company, upon approval of the Board, if (i) as the result of the failure of any of the conditions set forth in Section 14 hereof, (A) Purchaser shall have failed to commence the Offer within 60 days following the date of the Merger Agreement, (B) the Offer shall have terminated or expired in accordance with its terms without Purchaser having accepted any Shares for payment thereunder or (C) Purchaser shall have failed to pay for Shares pursuant to the Offer within 90 days following the commencement of the Offer (or where applicable under the conditions to the Offer set forth in Section 14, within the 120-day period specified therein), unless the occurrence of the event set forth in any of clauses (A), (B), or (C) above shall have been caused by or resulted from the 25 failure of the Company to perform in any material respect any material covenant or agreement of it contained in the Merger Agreement or the material breach by the Company of any material representation or warranty of it contained in the Merger Agreement, (ii) prior to the purchase of Shares pursuant to the Offer, the Board shall have determined to accept a Superior Proposal pursuant to Section 6.05(b) of the Merger Agreement and the Company has complied with all the provisions of Section 6.05(b) of the Merger Agreement; provided, that such termination under the foregoing provisions will not be effective until the Company has made payment of the full fee required by Section 8.03(a) of the Merger Agreement and has deposited with a mutually acceptable escrow agent $2 million for reimbursement of Expenses (as defined in the Merger Agreement) in accordance with Section 8.03 of the Merger Agreement, or (iii) prior to the purchase of Shares pursuant to the Offer, there has been a willful breach by SNI AG or Purchaser of any representation, warranty, covenant or agreement set forth in the Merger Agreement which breach is not reasonably capable of being cured within 40 business days after the date of the commencement of the Offer. In the event of the termination of the Merger Agreement, the Merger Agreement provides that it will forthwith become void and there will be no liability thereunder on the part of any party thereto except under the provisions of the Merger Agreement related to fees and expenses described below and under certain other provisions of the Merger Agreement which survive termination. The Merger Agreement provides that in the event that (a) any person (including, without limitation, the Company or any affiliate thereof), other than SNI AG or any affiliate of SNI AG, shall have become the beneficial owner of more than 50% of the then outstanding Shares and the Merger Agreement shall have been terminated pursuant to the provisions described in the second preceding paragraph above; (b) any person shall have commenced, publicly proposed or communicated to the Company a proposal that is publicly disclosed for a tender or exchange offer for 50% or more (or which, assuming the maximum amount of securities which could be purchased, would result in any person beneficially owning 50% or more) of the then outstanding Shares or otherwise for the direct or indirect acquisition of the Company or all or a substantial portion of its assets for per Share consideration having a value greater than $16.00 and (i) the Offer shall have remained open for at least 20 business days, (ii) the Minimum Condition shall not have been satisfied, and (iii) the Agreement shall have been terminated pursuant to the provisions described above, and (iv) within 12 months of such termination a Third Party Acquisition (as defined hereafter) shall occur; or (c) the Merger Agreement is terminated pursuant to the provisions described in clause (c)(ii) or clause (d)(ii) of the second preceding paragraph; then, in any such event, the Company will pay SNI AG promptly (but in no event later than five business days after the first of such events shall have occurred) a fee of $7 million (the "Fee"), which amount will be payable in immediately available funds, plus all Expenses (as defined below); provided, however, that neither the Fee nor any Expenses shall be paid if either SNI AG or Purchaser shall be in material breach of its representations and warranties or obligations under the Merger Agreement. The Merger Agreement provides that if it is terminated by SNI AG or Purchaser pursuant to the provisions described in clause (c)(ii) of the third preceding paragraph and neither SNI AG nor Purchaser is in material breach of their respective material covenants and agreements contained in the Merger Agreement or their respective representations and warranties contained in the Merger Agreement, the Company will, whether or not any payment is made pursuant to the provisions described in the immediately preceding paragraph, reimburse each of SNI AG, Purchaser and their affiliates (not later than five business days after submission of statements therefor) for all out-of-pocket expenses and fees up to $2 million in the aggregate (including, without limitation, fees and expenses payable to all banks, investment banking firms, other financial institutions and other persons and their respective agents and counsel for arranging, committing to provide or providing any financing for the Transactions or structuring such transactions and all fees of counsel, accountants, experts and consultants to SNI AG, Purchaser and their affiliates, and all printing and advertising expenses) actually incurred or accrued by either of them or on their behalf in connection with the Transactions, including, 26 without limitation, the financing thereof, and actually incurred or accrued by banks, investment banking firms, other financial institutions and other persons and assumed by SNI AG, Purchaser or their affiliates in connection with the negotiation, preparation, execution and performance of the Merger Agreement, the structuring and financing of the Transactions, and any financing commitments or agreements relating thereto (all of the foregoing being referred to herein collectively as the "Expenses"). Except as set forth in this paragraph, all costs and expenses incurred in connection with the Merger Agreement and the Transactions will be paid by the party incurring such expenses, whether or not any such transaction is consummated. "Third Party Acquisition" means the occurrence of any of the following events: (i) the acquisition of the Company by merger, tender offer, exchange offer, consolidation or otherwise by any person other than SNI AG, Purchaser or any affiliate thereof (a "Third Party"); (ii) the acquisition by any Third Party of all or substantially all of the total assets of the Company and its Subsidiaries, taken as a whole; (iii) the acquisition by a Third Party of 50% or more of the outstanding Shares; (iv) the adoption by the Company of a plan of liquidation or the declaration or payment of an extraordinary dividend; or (v) the repurchase by the Company or any of its Subsidiaries of 50% or more of the outstanding Shares. 11. Purpose of the Offer; Plans for the Company After the Offer and the Merger. Purpose of the Offer. The purpose of the Offer and the Merger is for Siemens AG indirectly to acquire control of, and the entire equity interest in, the Company. The purpose of the Merger is for Siemens AG indirectly to acquire all Shares not purchased pursuant to the Offer. Upon consummation of the Merger, the Company will become an indirect wholly owned subsidiary of Siemens AG. The Offer is being made pursuant to the Merger Agreement. Under Delaware Law, the approval of the Board and the affirmative vote of the holders of a majority of the outstanding Shares is required to approve and adopt the Merger Agreement and the transactions contemplated thereby, including the Merger. The Board of Directors of the Company has unanimously approved and adopted the Merger Agreement and the transactions contemplated thereby (with one director recusing himself), and, unless the Merger is consummated pursuant to the short-form merger provisions under Delaware Law described below, the only remaining required corporate action of the Company is the approval and adoption of the Merger Agreement and the transactions contemplated thereby by the affirmative vote of the holders of a majority of the Shares. Accordingly, if the Minimum Condition is satisfied, Purchaser will have sufficient voting power to cause the approval and adoption of the Merger Agreement and the transactions contemplated thereby without the affirmative vote of any other stockholder. In the Merger Agreement, the Company has agreed to take all action necessary to convene a meeting of its stockholders as soon as practicable after the consummation of the Offer for the purpose of considering and taking action on the Merger Agreement and the transactions contemplated thereby, if such action is required by Delaware Law. SNI AG and Purchaser have agreed that all Shares owned by them and their subsidiaries will be voted in favor of the Merger Agreement and the transactions contemplated thereby at any such meeting. If Purchaser purchases Shares pursuant to the Offer, the Merger Agreement provides that Purchaser will be entitled to designate representatives to serve on the Board in proportion to Purchaser's ownership of Shares following such purchase. See Section 10. Purchaser expects that such representation would permit Purchaser to exert control over the Company's conduct of its business and operations. SNI AG intends to transfer the 2,717,743 Shares it beneficially owns on the date hereof to Purchaser prior to, or concurrently with, the purchase of Shares by Purchaser pursuant to the Offer. Under Delaware Law, if Purchaser acquires, pursuant to the Offer or otherwise, such number of Shares 27 which, when added to the Shares owned of record by Purchaser on such date, constitutes at least 90% of the then outstanding Shares, Purchaser will be able to approve and adopt the Merger Agreement and the transactions contemplated thereby, including the Merger, without a vote of the Company's stockholders. In such event, SNI AG, Purchaser and the Company have agreed to take, at the request of Purchaser, all necessary and appropriate action to cause the Merger to become effective as soon as reasonably practicable after such acquisition, without a meeting of the Company's stockholders. If, however, Purchaser does not acquire such number of Shares which, when added to the Shares owned of record by Purchaser on such date, constitutes at least 90% of the then outstanding Shares pursuant to the Offer or otherwise and a vote of the Company's stockholders is required under Delaware Law, a significantly longer period of time will be required to effect the Merger. No appraisal rights are available in connection with the Offer. However, if the Merger is consummated, stockholders will have certain rights under Delaware Law to dissent and demand appraisal of, and to receive payment in cash of the fair value of, their Shares. Such rights to dissent, if the statutory procedures are complied with, could lead to a judicial determination of the fair value of the Shares, as of the day prior to the date on which the stockholders' vote was taken approving the Merger or similar business combination (excluding any element of value arising from the accomplishment or expectation of the Merger), required to be paid in cash to such dissenting holders for their Shares. In addition, such dissenting stockholders would be entitled to receive payment of a fair rate of interest from the date of consummation of the Merger on the amount determined to be the fair value of their Shares. In determining the fair value of the Shares, the court is required to take into account all relevant factors. Accordingly, such determination could be based upon considerations other than, or in addition to, the market value of the Shares, including, among other things, asset values and earning capacity. In Weinberger v. UOP, Inc., the Delaware Supreme Court stated, among other things, that "proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court" should be considered in an appraisal proceeding. Therefore, the value so determined in any appraisal proceeding could be the same, more or less than the purchase price per Share in the Offer or the Merger Consideration. In addition, several decisions by Delaware courts have held that, in certain circumstances, a controlling stockholder of a company involved in a merger has a fiduciary duty to other stockholders which requires that the merger be fair to such other stockholders. In determining whether a merger is fair to minority stockholders, Delaware courts have considered, among other things, the type and amount of consideration to be received by the stockholders and whether there was fair dealing among the parties. The Delaware Supreme Court stated in Weinberger and Rabkin v. Philip A. Hunt Chemical Corp. that the remedy ordinarily available to minority stockholders in a cash-out merger is the right to appraisal described above. However, a damages remedy or injunctive relief may be available if a merger is found to be the product of procedural unfairness, including fraud, misrepresentation or other misconduct. The Commission has adopted Rule 13e-3 under the Exchange Act which is applicable to certain "going private" transactions. Rule 13e-3 requires, among other things, that certain financial information concerning the Company and certain information relating to the fairness of the proposed transaction and the consideration offered to minority stockholders in such transaction be filed with the Commission and disclosed to stockholders prior to consummation of the transaction. Purchaser believes that Rule 13e-3 will not be applicable to the Offer or the Merger. However, no assurances can be given that the Commission will not take the position that Rule 13e-3 is applicable to the Offer or the Merger. The Company and Pyramid Technology Australia PTY, Ltd., a wholly owned subsidiary of the Company ("Pyramid Australia"), are parties to a Partnership Agreement dated June 10, 1994 (the "Partnership Agreement") between the Company, Pyramid Australia, Fujitsu Data Centre Systems PTY Limited and Fujitsu Australia Limited. Section 13.2 of the Partnership Agreement provides that if there is a change in the ownership of, or control of a controlling interest in, the Company or Pyramid Australia, 28 then the other parties may terminate the Partnership Agreement by notice in writing to the Company or Pyramid Australia, respectively. No assurances can be given that the consummation of the Offer or the Merger will not result in the termination of the Partnership Agreement pursuant to the aforementioned termination provisions. Plans for the Company. It is expected that, initially following the Merger, the business and operations of the Company will, except as set forth in this Offer to Purchase, be continued by the Company substantially as they are currently being conducted. SNI AG will continue to evaluate the business and operations of the Company during the pendency of the Offer and after the consummation of the Offer and the Merger, and will take such actions as it deems appropriate under the circumstances then existing. SNI AG intends to seek additional information about the Company during this period. Thereafter, SNI AG intends to review such information as part of a comprehensive review of the Company's business, operations, capitalization and management with a view to optimizing realization of the Company's potential in conjunction with SNI AG's businesses. It is expected that the business and operations of the Company would form an important part of SNI AG's future business plans. As more fully described in the Company's Schedule 14D-9, the Management Retention Agreement dated January 20, 1995, between John S. Chen and the Company provides that Mr. Chen will serve as a member of the Board during the term of his employment thereunder. Except as indicated in this Offer to Purchase, SNI AG does not have any present plans or proposals which relate to or would result in an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any Subsidiary, a sale or transfer of a material amount of assets of the Company or any Subsidiary or any material change in the Company's capitalization or dividend policy or any other material changes in the Company's corporate structure or business, or the composition of the Board or the Company's management. 12. Dividends and Distributions. The Merger Agreement provides that the Company will not, between the date of the Merger Agreement and the Effective Time, without the prior written consent of SNI AG, (a) issue, sell, pledge, dispose of, grant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of any shares of capital stock of any class of the Company or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company (except for the issuance of a maximum of 3,449,923 Shares issuable pursuant to employee stock options outstanding on the date hereof) or (b) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock. See Section 10. If, however, the Company should, during the pendency of the Offer, (i) split, combine or otherwise change the Shares or its capitalization, (ii) acquire or otherwise cause a reduction in the number of outstanding Shares or (iii) issue or sell any additional Shares, shares of any other class or series of capital stock, other voting securities or any securities convertible into, or options, rights, or warrants, conditional or otherwise, to acquire, any of the foregoing, then, without prejudice to Purchaser's rights under Section 14, Purchaser may (subject to the provisions of the Merger Agreement) make such adjustments to the purchase price and other terms of the Offer (including the number and type of securities to be purchased) as it deems appropriate to reflect such split, combination or other change. If, on or after January 20, 1995, the Company should declare or pay any dividend on the Shares or make any other distribution (including the issuance of additional shares of capital stock pursuant to a stock dividend or stock split, the issuance of other securities or the issuance of rights for the purchase of any securities) with respect to the Shares that is payable or distributable to stockholders of record on a date prior to the transfer to the name of Purchaser or its nominee or transferee on the Company's stock transfer records of the Shares purchased pursuant to the Offer, then, without prejudice to Purchaser's rights under Section 14, (i) the purchase price per Share payable by the Purchaser pursuant to the Offer will be reduced (subject to the Merger Agreement) to the extent any such dividend or distribution is payable in cash and (ii) any non-cash dividend, distribution or right shall be received and held by the tendering stockholder for the account of Purchaser and will be required to be promptly 29 remitted and transferred by each tendering stockholder to the Depositary for the account of Purchaser, accompanied by appropriate documentation of transfer. Pending such remittance and subject to applicable law, Purchaser will be entitled to all the rights and privileges as owner of any such non- cash dividend, distribution or right and may withhold the entire purchase price or deduct from the purchase price the amount or value thereof, as determined by Purchaser in its sole discretion. 13. Effect of the Offer on the Market for the Shares, Exchange Listing and Exchange Act Registration. The purchase of Shares by Purchaser pursuant to the Offer will reduce the number of Shares that might otherwise trade publicly and will reduce the number of holders of Shares, which could adversely affect the liquidity and market value of the remaining Shares held by the public. SNI AG intends to cause the delisting of the Shares by NASDAQ following consummation of the Offer. Depending upon the number of Shares purchased pursuant to the Offer, the Shares may no longer meet the standards for continued inclusion in the NASDAQ National Market System. According to the NASDAQ National Market System's published guidelines, the Shares would not be eligible to be included for listing if, among other things, the number of Shares falls below 200,000 publicly held Shares, the number of holders of Shares falls below 400 or the aggregate market value of such publicly held Shares does not exceed $1,000,000. If these standards are not met, quotations might continue to be published in the over-the-counter "additional list" or in one of the "local lists", but if the number of holders of the Shares falls below 300, or if the number of publicly held Shares falls below 100,000, or there is not at least one market maker for the Shares, NASD rules provide that the securities would no longer be "authorized" for NASDAQ reporting, and NASDAQ would cease to provide any quotations. Shares held directly or indirectly by an officer or director of the Company or by any beneficial owner of more than 10% of the Shares will ordinarily not be considered as being publicly held for this purpose. In the event the Shares were no longer eligible for NASDAQ quotation, quotations might still be available from other sources. The extent of the public market for the Shares and the availability of such quotations would, however, depend upon the number of holders of such Shares remaining at such time, the interest in maintaining a market in such Shares on the part of securities firms, the possible termination of registration of such Shares under the Exchange Act as described below and other factors. The Shares are currently "margin securities," as such term is defined under the rules of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), which has the effect, among other things, of allowing brokers to extend credit on the collateral of such securities. Depending upon factors similar to those described above regarding listing and market quotations, following the Offer it is possible that the Shares might no longer constitute "margin securities" for purposes of the margin regulations of the Federal Reserve Board, in which event such Shares could no longer be used as collateral for loans made by brokers. The Shares are currently registered under the Exchange Act. Such registration may be terminated upon application by the Company to the Commission if the Shares are not listed on a national securities exchange and there are fewer than 300 record holders. The termination of the registration of the Shares under the Exchange Act would substantially reduce the information required to be furnished by the Company to holders of Shares and to the Commission and would make certain provisions of the Exchange Act, such as the short-swing profit recovery provisions of Section 16(b), the requirement of furnishing a proxy statement in connection with shareholders' meetings and the requirements of Rule 13e-3 under the Exchange Act with respect to "going private" transactions, no longer applicable to the Shares. In addition, "affiliates" of the Company and persons holding "restricted securities" of the Company may be deprived of the ability to dispose of such securities pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended. If registration of the Shares under the Exchange Act were terminated, the Shares would no longer be "margin securities" or be eligible for NASDAQ reporting. Purchaser currently intends to seek to cause the Company to terminate the 30 registration of the Shares under the Exchange Act as soon after consummation of the Offer as the requirements for termination of registration are met. 14. Certain Conditions of the Offer. Notwithstanding any other provision of the Offer, subject to the terms of the Merger Agreement (including Purchaser's obligation to extend the Offer as provided in the Merger Agreement), Purchaser will not be required to accept for payment or pay for any Shares tendered pursuant to the Offer, and may terminate or amend the Offer and may postpone the acceptance for payment of and payment for Shares tendered, if (i) the Minimum Condition shall not have been satisfied, (ii) any applicable waiting period under the HSR Act and the other regulatory provisions listed in Section 3.05 of the Merger Agreement shall not have expired or been terminated prior to the expiration of the Offer, (iii) the Company shall not have obtained a negative declaration or executed a remediation agreement with the NJDEPE pursuant to the requirements of ISRA or (iv) (A) the applicable waiting period under the Exon-Florio Provision shall not have expired, (B) the Committee on Foreign Investment in the United States ("CFIUS") shall have initiated an investigation of the Transactions or (C) if CFIUS initiates an investigation, the applicable waiting period under the Exon-Florio Provision relating to such investigation shall not have expired, or such investigation shall have been completed and the President shall have announced a decision to take action pursuant to the Exon-Florio Provision before the expiration of the period ending on the 15th day (or if such day is not a business day, the next business day) following the completion of such investigation, which has a substantial likelihood of resulting, directly or indirectly, in any of the consequences referred to in clauses (i) through (v) of paragraph (a) below or such 15 day waiting period shall not have expired; provided, however, that prior to the expiration of 120 days following the date of the Merger Agreement, Purchaser will not terminate the Offer by reason of the non- satisfaction of either of the conditions set forth in clauses (ii), (iii) or (iv) above and will extend the Offer and will use its reasonable best efforts to cause the satisfaction of such conditions (it being understood that this proviso will not prohibit Purchaser from terminating the Offer or failing to extend the Offer by reason of the non-satisfaction of any other condition of the Offer). Furthermore, notwithstanding any other term of the Offer, subject to the terms of the Merger Agreement, Purchaser will not be required to accept for payment or pay for any Shares tendered pursuant to the Offer, and may terminate or amend the Offer and may postpone the acceptance for payment of and payment for Shares tendered, if, at any time on or after the date of the Merger Agreement, and prior to the acceptance for payment of Shares, any of the following conditions exist: (a) there shall be pending any action or proceeding instituted by any governmental authority before any court or governmental, administrative or regulatory authority or agency, domestic or foreign, (i) challenging or seeking to make illegal, materially delay or otherwise directly or indirectly restrain or prohibit or make materially more costly the making of the Offer, the acceptance for payment of, or payment for, any Shares by SNI AG, Purchaser or any other affiliate of SNI AG, or the consummation of any other Transaction, or seeking to obtain material damages in connection with any Transaction; (ii) seeking to prohibit or limit materially the ownership or operation by the Company, SNI AG or any of their subsidiaries of all or any material portion of the business or assets of the Company, SNI AG or any of their subsidiaries, or to compel the Company, SNI AG or any of their subsidiaries to dispose of or hold separate all or any material portion of the business or assets of the Company, SNI AG or any of their subsidiaries, as a result of the Transactions; (iii) seeking to impose or confirm limitations on the ability of SNI AG, Purchaser or any other affiliate of SNI AG to exercise effectively full rights of ownership of any Shares, including, without limitation, the right to vote any Shares acquired by Purchaser pursuant to the Offer or otherwise on all matters properly presented to the Company's stockholders, including, without limitation, the approval and adoption of this Agreement and the transactions contemplated hereby; (iv) seeking to require divestiture by SNI AG, Purchaser or any other affiliate of SNI AG of any Shares; or (v) which otherwise has a Material Adverse Effect or which is reasonably likely to materially adversely affect the business, operations, properties, condition (financial or otherwise), assets or liabilities (including, without 31 limitation, contingent liabilities) of SNI AG; provided, however, that prior to the expiration of 120 days following the date hereof, Purchaser will not terminate the Offer by reason of the non-satisfaction of the conditions set forth in this paragraph (a) and will extend the Offer and use its reasonable best efforts to cause the satisfaction of such condition unless there shall be in effect any permanent injunction or other order, decree, judgment or ruling that has become final and nonappealable by any court or governmental, administrative or regulatory authority or agency, domestic or foreign, which in any case shall have an effect specified in any of clauses (i) through (v) above (it being understood that this proviso will not prohibit Purchaser from terminating the Offer or failing to extend the Offer by reason of the non-satisfaction of any other condition of the Offer); (b) there shall have been any action taken, or any statute, rule, regulation, legislation, interpretation, judgment, order or injunction enacted, entered, enforced, promulgated, amended, issued or deemed applicable to (i) SNI AG, the Company or any subsidiary or affiliate of SNI AG or the Company or (ii) any Transaction, by any legislative body, court, government or governmental, administrative or regulatory authority or agency, domestic or foreign, which has a substantial likelihood of resulting, directly or indirectly, in any of the consequences referred to in clauses (i) through (v) of paragraph (a) above; (c) except as set forth in the Disclosure Schedule to the Merger Agreement, there shall have occurred any change, condition, event or development that has a Material Adverse Effect; (d) there shall have occurred (i) any general suspension of, or limitation on prices for, trading in securities of the Company on the NASDAQ National Market System, (ii) any extraordinary or material adverse change in the market price of the Shares or in the United States securities markets or financial markets generally, including, without limitation, a decline, measured from the date hereof, in the Standard & Poor's 500 Index by an amount in excess of 25%, (iii) any material adverse change in United States currency exchange rates or a suspension of, or limitation on, currency exchange markets, (iv) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States or Germany, (v) any limitation (whether or not mandatory) by any government or governmental, administrative or regulatory authority or agency, domestic or foreign, on, or other event that, in the reasonable judgment of Purchaser, might affect, the extension of credit by banks or other lending institutions, (vi) a commencement of a war or armed hostilities or other national or international calamity directly or indirectly involving the armed forces of the United States or Germany which could reasonably be expected to have a Material Adverse Effect or materially adversely affect (or materially delay) the consummation of the Offer or (vii) in the case of any of the foregoing existing on the date hereof, a material acceleration or worsening thereof; (e) (i) it shall have been publicly disclosed or Purchaser shall have otherwise learned that beneficial ownership (determined for the purposes of this paragraph as set forth in Rule 13d-3 promulgated under the Exchange Act) of 50% or more of the then outstanding Shares has been acquired by any person, other than SNI AG or any of its affiliates or (ii) (A) the Board or any committee thereof shall have withdrawn or modified in a manner adverse to SNI AG or Purchaser the approval or recommendation of the Offer, the Merger or the Merger Agreement or approved or recommended any takeover proposal or any other acquisition of Shares other than the Offer and the Merger or (B) the Board or any committee thereof shall have resolved to do any of the foregoing (except for such action under (A) or (B) that results from the failure of Parent or Purchaser to perform in any material respect any material covenant or agreement of either of them contained in the Merger Agreement or the material breach by Parent or Purchaser of any material representation or warranty of either of them contained in the Merger Agreement); (f) any representation or warranty of the Company in the Merger Agreement which is qualified as to materiality shall not be true and correct or any such representation or warranty that is not so 32 qualified shall not be true and correct in any material respect, in each case as if such representation or warranty was made as of such time on or after the date of the Merger Agreement; (g) the Company shall have failed to perform in any material respect any obligation or to comply in any material respect with any agreement or covenant of the Company to be performed or complied with by it under the Merger Agreement; (h) the Merger Agreement shall have been terminated in accordance with its terms; or (i) Purchaser and the Company shall have agreed that Purchaser shall terminate the Offer or postpone the acceptance for payment of or payment for Shares thereunder; which, in the reasonable judgment of Purchaser in any such case, and regardless of the circumstances (including any action or inaction by SNI AG or any of its affiliates) giving rise to any such condition, makes it inadvisable to proceed with such acceptance for payment or payment. The foregoing conditions are for the sole benefit of Purchaser and SNI AG and may be asserted by Purchaser or SNI AG regardless of the circumstances giving rise to any such condition or may be waived by Purchaser or SNI AG in whole or in part at any time and from time to time in their sole discretion, except that the Minimum Condition may not be waived by SNI AG or Purchaser without the prior written consent of the Company. The failure by SNI AG or Purchaser at any time to exercise any of the foregoing rights will not be deemed a waiver of any such right; the waiver of any such right with respect to particular facts and other circumstances will not be deemed a waiver with respect to any other facts and circumstances; and each such right will be deemed an ongoing right that may be asserted at any time and from time to time. 15. Certain Legal Matters and Regulatory Approvals. General. Based upon its examination of publicly available information with respect to the Company and the review of certain information furnished by the Company to SNI AG and discussions of representatives of SNI AG with representatives of the Company during SNI AG's investigation of the Company (see Section 10), neither Purchaser nor SNI AG is aware of any license or other regulatory permit that appears to be material to the business of the Company and the Subsidiaries, taken as a whole, which might be adversely affected by the acquisition of Shares by Purchaser pursuant to the Offer or, except as set forth below, of any approval or other action by any domestic (federal or state) or foreign governmental, administrative or regulatory authority or agency which would be required prior to the acquisition of Shares by Purchaser pursuant to the Offer. Should any such approval or other action be required, it is Purchaser's present intention to seek such approval or action. Purchaser does not currently intend, however, to delay the purchase of Shares tendered pursuant to the Offer pending the outcome of any such action or the receipt of any such approval (subject to Purchaser's right to decline to purchase Shares if any of the conditions in Section 14 shall have occurred). There can be no assurance that any such approval or other action, if needed, would be obtained without substantial conditions or that adverse consequences might not result to the business of the Company, Purchaser or SNI AG or that certain parts of the businesses of the Company, Purchaser or SNI AG might not have to be disposed of or held separate or other substantial conditions complied with in order to obtain such approval or other action or in the event that such approval was not obtained or such other action was not taken. Purchaser's obligation under the Offer to accept for payment and pay for Shares is subject to certain conditions, including conditions relating to the legal matters discussed in this Section 15. See Section 14. State Takeover Laws. The Company is incorporated under the laws of the State of Delaware. In general, Section 203 of Delaware Law prevents an "interested stockholder" (generally a person who owns or has the right to acquire 15% or more of a corporation's outstanding voting stock, or an affiliate or associate thereof) from engaging in a "business combination" (defined to include mergers and certain other transactions) with a Delaware corporation for a period of three years following the date 33 such person became an interested stockholder unless, among other things, prior to such date the board of directors of the corporation approved either the business combination or the transaction in which the interested stockholder became an interested stockholder. Prior to the execution of the Purchase Agreement, the Board of Directors of the Company, by unanimous vote of all directors present at a meeting held on such date, approved the execution by the Company of the Purchase Agreement and the purchase by Siemens U.S. of 2,000,000 Shares and the Warrant pursuant to the Purchase Agreement. In addition, on January 20, 1995, prior to the execution of the Merger Agreement, the Board of Directors of the Company, by unanimous vote of all directors present at a meeting held on such date (with Dr. Bodo, the SNI AG designee to the Board, recusing himself), approved the Merger Agreement and determined that each of the Offer and the Merger is fair to, and in the best interest of, the stockholders of the Company. Accordingly, Section 203 is inapplicable to the Offer and the Merger. A number of other states have adopted laws and regulations applicable to attempts to acquire securities of corporations which are incorporated, or have substantial assets, stockholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects, in such states. In Edgar v. MITE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover Statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However, in 1987 in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana may, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining stockholders. The state law before the Supreme Court was by its terms applicable only to corporations that had a substantial number of stockholders in the state and were incorporated there. The Company, directly or through subsidiaries, conducts business in a number of states throughout the United States, some of which have enacted takeover laws. Purchaser does not know whether any of these laws will, by their terms, apply to the Offer or the Merger and has not complied with any such laws. Should any person seek to apply any state takeover law, Purchaser will take such action as then appears desirable, which may include challenging the validity or applicability of any such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover laws is applicable to the Offer or the Merger, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, Purchaser might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, Purchaser might be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer, and the Merger. In such case, Purchaser may not be obligated to accept for payment any Shares tendered. See Section 14. Antitrust. Under the HSR Act and the rules that have been promulgated thereunder by the FTC, certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division and the FTC and certain waiting period requirements have been satisfied. The acquisition of Shares by Purchaser pursuant to the Offer is subject to such requirements. See Section 2. Pursuant to the HSR Act, on January 24, 1995, SNI AG filed a Pre-merger Notification and Report Form in connection with the purchase of Shares pursuant to the Offer with the Antitrust Division and the FTC. Under the provisions of the HSR Act applicable to the Offer, the purchase of Shares pursuant to the Offer may not be consummated until the expiration of a 15- calendar day waiting period following the filing by SNI AG. Accordingly, the waiting period under the HSR Act applicable to the purchase of Shares pursuant to the Offer will expire at 11:59 p.m., New York City time, on Wednesday, February 8, 1995, unless such waiting period is earlier terminated by the FTC and the Antitrust Division or extended by a request from the FTC or the Antitrust Division for additional information or documentary material 34 prior to the expiration of the waiting period. Pursuant to the HSR Act, SNI AG has requested early termination of the waiting period applicable to the Offer. There can be no assurance, however, that the 15-day HSR Act waiting period will be terminated early. If either the FTC or the Antitrust Division were to request additional information or documentary material from SNI AG with respect to the Offer, the waiting period with respect to the Offer would expire at 11:59 p.m., New York City time, on the tenth calendar day after the date of substantial compliance by SNI AG with such request. Thereafter, the waiting period could be extended only by court order. If the acquisition of Shares is delayed pursuant to a request by the FTC or the Antitrust Division for additional information or documentary material pursuant to the HSR Act, the Offer may, but need not, be extended and, in any event, the purchase of and payment for Shares will be deferred until 10 days after the request is substantially complied with, unless the extended period expires on or before the date when the initial 15-day period would otherwise have expired, or unless the waiting period is sooner terminated by the FTC and the Antitrust Division. Only one extension of such waiting period pursuant to a request for additional information is authorized by the HSR Act and the rules promulgated thereunder, except by court order. Any such extension of the waiting period will not give rise to any withdrawal rights not otherwise provided for by applicable law. See Section 4. It is a condition to the Offer that the waiting period applicable under the HSR Act to the Offer expire or be terminated. See Section 2 and Section 14. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the proposed acquisition of Shares by Purchaser pursuant to the Offer. At any time before or after the purchase of Shares pursuant to the Offer by Purchaser, the FTC or the Antitrust Division could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the purchase of Shares pursuant to the Offer or seeking the divestiture of Shares purchased by Purchaser or the divestiture of substantial assets of SNI AG, the Company or their respective subsidiaries. Private parties and state attorneys general may also bring legal action under federal or state antitrust laws under certain circumstances. Based upon an examination of information available to SNI AG relating to the businesses in which SNI AG, the Company and their respective subsidiaries are engaged, SNI AG and Purchaser believe that the Offer will not violate the antitrust laws. Nevertheless, there can be no assurance that a challenge to the Offer on antitrust grounds will not be made or, if such a challenge is made, what the result would be. See Section 14 for certain conditions to the Offer, including conditions with respect to litigation. Exon-Florio Amendment. Section 721 of the Defense Production Act of 1950, as amended (the "Exon-Florio Provision") authorizes the President or his designee to make an investigation to determine the effects on national security of mergers, acquisitions and takeovers by or with foreign persons which could result in foreign control of persons engaged in interstate commerce in the United States. The President has delegated authority to investigate proposed transactions to the Committee on Foreign Investment in the United States ("CFIUS"). Reviews under the Exon-Florio Provision are made in accordance with the following timetable: (i) within 30 days following the receipt by CFIUS of written notification of a proposed acquisition, CFIUS must determine whether to commence an investigation, (ii) if CFIUS commences an investigation, it must complete the investigation and submit a report and recommendation to the President within 45 days following the determination to commence an investigation; and (iii) the President has 15 days following the completion of the investigation to take action to suspend or prohibit the relevant acquisition. In order for the President to exercise his authority to suspend or prohibit an acquisition, the President must make two findings: (i) that there is credible evidence that leads the President to believe that the foreign interests exercising control might take action that threatens to impair the national security and (ii) that provisions of law other than the Exon-Florio Provision do not provide adequate and appropriate authority for the President to protect the national security in connection with the acquisition. Such findings are not subject to judicial review. If the President makes such findings, he 35 may take action for such time as he considers appropriate to suspend or prohibit the relevant acquisition. The President may direct the Attorney General to seek appropriate relief, including divestment relief, in the District Courts of the United States in order to implement and enforce the Exon-Florio Provision. The Exon-Florio Provision does not obligate the parties to an acquisition to notify CFIUS of a proposed transaction. However, if notice of a proposed acquisition is not submitted to CFIUS, then the transaction remains indefinitely subject to review by the President under the Exon-Florio Amendment. Purchaser and the Company filed with CFIUS a joint notice of the transactions contemplated by the Merger Agreement on January 24, 1995. Although Purchaser believes that the transactions contemplated by the Merger Agreement should not raise any national security concerns, there can be no assurance that CFIUS will not determine to conduct an investigation of the proposed transaction and, if an investigation is commenced, there can be no assurance regarding the outcome of such investigation. If the results of such investigation are adverse to Purchaser, Purchaser may not be obligated to accept for payment or pay for any Shares tendered pursuant to the Offer. See Section 14. German Merger Control. According to the German law against restraints of competition, the acquisition of Shares by Purchaser pursuant to the Offer is subject to German pre-merger control. Notice of a transaction subject to German pre-merger control must be provided before consummation to the Bundeskartellamt, the German Federal Cartel Office ("FCO"), and may not be effected until antitrust review has been completed and no objections raised. On January 24, 1995, SNI AG filed a Pre-Merger Notification with the FCO in connection with the purchase of Shares pursuant to the Offer. During a statutory one-month period following the filing, the FCO must either come to a final decision as to the compatibility of the transaction with the German market, or inform the parties in writing that it has initiated an in-depth review of the transaction. Since SNI AG effected the filing on January 24, 1995, the one-month period applicable to the purchase of Shares pursuant to the Offer will expire on February 24, 1995. In most instances to date, the FCO has completed antitrust review and given clearance to the respective transactions before the end of the one-month period. However, there can be no assurance that the review of the purchase of Shares pursuant to the Offer will also be completed within one month following the filing. If the FCO is not in a position to come to a final decision within the one- month period, it will have to inform the parties before the end of such period in writing that it has initiated an in-depth review of the transaction. Should the FCO fail to give such information to the parties before the end of the one-month period, the transaction is treated as if it had been given clearance. Provided that the FCO has informed the parties about the initiation of the in-depth review within such period, a review period of four months in total (beginning with the original filing) becomes applicable to the transaction. Regarding the purchase of Shares pursuant to the Offer, the four- month review period will expire on May 24, 1995, unless that period is extended with the consent of the parties involved. In most instances to date, where a four-month review period became applicable to a transaction, the FCO has completed antitrust review and given clearance to the respective transaction before the end of such period. There can be no assurance, however, that if the four-month period becomes applicable to the purchase of Shares pursuant to the Offer, antitrust review by the FCO will be completed before the end of such period. According to the German law against restraints of competition, the purchase of Shares pursuant to the Offer may not be consummated before the end of the one-month period, and, provided that the FCO has informed the parties about the initiation of an in-depth review within such period, before the end of the four-month period or its agreed-upon extension, unless the FCO has given its clearance to the transaction in writing before the end of such periods. 36 In the course of its reviews, the FCO will examine whether the proposed acquisition of Shares by Purchaser pursuant to the Offer would create a dominant market position or strengthen an already-existing dominant position in Germany. If the FCO makes such a finding, it will act to prohibit the transaction. Based upon an examination of information available to SNI AG relating to the businesses in which SNI AG, the Company and their respective subsidiaries are engaged, SNI AG and Purchaser believe that there is no ground for such a finding. Nevertheless, there can be no assurance that the FCO will not take a different point of view. It is a condition to the Offer that all waiting periods applicable under any applicable foreign competition and antitrust statutes and regulations (including the German law against restraints of competition) expire or be terminated. See Section 2 and Section 14. Certain Litigation. On January 9, 1995, an action was filed as a class action in the Court of Chancery of the State of Delaware in and for New Castle County (Pohli v. Pyramid Technology, et al., C.A. No. 13961) (the "Pohli Complaint") against the Company and its directors alleging that the Company had entered into talks with SNI AG for the purchase and sale of the Company for $15 per Share, that the Company had thereby evidenced the intent of its Board of Directors to have the Company consider a change of control transaction, that the directors are obligated to explore all alternatives to maximize shareholder value, that the directors must neutralize SNI AG's bargaining position by establishing bidding procedures or otherwise taking affirmative steps to actively encourage and solicit competing offers for the Company to assure that the highest value will be obtained, that the directors have a conflict of interest between their desire to retain their offices in the Company and their fiduciary obligation to maximize shareholder value in a change of control transaction and consequently will not be able to represent the interests of the Company's public stockholders, and that the directors have embarked upon a negotiating process with SNI AG which will preclude opportunities for other potential purchasers to express interest in acquiring the Company. The Pohli Complaint asks for equitable relief and damages, as well as awarding plaintiff his costs and disbursements, including attorneys' fees. The Company has advised Purchaser that it believes that the Pohli Complaint is without merit and intends to contest the matter vigorously. On January 11, 1995, a purported class action complaint entitled John S. Meade v. Pyramid Technology et al., C.V. No. 746621 (the "Meade Complaint") was filed against the Company and its directors in the Superior Court of California in and for the County of Santa Clara. The Meade Complaint alleges, among other things, that the defendants have breached their fiduciary duties to the Company by failing to conduct an active auction designed to maximize shareholder value and by failing to form an independent committee of unaffiliated directors to consider the Offer or other possible business combinations or alternative transactions. Among other things, the Meade Complaint seeks an order directing the Company's directors to carry out their fiduciary duties to the Company's stockholders by exploring third party interest in alternative business combinations with the Company and conducting an open and fair auction of the Company, as well as damages and costs. The Company has advised Purchaser that it believes that the Meade Complaint is without merit and intends to contest the matter vigorously. On January 12, 1995 and January 13, 1995, respectively, two purported class action complaints entitled, respectively, John Velonis v. Pyramid Technology et al., C.V. No. 746669 (the "Velonis Complaint") and Vincent Defeo v. Pyramid Technology et al., C.V. No. 746801 (the "Defeo Complaint") were filed against the Company, its directors and SNI AG in the Superior Court of California in and for the County of Santa Clara. The Velonis Complaint and the Defeo Complaint allege, among other things, that the defendants have breached their fiduciary duties to the Company's stockholders by failing and refusing to attempt in good faith to maximize shareholder value in connection with the sale of the Company by failing to put the Company up for auction and failing to consider offers by other companies 37 to acquire the Company. Among other things, the Velonis Complaint and the Defeo Complaint seek an order directing the Company's directors to carry out their fiduciary duties to the Company's stockholders by cooperating fully with any entity or person having a bona fide interest in proposing any transaction that would maximize shareholder value, including a buy-out or takeover of the Company, and taking all steps necessary to create an active auction of the Company, as well as damages and costs. The Company has advised Purchaser that it believes, and SNI AG believes, that the Velonis Complaint and the Defeo Complaint are without merit and each of the Company and SNI AG intends to contest the matters vigorously. 16. Fees and Expenses. Except as set forth below, Purchaser will not pay any fees or commissions to any broker, dealer or other person for soliciting tenders of Shares pursuant to the Offer. Goldman Sachs are acting as Dealer Managers in connection with the Offer and have provided certain financial advisory services in connection with the acquisition of the Company. Siemens Corporation ("Siemens"), a Delaware corporation and an indirect wholly owned subsidiary of Siemens AG, has paid Goldman Sachs a fee of $250,000, has agreed to pay an additional fee of $250,000 and has agreed to pay a transaction fee of $1,250,000 when the Offer and the Merger are consummated. Siemens has also agreed to reimburse Goldman Sachs for all reasonable out-of-pocket expenses incurred by Goldman Sachs, including the reasonable fees and expenses of legal counsel, and to indemnify Goldman Sachs against certain liabilities and expenses in connection with its engagement, including certain liabilities under the federal securities laws. Purchaser and SNI AG have retained Georgeson & Company Inc., as the Information Agent, and Chemical Bank, as the Depositary, in connection with the Offer. The Information Agent may contact holders of Shares by mail, telephone, telex, telecopy, telegraph and personal interview and may request banks, brokers, dealers and other nominee stockholders to forward materials relating to the Offer to beneficial owners. As compensation for acting as Information Agent in connection with the Offer, Georgeson & Company Inc. will be paid a fee of $10,000 and will also be reimbursed for certain out-of-pocket expenses and may be indemnified against certain liabilities and expenses in connection with the Offer, including certain liabilities under the federal securities laws. Purchaser will pay the Depositary reasonable and customary compensation for its services in connection with the Offer, plus reimbursement for out-of-pocket expenses, and will indemnify the Depositary against certain liabilities and expenses in connection therewith, including under federal securities laws. Brokers, dealers, commercial banks and trust companies will be reimbursed by Purchaser for customary handling and mailing expenses incurred by them in forwarding material to their customers. 17. Miscellaneous. Purchaser is not aware of any jurisdiction where the making of the Offer is prohibited by any administrative or judicial action pursuant to any valid state statute. If Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of Shares pursuant thereto, Purchaser will make a good faith effort to comply with any such state statute. If, after such good faith effort, Purchaser cannot comply with any such state statute, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of Shares in such state. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of Purchaser by the Dealer Managers or by one or more registered brokers or dealers licensed under the laws of such jurisdiction. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF PURCHASER OR THE COMPANY NOT CONTAINED IN THIS 38 OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. Pursuant to Rule 14d-3 of the General Rules and Regulations under the Exchange Act, SNI AG, Siemens AG and Purchaser have filed with the Commission the Schedule 14D-1, together with exhibits, furnishing certain additional information with respect to the Offer. The Schedule 14D-1 and any amendments thereto, including exhibits, may be inspected at, and copies may be obtained from, the same places and in the same manner as set forth in Section 7 (except that they will not be available at the regional offices of the Commission). Siemens Nixdorf Mid-Range Acquisition Corp. January 27, 1995 39 SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF SIEMENS AG, SNI AG AND PURCHASER 1. Directors and Executive Officers of Siemens AG. The following table sets forth the name, current business address, citizenship and present principal occupation or employment, and material occupations, positions, offices or employments and business addresses thereof for the past five years, of each member of the Managing Board of Directors and executive officer of Siemens AG. Unless otherwise indicated, each such person has held his present position as set forth below for the past five years. Unless otherwise noted, each of the following persons is a citizen of the Federal Republic of Germany.
POSITION WITH SIEMENS AG NAME AND PRINCIPAL OCCUPATION BUSINESS ADDRESS - ---- ------------------------ ---------------- Dr. Heinrich von Siemens AG, President and Wittelsbacherplatz 2 Pierer*................ CEO, Corporate Executive 80333 Munich Committee (10/92--present) Federal Republic of Germany Siemens AG, Executive Vice President, Corporate Executive Committee (10/90-- 9/92) Siemens Power Generation, Vice President, Freyeslebenstr., 1, 91088 Erlangen, Federal Republic of Germany (10/89--6/91) Dr. Karl-Hermann Siemens AG, Executive Vice Wittelsbacherplatz 2 Baumann*............... President, Corporate 80333 Munich Executive Committee and Federal Republic of Germany Group President Finance Professor Dr. Hans Gunter Danielmeyer..... Siemens AG, Group President Otto-Hahn-Ring 6 Research and Development 81739 Munich (10/88--present) Federal Republic of Germany Siemens AG, Senior Vice President, Managing Board (11/87--present) Siemens AG, Vice President Research and Development Group (10/86--9/88) Dr. Erwin Hardt......... Siemens AG, Senior Vice Hofmannstrasse 51 President, Managing Board 81359 Munich and Group President of Federal Republic of Germany Siemens Public Communications Networks
- -------- * Member of the Executive Committee of the Managing Board of Directors of Siemens AG. I-1
POSITION WITH SIEMENS AG NAME AND PRINCIPAL OCCUPATION BUSINESS ADDRESS - ---- ------------------------ ---------------- Adolf Huttl*............ Siemens AG, Nuclear Power Freyeslebenstr. 1 Generation, Group President 91058 Erlangen (7/91--present) Federal Republic of Germany Siemens AG, Senior Vice President and Member of the Managing Board (7/91-- present) Siemens Nuclear Power Generation, Vice President (10/89--6/91) Volker Jung............. Siemens AG, Executive Vice Wittelsbacherplatz 2 President, Corporate 80333 Munich Executive Committee (10/92-- Federal Republic of Germany present) Siemens Communication Systems, Inc., President & CEO (1/90--present) Siemens AG, Senior Vice President Corporate International Regions Office (7/91--9/92) Siemens Communications Systems, Inc., Senior Vice President, 900 Broken Sound Parkway, Boca Raton, Fl. 33487 (9/84--6/91) Eberhard Kill........... Siemens AG, Senior Vice Schuhstr. 60 President, Managing Board 91052 Erlangen and Group President of Federal Republic of Germany Siemens Industrial and Building Systems Jurgen Knorr............ Siemens AG, Senior Vice Balanstrasse 73 President, Managing Board 81541 Munich and Group President of Federal Republic of Germany Siemens Semiconductors Professor Dr. Walter Siemens Production and Wittelsbacherplatz 2 Kunerth*............... Logistics, Group President 80333 Munich (10/93--present) Federal Republic of Germany Siemens AG, Executive Vice President, Corporate Executive Committee (3/93-- present) Siemens Automotive Systems, Vice President, Im Gewerbepark D80 93059 Regensburg Federal Republic of Germany (10/89--3/93) Siemens AG, Senior Vice President, Corporate Executive Committee (11/92-- 2/93)
- -------- * Member of the Executive Committee of the Managing Board of Directors of Siemens AG. I-2
POSITION WITH SIEMENS AG NAME AND PRINCIPAL OCCUPATION BUSINESS ADDRESS - ---- ------------------------ ---------------- Dr. Horst Langer*.... Siemens AG, Executive Vice Werner-von-Siemens-Str. 50 President, Corporate 91052 Erlangen Executive Committee (7/90-- Federal Republic of Germany present) Siemens AG, Senior Vice President, Corporate Executive Committee (10/89-- 6/90) Wolfram Martinsen.... Siemens AG, Senior Vice Elsenstr. 87-96 President, Managing Board 12435 Berlin (10/94--present) Federal Republic of Germany Siemens Transportation Systems, Group President (10/89--present) Werner Maly*......... Siemens AG, Executive Vice Wittelsbacherplatz 2 President Corporate 80333 Munich Executive Committee and Federal Republic of Germany Group President of Human Resources (4/94--present) Siemens AG, Senior Vice President, Corporate Executive Committee and Group President of Siemens Medical Engineering, Henkestr. 127, 91052 Erlangen, Federal Republic of Germany (10/89--3/94) Peter Pribilla....... Siemens AG, Senior Vice Hofmannstrasse 51 President, Managing Board 81359 Munich (4/94--present) Federal Republic of Germany Rolm Company, President & CEO, 4900 Old Ironsides Drive, Santa Clara, CA 95052-8075 (8/90--present) Siemens Private Communication Systems, Group President (10/89--present) Jurgen Radomski*..... Siemens AG, Executive Vice Werner-von-Siemens Str. 50 President, Corporate 91052 Erlangen Executive Committee (11/94-- Federal Republic of Germany present) Siemens AG, Senior Vice President, Henkestr. 127, 91052 Erlangen, Federal Republic of Germany (6/94-- 10/94)
- -------- * Member of the Executive Committee of the Managing Board of Directors of Siemens AG. I-3
POSITION WITH SIEMENS AG NAME AND PRINCIPAL OCCUPATION BUSINESS ADDRESS - ---- ------------------------ ---------------- Siemens Medical Engineering, Vice President (9/91--9/94) Siemens AG, Corporate Department Finance, Statements and Corporate Controlling, Vice President, Siemens AG, Wittelsbacher Platz 2, 80333 Munich, Federal Republic of Germany (10/88--8/91) Gunter Wilhelm*...... Siemens AG, Executive Vice Werner-von-Siemens-Str. 50 President, Corporate 91052 Erlangen Executive Committee (10/92-- Federal Republic of Germany Present) Siemens Automation, Group President, Gleiwitzer Str. 555, 90475 Nurnberg, Federal Republic of Germany (10/89-- 9/92)
- -------- * Member of the Executive Committee of the Managing Board of Directors of Siemens AG. 2. Directors and Executive Officers of SNI AG. The following table sets forth the name, current business address, citizenship and present principal occupation or employment, and material occupations, positions, offices or employments and business addresses thereof for the past five years, of each member of the Managing Board of Directors and executive officer of SNI AG. Unless otherwise indicated, each such person has held his present position as set forth below for the past five years. Unless otherwise noted, each of the following persons is a citizen of the Federal Republic of Germany.
POSITION WITH SNI AG AND NAME PRINCIPAL OCCUPATION BUSINESS ADDRESS - ---- ------------------------ ---------------- Gerhard Schulmeyer... SNI AG, President & CEO Otto-Hahn-Ring 6 (10/94--present) 81739 Munich Federal Republic of Germany SNI AG, Member of the Managing Board (7/94--9/94) Massachusetts Institute of Technology, Visiting Senior Lecturer, Sloan School of Management (1/94--6/94) ABB Inc., President & CEO (8/93--1/94) ABB Inc., Executive Vice President, Stamford, Connecticut (4/90--7/93) Asea Brown Boveri Ltd. (ABB), Executive Vice President and Member of the Group Executive Management, Zurich, Switzerland (9/89-- 3/90)
I-4
POSITION WITH SNI AG AND NAME PRINCIPAL OCCUPATION BUSINESS ADDRESS - ---- ------------------------ ---------------- Robert Felix Hoogstraten Citizen of the SNI AG, Executive Vice Otto-Hahn-Ring 6 Netherlands............ President, Member of the 81739 Munich Managing Board responsible Federal Republic of Germany for Corporate Sales and Marketing (10/93--present) Tandem Computers, Vice President and Managing Director Europe, Amsterdam, Netherlands (10/86--9/93) Dr. Horst Nasko Austrian Citizen....... SNI AG, Executive Vice Otto-Hahn-Ring 6 President and Deputy 81739 Munich Chairman of the Managing Federal Republic of Germany Board responsible for Application Software and Projects, Systems Strategy (10/90--present) Nixdorf AG, CEO (11/89--9/90) Nixdorf AG, Executive Vice President, Member of the Managing Board and Group President of Telecommunications/External Relations, Berliner Str. 95, 80805 Munich, Federal Republic of Germany (1/83-- 9/90) Dr. Hartwig Rogge....... SNI AG, Executive Vice Otto-Hahn-Ring 6 President, Member of the 81739 Munich Managing Board responsible Federal Republic of Germany for Development and Production (10/90--present) Siemens AG, Vice President Data and Information Systems Group (10/89--9/90) Alfred Nowosad.......... SNI AG, Executive Vice Otto-Hahn-Ring 6 President, Member of the 81739 Munich Managing Board and CFO Federal Republic of Germany (10/90--present) Siemens AG, Vice President, Peripherals and Terminals Group, Hofmannstr. 51, 81359 Munich, Federal Republic of Germany (10/89--9/90)
I-5 3. Directors and Executive Officers of Purchaser. The following table sets forth the name, current business address, citizenship and present principal occupation or employment, and material occupations, positions, offices or employments and business addresses thereof for the past five years, of each director and executive officer of Purchaser. The current business address of each person is Otto-Hahn-Ring 6, 81739 Munich, Federal Republic of Germany. Each such person is a citizen of the Federal Republic of Germany.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL POSITIONS HELD DURING THE PAST NAME FIVE YEARS AND BUSINESS ADDRESSES THEREOF - ---- ------------------------------------------- Gerhard Schulmeyer.......... Siemens Nixdorf Mid-Range Acquisition Corp., Director, President and CEO (1/95--present) SNI AG, President & CEO (10/94--present) SNI AG, Member of the Managing Board (7/94--9/94) Massachusetts Institute of Technology, Visiting Senior Lecturer, Sloan School of Management (1/94-- 6/94) ABB Inc., President & CEO (8/93--1/94) ABB Inc., Executive Vice President, Stamford, Connecticut (4/90--7/93) Asea Brown Boveri Ltd. (ABB), Executive Vice President and Member of the Group Executive Management, Zurich, Switzerland (9/89--3/90) Dr. Adrian v. Hammerstein... Siemens Nixdorf Mid-Range Acquisition Corp., Director, Vice President and Secretary (1/95-- present) SNI AG, Director, Strategic Alliances (11/91-- present) Digital Equipment GmbH, Systems Business Finance Manager and a variety of other positions (1/86-- 10/91)
I-6 Facsimiles of the Letter of Transmittal will be accepted. The Letter of Transmittal and certificates evidencing Shares and any other required documents should be sent or delivered by each stockholder or his broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of its addresses set forth below. The Depositary for the Offer is: CHEMICAL BANK By Mail: By Facsimile: By Hand: (for Eligible Institutions only) or Overnight Courier: Chemical Bank Reorganization Dept. (212) 629-8015 or Chemical Bank P.O. Box 3085 (212) 629-8016 55 Water Street G.P.O. Station Second Floor-Room 234 New York, NY 10116-3085 Confirm by Telephone: New York, NY 10041 (212) 946-7137 Attention: Reorganization Department Questions or requests for assistance may be directed to the Information Agent at its address and telephone numbers listed below or to the Dealer Managers at their address listed below. Additional copies of this Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained from the Information Agent. A stockholder may also contact brokers, dealers, commercial banks or trust companies for assistance concerning the Offer. The Information Agent for the Offer is: GEORGESON & COMPANY INC. Wall Street Plaza New York, New York 10005 (212) 509-6240 (COLLECT) BANKS AND BROKERS CALL COLLECT (212) 440-9800 CALL TOLL FREE: 1-800-223-2064 The Dealer Managers for the Offer are: GOLDMAN, SACHS & CO. 85 Broad Street New York, New York 10004 EX-99.(A)(2) 3 FORM OF LETTER OF TRANSMITTAL EXHIBIT 99(A)(2) LETTER OF TRANSMITTAL TO TENDER SHARES OF COMMON STOCK OF PYRAMID TECHNOLOGY CORPORATION PURSUANT TO THE OFFER TO PURCHASE DATED JANUARY 27, 1995 OF SIEMENS NIXDORF MID-RANGE ACQUISITION CORP. AN INDIRECT WHOLLY OWNED SUBSIDIARY OF SIEMENS NIXDORF INFORMATIONSSYSTEME AG A DIRECT WHOLLY OWNED SUBSIDIARY OF SIEMENS AKTIENGESELLSCHAFT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FEBRUARY 24, 1995, UNLESS THE OFFER IS EXTENDED. The Depositary for the Offer is: CHEMICAL BANK By Facsimile By Hand or Transmission: Overnight Carrier: By Mail: (for Eligible Institutions only) Chemical Bank Chemical Bank (212) 629-8015 55 Water Street Reorganization Department or Second Floor-Room 234 P.O. Box 3085 (212) 629-8016 New York, New York 10041 G.P.O. Station Attention: Reorganization New York, New York 10116- Department 3085 Confirm by Telephone: (212) 946-7137 DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. This Letter of Transmittal is to be completed by stockholders either if certificates evidencing Shares (as defined below) are to be forwarded herewith or, unless an Agent's Message (as defined in the Offer to Purchase) is utilized, if delivery of Shares is to be made by book-entry transfer to the Depositary's account at The Depository Trust Company ("DTC"), the Midwest Securities Trust Company ("MSTC") or the Philadelphia Depository Trust Company ("PDTC") (each a "Book-Entry Transfer Facility" and collectively, the "Book- Entry Transfer Facilities") pursuant to the book-entry transfer procedure described in Section 3 of the Offer to Purchase (as defined below). DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. See Instruction 2. Stockholders whose certificates evidencing Shares ("Share Certificates") are not immediately available or who cannot deliver their Share Certificates and all other documents required hereby to the Depositary prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase) or who cannot complete the procedure for delivery by book-entry transfer on a timely basis and who wish to tender their Shares must do so pursuant to the guaranteed delivery procedure described in Section 3 of the Offer to Purchase. See Instruction 2. [_]CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING: Name of Tendering Institution _______________ Check Box of Applicable Book-Entry Transfer Facility: (check one) [_]DTC [_]MSTC [_]PDTC Account Number __________________________________ Transaction Code Number _________________________ [_]CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of Registered Holder(s) ____________________________________________ Window Ticket No. (if any) _________________________________________________ Date of Execution of Notice of Guaranteed Delivery _________________________ Name of Institution which Guaranteed Delivery ______________________________ DESCRIPTION OF SHARES TENDERED - -------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) (PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) ON SHARE SHARE CERTIFICATE(S) AND SHARE(S) TENDERED CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY) - ---------------------------------------------------------------------- TOTAL NUMBER SHARE OF SHARES NUMBER OF CERTIFICATE EVIDENCED BY SHARES NUMBER(S)* SHARE CERTIFICATE(S)* TENDERED** ------------------------------- ------------------------------- ------------------------------- ------------------------------- ------------------------------- TOTAL SHARES
- ------------------------------------------------------------------------------- * Need not be completed by stockholders delivering Shares by book-entry transfer. ** Unless otherwise indicated, it will be assumed that all Shares evidenced by each Share Certificate delivered to the Depositary are being tendered hereby. See Instruction 4. NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL CAREFULLY Ladies and Gentlemen: The undersigned hereby tenders to Siemens Nixdorf Mid-Range Acquisition Corp., a Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of Siemens Nixdorf Informationssysteme AG, a company organized under the laws of the Federal Republic of Germany and a direct wholly owned subsidiary of Siemens Aktiengesellschaft, a company organized under the laws of the Federal Republic of Germany, the above-described shares of common stock, par value $.01 per share (the "Shares"), of Pyramid Technology Corporation, a Delaware corporation (the "Company"), pursuant to Purchaser's offer to purchase all Shares at $16.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated January 27, 1995 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which together constitute the "Offer"). The undersigned understands that Purchaser reserves the right to transfer or assign, in whole or, from time to time, in part, to one or more of its affiliates, the right to purchase all or any portion of the Shares tendered pursuant to the Offer. Subject to, and effective upon, acceptance for payment of the Shares tendered herewith, in accordance with the terms of the Offer, the undersigned hereby sells, assigns and transfers to, or upon the order of, Purchaser all right, title and interest in and to all the Shares that are being tendered hereby and all dividends, distributions (including, without limitation, distributions of additional Shares) and rights declared, paid or distributed in respect of such Shares on or after January 20, 1995 (collectively, "Distributions"), and irrevocably appoints the Depositary the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares and all Distributions, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (i) deliver Share Certificates evidencing such Shares and all Distributions, or transfer ownership of such Shares and all Distributions on the account books maintained by a Book-Entry Transfer Facility, together, in either case, with all accompanying evidences of transfer and authenticity, to or upon the order of Purchaser, (ii) present such Shares and all Distributions for transfer on the books of the Company and (iii) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares and all Distributions, all in accordance with the terms of the Offer. The undersigned hereby irrevocably appoints Dr. Adrian v. Hammerstein and Adrienne Whitehead, and each of them, as the attorneys and proxies of the undersigned, each with full power of substitution, to vote in such manner as each such attorney and proxy or his or her substitute shall, in his or her sole discretion, deem proper and otherwise act (by written consent or otherwise) with respect to all the Shares tendered hereby which have been accepted for payment by Purchaser prior to the time of such vote or other action and all Shares and other securities issued in Distributions in respect of such Shares, which the undersigned is entitled to vote at any meeting of stockholders of the Company (whether annual or special and whether or not an adjourned or postponed meeting) or consent in lieu of any such meeting or otherwise. This proxy and power of attorney is coupled with an interest in the Shares tendered hereby, is irrevocable and is granted in consideration of, and is effective upon, the acceptance for payment of such Shares by Purchaser in accordance with other terms of the Offer. Such acceptance for payment shall revoke all other proxies and powers of attorney granted by the undersigned at any time with respect to such Shares (and all Shares and other securities issued in Distributions in respect of such Shares), and no subsequent proxy or power of attorney shall be given or written consent executed (and if given or executed, shall not be effective) by the undersigned with respect thereto. The undersigned understands that, in order for Shares to be deemed validly tendered, immediately upon Purchaser's acceptance of such Shares for payment, Purchaser must be able to exercise full voting and other rights with respect to such Shares and all Distributions, including, without limitation, voting at any meeting of the Company's stockholders then scheduled. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby and all Distributions, that when such Shares are accepted for payment by Purchaser, Purchaser will acquire good, marketable and unencumbered title thereto and to all Distributions, free and clear of all liens, restriction, charges and encumbrances, and that none of such Shares and Distributions will be subject to any adverse claim. The undersigned, upon request, shall execute and deliver all additional documents deemed to be necessary or advisable to complete the sale, the assignment and transfer of the Shares tendered hereby and all Distributions. In addition, the undersigned shall remit and transfer promptly to the Depositary for the account of Purchaser all Distributions in respect of the Shares tendered hereby, accompanied by appropriate documentation of transfer, and pending such remittance and transfer or appropriate assurance thereof, Purchaser shall be entitled to all rights and privileges as owner of each such Distribution and may withhold the entire purchase price of the Shares tendered hereby, or deduct from such purchase price, the amount or value of such Distribution as determined by Purchaser in its sole discretion. No authority herein conferred or agreed to be conferred shall be affected by, and all such authority shall survive, the death or incapacity of the undersigned. All obligations of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Except as stated in the Offer to Purchase, this tender is irrevocable. The undersigned understands that tenders of Shares pursuant to any one of the procedures described in Section 3 of the Offer to Purchase and in the instructions hereto will constitute the undersigned's acceptance of the terms and conditions of the Offer. Purchaser's acceptance of such Shares for payment will constitute a binding agreement between the undersigned and Purchaser upon the terms and subject to the conditions of the Offer. Unless otherwise indicated herein in the box entitled "Special Payment Instructions", please issue the check for the purchase price of all Shares purchased, and return all Share Certificates evidencing Shares not purchased or not tendered in the name(s) of the registered holder(s) appearing above under "Description of Shares Tendered". Similarly, unless otherwise indicated in the box entitled "Special Delivery Instructions", please mail the check for the purchase price of all Shares purchased and all Share Certificates evidencing Shares not tendered or not purchased (and accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing above under "Description of Shares Tendered". In the event that the boxes entitled "Special Payment Instructions" and "Special Delivery Instructions" are both completed, please issue the check for the purchase price of all Shares purchased and return all Share Certificates evidencing Shares not purchased or not tendered in the name(s) of, and mail such check and Share Certificates to, the person(s) so indicated. Unless otherwise indicated herein in the box entitled "Special Payment Instructions", please credit any Shares tendered hereby and delivered by book-entry transfer, but which are not purchased, by crediting the account at the Book-Entry Transfer Facility designated above. The undersigned recognizes that Purchaser has no obligation, pursuant to the Special Payment Instructions, to transfer any Shares from the name of the registered holder(s) thereof if Purchaser does not purchase any of the Shares tendered hereby. SPECIAL PAYMENT INSTRUCTIONS (SEE SPECIAL DELIVERY INSTRUCTIONS INSTRUCTIONS 1, 5, 6, AND 7) (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if the check To be completed ONLY if the check for the purchase price of Shares for the purchase price of Shares or Share Certificates evidencing purchased or Share Certificates Shares not tendered or not pur- evidencing Shares not tendered or chased to be issued in the name not purchased are to be mailed to of someone other than the under- someone other than the under- signed, or if Shares tendered signed, or to the undersigned at hereby and delivered by book-en- an address other than that shown try transfer which are not pur- under "Description of Shares Ten- chased are to be returned by dered". credit to an account at one of the Book-Entry Transfer Facili- ties other than that designated above. Mail [_] check [_] Share Cer- tificate(s) to: Name______________________________ (PLEASE PRINT) Issue [_] check [_] Share Cer- Address __________________________ tificate(s) to: __________________________________ (ZIP CODE) Name _____________________________ __________________________________ (PLEASE PRINT) TAXPAYER IDENTIFICATION OR SOCIAL Address __________________________ SECURITY NUMBER __________________________________ (SEE SUBSTITUTE FORM W-9 ON (ZIP CODE) REVERSE SIDE) __________________________________ TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER (SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE) [_]Credit Shares delivered by book-entry transfer and not purchased to the account set forth below: Check appropriate box: [_]DTC [_]MSTC [_]PDTC Account Number: __________________ IMPORTANT STOCKHOLDERS: SIGN HERE (PLEASE COMPLETE SUBSTITUTE FORM W-9 ON REVERSE) ------------------------------------------------------- ------------------------------------------------------- (SIGNATURE(S) OF HOLDER(S)) Dated: _________________________________________ , 1995 (Must be signed by registered holder(s) exactly as name(s) appear(s) on Share Certificates or on a security position listing or by a person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney- in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please provide the following information and see Instruction 5). Name(s): ______________________________________________ ------------------------------------------------------- (PLEASE PRINT) Capacity (full title): ________________________________ Address: ______________________________________________ _______________________________________________________ (INCLUDE ZIP CODE) Area Code and Telephone No.: __________________________ Tax Identification or Social Security No.: __________________________________ (SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE) GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5) Authorized Signature: _________________________________ Name: _________________________________________________ (PLEASE PRINT) Title: ________________________________________________ Name of Firm: _________________________________________ Address: ______________________________________________ _______________________________________________________ (INCLUDE ZIP CODE) INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. GUARANTEE OF SIGNATURES. All signatures on this Letter of Transmittal must be guaranteed by a firm which is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc., or by a commercial bank or trust company having an office or correspondent in the United States (each of the foregoing being referred to as an "Eligible Institution"), unless (i) this Letter of Transmittal is signed by the registered holder(s) of the Shares (which term, for purposes of this document, shall include any participant in a Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Shares) tendered hereby and such holder(s) has (have) completed neither the box entitled "Special Payment Instructions" nor the box entitled "Special Delivery Instructions" on the reverse hereof or (ii) such Shares are tendered for the account of an Eligible Institution. See Instruction 5. 2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES. This Letter of Transmittal is to be used either if Share Certificates are to be forwarded herewith or, unless an Agent's Message is utilized, if Shares are to be delivered by book-entry transfer pursuant to the procedure set forth in Section 3 of the Offer to Purchase. Share Certificates evidencing all physically tendered Shares, or a confirmation of a book-entry transfer into the Depositary's account at a Book-Entry Transfer Facility of all Shares delivered by book-entry transfer as well as a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees, or an Agent's Message in the case of a book-entry delivery, and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth on the reverse hereof prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase). If Share Certificates are forwarded to the Depositary in multiple deliveries, a properly completed and duly executed Letter of Transmittal must accompany each such delivery. Stockholders whose Share Certificates are not immediately available, who cannot deliver their Share Certificates and all other required documents to the Depositary prior to the Expiration Date or who cannot complete the procedure for delivery by book-entry transfer on a timely basis may tender their Shares pursuant to the guaranteed delivery procedure described in Section 3 of the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by Purchaser, must be received by the Depositary prior to the Expiration Date; and (iii) the Share Certificates evidencing all physically delivered Shares in proper form for transfer by delivery, or a confirmation of a book-entry transfer into the Depositary's account at a Book-Entry Transfer Facility of all Shares delivered by book- entry transfer, in each case together with a Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees (or, in the case of book-entry delivery, an Agent's Message), and any other documents required by this Letter of Transmittal, must be received by the Depositary within five National Association of Securities Dealers Automated Quotation--National Market System trading days after the date of execution of such Notice of Guaranteed Delivery, all as described in Section 3 of the Offer to Purchase. The method of delivery of this Letter of Transmittal, Share Certificates and all other required documents, including delivery through any Book-Entry Transfer Facility, is at the option and risk of the tendering stockholder, and the delivery will be deemed made only when actually received by the Depositary. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery. No alternative, conditional or contingent tenders will be accepted and no fractional Shares will be purchased. By execution of this Letter of Transmittal (or a facsimile hereof), all tendering stockholders waive any right to receive any notice of the acceptance of their Shares for payment. 3. INADEQUATE SPACE. If the space provided herein under "Description of Shares Tendered" is inadequate, the Share Certificate numbers, the number of Shares evidenced by such Share Certificates and the number of Shares tendered should be listed on a separate schedule and attached hereto. 4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY TRANSFER). If fewer than all the Shares evidenced by any Share Certificate delivered to the Depositary herewith are to be tendered hereby, fill in the number of Shares which are to be tendered in the box entitled "Number of Shares Tendered". In such cases, new Share Certificate(s) evidencing the remainder of the Shares that were evidenced by the Share Certificates delivered to the Depositary herewith will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the box entitled "Special Delivery Instructions" on the reverse hereof, as soon as practicable after the expiration or termination of the Offer. All Shares evidenced by Share Certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the Share Certificates evidencing such Shares without alteration, enlargement or any other change whatsoever. If any Share tendered hereby is owned of record by two or more persons, all such persons must sign this Letter of Transmittal. If any of the Shares tendered hereby are registered in the names of different holders, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of such Shares. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, no endorsements of Share Certificates or separate stock powers are required, unless payment is to be made to, or Share Certificates evidencing Shares not tendered or not purchased are to be issued in the name of, a person other than the registered holder(s), in which case, the Share Certificate(s) evidencing the Shares tendered hereby must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on such Share Certificate(s). Signatures on such Share Certificate(s) and stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares tendered hereby, the Share Certificate(s) evidencing the Shares tendered hereby must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on such Share Certificate(s). Signatures on such Share Certificate(s) and stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal or any Share Certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to Purchaser of such person's authority so to act must be submitted. 6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction 6, Purchaser will pay all stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price of any Shares purchased is to be made to, or Share Certificate(s) evidencing Shares not tendered or not purchased are to be issued in the name of, a person other than the registered holder(s), the amount of any stock transfer taxes (whether imposed on the registered holder(s), such other person or otherwise) payable on account of the transfer to such other person will be deducted from the purchase price of such Shares purchased, unless evidence satisfactory to Purchaser of the payment of such taxes, or exemption therefrom, is submitted. Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the Share Certificates evidencing the Shares tendered hereby. 7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase price of any Shares tendered hereby is to be issued, or Share Certificate(s) evidencing Shares not tendered or not purchased are to be issued, in the name of a person other than the person(s) signing this Letter of Transmittal or if such check or any such Share Certificate is to be sent to someone other than the person(s) signing this Letter of Transmittal or to the person(s) signing this Letter of Transmittal but at an address other than that shown in the box entitled "Description of Shares Tendered" on the reverse hereof, the appropriate boxes on the reverse of this Letter of Transmittal must be completed. Stockholders delivering Shares tendered hereby by book-entry transfer may request that Shares not purchased be credited to such account maintained at a Book-Entry Transfer Facility as such stockholder may designate in the box entitled "Special Payment Instructions" on the reverse hereof. If no such instructions are given, all such Shares not purchased will be returned by crediting the account at the Book-Entry Transfer Facility designated on the reverse hereof as the account from which such Shares were delivered. 8. QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for assistance may be directed to the Information Agent at its address or telephone numbers set forth below or to the Dealer Managers at their address set forth below. Additional copies of the Offer to Purchase, this Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained from the Information Agent or from brokers, dealers, commercial banks or trust companies. 9. SUBSTITUTE FORM W-9. Under the federal income tax law, a stockholder whose tendered Shares are accepted for payment is required by law to provide the Depositary (as payer) with such stockholder's correct TIN on Substitute Form W-9 below. If such stockholder is an individual, the TIN is such stockholder's social security number. If the Depositary is not provided with the correct TIN, the stockholder may be subject to a $50 penalty imposed by the Internal Revenue Service. In addition, payments that are made to such stockholder with respect to Shares purchased pursuant to the Offer may be subject to backup withholding. If backup withholding applies, the Depositary is required to withhold 31% of any payments made to the stockholder. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. Certain stockholders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, such individual must submit an Internal Revenue Service Form W-8, signed under penalties of perjury, attesting to such individual's exempt status. A form W-8 can be obtained from the Depositary. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions. To prevent backup withholding on payments that are made to a stockholder with respect to Shares purchased pursuant to the Offer, the stockholder is required to notify the Depositary of such stockholder's correct TIN by completing the form below certifying that the TIN provided on Substitute Form W-9 is correct (or that such stockholder is awaiting a TIN), and that (i) such stockholder has not been notified by the Internal Revenue Service that he is subject to backup withholding as a result of a failure to report all interest or dividends or (ii) the Internal Revenue Service has notified such stockholder that such stockholder is no longer subject to backup withholding. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional instructions. PAYER'S NAME: - ------------------------------------------------------------------------------- PART I--Taxpayer Identifi- cation Number--For all ac- counts, enter taxpayer identification number in the box at right. (For most individuals, this is your social security number. If you do not have a number, see Obtaining a Number in the enclosed Guidelines.) Certify by signing and dat- ing below. SUBSTITUTE ---------------------- FORM W-9 Social Security Number DEPARTMENT OF NOTE: If the account is in THE TREASURY more than one name, see the OR ___________________ INTERNAL REVENUE chart in the enclosed Employer SERVICE Guidelines to determine Identification which number to give the Number payer. PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER (TIN) (If awaiting TIN write "Applied For") -------------------------------------------------------- PART II--For Payees Exempt From Backup Withholding, see the enclosed Guidelines and complete as instructed therein. - ------------------------------------------------------------------------------- CERTIFICATION--Under penalties of perjury, I certify that: (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me), and (2) I am not subject to backup withholding either because I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of failure to report all interest or dividends, or the IRS has notified me that I am no longer subject to backup withholding. CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have been notified by the IRS that you are subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out item (2). (Also see instructions in the enclosed Guidelines.) - ------------------------------------------------------------------------------- SIGNATURE _____________________________________ DATE _____________ , 199 NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. FOR ADDITIONAL DETAILS, PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9. IMPORTANT: THIS LETTER OF TRANSMITTAL OR FACSIMILE HEREOF, PROPERLY COMPLETED AND DULY EXECUTED, OR AN AGENT'S MESSAGE IN THE CASE OF A BOOK-ENTRY DELIVERY (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES AND SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE). The Information Agent for the Offer is: GEORGESON & COMPANY INC. Wall Street Plaza New York, New York 10005 (212) 509-6240 (COLLECT) BANKS AND BROKERS CALL COLLECT: (212) 440-9800 ALL OTHERS CALL TOLL FREE 1-800-223-2064 The Dealer Managers for the Offer are: GOLDMAN, SACHS & CO. 85 Broad Street New York, New York 10004 January 27, 1995 EX-99.(A)(3) 4 FORM OF NOTICE OF GUARANTEED DELIVERY EXHIBIT 99(A)(3) NOTICE OF GUARANTEED DELIVERY FOR TENDER OF SHARES OF COMMON STOCK OF PYRAMID TECHNOLOGY CORPORATION (NOT TO BE USED FOR SIGNATURE GUARANTEES) This Notice of Guaranteed Delivery, or one substantially in the form hereof, must be used to accept the Offer (as defined below) (i) if certificates ("Share Certificates") evidencing shares of common stock, par value $.01 per share (the "Shares"), of Pyramid Technology Corporation, a Delaware corporation (the "Company"), are not immediately available, (ii) if Share Certificates and all other required documents cannot be delivered to Chemical Bank, as Depositary (the "Depositary"), prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase (as defined below)) or (iii) if the procedure for delivery by book-entry transfer cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be delivered by hand or mail or transmitted by telegram, telex or facsimile transmission to the Depositary. See Section 3 of the Offer to Purchase. The Depositary for the Offer is: CHEMICAL BANK By Mail: By Facsimile By Hand Transmission: or Overnight Courier: (for Eligible Institutions only) Chemical Bank Chemical Bank Reorganization (212) 629-8015 55 Water Street Department or Second Floor--Room 234 P.O. Box 3085 (212) 629-8016 New York, New York 10041 G.P.O. Station Attention: New York, New York Reorganization 10116-3085 Department Confirm by Telephone: (212) 946-7137 DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. This form is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an "Eligible Institution" under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal. Ladies and Gentlemen: The undersigned hereby tenders to Siemens Nixdorf Mid-Range Acquisition Corp., a Delaware corporation and an indirect wholly owned subsidiary of Siemens Nixdorf Informationssysteme AG, a corporation organized under the laws of the Federal Republic of Germany and a direct wholly owned subsidiary of Siemens Aktiengesellschaft, a corporation organized under the laws of the Federal Republic of Germany, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated January 27, 1995 (the "Offer to Purchase"), and the related Letter of Transmittal (which together constitute the "Offer"), receipt of each of which is hereby acknowledged, the number of Shares specified below pursuant to the guaranteed delivery procedure described in Section 3 of the Offer to Purchase. Number of Shares: ___________________ ------------------------------------- ------------------------------------- Certificate Nos. Signature(s) of Holder(s) (If Available): Dated: ________________________, 1995 - ------------------------------------- - ------------------------------------- Name(s) of Holders: ------------------------------------- Check one box if Shares will be ------------------------------------- delivered by book-entry transfer: ------------------------------------- Please Type or Print [_] The Depository Trust Company ------------------------------------- [_] Midwest Securities Trust Company Address [_] Philadelphia Depository Trust Company ------------------------------------- Zip Code Account No. _________________________ ------------------------------------- Area Code and Telephone No. GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a firm which is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc. or which is a commercial bank or trust company having an office or correspondent in the United States, guarantees to deliver to the Depositary, at one of its addresses set forth above, Share Certificates evidencing the Shares tendered hereby, in proper form for transfer, or confirmation of book- entry transfer of such Shares, into the Depositary's account at The Depository Trust Company, the Midwest Securities Trust Company or the Philadelphia Depository Trust Company, in each case with delivery of a Letter of Transmittal (or facsimile thereof) properly completed and duly executed, with any required signature guarantees or an Agent's Message (as defined in the Offer to Purchase) in the case of a book-entry delivery, and any other required documents, all within five National Association of Securities Dealers Automated Quotation--National Market System trading days of the date hereof. - ------------------------------------- ------------------------------------- Name of Firm Authorized Signature - ------------------------------------- Name: _______________________________ Address Please Type or Print - ------------------------------------- ------------------------------------- Zip Code Title - ------------------------------------- Dated: ________________________, 1995 Area Code and Telephone No. DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE. SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. EX-99.(A)(4) 5 FORM OF LETTER TO BROKER DEALERS EXHIBIT 99(A)(4) GOLDMAN, SACHS & CO. 85 BROAD STREET NEW YORK, NEW YORK 10004 OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF PYRAMID TECHNOLOGY CORPORATION AT $16.00 NET PER SHARE BY SIEMENS NIXDORF MID-RANGE ACQUISITION CORP. AN INDIRECT WHOLLY OWNED SUBSIDIARY OF SIEMENS NIXDORF INFORMATIONSSYSTEME AG A DIRECT WHOLLY OWNED SUBSIDIARY OF SIEMENS AKTIENGESELLSCHAFT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 24,1995 UNLESS THE OFFER IS EXTENDED. January 27, 1995 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We have been appointed by Siemens Nixdorf Mid-Range Acquisition Corp., a Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of Siemens Nixdorf Informationssysteme AG, a company organized under the laws of the Federal Republic of Germany ("SNI AG") and a direct wholly owned subsidiary of Siemens Aktiengesellschaft, a company organized under the laws of the Federal Republic of Germany ("Siemens AG"), to act as Dealer Managers in connection with Purchaser's offer to purchase all outstanding shares of common stock, par value $.01 per share (the "Shares"), of Pyramid Technology Corporation, a Delaware corporation (the "Company"), at a price of $16.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in Purchaser's Offer to Purchase, dated January 27, 1995 (the "Offer to Purchase"), and the related Letter of Transmittal (which together constitute the "Offer") enclosed herewith. Please furnish copies of the enclosed materials to those of your clients for whose accounts you hold Shares registered in your name or in the name of your nominee. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST THAT NUMBER OF SHARES THAT, WHEN ADDED TO THE SHARES OWNED OF RECORD BY SNI AG OR ANY OF ITS SUBSIDIARIES ON THE DATE HEREOF (OTHER THAN SHARES ISSUABLE UPON EXERCISE OF THE WARRANT (AS DEFINED IN THE OFFER TO PURCHASE)), SHALL CONSTITUTE A MAJORITY OF THE THEN OUTSTANDING SHARES ON A FULLY DILUTED BASIS (OTHER THAN ANY SHARES ISSUABLE UPON THE EXERCISE OF THE WARRANT (AS DEFINED IN THE OFFER TO PURCHASE) AND OTHER THAN THE RIGHTS (AS DEFINED IN THE OFFER TO PURCHASE)). THE OFFER IS ALSO CONDITIONED UPON, AMONG OTHER THINGS, THE EXPIRATION OR TERMINATION OF ALL WAITING PERIODS UNDER THE HART-SCOTT-RODINO ANTI-TRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND ANY FOREIGN COMPETITION AND ANTITRUST STATUTES AND REGULATIONS. Enclosed for your information and use are copies of the following documents: 1. Offer to Purchase, dated January 27, 1995; 2. Letter of Transmittal to be used by holders of Shares in accepting the Offer and tendering Shares; 3. Notice of Guaranteed Delivery to be used to accept the Offer if the Shares and all other required documents are not immediately available or cannot be delivered to Chemical Bank (the "Depositary") by the Expiration Date (as defined in the Offer to Purchase) or if the procedure for book- entry transfer cannot be completed by the Expiration Date; 4. A letter to stockholders of the Company from Richard H. Lussier, Chief Executive Officer and Chairman of the Board of the Company, together with a Solicitation/Recommendation Statement on Schedule 14D-9 filed with the Securities and Exchange Commission by the Company; 5. A letter which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Offer; 6. Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9; and 7. Return envelope addressed to the Depositary. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 24, 1995, UNLESS THE OFFER IS EXTENDED. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) certificates evidencing such Shares (or a confirmation of a book-entry transfer of such Shares into the Depositary's account at one of the Book-Entry Transfer Facilities (as defined in the Offer to Purchase)), (ii) a Letter of Transmittal (or facsimile thereof) properly completed and duly executed or an Agent's Message (as defined in the Offer to Purchase) in connection with a book-entry delivery of Shares and (iii) any other required documents. If a holder of Shares wishes to tender, but cannot deliver such holder's certificates or other required documents, or cannot comply with the procedure for book-entry transfer, prior to the expiration of the Offer, a tender of Shares may be effected by following the guaranteed delivery procedure described in Section 3 of the Offer to Purchase. 2 Purchaser will not pay any fees or commissions to any broker, dealer or other person (other than the Dealer Managers, the Depositary and the Information Agent as described in the Offer to Purchase) in connection with the solicitation of tenders of Shares pursuant to the Offer. However, Purchaser will reimburse you for customary mailing and handling expenses incurred by you in forwarding any of the enclosed materials to your clients. Purchaser will pay or cause to be paid any stock transfer taxes payable with respect to the transfer of Shares to it, except as otherwise provided in Instruction 6 of the Letter of Transmittal. Any inquiries you may have with respect to the Offer should be addressed to, and additional copies of the enclosed material may be obtained by contacting, Georgeson & Company, Inc. (the "Information Agent") at its address and telephone numbers set forth on the back cover page of the Offer to Purchase. Inquiries with respect to the Offer may also be addressed to Goldman, Sachs & Co. at the address set forth on the back cover page of the Offer to Purchase. Very truly yours, Goldman, Sachs & Co. NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL AUTHORIZE YOU OR ANY OTHER PERSON TO ACT ON BEHALF OF OR AS THE AGENT OF SIEMENS AG, SNI AG, PURCHASER, THE COMPANY, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE DEPOSITARY, OR OF ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR TO MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN. 3 EX-99.(A)(5) 6 FORM OF LETTER TO CLIENTS EXHIBIT 99(A)(5) OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF PYRAMID TECHNOLOGY CORPORATION AT $16.00 NET PER SHARE BY SIEMENS NIXDORF MID-RANGE ACQUISITION CORP. AN INDIRECT WHOLLY OWNED SUBSIDIARY OF SIEMENS NIXDORF INFORMATIONSSYSTEME AG A DIRECT WHOLLY OWNED SUBSIDIARY OF SIEMENS AKTIENGESELLSCHAFT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 24, 1995, UNLESS THE OFFER IS EXTENDED. To Our Clients: Enclosed for your consideration are an Offer to Purchase dated January 27, 1995 (the "Offer to Purchase") and a related Letter of Transmittal (which together constitute the "Offer") in connection with the offer by Siemens Nixdorf Mid-Range Acquisition Corp., a Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of Siemens Nixdorf Informationssysteme AG, a corporation organized under the laws of the Federal Republic of Germany ("SNI AG") and a direct wholly owned subsidiary of Siemens Aktiengesellschaft, a corporation organized under the laws of the Federal Republic of Germany ("Siemens AG"), to purchase all outstanding shares of common stock, par value $.01 per share (the "Shares"), of Pyramid Technology Corporation, a Delaware corporation (the "Company"), at a price of $16.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer. Also enclosed is the letter to stockholders of the Company from Richard H. Lussier, Chief Executive Officer and Chairman of the Board of the Company, together with a Solicitation/Recommendation Statement on Schedule 14D-9 filed with the Securities and Exchange Commission by the Company. We are (or our nominee is) the holder of record of Shares held by us for your account. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT. We request instructions as to whether you wish to have us tender on your behalf any or all of the Shares held by us for your account, upon the terms and subject to the conditions set forth in the Offer. Your attention is invited to the following: 1. The tender price is $16.00 per Share, net to the seller in cash. 2. The Offer is being made for all outstanding Shares. 3. The Board of Directors of the Company unanimously (with one director recusing himself) has determined that each of the Offer and the Merger (as defined in the Offer to Purchase) is fair to, and in the best interests of, the stockholders of the Company, and recommends that stockholders accept the Offer and tender their Shares pursuant to the Offer. 4. The Offer and withdrawal rights will expire at 12:00 Midnight, New York City time, on Friday, February 24, 1995, unless the Offer is extended. 5. The Offer is conditioned upon, among other things, there being validly tendered and not properly withdrawn prior to the expiration of the Offer at least that number of Shares that, when added to the Shares owned of record by SNI AG or any of its subsidiaries on the date hereof (other than Shares issuable upon exercise of the Warrant (as defined in the Offer to Purchase)), shall constitute a majority of the then outstanding Shares on a fully diluted basis (including, without limitation, all Shares issuable upon the exercise of any options, warrants or rights (other than any Shares issuable upon the exercise of the Warrant (as defined in the Offer to Purchase) and other than the Rights (as defined in the Offer to Purchase))). The Offer is also conditioned upon, among other things, the expiration or termination of all waiting periods under the Hart-Scott- Rodino Anti-Trust Improvements Act of 1976, as amended, and any foreign competition and antitrust statutes and regulations. 6. Tendering stockholders will not be obligated to pay brokerage fees or commissions or, except as otherwise provided in Instruction 6 of the Letter of Transmittal, stock transfer taxes with respect to the purchase of Shares by Purchaser pursuant to the Offer. If you wish to have us tender any or all of your Shares, please so instruct us by completing, executing and returning to us the instruction form contained in this letter. An envelope in which to return your instructions to us is enclosed. If you authorize the tender of your Shares, all such Shares will be tendered unless otherwise specified in your instructions. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER. The Offer is made solely by the Offer to Purchase and the related Letter of Transmittal and is being made to all holders of Shares. Purchaser is not aware of any jurisdiction where the making of the Offer is prohibited by administrative or judicial action pursuant to any valid state statute. If Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of Shares pursuant thereto, Purchaser will make a good faith effort to comply with any such state statute. If, after such good faith effort, Purchaser cannot comply with any such state statute, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of Shares in such state. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of Purchaser by Goldman, Sachs & Co. or one or more registered brokers or dealers licensed under the laws of such jurisdiction. INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF PYRAMID TECHNOLOGY CORPORATION BY SIEMENS NIXDORF MID-RANGE ACQUISITION CORP. The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated January 27, 1995, and the related Letter of Transmittal (which together constitute the "Offer"), in connection with the offer by Siemens Nixdorf Mid-Range Acquisition Corp., a Delaware corporation and an indirect wholly owned subsidiary of Siemens Nixdorf Informationssysteme AG, a corporation organized under the laws of the Federal Republic of Germany and a direct wholly owned subsidiary of Siemens Aktiengesellschaft, a corporation organized under the laws of the Federal Republic of Germany, to purchase all outstanding shares of common stock, par value $.01 per share (the "Shares"), of Pyramid Technology Corporation, a Delaware corporation. This will instruct you to tender the number of Shares indicated below (or, if no number is indicated below, all Shares) that are held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer. Number of Shares to be Tendered:_____________ Shares* Dated: _______________________ , 1995 - ------------------------------------------------------------------------------- SIGN HERE Signature(s): ________________________________________________________________ - ------------------------------------------------------------------------------- Please type or print name(s): ________________________________________________ - ------------------------------------------------------------------------------- Please type or print address: ________________________________________________ - ------------------------------------------------------------------------------- Area Code and Telephone Number: ______________________________________________ Taxpayer Identification or Social Security Number: ___________________________ * Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered. EX-99.(A)(6) 7 FORM OF GUIDELINES FOR FORM W-9 EXHIBIT 99.(A)(6) GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER. -- Social Security numbers have nine digits separated by two hyphens: i.e. 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e. 00-0000000. The table below will help determine the number to give the payer. - --------------------------------------------------------------------------------
GIVE THE FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY NUMBER OF -- - -------------------------------------------------------------------------------- 1. An individual's account The individual 2. Two or more individuals (joint account) The actual owner of the account or, if combined funds, any one of the individuals(1) 3. Custodian account of a minor (Uniform Gift to Minors Act) The minor(2) 4. a The usual revocable savings trust account (grantor is The grantor- also trustee) trustee(1) b So-called trust account that is not a legal or valid The actual trust under State law owner(1) 5. Sole proprietorship account The owner(3)
- --------------------------------------------------------------------------------
GIVE THE EMPLOYER FOR THIS TYPE OF ACCOUNT: IDENTIFICATION NUMBER OF -- - -------------------------------------------------------------------------------- 6. A valid trust, estate, or pension trust The legal entity (Do not furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)(4) 7. Corporate account The corporation 8. Religious, charitable, or educational organization The organization account 9. Partnership The partnership 10. Association, club, or other tax-exempt organization The organization 11. A broker or registered nominee The broker or nominee 12. Account with the Department of Agriculture in the name The public of a public entity (such as a State or local government, entity school district, or prison) that receives agricultural program payments
- -------------------------------------------------------------------------------- (1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's social security number. (3) Show the name of the owner. You may also enter your business name. You may use your Social Security Number or Employer Identification Number. (4) List first and circle the name of the legal trust, estate, or pension trust. NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 PAGE 2 OBTAINING A NUMBER If you don't have a taxpayer identification number or you don't know your num- ber, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number. PAYEES EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from backup withholding on ALL payments include the following: . A corporation. . A financial institution. . An organization exempt from tax under section 501(a), or an individual re- tirement plan. . The United States or any agency or instrumentality thereof. . A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof. . A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof. . An international organization or any agency, or instrumentality thereof. . A registered dealer in securities or commodities registered in the U.S. or a possession of the U.S. . A real estate investment trust. . A common trust fund operated by a bank under section 584(a) . An exempt charitable remainder trust, or a non-exempt trust described in section 4947(a)(1). . An entity registered at all times under the Investment Company Act of 1940. . A foreign central bank of issue. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: . Payments to nonresident aliens subject to withholding under section 1441. . Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner. . Payments of patronage dividends where the amount received is not paid in money. . Payments made by certain foreign organizations. Payments of interest not generally subject to backup withholding include the following: . Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. . Payments of tax-exempt interest (including exempt-interest dividends under section 852). . Payments described in section 6049(b)(5) to non-resident aliens. . Payments on tax-free covenant bonds under section 1451. . Payments made by certain foreign organizations. Exempt payees described above should file Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDEN- TIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM. Certain payments other than interest, dividends, and patronage dividends, that are not subject to information reporting are also not subject to backup withholding. For details, see the regulations under sections 6041, 6041A(a), 6045, and 6050A. PRIVACY ACT NOTICE.-- Section 6109 requires most recipients of dividend, in- terest, or other payments to give taxpayer identification numbers to payers who must report the payments to IRS. IRS uses the numbers for identification purposes. Payers must be given the numbers whether or not recipients are re- quired to file tax returns. Beginning January 1, 1984, payers must generally withhold 31% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Cer- tain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail to furnish your taxpayer identification number to a payer, you are sub- ject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or affirmations may subject you to criminal penalties including fines and/or im- prisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE EX-99.(A)(7) 8 SUMMARY ADVERTISEMENT EXHIBIT 99.(A)(7) This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares. The Offer is made solely by the Offer to Purchase dated January 27, 1995 and the related Letter of Transmittal, and is being made to all holders of Shares. Purchaser is not aware of any state where the making of the Offer is prohibited by administrative or judicial action pursuant to any valid state statute. If Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of Shares pursuant thereto, Purchaser will make a good faith effort to comply with such state statute. If, after such good faith effort, Purchaser cannot comply with such state statute, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of Shares in such state. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of Purchaser by Goldman, Sachs & Co. or one or more registered brokers or dealers licensed under the laws of such jurisdiction. Notice of Offer to Purchase for Cash All Outstanding Shares of Common Stock of Pyramid Technology Corporation at $16.00 Net Per Share by Siemens Nixdorf Mid-Range Acquisition Corp. an indirect wholly owned subsidiary of Siemens Nixdorf Informationssysteme AG a direct wholly owned subsidiary of Siemens Aktiengesellschaft Siemens Nixdorf Mid-Range Acquisition Corp., a Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of Siemens Nixdorf Informationssysteme AG, a corporation organized under the laws of the Federal Republic of Germany ("SNI AG") and a direct wholly owned subsidiary of Siemens Aktiengesellschaft, a corporation organized under the laws of the Federal Republic of Germany ("Siemens AG"), is offering to purchase all outstanding shares of Common Stock, par value $.01 per share (the "Shares"), of Pyramid Technology Corporation, a Delaware corporation (the "Company"), at a price of $16.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase dated January 27, 1995 (the "Offer to Purchase") and in the related Letter of Transmittal (which together constitute the "Offer"). Following the Offer, Purchaser intends to effect the Merger described below. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 24, 1995, UNLESS THE OFFER IS EXTENDED. The Offer is conditioned upon, among other things, there being validly tendered and not withdrawn prior to the expiration of the Offer at least that number of Shares that, when added to the Shares owned of record by SNI AG or any of its subsidiaries on the date hereof (other than Shares issuable upon exercise of the Warrant (as defined in the Offer to Purchase)), shall constitute a majority of the then outstanding Shares on a fully diluted basis (other than any Shares issuable upon the exercise of the Warrant and other than the Rights (as defined in the Offer to Purchase)). The Offer is also conditioned upon, among other things, the expiration or termination of all waiting periods imposed upon consummation of the Offer by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the regulations thereunder and any applicable foreign competition and antitrust statutes and regulations, as well as the other conditions described in the Offer to Purchase. The Offer is being made pursuant to an Agreement and Plan of Merger dated as of January 20, 1995 (the "Merger Agreement") among SNI AG, Purchaser and the Company. The Merger Agreement provides that, among other things, as soon as practicable after the purchase of Shares pursuant to the Offer and the satisfaction of the other conditions set forth in the Merger Agreement and in accordance with relevant provisions of the General Corporation Law of the State of Delaware ("Delaware Law"), Purchaser will be merged with and into the Company (the "Merger"). Following consummation of the Merger, the Company will continue as the surviving corporation (the "Surviving Corporation") and will become an indirect wholly owned subsidiary of SNI AG. At the effective time of the Merger (the "Effective Time"), each Share issued and outstanding immediately prior to the Effective Time (other than Shares held in the treasury of the Company and any Shares owned by Purchaser, SNI AG or any direct or indirect wholly owned subsidiary of SNI AG or of the Company, and other than Shares held by stockholders who shall have demanded and perfected appraisal rights, if any, under Delaware Law) will be cancelled and converted automatically into the right to receive $16.00 in cash, or any higher price that may be paid per Share in the Offer, without interest. The Board of Directors of the Company has determined that each of the Offer and the Merger is fair to, and in the best interests of, the stockholders of the Company, and recommends that stockholders accept the Offer and tender their Shares pursuant to the Offer. For purposes of the Offer, Purchaser will be deemed to have accepted for payment (and thereby purchased) Shares validly tendered and not properly withdrawn as, if and when Purchaser gives oral or written notice to Chemical Bank (the "Depositary") of Purchaser's acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payments from Purchaser and transmitting such payments to tendering stockholders whose Shares have been accepted for payment. Under no circumstances will interest on the purchase price for Shares be paid, regardless of any delay in making such payment. In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) the certificates evidencing such Shares (the "Share Certificates") or timely confirmation of a book-entry transfer of such Shares into the Depositary's account at one of the Book-Entry Transfer Facilities (as defined in Section 2 of the Offer to Purchase) pursuant to the procedure set forth in Section 3 of the Offer to Purchase, (ii) the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message (as defined in the Offer to Purchase)) and (iii) any other documents required under the Letter of Transmittal. Purchaser expressly reserves the right, in its sole discretion (but subject to the terms and conditions of the Merger Agreement), at any time and from time to time, to extend for any reason the period of time during which the Offer is open, including the occurrence of any condition specified in Section 14 of the Offer to Purchase, by giving oral or written notice of such extension to the Depositary. Any such extension will be followed as promptly as practicable by public announcement thereof, such announcement to be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date of the Offer. During any such extension, all Shares previously tendered and not withdrawn will remain subject to the Offer, subject to the rights of a tendering stockholder to withdraw such stockholder's Shares. Tenders of Shares made pursuant to the Offer are irrevocable except that such Shares may be withdrawn at any time prior to 12:00 Midnight, New York City time, on Friday, February 24, 1995 (or the latest time and date at which the Offer, if extended by Purchaser, shall expire) and, unless theretofore accepted for payment by Purchaser pursuant to the Offer, may also be withdrawn at any time after March 27, 1995. For the withdrawal to be effective, a written, telegraphic, telex or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover page of the Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of such Shares, if different from that of the person who tendered such Shares. If Share Certificates evidencing Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such Share Certificates, the serial numbers shown on such Share Certificates must be submitted to the Depositary and the signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution (as defined in Section 3 of the Offer to Purchase), unless such Shares have been tendered for the account of an Eligible Institution. If Shares have been tendered pursuant to the procedure for book-entry transfer as set forth in Section 3 of the Offer to Purchase, any notice of withdrawal must specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares. All questions as to the form and validity (including the time of receipt) of any notice of withdrawal will be determined by Purchaser, in its sole discretion, whose determination will be final and binding. The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is incorporated herein by reference. The Company has provided Purchaser with the Company's stockholder list and security position listings for the purpose of disseminating the Offer to holders of Shares. The Offer to Purchase and the related Letter of Transmittal will be mailed to record holders of Shares whose names appear on the Company's stockholder list and will be furnished to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency's security position listing for subsequent transmittal to beneficial owners of Shares. The Offer to Purchase and the related Letter of Transmittal contain important information which should be read before any decision is made with respect to the Offer. Questions and requests for assistance or for additional copies of the Offer to Purchase and the related Letter of Transmittal and other tender offer materials may be directed to the Information Agent or the Dealer Managers as set forth below, and copies will be furnished promptly at Purchaser's expense. No fees or commissions will be paid to brokers, dealers or other persons (other than the Information Agent and the Dealer Managers) for soliciting tenders of Shares pursuant to the Offer. The Information Agent for the Offer is: GEORGESON & COMPANY INC. -------------- Wall Street Plaza New York, New York 10005 Banks and Brokers call collect (212) 440-9800 Call Toll Free: 1-800-223-2064 The Dealer Managers for the Offer are: Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 January 27, 1995 EX-99.(A)(8) 9 PRESS RELEASE DATED 1/23/95 EXHIBIT 99.(A)(8) PRESS RELEASE CONTACT: Mr. Kent Robertson Senior Vice President, Chief Financial Officer Pyramid Technology Corporation Telephone: (408) 428-9000 Mr. Jochen Doering Vice President, Corporate Communications Siemens Nixdorf Informationssysteme AG Telephone: 011-49-89-636-42700 FOR IMMEDIATE RELEASE --------------------- PYRAMID TECHNOLOGY CORPORATION TO BE ACQUIRED BY SIEMENS NIXDORF SAN JOSE, CALIFORNIA AND PADERBORN, GERMANY, January 23, 1995. Pyramid Technology Corporation ("Pyramid") and Siemens Nixdorf Informationssysteme AG ("SNI"), a wholly owned subsidiary of Siemens AG, jointly announced today that they have entered into an agreement pursuant to which a wholly-owned subsidiary of SNI will acquire all of the outstanding common stock of Pyramid (NASD Symbol: PYRD) not currently owned by SNI for an aggregate purchase price of approximately US$207 million. Under the agreement, SNI's subsidiary will commence a tender offer for all outstanding common stock of Pyramid for $16.00 per share in cash. The tender offer will be followed by a merger in which any shares not acquired by SNI's subsidiary in the tender offer will be acquired for the same amount of cash. SNI currently owns over 17% of the outstanding stock of Pyramid. The tender offer, which has been approved by Pyramid's board of directors, will commence no later than January 27 and will be conditioned on a majority of the outstanding shares of Pyramid being tendered as well as other customary conditions, including regulatory approvals. 2 Richard H. Lussier, Pyramid's Chairman and CEO, made the following statement: "We are very pleased to become part of the SNI family. We feel this transaction is fair to both the shareholders and the employees of Pyramid. With the backing of SNI, our goal is to expand our market presence and to exploit our technological leadership." Gerhard Schulmeyer, SNI President and CEO, stated: "I am very pleased that our two companies have come to terms. SNI's relationship with Pyramid has evolved over a number of years. While this has been mutually beneficial, we have together come to the conclusion that a closer link between the companies is necessary in order to be able to fully realize our joint potential in terms of both market coverage and technology competence. "Pyramid will retain its corporate identity but will operate within the framework of SNI's world-wide mid-range computer business. It is especially important to us that this agreement has the support of Pyramid management. The success of our combined operation depends upon maintaining that support in the future." SNI, Paderborn, Germany, is a systems partner with universal expertise in the field of information technology. It is one of the world's largest companies in this area and is the largest supplier of information technology of European origin. In the past fiscal year (October 1, 1993 to September 30, 1994), SNI had revenues of more than U.S. $7.3 billion. SNI has a work force of more than 39,000 and is represented in 45 countries. SNI is a separate legal unit within the Siemens organization. In the fiscal year 1993/94, Siemens AG had worldwide sales of more than U.S. $51 billion. Founded in 1847, the company numbers among the world's largest electrical and electronics companies. Founded in 1981, Pyramid develops scalable enterprise servers that deliver high quality, high performance solutions for mid-range to high-end of the open systems market. Pyramid provides data center-class support for business critical environments, complemented by a full suite of professional programs and support tools that help customers successfully implement scalable enterprise computing. In the past fiscal year (October 1, 1993 to September 30, 1994), Pyramid had revenues of approximately $218 million. Pyramid has a work force of approximately 850 employees. # # # EX-99.(A)(9) 10 PRESS RELEASE DATED 1/27/95 EXHIBIT 99(A)(9) PRESS RELEASE CONTACT: Mr. Kevin Kimball Corporate Communications Siemens Corporation Telephone: (212) 258-4335 Mr. Kent Robertson Senior Vice President, Chief Financial Officer Pyramid Technology Corporation Telephone: (408) 428-9000 FOR IMMEDIATE RELEASE SIEMENS NIXDORF LAUNCHES TENDER OFFER FOR PYRAMID TECHNOLOGY CORPORATION NEW YORK, NEW YORK AND SAN JOSE, CALIFORNIA, January 27, 1995. Siemens Nixdorf Informationssysteme AG ("SNI AG"), a wholly owned subsidiary of Siemens AG, and Pyramid Technology Corporation ("Pyramid") (NASDAQ: PYRD) jointly announced today that SNI AG, through Siemens Nixdorf Mid-Range Acquisition Corp. ("SNI Mid-Range"), an indirect wholly-owned subsidiary of SNI AG, have commenced a tender offer (the "Offer") to purchase all outstanding shares of common stock, par value $0.01 per share (the "Shares"), of Pyramid not currently owned by SNI AG and its subsidiaries, for $16.00 per Share, net to the seller in cash. The Offer is conditioned upon, among other things, there being validly tendered and not withdrawn prior to the expiration of the Offer at least that number of Shares that, when added to the Shares currently owned by SNI AG and its affiliates, constitutes a majority of the Shares, as well as other customary conditions, including regulatory approvals. The Offer is being made pursuant to an Agreement and Plan of Merger dated as of January 20, 1995 (the "Merger Agreement") among SNI AG, SNI Mid-Range and Pyramid. The Merger Agreement provides that, among other things, as soon as practicable after the purchase of Shares pursuant to the Offer and the satisfaction of the other conditions set forth in the Merger Agreement and in accordance with the relevant provisions of the General Corporation Law of the State of Delaware, SNI Mid-Range will be merged with and into Pyramid (the "Merger"). All shares not purchased in the Offer will be converted into the right to receive $16.00 in cash at the time of the Merger. The Board of Directors of Pyramid has determined that each of the Offer and the Merger is fair to, and in the best interests of, the stockholders of Pyramid and recommends that all Pyramid stockholders accept the Offer and tender the Shares owned by them. Smith Barney Inc. acted as financial advisor to Pyramid in the transaction. The Offer and withdrawal rights expire at 12:00 Midnight, New York City time on Friday, February 24, 1995, unless the Offer is extended. The information filed with the Securities and Exchange Commission in connection with the Offer may be obtained by calling the information agent, Georgeson & Company, toll free at 800-223-2064. SNI AG, Paderborn, Germany, is a systems partner with universal expertise in the field of information technology. It is one of the world's largest companies in this area and is the largest supplier of information technology of European origin. In the past fiscal year (October 1, 1993 to September 30, 1994), SNI AG had revenues of more than U.S. $7.3 billion. SNI AG has a work force of more than 39,000 and is represented in 45 countries. SNI AG is a separate legal unit within the Siemens organization. In the fiscal year 1993/94, Siemens AG had worldwide sales of more than U.S. $51 billion. Founded in 1847, Siemens AG numbers among the world's largest electrical and electronics companies. Founded in 1981, Pyramid develops scalable enterprise servers that deliver high quality, high performance solutions for mid-range to high-end of the open systems market. Pyramid provides data center-class support for business critical environments, complemented by a full suite of professional programs and support tools that help customers successfully implement scalable enterprise computing. In the past fiscal year (October 1, 1993 to September 30, 1994), Pyramid had revenues of approximately $218 million. Pyramid has a work force of approximately 850 employees. Goldman, Sachs & Co. is acting as dealer manager for the Offer and has acted as financial advisor to SNI AG. 2 EX-99.(C)(1) 11 AGREEMENT AND PLAN OF MERGER EXHIBIT 99.(C)(1) CONFORMED COPY ================================================================================ AGREEMENT AND PLAN OF MERGER AMONG SIEMENS NIXDORF INFORMATIONSSYSTEME AG, SIEMENS NIXDORF MID-RANGE ACQUISITION CORP. AND PYRAMID TECHNOLOGY CORPORATION DATED AS OF JANUARY 20, 1995 ================================================================================ TABLE OF CONTENTS PAGE
ARTICLE I THE OFFER --------- SECTION 1.01. The Offer........................................... 1 --------- SECTION 1.02. Company Action...................................... 3 -------------- ARTICLE II THE MERGER ---------- SECTION 2.01. The Merger.......................................... 5 ---------- SECTION 2.02. Effective Time; Closing............................. 5 ----------------------- SECTION 2.03. Effect of the Merger................................ 5 -------------------- SECTION 2.04. Certificate of Incorporation; By-laws............... 5 ------------------------------------- SECTION 2.05. Directors and Officers.............................. 6 ---------------------- SECTION 2.06. Conversion of Securities............................ 6 ------------------------ SECTION 2.07. .................................................... 6 SECTION 2.08. Dissenting Shares................................... 8 ----------------- SECTION 2.09. Surrender of Shares; Stock Transfer Books........... 8 ----------------------------------------- ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY --------------------------------------------- SECTION 3.01. Organization and Qualification; Subsidiaries........ 9 -------------------------------------------- SECTION 3.02. Certificate of Incorporation and By-laws............ 10 ---------------------------------------- SECTION 3.03. Capitalization...................................... 10 -------------- SECTION 3.04. Authority Relative to this Agreement................ 11 ------------------------------------ SECTION 3.05. No Conflict; Required Filings and Consents.......... 11 ------------------------------------------ SECTION 3.06. Compliance.......................................... 12 ---------- SECTION 3.07. SEC Filings; Financial Statements................... 13 --------------------------------- SECTION 3.08. Absence of Certain Changes or Events................ 14 ------------------------------------ SECTION 3.09. Absence of Litigation............................... 14 --------------------- SECTION 3.10. Employee Benefit Plans.............................. 15 ---------------------- SECTION 3.11. Offer Documents; Schedule 14D-9; Proxy Statement.... 17 ------------------------------------------------ SECTION 3.12. Real Property and Leases............................ 18 ------------------------ SECTION 3.13. Trademarks, Patents and Copyrights.................. 18 ---------------------------------- SECTION 3.14. Environmental Matters............................... 19 --------------------- SECTION 3.15. Brokers............................................. 20 ------- SECTION 3.16. Amendment to Rights Agreement....................... 20 -----------------------------
ii PAGE SECTION 3.17. Offer Conditions.................................... 20 ---------------- SECTION 3.18. Agreements.......................................... 20 ---------- SECTION 3.19. Opinion of Financial Advisor........................ 21 ---------------------------- SECTION 3.20. Insurance........................................... 21 ---------
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER ------------------------------------------------------ SECTION 4.01. Corporate Organization.............................. 22 ---------------------- SECTION 4.02. Authority Relative to this Agreement................ 22 ------------------------------------ SECTION 4.03. No Conflict; Required Filings and Consents.......... 22 ------------------------------------------ SECTION 4.04. Financing........................................... 23 --------- SECTION 4.05. Offer Documents; Proxy Statement.................... 23 -------------------------------- SECTION 4.06. Brokers............................................. 23 ------- ARTICLE V CONDUCT OF BUSINESS PENDING THE MERGER -------------------------------------- SECTION 5.01. Conduct of Business by the Company Pending the ---------------------------------------------- Merger.............................................. 24 ------ ARTICLE VI ADDITIONAL AGREEMENTS --------------------- SECTION 6.01. Stockholders' Meeting............................... 26 --------------------- SECTION 6.02. Proxy Statement..................................... 26 --------------- SECTION 6.03. Company Board Representation; Section 14(f)......... 27 ------------------------------------------- SECTION 6.04. Access to Information; Confidentiality.............. 28 -------------------------------------- SECTION 6.05. No Solicitation of Transactions..................... 28 ------------------------------- SECTION 6.06. Employee Benefits Matters........................... 29 ------------------------- SECTION 6.07. Directors' and Officers' Indemnification and -------------------------------------------- Insurance........................................... 29 --------- SECTION 6.08. Notification of Certain Matters..................... 30 ------------------------------- SECTION 6.09. Further Action; Reasonable Best Efforts............. 30 --------------------------------------- SECTION 6.10. Public Announcements................................ 31 -------------------- SECTION 6.11. ISRA................................................ 31 ---- SECTION 6.12. Confidentiality Agreement........................... 32 ------------------------- SECTION 6.13. Waiver by the Company of Certain Provisions of the -------------------------------------------------- August Purchase Agreement..................................... 32 -------------------------
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ARTICLE VII CONDITIONS TO THE MERGER ------------------------ SECTION 7.01. Conditions to the Merger............................ 32 ------------------------ ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER --------------------------------- SECTION 8.01. Termination......................................... 33 ----------- SECTION 8.02. Effect of Termination............................... 34 --------------------- SECTION 8.03. Fees and Expenses................................... 35 ----------------- SECTION 8.04. Amendment........................................... 36 --------- SECTION 8.05. Waiver.............................................. 36 ------ ARTICLE IX GENERAL PROVISIONS ------------------ SECTION 9.01. Non-Survival of Representations, Warranties and ----------------------------------------------- Agreements................................................... 37 ---------- SECTION 9.02. Notices............................................. 37 ------- SECTION 9.03. Certain Definitions................................. 38 ------------------- SECTION 9.04. Severability........................................ 39 ------------ SECTION 9.05. Entire Agreement; Assignment........................ 39 ---------------------------- SECTION 9.06. Parties in Interest................................. 39 ------------------- SECTION 9.07. Specific Performance................................ 40 -------------------- SECTION 9.08. Governing Law....................................... 40 ------------- SECTION 9.09. Headings............................................ 40 -------- SECTION 9.10. Counterparts........................................ 40 ------------
ANNEX A -- Conditions to the Offer ANNEX B -- Agreement Respecting the Plans and Other Employee Benefit Matters AGREEMENT AND PLAN OF MERGER dated as of January 20, 1995 (this "Agreement") among SIEMENS NIXDORF INFORMATIONSSYSTEME AG, a corporation --------- organized under the laws of the Federal Republic of Germany ("Parent"), SIEMENS ------ NIXDORF MID-RANGE ACQUISITION CORP., a Delaware corporation and a wholly owned subsidiary of Parent ("Purchaser"), and PYRAMID TECHNOLOGY CORPORATION, a --------- Delaware corporation (the "Company"). ------- WHEREAS, the Boards of Directors of Purchaser and the Company and the Managing Board of Directors of Parent have each determined that it is in the best interests of their respective stockholders for Parent, through Purchaser, to acquire the Company upon the terms and subject to the conditions set forth herein; WHEREAS, in furtherance of such acquisition, it is proposed that Purchaser shall make a cash tender offer (the "Offer") to acquire all the issued ----- and outstanding shares of common stock, par value $.01 per share, of the Company ("Company Common Stock") (shares of Company Common Stock being hereinafter -------------------- collectively referred to as the "Shares"), other than any Shares owned by ------ Parent, Purchaser or any of its affiliates or Shares issuable upon the exercise of the Parent Warrant (as defined hereafter), for $16.00 per Share (such amount, or any greater amount per Share paid pursuant to the Offer, being hereinafter referred to as the "Per Share Amount") net to the seller in cash, without ---------------- interest thereon, upon the terms and subject to the conditions of this Agreement and the Offer; WHEREAS, the Board of Directors of the Company (the "Board") has ----- approved the making of the Offer and resolved and agreed to recommend that holders of Shares tender their Shares pursuant to the Offer; and WHEREAS, also in furtherance of such acquisition, the Boards of Directors of Purchaser and the Company and the Managing Board of Directors of Parent have each approved the merger (the "Merger") of Purchaser with and into ------ the Company in accordance with the General Corporation Law of the State of Delaware ("Delaware Law") following the consummation of the Offer and upon the ------------ terms and subject to the conditions set forth herein. NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, Parent, Purchaser and the Company hereby agree as follows: ARTICLE I THE OFFER --------- SECTION 1.01. The Offer. (a) Provided that this Agreement shall --------- not have been terminated in accordance with Section 8.01 and none of the events set forth in paragraphs (a) through (i) of Annex A hereto shall have occurred or be existing, Purchaser shall commence 2 the Offer in accordance with Rule 14d-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as promptly as reasonably practicable ------------ after the date hereof, but in no event later than five business days after the initial public announcement of Purchaser's intention to commence the Offer. The obligation of Purchaser to accept for payment and pay for Shares tendered pursuant to the Offer shall be subject only to (i) the condition (the "Minimum ------- Condition") that there shall have been validly tendered and not withdrawn prior - --------- to the expiration of the Offer at least the number of Shares that when added to the Shares owned by Parent or any of its subsidiaries on the date hereof (other than Shares issuable upon exercise of the Parent Warrant (as defined in Section 3.03) shall constitute a majority of the then outstanding Shares on a fully diluted basis (including, without limitation, all Shares issuable upon the exercise of any options, warrants or rights (other than any Shares issuable upon the exercise of the Parent Warrant and other than the Rights (as defined in the Rights Agreement (as defined in Section 3.16))) and (ii) the satisfaction of each of the other conditions set forth in Annex A hereto. Purchaser expressly reserves the right to waive any such condition (other than the Minimum Condition, which may not be waived by Parent or Purchaser without the prior written consent of the Company), and the right to increase the price per Share payable in the Offer, and to make any other changes in the terms and conditions of the Offer; provided, however, that no change may be made which decreases the -------- ------- price per Share payable in the Offer, reduces the maximum number of Shares to be purchased in the Offer, imposes conditions to the Offer in addition to those set forth in Annex A hereto, changes the form of consideration payable in the Offer or amends any other terms of the Offer in a manner adverse to the Company's stockholders. The Per Share Amount shall, subject to applicable withholding of taxes, be net to the seller in cash, without interest thereon, upon the terms and subject to the conditions of the Offer. Subject to the terms and conditions of the Offer, Purchaser shall accept for payment and shall pay, as promptly as practicable after expiration of the Offer, for all Shares validly tendered and not withdrawn. Unless this Agreement is earlier terminated in accordance with Section 8.01, the Offer shall remain open until 12:00 p.m., New York City time, on the 20th business day following the commencement of the Offer (such date and time being the "Expiration Date," unless Purchaser extends the Offer as --------------- permitted or required by this Agreement, in which case the "Expiration Date" --------------- means the latest time and date to which the Offer is extended). The Offer may not, without the Company's prior written consent, be extended except as necessary to provide time to satisfy the conditions set forth in Annex A; provided, that Purchaser may extend (and re-extend) the Offer for up to a total - -------- of ten business days, if as of the initial Expiration Date of the Offer, there shall not have been tendered at least 90% of the outstanding Shares so that the Merger could be effected without a meeting of the Company's stockholders in accordance with Section 253 of Delaware Law. Purchaser agrees that if all conditions set forth in Annex A are not satisfied on the initial Expiration Date of the Offer (other than the Minimum Condition, and other than the conditions set forth in clauses (ii) or (iii) of the second paragraph of Annex A or the condition set forth in paragraph (a) of Annex A (which conditions in such clauses (ii) and (iii) and paragraph (a) are subject to a 120-day extension requirement as set forth therein)), Purchaser shall extend (and re-extend) the Offer for up to a maximum of 20 business days to provide time to satisfy such conditions, unless the 3 Company shall have breached any representation, warranty, covenant or agreement set forth in this Agreement, which breach shall result in any conditions set forth in Annex A not being satisfied (and such breach is not reasonably capable of being cured and such condition satisfied prior to the expiration of such 20- business day period). (b) The Offer shall be made by means of an offer to purchase (the "Offer to Purchase") containing the terms set forth in this Agreement and the ---------------- conditions set forth in Annex A. As soon as reasonably practicable on the date of commencement of the Offer, Purchaser shall file with the Securities and Exchange Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1 --- (together with all amendments and supplements thereto, the "Schedule 14D-1") -------------- with respect to the Offer. The Schedule 14D-1 shall contain or shall incorporate by reference the Offer to Purchase and forms of the related letter of transmittal and any related summary advertisement (the Schedule 14D-1, the Offer to Purchase and such other documents, together with all supplements and amendments thereto, being referred to herein collectively as the "Offer ----- Documents"). The Company and its counsel shall be given an opportunity to review - --------- and comment upon the Offer Documents and any amendments or supplements thereto prior to the filing thereof with the SEC, and Parent and Purchaser shall in good faith consider any such comments. Parent and Purchaser agree to provide the Company and its counsel with any comments which Parent, Purchaser or their counsel may receive from the SEC or the Staff of the SEC with respect to the Offer Documents promptly after receipt thereof. Parent, Purchaser and the Company agree to correct promptly any information provided by any of them for use in the Offer Documents which shall have become false or misleading, and Parent and Purchaser further agree to take all steps necessary to cause the Schedule 14D-1 as so corrected to be filed with the SEC and the other Offer Documents as so corrected to be disseminated to holders of Shares, in each case as and to the extent required by applicable federal securities laws. SECTION 1.02. Company Action. (a) The Company hereby approves -------------- of and consents to the Offer and represents that (i) the Board, at a meeting duly called and held on January 20, 1995, has (A) determined that this Agreement and the transactions contemplated hereby, including each of the Offer and the Merger, are fair to and in the best interests of the holders of Shares, (B) approved and adopted this Agreement and the transactions, including, without limitation, the Merger, contemplated hereby and (C) resolved to recommend that the stockholders of the Company accept the Offer and approve and adopt this Agreement and the transactions, including, without limitation, the Merger, contemplated hereby (provided, however, that subject to the provisions of Section 6.05(b) below, such recommendation may be withdrawn, modified or amended in connection with a Superior Proposal (as defined in Section 6.05(b) below)), and (ii) Smith Barney Inc. ("Smith Barney") has delivered to the Board a written ------------ opinion that the consideration to be received by the holders of Shares (other than Parent, Purchaser or their affiliates) pursuant to each of the Offer and the Merger is fair to such holders of Shares from a financial point of view. The Company has been authorized by Smith Barney, subject to prior review by Smith Barney, to include such fairness opinion (or references thereto) 4 in the Offer Documents and in the Schedule 14D-9 (as defined in paragraph (b) of this Section 1.02) and the Proxy Statement (as defined in Section 3.11). The Company hereby consents to the inclusion in the Offer Documents of the recommendation of the Board described in the immediately preceding sentence. The Company has been advised by each of its directors and executive officers that, as of the date of this Agreement, they intend either to tender all Shares beneficially owned by them to Purchaser pursuant to the Offer, unless to do so would subject such person to liability under Section 16(b) of the Exchange Act, or to vote such Shares in favor of the approval and adoption by the stockholders of the Company of this Agreement and the transactions contemplated hereby. (b) As promptly as reasonably practicable on the date of commencement of the Offer, the Company shall file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 (together with all amendments and supplements thereto, the "Schedule 14D-9") containing, subject -------------- only to the fiduciary duties of the Board under applicable law as advised by independent counsel, the recommendation of the Board described in Section 1.02(a) and shall disseminate the Schedule 14D-9 to the extent required by Rule 14d-9 promulgated under the Exchange Act, and any other applicable federal securities laws. Purchaser and its counsel shall be given an opportunity to review and comment upon the Schedule 14D-9 and any amendments or supplements thereto, prior to the filing thereof with the SEC, and the Company shall in good faith consider any such comments. The Company, Parent and Purchaser agree to correct promptly any information provided by any of them for use in the Schedule 14D-9 which shall have become false or misleading, and the Company further agrees to take all steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the SEC and disseminated to holders of Shares, in each case as and to the extent required by applicable federal securities laws. (c) The Company shall promptly furnish Purchaser with mailing labels containing the names and addresses of all record holders of Shares and with security position listings of Shares held in stock depositories, each as of the most recent date practicable, together with all other available listings and computer files containing names, addresses and security position listings of record holders and non-objecting beneficial owners of Shares. The Company shall furnish Purchaser with such additional information, including, without limitation, updated listings and computer files of stockholders, mailing labels and security position listings, and such other assistance as Parent, Purchaser or their agents may reasonably request. Subject to the requirements of applicable law, and except for such steps as are necessary to disseminate the Offer Documents and any other documents necessary to consummate the Offer or the Merger, Parent and Purchaser shall hold in confidence the information contained in such labels, listings and files, shall use such information only in connection with the Offer and the Merger, and, if this Agreement shall be terminated in accordance with Section 8.01, shall deliver to the Company all copies of such information then in their possession. 5 ARTICLE II THE MERGER ---------- SECTION 2.01. The Merger. Upon the terms and subject to the ---------- conditions set forth in Article VII, and in accordance with Delaware Law, at the Effective Time (as hereinafter defined) Purchaser shall be merged with and into the Company. As a result of the Merger, the separate corporate existence of Purchaser shall cease and the Company shall continue as the surviving corporation of the Merger (the "Surviving Corporation"). Notwithstanding --------------------- anything to the contrary contained in this Section 2.01, Parent may elect instead, at any time prior to the fifth business day immediately preceding the date on which the Proxy Statement (as defined in Section 3.11) is mailed initially to the Company's stockholders, to merge the Company with or into Purchaser or another direct or indirect wholly owned subsidiary of SIEMENS AKTIENGESELLSCHAFT, a German corporation (the "Ultimate Parent Company"). In ----------------------- such event, the parties agree to execute an appropriate amendment to this Agreement in order to reflect the foregoing and to provide, as the case may be, that Purchaser or such other wholly owned subsidiary of Parent shall be the Surviving Corporation. SECTION 2.02. Effective Time; Closing. As promptly as ----------------------- practicable after the satisfaction or, if permissible, waiver of the conditions set forth in Article VII, the parties hereto shall cause the Merger to be consummated by filing this Agreement or a certificate of merger or certificate of ownership and merger, as applicable (in either case, the "Certificate of -------------- Merger"), with the Secretary of State of the State of Delaware, in such form as - ------ is required by, and executed in accordance with the relevant provisions of, Delaware Law (the date and time of such filing being the "Effective Time"). -------------- Prior to such filing, a closing shall be held at the offices of Shearman & Sterling, 599 Lexington Avenue, New York, New York, 10022, or such other place as the parties shall agree, for the purpose of confirming the satisfaction or waiver, as the case may be, of the conditions set forth in Article VII. SECTION 2.03. Effect of the Merger. At the Effective Time, the -------------------- effect of the Merger shall be as provided in the applicable provisions of Delaware Law. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time all the property, rights, privileges, powers and franchises of the Company and Purchaser shall vest in the Surviving Corporation, and all debts, liabilities, obligations, restrictions, disabilities and duties of the Company and Purchaser shall become the debts, liabilities, obligations, restrictions, disabilities and duties of the Surviving Corporation. SECTION 2.04. Certificate of Incorporation; By-laws. (a) Unless ------------------------------------- otherwise determined by Parent prior to the Effective Time, at the Effective Time the Certificate of Incorporation of Purchaser, as in effect immediately prior to the Effective Time, shall be the Certificate of Incorporation of the Surviving Corporation until thereafter amended as provided by law and such Certificate of Incorporation. 6 (b) Unless otherwise determined by Parent prior to the Effective Time, the By-laws of Purchaser, as in effect immediately prior to the Effective Time, shall be the By-laws of the Surviving Corporation until thereafter amended as provided by law, the Certificate of Incorporation of the Surviving Corporation and such By-laws. SECTION 2.05. Directors and Officers. The directors of Purchaser ---------------------- immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation, each to hold office in accordance with the Certificate of Incorporation and By-laws of the Surviving Corporation, and the officers of the Company immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation, in each case until their respective successors are duly elected or appointed and qualified. SECTION 2.06. Conversion of Securities. At the Effective Time, ------------------------ by virtue of the Merger and without any action on the part of Purchaser, the Company or the holders of any of the following securities: (a) Each Share issued and outstanding immediately prior to the Effective Time (other than any Shares to be cancelled pursuant to Section 2.06(b) and any Dissenting Shares (as hereinafter defined)) shall be automatically converted into, and exchanged for, the right to receive an amount equal to the Per Share Amount in cash (the "Merger Consideration") -------------------- payable, without interest, to the holder of such Share, upon surrender, in the manner provided in Section 2.09, less any required withholding tax, of the certificate that formerly evidenced such Share; (b) Each Share held in the treasury of the Company and each Share owned by Purchaser, Parent or any direct or indirect wholly owned subsidiary of Parent or of the Company immediately prior to the Effective Time shall be cancelled without any conversion thereof and no payment or distribution shall be made with respect thereto; and (c) Each share of Common Stock, par value $.01 per share, of Purchaser issued and outstanding immediately prior to the Effective Time shall be converted into and exchanged for one validly issued, fully paid and nonassessable share of common stock, par value $.01 per share, of the Surviving Corporation. SECTION 2.07. Employee Stock Options. (a) Executive Officers' ---------------------- ------------------- Nonstatutory Stock Option Plan, Share Option Scheme for U.K. Executives and - --------------------------------------------------------------------------- Amended and Restated Directors' Option Plan. Each outstanding employee or - ------------------------------------------- director stock option to purchase Shares (a "non-1982 Plan Option") granted under any of the Company's Executive Officers Nonstatutory Stock Option Plan, Amended and Restated Directors' Option Plan and Share Option Scheme for U.K. Executives (collectively, the "non-1982 Stock Option Plans"), shall be made exercisable on the date that this Agreement is signed, regardless of whether they would 7 otherwise be exercisable under the terms of such non-1982 Stock Option Plans. Any non-1982 Plan Option not exercised by the Effective Time shall be cancelled by the Company and no payment shall be made therefor. (b) Amended 1982 Incentive Stock Option Plan. Each outstanding ---------------------------------------- employee or director stock option to purchase Shares (a "1982 Plan Option") granted under the Company's Amended 1982 Incentive Stock Option Plan shall be made exercisable on the date that Purchaser accepts for payment of Shares tendered pursuant to the Offer, regardless of whether such stock options would otherwise be exercisable under the terms of the Amended 1982 Incentive Stock Option Plan. Moreover, on such date, each 1982 Plan Option, other than any 1982 Plan Option that was granted to any "officer" (as that term is defined in Rule 16a-1(f) promulgated by the SEC) of the Company (a "Section 16 Insider Option"), shall be cancelled, without further action required on the part of the holder of such option, in exchange for the right to receive, as soon as practicable following Purchaser's acceptance for payment of Shares tendered pursuant to the Offer, a cash payment by the Purchaser to the holder in an amount equal to the excess, if any, of the Per Share Amount over the exercise price per share of the 1982 Plan Option minus applicable withholding. Each outstanding Section 16 Insider Option shall be treated in one of two ways. First, with respect to Section 16 Insider Options that were granted at any time before the date that is six months prior to the Effective Time (the "Old Insider Options"), such options must be exercised immediately following the acceleration of vesting provided for in the first sentence of this subsection; to the extent that such Old Insider Options are not so exercised, they shall be cancelled by the Company and no payment shall be made therefor. Second, with respect to Section 16 Insider Options that were granted at any time on or after the date that is six months prior to the Effective Time (the "Recent Insider Options"), such options shall remain outstanding in accordance with their terms (amended as provided below) and shall not be affected in any way by the consummation of the Merger, except for their becoming exercisable in full pursuant to the first sentence of this subsection. As soon as practicable following the Effective Time, but at least six months after the grant date of any Recent Insider Option, Parent, in its capacity as sole stockholder of the Surviving Corporation, shall approve amendments to the Amended 1982 Incentive Stock Option Plan to provide (a) that upon exercise of a Recent Insider Option, the holder shall receive an amount in cash per Share equal to the excess, if any, of the Per Share Amount over the exercise price per share of the Recent Insider Option, minus applicable withholding, and (b) that each Recent Insider Option that has not been exercised as of July 31, 1995 shall be cancelled by the Surviving Corporation on such date and no payment shall be made therefor. (c) 1987 Employee Stock Purchase Plan. With respect to the --------------------------------- Company's 1987 Employee Stock Purchase Plan (the "Purchase Plan"), the offering period currently in progress shall be shortened by setting a new exercise date which shall be the date immediately preceding the Effective Time (the "New Exercise Date"). The Purchase Plan shall terminate immediately following the purchase of Shares on the New Exercise Date. 8 SECTION 2.08. Dissenting Shares. (a) Notwithstanding any ----------------- provision of this Agreement to the contrary, Shares that are outstanding immediately prior to the Effective Time and which are held by stockholders who shall have not voted in favor of the Merger or consented thereto in writing and who shall have demanded properly in writing appraisal for such Shares in accordance with Section 262 of Delaware Law (collectively, the "Dissenting ---------- Shares") shall not be converted into or represent the right to receive the - ------ Merger Consideration. Such stockholders shall be entitled to receive payment of the appraised value of such Shares held by them in accordance with the provisions of such Section 262, except that all Dissenting Shares held by stockholders who shall have failed to perfect or who effectively shall have withdrawn or lost their rights to appraisal of such Shares under such Section 262 shall thereupon be deemed to have been converted into and to have become exchangeable for, as of the Effective Time, the right to receive the Merger Consideration, without any interest thereon, upon surrender, in the manner provided in Section 2.09 of this Agreement, of the certificate or certificates that formerly evidenced such Shares. (b) The Company shall give Parent (i) prompt notice of any demands for appraisal received by the Company, withdrawals of such demands, and any other instruments served pursuant to Delaware Law and received by the Company and (ii) the opportunity to direct all negotiations and proceedings with respect to demands for appraisal under Delaware Law. The Company shall not, except with the prior written consent of Parent, make any payment with respect to any demands for appraisal or offer to settle or settle any such demands. SECTION 2.09. Surrender of Shares; Stock Transfer Books. (a) ----------------------------------------- Prior to the Effective Time, Purchaser shall designate a bank or trust company reasonably acceptable to the Company to act as agent (the "Paying Agent") for ------------ the holders of Shares in connection with the Merger to receive the funds to which holders of Shares shall become entitled pursuant to Section 2.06(a). At the Effective Time, Purchaser or Parent shall provide the Paying Agent with sufficient cash to allow the Merger Consideration to be paid by the Paying Agent for each Share then entitled to receive the Merger Consideration. Such funds shall be invested by the Paying Agent as directed by the Surviving Corporation. (b) Promptly after the Effective Time, the Surviving Corporation shall cause to be mailed to each person who was, at the Effective Time, a holder of record of Shares entitled to receive the Merger Consideration pursuant to Section 2.06(a) a form of letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the certificates evidencing such Shares (the "Certificates") shall pass, only upon proper ------------ delivery of the Certificates to the Paying Agent) and instructions for use in effecting the surrender of the Certificates pursuant to such letter of transmittal. Upon surrender to the Paying Agent of a Certificate, together with such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, and such other documents as may be required pursuant to such instructions, the holder of such Certificate shall be entitled to receive in exchange therefor the Merger Consideration for each Share formerly evidenced by such Certificate, and 9 such Certificate shall then be cancelled. No interest shall accrue or be paid on the Merger Consideration payable upon the surrender of any Certificate for the benefit of the holder of such Certificate. If payment of the Merger Consideration is to be made to a person other than the person in whose name the surrendered Certificate is registered on the stock transfer books of the Company, it shall be a condition of payment that the Certificate so surrendered shall be endorsed properly or otherwise be in proper form for transfer and that the person requesting such payment shall have paid all transfer and other taxes required by reason of the payment of the Merger Consideration to a person other than the registered holder of the Certificate surrendered or shall have established to the satisfaction of the Surviving Corporation that such taxes either have been paid or are not applicable. (c) At any time following the third month after the Effective Time, the Surviving Corporation shall be entitled to require the Paying Agent to deliver to it any funds which had been made available to the Paying Agent and not disbursed to holders of Shares (including, without limitation, all interest and other income received by the Paying Agent in respect of all funds made available to it), and thereafter such holders shall be entitled to look to the Surviving Corporation (subject to abandoned property, escheat and other similar laws) only as general creditors thereof with respect to any Merger Consideration that may be payable upon due surrender of the Certificates held by them. Notwithstanding the foregoing, neither the Surviving Corporation nor the Paying Agent shall be liable to any holder of a Share for any Merger Consideration delivered in respect of such Share to a public official pursuant to any abandoned property, escheat or other similar law. (d) At the close of business on the day of the Effective Time, the stock transfer books of the Company shall be closed and thereafter there shall be no further registration of transfers of Shares on the records of the Company. From and after the Effective Time, the holders of Shares outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such Shares except as otherwise provided herein or by applicable law. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY --------------------------------------------- The Company hereby represents and warrants to Parent and Purchaser that, except as described in the Disclosure Schedule furnished by the Company to Parent prior to the date of this Agreement (the "Disclosure Schedule") or as set ------------------- forth in, or incorporated by reference into, the SEC Reports (as defined hereafter): SECTION 3.01. Organization and Qualification; Subsidiaries. (a) -------------------------------------------- Each of the Company and each subsidiary of the Company (a "Subsidiary") is a ---------- corporation duly 10 incorporated, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has the requisite power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as it is now being conducted, except where the failure to be so incorporated, existing or in good standing or to have such power, authority and governmental approvals would not, individually or in the aggregate, have a Material Adverse Effect (as defined below). The Company and each Subsidiary is duly qualified or licensed as a foreign corporation to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing necessary, except for such failures to be so qualified or licensed and in good standing that would not, individually or in the aggregate, have a Material Adverse Effect. When used in connection with the Company or any Subsidiary, the term "Material Adverse Effect" means any change ----------------------- or effect that, when taken together with all other adverse changes and effects that are within the scope of the representations and warranties made by the Company in this Agreement and which are not individually or in the aggregate deemed to have a Material Adverse Effect, is or is reasonably likely to be materially adverse to the business, operations, properties, assets or liabilities (including, without limitation, contingent liabilities) of the Company and the Subsidiaries taken as a whole. A true and complete list of all the Subsidiaries, together with the jurisdiction of incorporation of each Subsidiary and the percentage of the outstanding capital stock of each Subsidiary owned by the Company and each other Subsidiary, is set forth in Section 3.01 of the Disclosure Schedule previously delivered by the Company to Parent. Except as disclosed in such Section 3.01, the Company does not directly or indirectly own any equity or similar interest in, or any interest convertible into or exchangeable or exercisable for any equity or similar interest in, any corporation, partnership, joint venture or other business association or entity. (b) Each Subsidiary that is material to the business, operations, properties, assets or liabilities of the Company and the Subsidiaries taken as a whole is so identified in Section 3.01 of the Disclosure Schedule and is referred to herein as a "Material Subsidiary". ------------------- SECTION 3.02. Certificate of Incorporation and By-laws. The Company ---------------------------------------- has heretofore furnished to Parent a complete and correct copy of the Certificate of Incorporation and the By-laws or equivalent organizational documents, each as amended to date, of the Company and each Subsidiary. Such Certificates of Incorporation, By-laws and equivalent organizational documents are in full force and effect. Neither the Company nor any Subsidiary is in violation of any provision of its Certificate of Incorporation, By-laws or equivalent organizational documents. SECTION 3.03. Capitalization. The authorized capital stock of the -------------- Company consists of 30,000,000 Shares. As of January 18, 1995, (i) 15,628,591 Shares are issued and outstanding, all of which are validly issued, fully paid and nonassessable, (ii) no Shares are held in the treasury of the Company, (iii) no Shares are held by the Subsidiaries, (iv) 3,449,923 Shares are reserved for future issuance pursuant to outstanding employee stock options or stock 11 incentive rights granted pursuant to the Company's Stock Option and Purchase Plans and (v) 405,034 Shares are reserved for future issuance pursuant to future grants of employee stock options or stock incentive rights pursuant to the Company's Stock Option and Purchase Plans and (vi) 1,330,000 Shares are reserved for future issuance pursuant to the warrant (the "Parent Warrant") purchased by -------------- Parent pursuant to the Common Stock and Warrant Purchase Agreement dated as of August 21, 1994, between Highnoon and Parent (the "August Purchase Agreement"). ------------------------- Except as set forth in this Section 3.03, and except pursuant to the Rights Agreement (as defined in Section 3.16) and the August Purchase Agreement, there are no options, warrants or other rights, agreements, arrangements or commitments of any character relating to the issued or unissued capital stock of the Company or any Subsidiary or obligating the Company or any Subsidiary to issue or sell any shares of capital stock of, or other equity interests in, the Company or any Subsidiary. All Shares subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable. There are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any Shares or any capital stock of any Subsidiary or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other person. Each outstanding share of capital stock of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable and each such share owned by the Company or another Subsidiary is free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on the Company's or such other Subsidiary's voting rights, charges and other encumbrances of any nature whatsoever. SECTION 3.04. Authority Relative to this Agreement. The Company has ------------------------------------ all necessary power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions, including, without limitation, the Merger, contemplated hereby (the "Transactions"). The ------------ execution and delivery of this Agreement by the Company and the consummation by the Company of the Transactions have been duly and validly authorized by all necessary corporate action and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement or to consummate the Transactions (other than, with respect to the Merger, the approval and adoption of this Agreement by the holders of a majority of the then outstanding Shares if and to the extent required by applicable law, and the filing and recordation of appropriate merger documents as required by Delaware Law). This Agreement has been duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery by Parent and Purchaser, constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms. The restrictions on business combinations contained in Section 203 of Delaware Law have been satisfied with respect to the Transactions. SECTION 3.05. No Conflict; Required Filings and Consents. (a) The ------------------------------------------ execution and delivery of this Agreement by the Company do not, and the performance of this Agreement by the Company will not: (i) conflict with or violate the Certificate of Incorporation or By-laws 12 or equivalent organizational documents of the Company or any Subsidiary, (ii) conflict with or violate any law, rule, regulation, order, judgment or decree applicable to the Company or any Subsidiary or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any right of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or other encumbrance on any property or asset of the Company or any Subsidiary pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation, except for any such conflicts, violations, breaches, defaults or other occurrences as to which requisite waivers have been obtained or which would not, individually or in the aggregate, have a Material Adverse Effect. (b) The execution and delivery of this Agreement by the Company do not, and the performance of this Agreement by the Company will not, require any consent, approval, authorization or permit of, or filing with or notification to, any governmental or regulatory authority, domestic or foreign, except (i) for applicable requirements, if any, of the Exchange Act, state securities or "blue sky" laws ("Blue Sky Laws") and state takeover laws, the pre-merger ------------- notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder (the "HSR Act"), the ------- requirements of Section 721 of Title VII of the Defense Production Act of 1950, as amended, and the regulations promulgated thereunder (the "Exon-Florio ----------- Provision"), the pre-Merger notification requirements of the Bundeskartellamt, - --------- the post-closing notification requirements of the Investment Canada Act of 1985 (the "ICA"), the requirements of the Industrial Sites Recovery Act ("ISRA"), --- ---- applicable pre-merger notification requirements, if any, under the laws of any other country and filing and recordation of appropriate merger documents as required by Delaware Law and (ii) where failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not prevent or delay consummation of the Offer or the Merger, or otherwise prevent the Company from performing its obligations under this Agreement, and would not, individually or in the aggregate, have a Material Adverse Effect. SECTION 3.06. Compliance. Neither the Company nor any Subsidiary is ---------- in conflict with, or in default or violation of, (i) any law, rule, regulation, order, judgment or decree applicable to the Company or any Subsidiary or by which any property or asset of the Company or any Subsidiary is bound or affected, or (ii) any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary or any property or asset of the Company or any Subsidiary is bound or affected, except for any such conflicts, defaults or violations that would not, individually or in the aggregate, have a Material Adverse Effect. 13 SECTION 3.07. SEC Filings; Financial Statements. (a) The Company --------------------------------- has filed all forms, reports and documents required to be filed by it with the SEC since September 30, 1992, and has heretofore made available to Parent, in the form filed with the SEC, (i) its Annual Reports on Form 10-K for the fiscal years ended September 30, 1992, 1993, and 1994, respectively, (ii) all proxy statements (other than preliminary proxy materials) relating to the Company's meetings of stockholders (whether annual or special) held since January 1, 1992 and (iii) all other forms, reports and other registration statements filed by the Company with the SEC since September 30, 1992 (other than Quarterly Reports on Form 10-Q filed by the Company with the SEC prior to September 30, 1994 (the forms, reports and other documents referred to in clauses (i), (ii) and (iii) above being referred to herein, collectively, as the "SEC Reports"). The SEC ----------- Reports (i) were prepared in accordance with the requirements of the Securities Act of 1933, as amended (the "Securities Act"), and the Exchange Act, as the -------------- case may be, and the rules and regulations thereunder and (ii) did not at the time they were filed contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. No Subsidiary is required to file any form, report or other document with the SEC. (b) Each of the consolidated financial statements (including, in each case, any notes thereto) contained in the SEC Reports was prepared in accordance with generally accepted accounting principles applied on a consistent basis ("GAAP") throughout the periods indicated (except for the notes and as may be ---- indicated in the notes thereto) and each fairly presented the consolidated financial position, results of operations and cash flows of the Company and the consolidated Subsidiaries as at the respective dates thereof and for the respective periods indicated therein (subject, in the case of unaudited statements, to normal and recurring year-end adjustments which were not and are not expected, individually or in the aggregate, to be material in amount). (c) Set forth on Section 3.07(c) of the Disclosure Schedule is the earnings release issued by the Company on January 18, 1995, which, in light of the SEC Reports, does not contain as of the date of this Agreement any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, misleading. (d) Except as and to the extent set forth on the consolidated balance sheet of the Company and the consolidated Subsidiaries as at September 30, 1994, including the notes thereto (the "1994 Balance Sheet"), neither the Company nor ------------------ any Subsidiary has any liability or obligation of any nature (whether accrued, absolute, contingent or otherwise) which would be required to be reflected on a balance sheet, or in the notes thereto, prepared in accordance with GAAP, except for liabilities and obligations (i) disclosed in the SEC Reports, (ii) identified in Section 3.09(d) of the Disclosure Schedule or (iii) incurred in the ordinary course of business 14 consistent with past practice since September 30, 1994 which would not, individually or in the aggregate, have a Material Adverse Effect. (e) The Company has heretofore furnished to Parent complete and correct copies of all amendments and modifications that have not been filed by the Company with the SEC to all agreements, documents and other instruments that previously had been filed by the Company with the SEC and are currently in effect. SECTION 3.08. Absence of Certain Changes or Events. Since September ------------------------------------ 30, 1994, except as contemplated by this Agreement or disclosed in any SEC Report filed since September 30, 1994 and prior to the date of this Agreement, the Company and the Subsidiaries have conducted their businesses only in the ordinary course and in a manner consistent with past practice and, since September 30, 1994, there has not been (i) any change in the business, operations, properties, condition (financial or otherwise), assets or liabilities (including, without limitation, contingent liabilities) or prospects of the Company or any Subsidiary having, individually or in the aggregate, a Material Adverse Effect, (ii) any damage, destruction or loss (whether or not covered by insurance) with respect to any property or asset of the Company or any Subsidiary and having, individually or in the aggregate, a Material Adverse Effect, (iii) any change by the Company in its accounting methods, principles or practices, (iv) any revaluation by the Company of any asset (including, without limitation, any writing down of the value of inventory or writing off of notes or accounts receivable), other than in the ordinary course of business consistent with past practice, (v) any failure by the Company to revalue any asset in accordance with GAAP, (vi) any entry by the Company or any Subsidiary into any commitment or transaction material to the Company and the Subsidiaries taken as a whole, (vii) any declaration, setting aside or payment of any dividend or distribution in respect of any capital stock of the Company or redemption, purchase or other acquisition of any of its securities or (viii) any increase in or establishment of any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option (including, without limitation, the granting of stock options, stock appreciation rights, performance awards, or restricted stock awards), stock purchase or other employee benefit plan, or any other increase in the compensation payable or to become payable to any officers or key employees of the Company or any Subsidiary, except in the ordinary course of business consistent with past practice. SECTION 3.09. Absence of Litigation. Except as disclosed in the SEC --------------------- Reports filed prior to the date of this Agreement, there is no claim, action, proceeding or investigation pending or, to the best knowledge of the Company, threatened against the Company or any Subsidiary, or any property or asset of the Company or any Subsidiary, before any court, arbitrator or administrative, governmental or regulatory authority or body, domestic or foreign, which (i) individually or in the aggregate, is reasonably likely to have a Material Adverse Effect or (ii) seeks to delay or prevent the consummation of any Transaction. As of the date hereof, neither the Company nor any Subsidiary nor any property or asset of the Company or any 15 Subsidiary is subject to any order, writ, judgment, injunction, decree, determination or award having, individually or in the aggregate, a Material Adverse Effect. SECTION 3.10. Employee Benefit Plans. (a) Section 3.10 of the ---------------------- Disclosure Schedule contains a true and complete list of (i) all employee benefit plans (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) and all bonus, stock option, ----- stock purchase, restricted stock, incentive, deferred compensation, retiree medical or life insurance, supplemental retirement, severance or other benefit plans, programs or arrangements, and all employment, termination, severance or other similar contracts or agreements to which the Company or any Subsidiary is a party, with respect to which the Company or any Subsidiary has any obligation or which are maintained, contributed to or sponsored by the Company or any Subsidiary for the benefit of any current or former employee, officer or director of the Company or any Subsidiary and (ii) each employee benefit plan for which the Company or any Subsidiary could incur liability under Section 4069 of ERISA, in the event such plan were terminated, or under Section 4212(c) of ERISA, or in respect of which the Company or any Subsidiary remains secondarily liable under Section 4204 of ERISA (collectively, the "Plans"). Each Plan is in ----- writing or, if not, a written description thereof is set forth in Section 3.10 of the Disclosure Schedule, and the Company has made available to Parent a true and complete copy of each Plan and a true and complete copy of each material document prepared in connection with each such Plan, including, without limitation, (i) a copy of each trust or other funding arrangement, (ii) each summary plan description and summary of material modifications, (iii) the most recently filed Internal Revenue Service ("IRS") Form 5500 and (iv) the most --- recently received IRS determination letter for each such Plan. Except in the ordinary course of business, neither the Company nor any Subsidiary has any express or implied commitment (i) to create, incur liability with respect to or cause to exist any other employee benefit plan, program or arrangement, (ii) to enter into any contract or agreement to provide compensation or benefits to any individual or (iii) to modify, change or terminate any Plan, other than with respect to a modification, change or termination required by ERISA or the Internal Revenue Code of 1986, as amended (the "Code"). ---- (b) Other than as specifically disclosed in Section 3.10 of the Disclosure Schedule, none of the Plans maintained by the Company are subject to Title IV of ERISA, and neither the Company nor any other entity that is or was under common control with the Company (within the meaning of (S)(S) 414(b) and (c) of the Code) has ever maintained a plan subject to Title IV of ERISA. Except as specifically disclosed in Section 3.10 of the Disclosure Schedule, none of the Plans (i) provides for the payment of separation, severance, termination or similar-type benefits to any person, (ii) obligates the Company or any Subsidiary to pay separation, severance, termination or other benefits as a result of any Transaction or (iii) obligates the Company or any Subsidiary to make any payment or provide any benefit that could be subject to a tax under Section 4999 of the Code. None of the Plans provides for or promises retiree medical, disability or life insurance benefits to any current or former employee, officer or director of the Company or any Subsidiary. 16 (c) Each Plan which is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from the IRS that such Plan is so qualified. To the best of the Company's knowledge, no fact or event has occurred since the date of any such determination letter from the IRS that could adversely affect the qualified status of any such Plan or the exempt status of any such trust. Each trust maintained or contributed to by the Company or any Subsidiary which is intended to be qualified as a voluntary employees' beneficiary association exempt from federal income taxation under Sections 501(a) and 501(c)(9) of the Code has received a favorable determination letter from the IRS that it is so qualified and so exempt, and no fact or event has occurred since the date of such determination by the IRS that could adversely affect such qualified or exempt status. (d) To the best of the Company's knowledge, there has been no prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) with respect to any Plan. Neither the Company nor any Subsidiary is currently liable or has previously incurred any material liability for any tax or penalty arising under Section 4971, 4972, 4979, 4980 or 4980B of the Code or Section 502(c) of ERISA, and no fact or event exists which could give rise to any such liability. No complete or partial termination has occurred within the five years preceding the date hereof with respect to any Plan that is an employee pension benefit plan as defined in Section 3(2) of ERISA. (e) Each Plan is now and has been operated in all respects in accordance with the requirements of all applicable laws, including, without limitation, ERISA and the Code, and the Company and each Subsidiary have performed all obligations required to be performed by them under, are not in any respect in default under or in violation of, and have no knowledge of any default or violation by any party to, any Plan, except for such failures of compliance or performance, defaults and violations which do not individually, or in the aggregate, have a Material Adverse Effect. All contributions, premiums or payments required to be made with respect to any Plan are fully deductible for income tax purposes and no such deduction previously claimed has been challenged by any government entity. The 1994 Balance Sheet reflects an accrual of all amounts of employer contributions and premiums accrued but unpaid with respect to the Plans. (f) The Company and the Subsidiaries have not incurred any liability under, and have complied in all respects with, the Worker Adjustment Retraining Notification Act and the regulations promulgated thereunder ("WARN") ---- and do not reasonably expect to incur any such liability as a result of actions taken or not taken prior to the Effective Time. Section 3.10(f) of the Disclosure Schedule lists (i) all the employees terminated or laid off by the Company or any Subsidiary during the 90 days prior to the date hereof and (ii) all the employees of the Company or any Subsidiary who have experienced a reduction in hours of work of more than 50% (other than voluntary reductions in hours per week) during any month during the 90 days prior to the date hereof and describes all notices given by the Company and the Subsidiaries in connection with WARN. The Company will, by written notice to Parent and 17 Purchaser, update Section 3.10(f) of the Disclosure Schedule to include any such terminations, layoffs and reductions in hours from the date hereof through the Effective Time and will provide Parent and Purchaser with any related information which they may reasonably request. (g) In addition to the foregoing, with respect to each Plan that is not subject to United States law (a "Foreign Benefit Plan"): -------------------- (i) All employer and employee contributions to each Foreign Benefit Plan required by law or by the terms of such Foreign Benefit Plan have been made, or, if applicable, accrued in accordance with normal accounting practices; (ii) The fair market value of the assets of each funded Foreign Benefit Plan, the liability of each insurer for any Foreign Benefit Plan funded through insurance or the book reserve established for any Foreign Benefit Plan, together with any accrued contributions, is sufficient to procure or provide for the benefits determined on any ongoing basis (actual or contingent) accrued to the Effective Time with respect to all current and former participants under such Foreign Benefit Plan according to the actuarial assumptions and valuations most recently used to determine employer contributions to such Foreign Benefit Plan, and no transaction contemplated by this Agreement shall cause such assets or insurance obligations to be less than such benefit obligations, except where any such shortfall would not have a Material Adverse Effect; and (iii) Each Foreign Benefit Plan required to be registered has been registered and has been maintained in good standing with applicable regulatory authorities. Each Foreign Benefit Plan is now and always has been operated in full compliance with all applicable non-United States laws, except for such failure of compliance as does not, individually or in the aggregate, have a Material Adverse Effect. SECTION 3.11. Offer Documents; Schedule 14D-9; Proxy Statement. ------------------------------------------------ Neither the Schedule 14D-9 nor any information supplied by the Company for inclusion in the Offer Documents shall, at the respective times the Schedule 14D-9, the Offer Documents or any amendments or supplements thereto are filed with the SEC or are first published, sent or given to stockholders of the Company, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they are made, not misleading. Neither the proxy statement to be sent to the stockholders of the Company in connection with the Stockholders' Meeting (as hereinafter defined) or the information statement to be sent to such stockholders, as appropriate (such proxy statement or information statement, as amended or supplemented, being referred to herein as the "Proxy Statement"), --------------- shall, at the date the Proxy Statement (or any amendment or supplement thereto) is first mailed to stockholders of the Company, at the time of the Stockholders' Meeting and at the Effective 18 Time, be false or misleading with respect to any material fact, or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they are made, not misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of proxies for the Stockholders' Meeting which shall have become false or misleading. The Schedule 14D-9 and the Proxy Statement shall comply in all material respects as to form with the requirements of applicable federal securities laws, including the Exchange Act and the rules and regulations thereunder. SECTION 3.12. Real Property and Leases. (a) Neither the ------------------------ Company nor any Subsidiary owns any real property. (b) Section 3.12(b)(i) of the Disclosure Schedule lists each parcel of real property leased by the Company or any Subsidiary requiring annual rental payments exceeding $250,000 (the "Leased Real Property"). With respect to -------------------- any Leased Real Property, there exists no material default by the Company or any Subsidiary or, to the knowledge of the Company, by any other party under any lease relating thereto. Except as disclosed in Section 3.12(b)(ii) of the Disclosure Schedule, neither the Company nor any Subsidiary has leased or subleased any of the Leased Real Property to any other person. SECTION 3.13. Trademarks, Patents and Copyrights. Except as set ---------------------------------- forth on Schedule 3.13 to the Disclosure Schedule: (a) each of the Company and the Subsidiaries owns, possesses, and has the right to use, has the right to bring actions for the infringement of, or, where necessary, has made timely and proper application for, and diligently protected and enforced its rights in all Intellectual Property Rights (as hereinafter defined) owned by the Company or any Subsidiary, or used in, contemplated for use in, or necessary or required for the conduct of its business as currently conducted; (b) no royalties, honorariums or fees in excess of $50,000 per annum are payable by the Company or its Subsidiaries to other persons by reason of the ownership or use of the Intellectual Property Rights; (c) to the best of the Company's knowledge, no product or service that is designed, manufactured, marketed, performed or sold by the Company or the Subsidiaries violates any license or infringes any Intellectual Property Rights of another, nor is there any anticipated or pending or written threat of a claim or litigation against the Company or its Subsidiaries (nor to the knowledge of the Company does there exist any basis therefor) claiming infringement or violation of or contesting the validity of, or right to use, any Intellectual Property Rights; and 19 (d) none of the Company or the Subsidiaries has received notice that any use or contemplated use of any Intellectual Property Rights, or that the operation of or proposed operation of the Company's or the Subsidiaries' businesses, conflicts or will conflict with the rights of others; and (e) the Company and Subsidiaries have not granted any exclusive rights in the Intellectual Property Rights to any third party, including to develop, manufacture, use, market or service the Company's current products or Intellectual Property Rights. As used herein, the term "Intellectual Property Rights" means all industrial and ---------------------------- intellectual property rights, including, without limitation, Proprietary Technology (as hereinafter defined), patents, patent applications, patent rights, trademarks, trademark applications, trade names, service marks, service mark applications, copyrights, know-how, certificates of public convenience and necessity, franchises, licenses, trade secrets, proprietary processes and formulae used by the Company in its businesses. As used herein, "Proprietary ----------- Technology" means all source code, designs, algorithms, layouts, processes, - ---------- inventions, trade secrets, know-how and other proprietary rights pertaining to any product or service manufactured, marketed, performed or provided, or proposed to be manufactured, marketed, performed or provided (as the case may be), by the Company or the Subsidiaries or used, employed or exploited in the development, license, sale, marketing, distribution or maintenance thereof, and all documentation and media embodying or relating to the above, including, without limitation, manuals, models, prototypes, memoranda, know-how, notebooks, computer program software databases, patents and patent applications, trademarks and trademark applications, copyrights and copyright applications, records and disclosures. SECTION 3.14. Environmental Matters. (a) For purposes of this --------------------- Agreement, the following terms shall have the following meanings: (i) "Hazardous Substances" means (A) those substances defined in or regulated under -------------------- the following federal statutes and their state counterparts, as each may be amended from time to time, and all regulations thereunder: the Hazardous Materials Transportation Act, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Clean Water Act, the Safe Drinking Water Act, the Atomic Energy Act, the Federal Insecticide, Fungicide, and Rodenticide Act and the Clean Air Act; (B) petroleum and petroleum products including crude oil and any fractions thereof; (C) natural gas, synthetic gas, and any mixtures thereof; (D) radon; (E) any other contaminant; and (F) any substance with respect to which a federal, state or local agency requires environmental investigation, monitoring, reporting or remediation; and (ii) "Environmental Laws" means any federal, state or local law ------------------ (A) relating to releases or threatened releases of Hazardous Substances or materials containing Hazardous Substances; (B) relating to the manufacture, handling, transport, use, treatment, storage or disposal of Hazardous Substances or materials containing Hazardous Substances; or (C) otherwise relating to pollution of the environment or the protection of human health. 20 (b) Except as described in Section 3.14 of the Disclosure Schedule or as would not, individually or in the aggregate, have a Material Adverse Effect: (i) the Company has not violated and is not in violation of any Environmental Law; (ii) none of the properties currently or formerly owned or leased by the Company (including, without limitation, soils and surface and ground waters) are contaminated with any Hazardous Substance; (iii) the Company is not liable for any off-site contamination; (iv) the Company is not liable under any Environmental Law; (v) the Company has all permits, licenses and other authorizations required under any Environmental Law ("Environmental Permits"); --------------------- and (vi) the Company has always been and is in compliance with its Environmental Permits. SECTION 3.15. Brokers. No broker, finder or investment banker ------- (other than Smith Barney) is entitled to any brokerage, finder's or other fee or commission in connection with the Transactions based upon arrangements made by or on behalf of the Company. The Company has heretofore furnished to Parent a complete and correct copy of all agreements between the Company and Smith Barney pursuant to which such firm would be entitled to any payment relating to the Transactions. SECTION 3.16. Amendment to Rights Agreement. The Board has taken ----------------------------- such corporate action as is necessary to amend the Common Shares Rights Agreement dated as of December 12, 1988, as amended (the "Rights Agreement"), ---------------- between the Company and Bank of America, N.T. & S.A., as Rights Agent, so that none of the execution of this Agreement, the making of the Offer, the purchase of Shares pursuant to the Offer or the Merger shall cause Purchaser, Parent or any affiliate of Purchaser or Parent to become an "Acquiring Person" or cause a "Shares Acquisition Date", "Distribution Date" or "Triggering Event" to occur (each as defined in the Rights Agreement). Additionally, the Board has taken such corporate action as is necessary to amend the Rights Agreement so that the Final Expiration Date (as defined in the Rights Agreement) shall occur immediately prior to the purchase of Shares by Purchaser pursuant to the Offer. SECTION 3.17. Offer Conditions. To the Company's knowledge, since ---------------- September 30, 1994, no event has occurred and no circumstance has arisen which could reasonably be expected to result in a failure to satisfy any of the conditions to the Offer set forth in Annex A hereto. SECTION 3.18. Agreements. Except as set forth on Schedule 3.18 to ---------- the Disclosure Schedule or on Schedule 2.12 to the Disclosure Schedule delivered by the Company pursuant to the August Purchase Agreement, to the Company's knowledge, the Company and the Subsidiaries are not parties to any material written or oral contract or commitment not made in the ordinary course of business and, whether or not made in the ordinary course of business, the Company and the Subsidiaries are not parties to any written or oral (i) contract or commitment with any labor union, (ii) contract or commitment for the future purchase of fixed assets (other than materials or supplies required to manufacture the Company's products in the 21 ordinary course of business) in excess of $500,000 in the aggregate or for the future purchase of materials, supplies or equipment in excess of normal operating requirements, (iii) agreements, indentures or commitments relating to the borrowing of money in excess of $250,000 individually or to the mortgaging, pledging or otherwise placing of a lien on any assets of the Company or the Subsidiaries (other than relating to equipment held under capitalized leases or secured by purchase money security interests), (iv) guaranty of any obligation (other than any obligation of a Subsidiary) in excess of $250,000 individually, (v) agreement or other commitment for capital expenditures in excess of $500,000 individually, (vi) contract or agreement under which the Company or the Subsidiaries are obligated to pay any broker's fees, finder's fees or any such similar fees to any third party (other than as are incidental to the operation of its business in the ordinary course of business consistent with industry practices or in connection with the Transactions), (vii) contract or agreement for the payment or receipt of any royalty, (viii) license for the use of any patent, know-how, trademark, trade name, copyright or other intellectual property which is material to the financial condition or operations of the Company or (ix) other contract, agreement, arrangement or understanding that is material to the financial condition or operations of the Company and the Subsidiaries, taken as a whole. The Company has furnished or made available to counsel for Purchaser true and correct copies of all such agreements and such other documents as have been requested by Purchaser or their authorized representatives. Each of the foregoing contracts is valid, binding and in full force and effect in accordance with its terms. SECTION 3.19. Opinion of Financial Advisor. The Company has ---------------------------- received the written opinion of Smith Barney to the effect that the consideration to be received by the stockholders of the Company pursuant to the Offer and the Merger is fair to such stockholders from a financial point of view, a copy of which opinion has been delivered to Parent. SECTION 3.20. Insurance. Each of the Company and the Subsidiaries --------- maintains such insurance coverage, including amounts, described on Schedule 3.20 to the Disclosure Schedule. Such insurance listed on Schedule 3.20 to the Disclosure Schedule is outstanding and in full force and effect and all premiums with respect to such policies are currently paid. Each of the Company and the Subsidiaries has not during the past three fiscal years been denied or had revoked or rescinded any insurance policy. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER ------------------------------------------------------ Parent and Purchaser hereby, jointly and severally, represent and warrant to the Company that: 22 SECTION 4.01. Corporate Organization. Purchaser is a corporation ---------------------- duly incorporated, validly existing and in good standing under the laws of the State of Delaware. Parent is a corporation duly incorporated, validly existing and in good standing under the laws of the Federal Republic of Germany. Each of Parent and Purchaser has the requisite power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as it is now being conducted, except where the failure to be so incorporated, existing or in good standing or to have such power, authority and governmental approvals would not, individually or in the aggregate, adversely affect the ability of Parent and Purchaser to perform their obligations hereunder and to consummate the Transactions. SECTION 4.02. Authority Relative to this Agreement. Each of ------------------------------------ Parent and Purchaser has all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the Transactions. The execution and delivery of this Agreement by Parent and Purchaser and the consummation by Parent and Purchaser of the Transactions have been duly and validly authorized by all necessary corporate action and no other corporate proceedings on the part of Parent or Purchaser are necessary to authorize this Agreement or to consummate the Transactions (other than, with respect to the Merger, the filing and recordation of appropriate merger documents as required by Delaware Law). This Agreement has been duly and validly executed and delivered by Parent and Purchaser and, assuming the due authorization, execution and delivery by the Company, constitutes a legal, valid and binding obligation of each of Parent and Purchaser enforceable against each of Parent and Purchaser in accordance with its terms. SECTION 4.03. No Conflict; Required Filings and Consents. (a) ------------------------------------------ The execution and delivery of this Agreement by Parent and Purchaser do not, and the performance of this Agreement by Parent and Purchaser will not, (i) conflict with or violate the Certificate of Incorporation or By-laws (or equivalent governing documents) of either Parent or Purchaser, (ii) conflict with or violate any law, rule, regulation, order, judgment or decree applicable to Parent or Purchaser or by which any property or asset of either of them is bound or affected, or (iii) result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or other encumbrance on any property or asset of Parent or Purchaser pursuant to, any material note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which Parent or Purchaser is a party or by which Parent or Purchaser or any property or asset of either of them is bound or affected, except for any such conflicts, violations, breaches, defaults or other occurrences which would not, individually or in the aggregate, adversely affect the ability of Parent and Purchaser to perform their obligations hereunder and to consummate the Transactions. (b) The execution and delivery of this Agreement by Parent and Purchaser do not, and the performance of this Agreement by Parent and Purchaser will not, require any 23 consent, approval, authorization or permit of, or filing with or notification to, any governmental or regulatory authority, domestic or foreign, except (i) for applicable requirements, if any, of the Exchange Act, Blue Sky Laws and state takeover laws, the HSR Act, the Exon-Florio Provision, ISRA, the Bundeskartellamt, the ICA, applicable pre-merger notification requirements, if any, under the laws of any other country and filing and recordation of appropriate merger documents as required by Delaware Law and (ii) where failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not prevent or delay consummation of the Offer or the Merger, or otherwise prevent Parent or Purchaser from performing their respective obligations under this Agreement. SECTION 4.04. Financing. Parent has or will have sufficient funds --------- to permit Purchaser to acquire all the outstanding Shares in the Offer and the Merger. SECTION 4.05. Offer Documents; Proxy Statement. The Offer -------------------------------- Documents will not, at the time the Offer Documents are filed with the SEC or are first published, sent or given to stockholders of the Company, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they are made, not misleading. The information supplied by Parent for inclusion in the Schedule 14D-9 and the Proxy Statement (or any amendment or supplement thereto) will not, at the respective times the Schedule 14D-9, the Proxy Statement or any amendments or supplements thereto are filed with the SEC or are first published, sent or given to stockholders of the Company, at the time of the Stockholders' Meeting and at the Effective Time, as the case may be, contain any statement which, at such time and in light of the circumstances under which it is made, is false or misleading with respect to any material fact, or omits to state any material fact required to be stated therein or necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the Offer or the solicitation of proxies for the Stockholders' Meeting which shall have become false or misleading. Notwithstanding the foregoing, Parent and Purchaser make no representation or warranty with respect to any information supplied by the Company or any of its representatives which is contained in any of the foregoing documents or the Offer Documents. The Offer Documents shall comply in all material respects as to form with the requirements of applicable federal securities laws, including the Exchange Act and the rules and regulations thereunder. SECTION 4.06. Brokers. No broker, finder or investment banker ------- (other than Goldman, Sachs & Co.) is entitled to any brokerage, finder's or other fee or commission in connection with the Transactions based upon arrangements made by or on behalf of Parent or Purchaser. 24 ARTICLE V CONDUCT OF BUSINESS PENDING THE MERGER -------------------------------------- SECTION 5.01. Conduct of Business by the Company Pending the ----------------------------------------------- Merger. The Company covenants and agrees that, between the date of this - ------ Agreement and the Effective Time, unless Parent shall otherwise agree in writing, the businesses of the Company and the Subsidiaries shall be conducted only in, and the Company and the Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company shall use its reasonable best efforts to preserve substantially intact the business organization of the Company and the Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement or as set forth in Section 5.01 of the Disclosure Schedule, neither the Company nor any Subsidiary shall, between the date of this Agreement and the Effective Time, directly or indirectly do, or propose to do, any of the following without the prior written consent of Parent: (a) amend or otherwise change its Certificate of Incorporation or By-laws or equivalent organizational documents; (b) issue, sell, pledge, dispose of, grant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of capital stock of any class of the Company or any Subsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary (except for the issuance of a maximum of 3,449,923 Shares issuable pursuant to employee stock options outstanding on the date hereof, and except for the grant of stock options under the Company's Stock Option and Purchase Plans (and the resulting issuance of shares thereunder) consistent with established practice to new employees of the Company hired after December 7, 1994, and identified in Section 5.01 of the Disclosure Schedule) or (ii) any assets of the Company or any Subsidiary, except for sales of products in the ordinary course of business and in a manner consistent with past practice; (c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock; (d) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock; 25 (e) (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any corporation, partnership, other business organization or any division thereof or any material amount of assets; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except in the ordinary course of business and consistent with past practice; (iii) enter into any contract or agreement other than in the ordinary course of business, consistent with past practice; (iv) other than in the ordinary course of business, consistent with past practice, authorize any single capital expenditure which is in excess of $250,000 or capital expenditures which are, in the aggregate, in excess of $500,000 for the Company and the Subsidiaries taken as a whole; or (v) enter into or amend any contract, agreement, commitment or arrangement with respect to any matter set forth in this Section 5.01(e); (f) other than pursuant to policies or agreements of the Company or any of its Subsidiaries in effect on or prior to the date of this Agreement and disclosed in Section 3.10 of the Disclosure Schedule, increase the compensation payable or to become payable to its officers or employees, except for increases in accordance with past practices in salaries or wages of employees of the Company or any Subsidiary who are not officers of the Company, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company or any Subsidiary, or establish, adopt, enter into or amend any collective bargaining, bonus, profit/sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee; (g) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures; (h) make any tax election or settle or compromise any material federal, state, local or foreign income tax liability; (i) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities incurred in the ordinary course of business and consistent with past practice; 26 (j) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger); (k) settle or comprise any pending or threatened suit, action or claim which is material or which relates to any of the Transactions; or (l) take or offer or propose to take, or agree to take in writing, or otherwise, any of the actions described in paragraphs (a) through (k) of this Section 5.01 or any action which would make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect as of the date when made if such action had then been taken, or would result in any of the Offer conditions not being satisfied. ARTICLE VI ADDITIONAL AGREEMENTS --------------------- SECTION 6.01. Stockholders' Meeting. (a) If required by --------------------- applicable law in order to consummate the Merger, the Company, acting through the Board, shall, if required, in accordance with applicable law and the Company's Certificate of Incorporation and By-laws, (i) duly call, give notice of, convene and hold an annual or special meeting of its stockholders as soon as practicable following consummation of the Offer for the purpose of considering and taking action on this Agreement and the Transactions (the "Stockholders' ------------- Meeting") and (ii) subject to its fiduciary duties under applicable law as - ------- advised by independent counsel, (A) include in the Proxy Statement the recommendation of the Board that the stockholders of the Company approve and adopt this Agreement and the transactions contemplated hereby and (B) use its reasonable best efforts to obtain such approval and adoption. At the Stockholders' Meeting, Parent and Purchaser shall cause all Shares then owned by them and their subsidiaries to be voted in favor of the approval and adoption of this Agreement and the transactions contemplated hereby. (b) Notwithstanding the foregoing, in the event that Purchaser shall acquire at least 90 percent of the then outstanding Shares, the parties hereto agree, at the request of Purchaser, subject to Article VII, to take all necessary and appropriate action to cause the Merger to become effective, in accordance with Section 253 of Delaware Law, as promptly as reasonably practicable after such acquisition, without a meeting of the stockholders of the Company. SECTION 6.02. Proxy Statement. If required by applicable law, as --------------- promptly as practicable following consummation of the Offer, the Company shall file the Proxy Statement 27 with the SEC under the Exchange Act, and shall use its best efforts to have the Proxy Statement cleared by the SEC. Parent, Purchaser and the Company shall cooperate with each other in the preparation of the Proxy Statement, and the Company shall notify Parent of the receipt of any comments of the SEC with respect to the Proxy Statement and of any requests by the SEC for any amendment or supplement thereto or for additional information and shall provide to Parent promptly copies of all correspondence between the Company or any representative of the Company and the SEC. The Company shall give Parent and its counsel the opportunity to review the Proxy Statement prior to its being filed with the SEC and shall give Parent and its counsel the opportunity to review all amendments and supplements to the Proxy Statement and all responses to requests for additional information and replies to comments prior to their being filed with, or sent to, the SEC. Each of the Company, Parent and Purchaser agrees to use its reasonable best efforts, after consultation with the other parties hereto, to respond promptly to all such comments of and requests by the SEC and to cause the Proxy Statement and all required amendments and supplements thereto to be mailed to the holders of Shares entitled to vote at the Stockholders' Meeting at the earliest practicable time. SECTION 6.03. Company Board Representation; Section 14(f). (a) ------------------------------------------- Promptly upon the purchase by Purchaser of Shares pursuant to the Offer and from time to time thereafter, Purchaser shall be entitled to designate up to such number of directors, rounded up to the next whole number, on the Board as shall give Purchaser representation on the Board equal to the product of the total number of directors on the Board (giving effect to the directors elected pursuant to this sentence) multiplied by the percentage that the aggregate number of Shares beneficially owned by Purchaser or any affiliate of Purchaser following such purchase bears to the total number of Shares then outstanding, and the Company shall, at such time, promptly take all actions necessary to cause Purchaser's designees to be elected as directors of the Company, including increasing the size of the Board or securing the resignations of incumbent directors or both. The Company shall cause persons designated by Purchaser to constitute the same percentage as persons designated by Purchaser shall constitute of the Board of (i) each committee of the Board, (ii) each board of directors of each domestic Subsidiary and (iii) each committee of each such board, in each case only to the extent permitted by applicable law. Notwithstanding the foregoing, until the earlier of (i) the time Purchaser acquires a majority of the then outstanding Shares on a fully diluted basis and (ii) the Effective Time, the Company shall use its best efforts to ensure that all the members of the Board and each committee of the Board and such boards and committees of the domestic Subsidiaries as of the date hereof who are not employees of the Company shall remain members of the Board and of such boards and committees. (b) The Company shall promptly take all actions required pursuant to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order to fulfill its obligations under this Section 6.03 and shall include in the Schedule 14D-9 such information with respect to the Company and its officers and directors as is required under Section 14(f) and Rule 14f-1 to fulfill such obligations. Parent or Purchaser shall supply to the Company and be 28 solely responsible for any information with respect to either of them and their nominees, officers, directors and affiliates required by such Section 14(f) and Rule 14f-1. (c) Following the election or appointment of designees of Purchaser pursuant to this Section 6.03, prior to the Effective Time, any amendment of this Agreement or the Certificate of Incorporation or By-laws of the Company, any termination of this Agreement by the Company, any extension by the Company of the time for the performance of any of the obligations or other acts of Parent or Purchaser or waiver of any of the Company's rights hereunder shall require the concurrence of a majority of the directors of the Company then in office who neither were designated by Purchaser nor are employees of the Company. SECTION 6.04. Access to Information; Confidentiality. (a) From -------------------------------------- the date hereof to the Effective Time, the Company shall, and shall cause the Subsidiaries and the officers, directors, employees, auditors and agents of the Company and the Subsidiaries to, afford the officers, employees and agents of Parent and Purchaser complete access at all reasonable times to the officers, employees, agents, properties, offices, plants and other facilities, books and records of the Company and each Subsidiary, and shall furnish Parent and Purchaser with all financial, operating and other data and information as Parent or Purchaser, through its officers, employees or agents, may reasonably request. (b) All information obtained by Parent or Purchaser pursuant to this Section 6.04 shall be kept confidential in accordance with the provisions of Section 7.7 of the August Purchase Agreement. (c) No investigation pursuant to this Section 6.04 shall affect any representation or warranty in this Agreement of any party hereto or any condition to the obligations of the parties hereto. SECTION 6.05. No Solicitation of Transactions. (a) Neither the ------------------------------- Company nor any Subsidiary shall, and neither the Company nor any Subsidiary shall permit any officer, director or agent to solicit, initiate or encourage the submission of any proposal or offer from any person relating to any acquisition or purchase of all or (other than in the ordinary course of business) any portion of the assets of, or any equity interest in, the Company or any Subsidiary or any business combination with the Company or any Subsidiary (whether by a tender offer, exchange offer, merger, consolidation or otherwise), participate in any negotiations regarding, or furnish to any other person any information with respect to, any of the foregoing (an "Acquisition Proposal"). -------------------- The Company immediately shall cease and cause to be terminated all existing discussions or negotiations with any parties conducted heretofore with respect to any of the foregoing. The Company shall notify Parent promptly if any such proposal or offer, or any inquiry or contact with any person with respect thereto, is made and shall, in any such notice to Parent, indicate in reasonable detail the identity of the person making such proposal, offer, inquiry or contact and the terms and conditions of such proposal, offer, inquiry or contact. 29 The Company agrees not to release any third party from, or waive any provision of, any confidentiality or standstill agreement to which the Company is a party, except to the extent required by fiduciary obligations under applicable law as advised by independent counsel. (b) Notwithstanding the foregoing, to the extent required by fiduciary obligations under applicable law as advised by independent counsel, the Company may, in response to an Acquisition Proposal which was not solicited after the date of this Agreement, participate in discussions or negotiations with, or furnish information with respect to the Company pursuant to a confidentiality agreement in reasonably customary form, to any person. In addition, following the receipt of an Acquisition Proposal, which the Board of Directors of the Company, after consultation with and based on the advice of independent legal counsel and its financial advisor, determines in good faith to be more favorable to the Company's stock-holders than the Offer and the Merger (a "Superior Proposal"), the Company may, upon payment of the Fee and Expenses ----------------- (as defined hereafter) as required by Section 8.01(d)(ii), terminate this Agreement pursuant to such Section 8.01(d)(ii) and accept such Superior Proposal, and the Board of Directors of the Company may approve or recommend such Superior Proposal (and, in connection therewith, withdraw or modify its approval or recommendation of the Offer, this Agreement or the Merger. Nothing contained in this Section 6.05(b) shall prohibit the Company or its Board of Directors from (i) taking, and disclosing to the Company's stockholders, a position with respect to an Acquisition Proposal pursuant to Rules 14d-9 and 14e-2(a) under the Exchange Act or (ii) making any disclosure to the Company's stockholders that, in the judgment of the Board of Directors or the Company, is required under applicable law. SECTION 6.06. Employee Benefits Matters. Annex B hereto sets ------------------------- forth certain agreements among the parties hereto with respect to the Plans and other employee benefits matters. SECTION 6.07. Directors' and Officers' Indemnification and --------------------------------------------- Insurance. (a) The Surviving Corporation and --------- Parent agree that for a period ending not sooner than the sixth anniversary of the Effective Time, the Surviving Corporation will maintain all rights to indemnification (including with respect to the advancement of expenses incurred in the defense of any action or suit) existing on the date of this Agreement in favor of the present and the former directors, officers, employees and agents of the Company as provided in the Company's Certificate of Incorporation and Bylaws and as set forth in the Indemnification Agreements listed in Section 6.07 of the Disclosure Schedule (true and correct copies of which have been made available to Purchaser), in each case as in effect on the date of this Agreement, and that during such period, the Certificate of Incorporation and Bylaws of the Surviving Corporation shall not be amended to reduce or limit the rights of indemnity afforded to the present and former directors, officers, employees and agents of the Company, or the ability of the Surviving Corporation to indemnify them, nor to hinder, delay or make more difficult the exercise of such rights or indemnity or the ability to indemnify. 30 (b) Parent and the Surviving Corporation shall use their respective reasonable best efforts to maintain in effect for three years from the Effective Time, if available, the current directors' and officers' liability insurance policies maintained by the Company (provided that the Surviving Corporation may substitute therefor policies of at least the same coverage containing terms and conditions which are not materially less favorable) with respect to matters occurring prior to the Effective Time; provided, however, that in no event shall -------- ------- the Surviving Corporation be required to expend pursuant to this Section 6.07(b) more than an amount per year equal to 150% of current annual premiums paid by the Company for such insurance (which premiums the Company represents and warrants to be $533,000 in the aggregate). (c) Should any claim or claims be made against any present or former director, officer, employee or agent of the Company, arising from such person's service as such, on or prior to the sixth anniversary of the Effective Time, the provisions of this Section 6.07 respecting the Certificate of Incorporation and Bylaws and the obligation of indemnity of the Parent and the Surviving Corporation shall continue in effect until the final disposition of all such claims. (d) In the event that Parent or the Surviving Corporation or any of their successors or assigns consolidates with or merges into any other person and shall not be the continuing or surviving corporation or entity of such consolidation or merger, then and in each such case, proper provisions shall be made so that the successors and assigns or Parent or the Surviving Corporation, as the case may be, or, at Parent's option, Parent shall assume the obligations of Parent or the Surviving Corporation set forth in this Section 6.07. (e) The provisions of this Section 6.07 are intended to be for the benefit of, and shall be enforceable by, each indemnified party and such party's heirs and representatives. SECTION 6.08. Notification of Certain Matters. The Company shall ------------------------------- give prompt notice to Parent, and Parent shall give prompt notice to the Company, of (i) the occurrence, or non-occurrence, of any event the occurrence, or non-occurrence, of which would be likely to cause any representation or warranty contained in this Agreement to be untrue or inaccurate in any material respect and (ii) any material failure of the Company, Parent or Purchaser, as the case may be, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; provided, however, that the -------- ------- delivery of any notice pursuant to this Section 6.08 shall not limit or otherwise affect the remedies available hereunder to the party receiving such notice. SECTION 6.09. Further Action; Reasonable Best Efforts. Upon the --------------------------------------- terms and subject to the conditions hereof, each of the parties hereto shall (i) make promptly its respective filings, and thereafter make any other required submissions, under the HSR Act and the other regulatory provisions listed in Section 3.05 with respect to the Transactions and (ii) use all 31 reasonable best efforts to take, or cause to be taken, all appropriate action, and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the Transactions, including, without limitation, using all reasonable best efforts to obtain all licenses, permits (including, without limitation, Environmental Permits), consents, approvals, authorizations, qualifications and orders of governmental authorities and parties to contracts with the Company and the Subsidiaries as are necessary for the consummation of the Transactions and to fulfill the conditions to the Offer and the Merger. Parent shall give notice promptly to the Chairman of the Committee on Foreign Investment in the United States pursuant to the Exon-Florio Provision of the Transactions, and each of the parties hereto shall make such additional filings and submissions as may be reasonably necessary under the Exon-Florio Provision in respect of the Transactions. Parent and the Company will consult and cooperate with one another, and consider in good faith the views of one another, in connection with any analyses, appearances, presentations, memoranda, briefs, arguments, opinions or proposals made or submitted by or on behalf of any party hereto in connection with proceedings under or relating to the HSR Act, the Exon-Florio Provision, the pre-notification requirements of any foreign jurisdiction, or any other federal or state antitrust or fair trade law. In case at any time after the Effective Time any further action is necessary or desirable to carry out the purposes of this Agreement, the proper officers and directors of each party to this Agreement shall use their reasonable best efforts to take all such action. No provision of this Section 6.09 shall be interpreted as requiring the Company to continue its recommendation to stockholders when such recommendation can be withdrawn or modified under Section 6.05(b). Parent and Purchaser agree to offer to enter into any remediation agreement with the NJDEPE pursuant to the requirements of ISRA as may be necessary to permit the consummation of the Transactions unless such remediation agreement would have a Material Adverse Effect. SECTION 6.10. Public Announcements. Parent and the Company shall -------------------- consult with each other before issuing any press release or otherwise making any public statements with respect to this Agreement or any Transaction and shall not issue any such press release or make any such public statement prior to such consultation and agreement as to the terms of such release, except as may be required by law or any listing agreement with a national securities exchange to which Parent or the Company is a party. SECTION 6.11. ISRA. No later than five days after the execution of ---- this Agreement, the Company shall notify the New Jersey Department of Environmental Protection and Energy (the "NJDEPE") of the Offer and the other ------ Transactions (including, without limitation, the Merger) pursuant to the requirements of ISRA. Immediately thereafter, the Company shall make application to the NJDEPE for a negative declaration or a remediation agreement as appropriate under ISRA. Parent shall cooperate with and assist the Company in any reasonable manner in connection with obtaining such negative declaration or remediation agreement. The Company shall not enter in any remediation agreement without the prior written consent of Parent. 32 SECTION 6.12. Confidentiality Agreement. The Company hereby waives ------------------------- the provisions of Section 7.7 of the August Purchase Agreement regarding confidential information as and only to the extent necessary to permit the consummation of each Transaction. Upon the acceptance for payment of Shares pursuant to the Offer, Section 7.7 of the August Purchase Agreement shall be deemed to have terminated without further action by the parties thereto. SECTION 6.13. Waiver by the Company of Certain Provisions of the -------------------------------------------------- August Purchase Agreement. The Company hereby waives the provisions of Sections - ------------------------- 7.1, 7.2, 7.3, 7.4, 7.5, 7.6, 7.9, 8.1, 8.2 and 8.3 of the August Purchase Agreement. This Agreement shall, to the extent that there is any conflict between the terms of this Agreement and the terms of the August Purchase Agreement, supersede the August Purchase Agreement. If this Agreement shall be terminated for any reason, the terms and provisions of the August Purchase Agreement shall remain in full force and effect. ARTICLE VII CONDITIONS TO THE MERGER ------------------------ SECTION 7.01. Conditions to the Merger. The respective obligations ------------------------ of each party to effect the Merger shall be subject to the satisfaction at or prior to the Effective Time of the following conditions: (a) Stockholder Approval. This Agreement and the transactions -------------------- contemplated hereby shall have been approved and adopted by the affirmative vote of the stockholders of the Company to the extent required by Delaware Law and the Certificate of Incorporation of the Company; (b) Regulatory Approvals. Any waiting period (and any extension -------------------- thereof) applicable to the consummation of the Merger under the HSR Act and the other regulatory provisions listed in Section 3.05 shall have expired or been terminated, and the Company shall have obtained a negative declaration or executed a remediation agreement with the NJDEPE pursuant to the requirements of ISRA; (c) No Order. No foreign, United States or state governmental -------- authority or other agency or commission or foreign, United States or state court of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any law, rule, regulation, executive order, decree, injunction or other order (whether temporary, preliminary or permanent) which is then in effect and has the effect of making the acquisition of Shares by Parent or Purchaser or any affiliate of either of them illegal or otherwise restricting, preventing or prohibiting consummation of the Transactions; and 33 (d) Offer. Purchaser or its permitted assignee shall have ----- purchased all Shares validly tendered and not withdrawn pursuant to the Offer; provided, however, that this condition shall not be applicable to -------- ------- the obligations of Parent or Purchaser if, in breach of this Agreement or the terms of the Offer, Purchaser fails to purchase any Shares validly tendered and not withdrawn pursuant to the Offer. ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER --------------------------------- SECTION 8.01. Termination. This Agreement may be terminated and the ----------- Merger and the other Transactions may be abandoned at any time prior to the Effective Time, notwithstanding any requisite approval and adoption of this Agreement and the transactions contemplated hereby by the stockholders of the Company (provided, however, that if Shares are purchased pursuant to the Offer, -------- ------- Parent or Purchaser may not in any event terminate this Agreement): (a) By mutual written consent duly authorized by the Boards of Directors of Parent, Purchaser and the Company; or (b) By either Parent, Purchaser or the Company if (i) the Effective Time shall not have occurred on or before July 31, 1995; provided, however, that the right to terminate this Agreement under this -------- ------- Section 8.01(b) shall not be available to any party whose failure to fulfill any obligation under this Agreement has been the cause of, or resulted in, the failure of the Effective Time to occur on or before such date or (ii) any court of competent jurisdiction or other governmental authority shall have issued an order, decree, ruling or taken any other action restraining, enjoining or otherwise prohibiting the Merger and such order, decree, ruling or other action shall have become final and nonappealable; or (c) By Parent if (i) as the result of a failure of any condition set forth in Annex A hereto, (A) Purchaser shall have failed to commence the Offer within 60 days following the date of this Agreement, (B) the Offer shall have terminated or expired in accordance with its terms without Purchaser having accepted any Shares for payment thereunder, and without Purchaser having had an obligation under Section 1.01 of this Agreement to extend the Offer, or (C) Purchaser shall have failed to pay for Shares pursuant to the Offer within 90 days following the commencement of the Offer (or where applicable under the conditions to the Offer set forth in Annex A, within the 120-day period specified therein), unless the occurrence of the event set forth in any of clauses (A), (B) or (C) above shall have been caused by or resulted from the failure of Parent or Purchaser to perform in any material respect any material covenant or agreement of 34 either of them contained in this Agreement or the material breach by Parent or Purchaser of any material representation or warranty of either of them contained in this Agreement (including where such occurrence results from an action by the Company permitted under Section 6.05(b) that results from such failure or material breach by Parent or Purchaser) or (ii) prior to the purchase of Shares pursuant to the Offer, the Board or any committee thereof shall have withdrawn or modified in a manner adverse to Purchaser or Parent its approval or recommendation of the Offer, this Agreement, the Merger or any other Transaction or shall have recommended another Acquisition Proposal, or shall have resolved to do any of the foregoing; or (d) By the Company, upon approval of the Board, if (i) as the result of the failure of any of the conditions set forth in Annex A hereto, (A) Purchaser shall have failed to commence the Offer within 60 days following the date of this Agreement, (B) the Offer shall have terminated or expired in accordance with its terms without Purchaser having accepted any Shares for payment thereunder or (C) Purchaser shall have failed to pay for Shares pursuant to the Offer within 90 days following the commencement of the Offer (or where applicable under the conditions to the Offer set forth in Annex A, within the 120-day period specified therein), unless the occurrence of the event set forth in any of clauses (A), (B) or (C) above shall have been caused by or resulted from the failure of the Company to perform in any material respect any material covenant or agreement of it contained in this Agreement or the material breach by the Company of any material representation or warranty of it contained in this Agreement, (ii) prior to the purchase of Shares pursuant to the Offer, the Board shall have determined to accept a Superior Proposal pursuant to Section 6.05(b) and the Company has complied with all the provisions of Section 6.05(b); provided that such termination under this Section 8.01(d) shall not be -------- effective until the Company has made payment of the full fee required by Section 8.03(a) hereof and has deposited with a mutually acceptable escrow agent $2 million for reimbursement of Expenses (as defined below) in accordance with Section 8.03, or (iii) prior to the purchase of Shares pursuant to the Offer, there has been a willful breach by Parent or Purchaser of any representation, warranty, covenant or agreement set forth in this Agreement which breach is not reasonably capable of being cured by within 40 business days after the date of the commencement of the Offer. SECTION 8.02. Effect of Termination. In the event of the termination --------------------- of this Agreement pursuant to Section 8.01, this Agreement shall forthwith become void, and there shall be no liability on the part of any party hereto, except (i) as set forth in Sections 8.03 and 9.01 and (ii) nothing herein shall relieve any party from liability for any breach hereof. 35 SECTION 8.03. Fees and Expenses. (a) In the event that ----------------- (i) any person (including, without limitation, the Company or any affiliate thereof), other than Parent or any affiliate of Parent, shall have become the beneficial owner of more than 50% of the then outstanding Shares and this Agreement shall have been terminated pursuant to Section 8.01; or (ii) any person shall have commenced, publicly proposed or communicated to the Company a proposal that is publicly disclosed for a tender or exchange offer for 50% or more (or which, assuming the maximum amount of securities which could be purchased, would result in any person beneficially owning 50% or more) of the then outstanding Shares or otherwise for the direct or indirect acquisition of the Company or all or a substantial portion of its assets for per Share consideration having a value greater than the Per Share Amount and (A) the Offer shall have remained open for at least 20 business days, (B) the Minimum Condition shall not have been satisfied, (C) this Agreement shall have been terminated pursuant to Section 8.01, and (D) within 12 months of such termination a Third Party Acquisition (as defined hereafter) shall occur; or (iii) this Agreement is terminated pursuant to Section 8.01(c)(ii) or 8.01(d)(ii); then, in any such event, the Company shall pay Parent promptly (but in no event later than five business days after the first of such events shall have occurred) a fee of $7 million (the "Fee"), which amount shall be payable in --- immediately available funds, plus all Expenses (as hereinafter defined); provided, however, that neither the Fee nor any Expenses shall be paid pursuant - -------- ------- to this Section 8.03 if either Parent or Purchaser shall be in material breach of its representations and warranties or obligations hereunder. (b) "Expenses" shall mean all out-of-pocket expenses and fees up to $2 million in the aggregate (including, without limitation, fees and expenses payable to all banks, investment banking firms, other financial institutions and other persons and their respective agents and counsel for arranging, committing to provide or providing any financing for the Transactions or structuring the Transactions and all fees of counsel, accountants, experts and consultants to Parent, Purchaser and their affiliates, and all printing and advertising expenses) actually incurred or accrued by either of them or on their behalf in connection with the Transactions, including, without limitation, the financing thereof, and actually incurred or accrued by banks, investment banking firms, other financial institutions and other persons and assumed by Parent, Purchaser or their affiliates in connection with the negotiation, preparation, execution and performance of this Agreement, the structuring and financing of the Transactions and any financing commitments or agreements relating thereto. 36 (c) Except as set forth in this Section 8.03, all costs and expenses incurred in connection with this Agreement and the Transactions shall be paid by the party incurring such expenses, whether or not any Transaction is consummated. (d) In the event that the Company shall fail to pay the Fee or any Expenses when due, the term "Expenses" shall be deemed to include the costs and expenses actually incurred or accrued by Parent, Purchaser and their affiliates (including, without limitation, fees and expenses of counsel) in connection with the collection under and enforcement of this Section 8.03, together with interest on such unpaid Fee and Expenses, commencing on the date that the Fee or such Expenses became due, at a rate equal to the rate of interest publicly announced by Citibank, N.A., from time to time, in the City of New York, as such bank's Base Rate plus 3%. (e) "Third Party Acquisition" means the occurrence of any of the ----------------------- following events: (i) the acquisition of the Company by merger, tender offer, exchange offer, consolidation or otherwise by any person other than Parent, Purchaser or any affiliate thereof (a "Third Party"); (ii) the acquisition by ----------- any Third Party of all or substantially all of the total assets of the Company and its Subsidiaries, taken as a whole; (iii) the acquisition by a Third Party of 50% or more of the outstanding Shares; (iv) the adoption by the Company of a plan of liquidation or the declaration or payment of an extraordinary dividend; or (v) the repurchase by the Company or any of its Subsidiaries of 50% or more of the outstanding Shares. SECTION 8.04. Amendment. Subject to Section 6.03, this Agreement may --------- be amended by the parties hereto by action taken by or on behalf of their respective Boards of Directors at any time prior to the Effective Time; provided, however, that, after the approval and adoption of this Agreement and - -------- ------- the transactions contemplated hereby by the stockholders of the Company, no amendment may be made which would reduce the amount or change the type of consideration into which each Share shall be converted upon consummation of the Merger or changes any other terms or conditions of this Agreement if the changes alone or in the aggregate, would adversely affect the stockholders of the Company. This Agreement may not be amended except by an instrument in writing signed by the parties hereto. SECTION 8.05. Waiver. At any time prior to the Effective Time, ------ unless expressly limited elsewhere in this Agreement, any party hereto may (i) extend the time for the performance of any obligation or other act of any other party hereto, (ii) waive any inaccuracy in the representations and warranties contained herein or in any document delivered pursuant hereto and (iii) waive compliance with any agreement or condition contained herein. Any such extension or waiver shall be valid if set forth in an instrument in writing signed by the party or parties to be bound thereby. 37 ARTICLE IX GENERAL PROVISIONS ------------------ SECTION 9.01. Non-Survival of Representations, Warranties and ----------------------------------------------- Agreements. The representations, warranties and agreements in this Agreement - ---------- shall terminate at the Effective Time or upon the termination of this Agreement pursuant to Section 8.01, as the case may be, except that the agreements set forth in Articles II and IX and Sections 6.06 and 6.07 shall survive the Effective Time indefinitely and those set forth in Sections 6.04, 6.13 and 8.03 and Article IX shall survive termination indefinitely. SECTION 9.02. Notices. All notices, requests, claims, demands and ------- other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by cable, telecopy, telegram, facsimile or telex or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 9.02): if to Parent or Purchaser: Siemens Nixdorf Informationssysteme AG Otto-Hahn-Ring 6 81739 Munich Germany Facsimile No: 011 49 89 636 42922 Attention: Gerhard Schulmeyer Adrian van Hammerstein with a copy to each of: Siemens Corporation 1301 Avenue of the Americas New York, New York Facsimile No: (212) 258-4945 Attention: E. Robert Lupone Shearman & Sterling 599 Lexington Avenue New York, New York 10022 Facsimile No: (212) 848-7179/80 Attention: Peter D. Lyons, Esq. 38 if to the Company: Pyramid Technology Corporation 3860 N. First Street San Jose, CA 95134 Facsimile No: (408) 428-8820 Attention: Richard H. Lussier with a copy to: Wilson, Sonsini, Goodrich & Rosati 650 Page Mill Road Palo Alto, CA 94304-1050 Facsimile No: (415) 493-6811 Attention: Larry W. Sonsini, Esq. SECTION 9.03. Certain Definitions. For purposes of this Agreement, ------------------- the term: (a) "affiliate" of a specified person means a person who --------- directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with, such specified person; (b) "beneficial owner" with respect to any Shares means a person ---------------- who shall be deemed to be the beneficial owner of such Shares (i) which such person or any of its affiliates or associates (as such term is defined in Rule 12b-2 promulgated under the Exchange Act) beneficially owns, directly or indirectly, (ii) which such person or any of its affiliates or associates has, directly or indirectly, (A) the right to acquire (whether such right is exercisable immediately or subject only to the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of consideration rights, exchange rights, warrants or options, or otherwise, or (B) the right to vote pursuant to any agreement, arrangement or understanding or (iii) which are beneficially owned, directly or indirectly, by any other persons with whom such person or any of its affiliates or associates or person with whom such person or any of its affiliates or associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any Shares; (c) "business day" means any day on which the principal offices ------------ of the SEC in Washington, D.C. are open to accept filings, or, in the case of determining a date when any payment is due, any day on which banks are not required or authorized to close in the City of New York; 39 (d) "control" (including the terms "controlled by" and "under ------- ------------- ----- common control with") means the possession, directly or indirectly or as ------------------- trustee or executor, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, as trustee or executor, by contract or credit arrangement or otherwise; (e) "person" means an individual, corporation, partnership, ------ limited partnership, syndicate, person (including, without limitation, a "person" as defined in Section 13(d)(3) of the Exchange Act), trust, association or entity or government, political subdivision, agency or instrumentality of a government; and (f) "subsidiary" or "subsidiaries" of the Company, the Surviving ---------- ------------ Corporation, Parent or any other person means an affiliate controlled by such person, directly or indirectly, through one or more intermediaries. SECTION 9.04. Severability. If any term or other provision of this ------------ Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the Transactions be consummated as originally contemplated to the fullest extent possible. SECTION 9.05. Entire Agreement; Assignment. This Agreement ---------------------------- constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof. This Agreement shall not be assigned by operation of law or otherwise, except that Parent and Purchaser may assign all or any of their rights and obligations hereunder to any affiliate of Parent provided that no such assignment shall relieve the assigning party of its obligations hereunder if such assignee does not perform such obligations. SECTION 9.06. Parties in Interest. This Agreement shall be binding ------------------- upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement, other than Section 6.07 (which is intended to be for the benefit of the persons covered thereby and may be enforced by such persons). 40 SECTION 9.07. Specific Performance. The parties hereto agree that -------------------- irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or equity. SECTION 9.08. Governing Law. This Agreement shall be governed by, ------------- and construed in accordance with, the laws of the State of Delaware applicable to contracts executed in and to be performed in that State. All actions and proceedings arising out of or relating to this Agreement shall be heard and determined in any state or federal court sitting in the state of Delaware. SECTION 9.09. Headings. The descriptive headings contained in this -------- Agreement are included for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. SECTION 9.10. Counterparts. This Agreement may be executed in one or ------------ more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. 41 IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized. ATTEST: SIEMENS NIXDORF INFORMATIONSSYSTEME AG /s/Michael W. Schiefen By/s/ Gerhard Schulmeyer - --------------------------------- -------------------------------- Name: Gerhard Schulmeyer Title: Chairman /s/Michael W. Schiefen By/s/Adrian v. Hammerstein - --------------------------------- -------------------------------- Name: Adrian v. Hammerstein Title: Attorney-in-fact ATTEST: SIEMENS NIXDORF MID-RANGE ACQUISITION CORP. /s/ Michael W. Schiefen By/s/Gerhard Schulmeyer - --------------------------------- -------------------------------- Name: Gerhard Schulmeyer Title: President /s/ Michael W. Schiefen By/s/Adrian v. Hammerstein - --------------------------------- -------------------------------- Name: Adrian v. Hammerstein Title: Secretary ATTEST: PYRAMID TECHNOLOGY CORPORATION /s/ Michael W. Schiefen By/s/ Richard H. Lussier - --------------------------------- -------------------------------- Name: Richard H. Lussier Title: Chairman ANNEX A ------- Conditions to the Offer ----------------------- The capitalized terms used in this Annex A have the meanings set forth in the attached Agreement, except that the term "Merger Agreement" shall be deemed to refer to the attached Agreement. Notwithstanding any other provision of the Offer, subject to the terms of the Merger Agreement (including the Purchaser's obligation to extend the Offer as provided in the Merger Agreement), Purchaser shall not be required to accept for payment or pay for any Shares tendered pursuant to the Offer, and may terminate or amend the Offer and may postpone the acceptance for payment of and payment for Shares tendered, if (i) the Minimum Condition shall not have been satisfied, (ii) any applicable waiting period under the HSR Act and the other regulatory provisions listed in Section 3.05 of the Merger Agreement shall not have expired or been terminated prior to the expiration of the Offer, (iii) the Company shall not have obtained a negative declaration or executed a remediation agreement with the NJDEPE pursuant to the requirements of ISRA or (iv) (A) the applicable waiting period under the Exon-Florio Provision shall not have expired, (B) the Committee on Foreign Investment in the United States ("CFIUS") shall have initiated an investigation of the Transactions or (C) if CFIUS initiates an investigation, the applicable waiting period under the Exon-Florio Provision relating to such investigation shall not have expired, or such investigation shall have been completed and the President shall have announced a decision to take action pursuant to the Exon-Florio Provision before the expiration of the period ending on the 15th day (or if such day is not a business day, the next business day) following the completion of such investigation, which has a substantial likelihood of resulting, directly or indirectly, in any of the consequences referred to in clauses (i) through (v) of paragraph (a) below or such 15 day waiting period shall not have expired; provided, however, that prior to the expiration of 120 days following the date - -------- ------- of the Merger Agreement, Purchaser shall not terminate the Offer by reason of the non-satisfaction of either of the conditions set forth in clauses (ii), (iii) or (iv) above and shall extend the Offer and shall use its reasonable best efforts to cause the satisfaction of such conditions (it being understood that this proviso shall not prohibit Purchaser from terminating the Offer or failing to extend the Offer by reason of the non-satisfaction of any other condition of the Offer). Furthermore, notwithstanding any other term of the Offer, subject to the terms of the Merger Agreement, Purchaser shall not be required to accept for payment or pay for any Shares tendered pursuant to the Offer, and may terminate or amend the Offer and may postpone the acceptance for payment of and payment for Shares tendered, if, at any time on or after the date of the Merger Agreement, and prior to the acceptance for payment of Shares, any of the following conditions exist: (a) there shall be pending any action or proceeding instituted by any governmental authority before any court or governmental, administrative or regulatory authority or agency, domestic or foreign, (i) challenging or seeking to make illegal, A-2 materially delay or otherwise directly or indirectly restrain or prohibit or make materially more costly the making of the Offer, the acceptance for payment of, or payment for, any Shares by Parent, Purchaser or any other affiliate of Parent, or the consummation of any other Transaction, or seeking to obtain material damages in connection with any Transaction; (ii) seeking to prohibit or limit materially the ownership or operation by the Company, Parent or any of their subsidiaries of all or any material portion of the business or assets of the Company, Parent or any of their subsidiaries, or to compel the Company, Parent or any of their subsidiaries to dispose of or hold separate all or any material portion of the business or assets of the Company, Parent or any of their subsidiaries, as a result of the Transactions; (iii) seeking to impose or confirm limitations on the ability of Parent, Purchaser or any other affiliate of Parent to exercise effectively full rights of ownership of any Shares, including, without limitation, the right to vote any Shares acquired by Purchaser pursuant to the Offer or otherwise on all matters properly presented to the Company's stockholders, including, without limitation, the approval and adoption of this Agreement and the transactions contemplated hereby; (iv) seeking to require divestiture by Parent, Purchaser or any other affiliate of Parent of any Shares; or (v) which otherwise has a Material Adverse Effect or which is reasonably likely to materially adversely affect the business, operations, properties, condition (financial or otherwise), assets or liabilities (including, without limitation, contingent liabilities) of Parent; provided, however, that prior to the expiration of 120 days -------- ------- following the date hereof, Purchaser shall not terminate the Offer by reason of the non-satisfaction of the conditions set forth in this paragraph (a) and shall extend the Offer and use its reasonable best efforts to cause the satisfaction of such condition unless there shall be in effect any permanent injunction or other order, decree, judgment or ruling that has become final and nonappealable by any court or governmental, administrative or regulatory authority or agency, domestic or foreign, which in any case shall have an effect specified in any of clauses (i) through (v) above (it being understood that this proviso shall not prohibit Purchaser from terminating the Offer or failing to extend the Offer by reason of the non-satisfaction of any other condition of the Offer); (b) there shall have been any action taken, or any statute, rule, regulation, legislation, interpretation, judgment, order or injunction enacted, entered, enforced, promulgated, amended, issued or deemed applicable to (i) Parent, the Company or any subsidiary or affiliate of Parent or the Company or (ii) any Transaction, by any legislative body, court, government or governmental, administrative or regulatory authority or agency, domestic or foreign, which has a substantial likelihood of resulting, directly or indirectly, in any of the consequences referred to in clauses (i) through (v) of paragraph (a) above; (c) except as set forth in the Disclosure Schedule, there shall have occurred any change, condition, event or development that has a Material Adverse Effect; A-3 (d) there shall have occurred (i) any general suspension of, or limitation on prices for, trading in securities of the Company on the NASDAQ National Market System, (ii) any extraordinary or material adverse change in the market price of the Shares or in the United States securities markets or financial markets generally, including, without limitation, a decline, measured from the date hereof, in the Standard & Poor's 500 Index by an amount in excess of 25%, (iii) any material adverse change in United States currency exchange rates or a suspension of, or limitation on, currency exchange markets, (iv) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States or Germany, (v) any limitation (whether or not mandatory) by any government or governmental, administrative or regulatory authority or agency, domestic or foreign, on, or other event that, in the reasonable judgment of Purchaser, might affect, the extension of credit by banks or other lending institutions, (vi) a commencement of a war or armed hostilities or other national or international calamity directly or indirectly involving the armed forces of the United States or Germany which could reasonably be expected to have a Material Adverse Effect or materially adversely affect (or materially delay) the consummation of the Offer or (vii) in the case of any of the foregoing existing on the date hereof, a material acceleration or worsening thereof; (e) (i) it shall have been publicly disclosed or Purchaser shall have otherwise learned that beneficial ownership (determined for the purposes of this paragraph as set forth in Rule 13d-3 promulgated under the Exchange Act) of 50% or more of the then outstanding Shares has been acquired by any person, other than Parent or any of its affiliates or (ii) (A) the Board or any committee thereof shall have withdrawn or modified in a manner adverse to Parent or Purchaser the approval or recommendation of the Offer, the Merger or the Merger Agreement or approved or recommended any Acquisition Proposal other than the Offer and the Merger or (B) the Board or any committee thereof shall have resolved to do any of the foregoing (except for such action under (A) or (B) that results from the failure of Parent or Purchaser to perform in any material respect any material covenant or agreement of either of them contained in the Merger Agreement or the material breach by Parent or Purchaser of any material representation or warranty of either of them contained in the Merger Agreement); (f) any representation or warranty of the Company in the Merger Agreement which is qualified as to materiality shall not be true and correct or any such representation or warranty that is not so qualified shall not be true and correct in any material respect, in each case as if such representation or warranty was made as of such time on or after the date of the Merger Agreement; A-4 (g) the Company shall have failed to perform in any material respect any obligation or to comply in any material respect with any agreement or covenant of the Company to be performed or complied with by it under the Merger Agreement; (h) the Merger Agreement shall have been terminated in accordance with its terms; or (i) Purchaser and the Company shall have agreed that Purchaser shall terminate the Offer or postpone the acceptance for payment of or payment for Shares thereunder; which, in the reasonable judgment of Purchaser in any such case, and regardless of the circumstances (including any action or inaction by Parent or any of its affiliates) giving rise to any such condition, makes it inadvisable to proceed with such acceptance for payment or payment. The foregoing conditions are for the sole benefit of Purchaser and Parent and may be asserted by Purchaser or Parent regardless of the circumstances giving rise to any such condition or may be waived by Purchaser or Parent in whole or in part at any time and from time to time in their sole discretion, except that the Minimum Condition may not be waived by Parent or Purchaser without the prior written consent of the Company. The failure by Parent or Purchaser at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right; the waiver of any such right with respect to particular facts and other circumstances shall not be deemed a waiver with respect to any other facts and circumstances; and each such right shall be deemed an ongoing right that may be asserted at any time and from time to time. ANNEX B ------- AGREEMENTS RESPECTING EMPLOYEE BENEFIT MATTERS (a) Benefits Following the Effective Time. Parent shall cause the ------------------------------------- Surviving Corporation for a period of at least two years following the acceptance of Shares by Purchaser pursuant to the Offer to continue to provide the employees of the Surviving Corporation with the employee pension, welfare and fringe benefits currently in effect (subject to paragraph (c) below) or substitute benefits that are substantially comparable to, and in the aggregate no less favorable than, such employee pension, welfare and fringe benefits. (b) Phantom Equity or Long-Term Incentive Program. As soon as practicable --------------------------------------------- following the Effective Time, Parent shall cause the Surviving Corporation to implement a phantom equity or long-term incentive program instead of the Stock Option Plans as currently in effect to reward revenue growth and profitability over a three year period, which program shall be designed by Parent following good faith consultation with the Surviving Corporation's senior management and under which program potential payments shall be at a level consistent with the objective of preserving the entrepreneurial character of the Surviving Corporation. Such program shall also contain provisions providing for the conversion of awards into common equity of the Surviving Corporation in the event of an initial public offering of the common equity of the Surviving Corporation. (c) Amendment to 401(k) Plan. As soon as practicable following the ------------------------ Effective Time, Parent shall cause the Surviving Corporation to amend the Surviving Corporation 401(k) plan to effect an appropriate increase to the rate of employer matching contributions and/or discretionary contributions so as to compensate the employees of the Surviving Corporation for the termination of the 1987 Stock Purchase Plan. (d) Management Incentive Plan. Parent shall cause the Surviving ------------------------- Corporation to retain the Management Incentive Plan (the "MIP") until September 30, 1995, as modified as provided below, with the same employees remaining eligible for bonuses thereunder. The amounts payable to each of the Surviving Corporation's executive officers participating in the MIP shall be increased by 30%. Each other participant in the MIP shall be given the right to elect, no later than 30 days following the Effective Time, either (i) the 30% increase described in the immediately proceeding sentence or (ii) a guaranteed minimum bonus equal to 50% of such participant's bonus at 100% target performance. Appropriate adjustments shall be made to the plan target levels to eliminate the effect of legal, investment banking and other extraordinary fees and expenses incurred by the Surviving Corporation as a consequence of the transactions effected pursuant to this Agreement and the preparation and negotiations leading thereto. (e) Incentive Plan for Selected Non-MIP Employees. Parent shall cause the --------------------------------------------- Surviving Corporation to establish a bonus system for selected non-MIP, non- sales employees which will reward milestones, for example, in the development of products. B-2 (f) Retention Bonuses. As soon as practicable following the Effective ----------------- Time, Parent shall cause the Surviving Corporation to enter into retention bonus agreements with up to 30 employees of the Surviving Corporation to be identified by mutual agreement of Parent and senior management of the Company. Such retention bonus agreements shall be in a form to be established by Parent following good faith consultation with senior management of the Surviving Corporation and shall provide each covered employee with the opportunity to receive a retention bonus (in addition to any bonus payable under the MIP or other annual bonus plan) of up to 100% of such employee's base salary on the second anniversary of the Effective Time, subject to such employee being employed by the Surviving Corporation on such anniversary date. EX-99.(C)(2) 12 MANAGEMENT RETENTION AGREEMENT EXHIBIT 99.(C)(2) CONFORMED COPY MANAGEMENT RETENTION AGREEMENT ------------------------------ THIS MANAGEMENT RETENTION AGREEMENT is entered into as of January 20, 1995, by and between PYRAMID TECHNOLOGY CORPORATION, a Delaware corporation (the "Company"), and John S. Chen ("Executive"). WHEREAS, Executive is and has been employed by the Company and is currently serving as the President and Chief Operating Officer of the Company; and WHEREAS, the Company and Executive are parties to a Statement of Employment Terms, dated as of August 5, 1991, which sets forth the terms and conditions of Executive's employment with the Company (the "Original Agreement"); and WHEREAS, Executive and the Company desire to terminate the Original Agreement; and WHEREAS, the Company desires to continue to employ Executive and to assure itself of the continued services of Executive for the term of employment provided for in this Management Retention Agreement (the "Agreement"), and Executive desires to be employed by the Company for such period, upon the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth, the parties hereto agree as follows: 1. Termination of Original Agreement; Effectiveness of Agreement. The ------------------------------------------------------------- Company and Executive agree that the Original Agreement shall be terminated, and shall be of no further force and effect, as of the Effective Date (as specified in Section 3 of this Agreement). This Agreement shall become effective only upon the Effective Date and shall have no force or effect for so long as the Effective Date does not occur. The Company and Executive agree that neither party shall be liable to the other under any provision of the Original Agreement, and that this Agreement shall govern the terms and conditions of Executive's employment with the Company, from and after the Effective Date. 2. Employment; Duties. The Company and Executive hereby agree that ------------------ Executive's continued employment with the Company during the Employment Terms (as defined in Section 3 of this Agreement) shall be upon the terms and conditions set forth herein. During the Employment Term, Executive shall serve as Chief Executive Officer of the Company and as a member of the Company's board of directors (the "Board"), and shall render such business and professional services in the performance of his duties as shall be assigned to him by the Board. Executive shall devote his full time and efforts to perform his 2 duties faithfully, diligently and to the best of his ability to advance the interests of the Company. Executive shall not serve as a director, employee, consultant or advisor to any other corporation or other business enterprise without the prior written consent of the Board. Executive may serve in any capacity with any civic, educational or charitable organization or any trade association without the approval of the Board, provided that such activities do not interfere with his duties and obligations under this Agreement. 3. Term of Employment. Executive's employment under this Agreement ------------------ shall commence at the Effective Time, as such term is defined in the Agreement and Plan of Merger (the "Merger Agreement") among Siemens Nixdorf Informationssysteme AG ("SNI"), HN Acquisition Corp and the Company (the "Effective Date"), and shall terminate on the earlier of (i) the fifth anniversary of the Effective Date, or (ii) termination of Executive's employment pursuant to this Agreement (the period commencing on the Effective Date and ending on the fifth anniversary thereof is hereinafter referred to as the "Employment Term"). 4. Compensation. ------------ (a) Signing Bonus. In consideration of Executive's agreement to ------------- continue his employment with the Company, on or as soon as practicable (but no more than 60 days) following the Effective Date, the Company shall pay Executive a signing bonus of $250,000. (b) Base Salary. The Company shall pay Executive throughout the ----------- term of this Agreement a base salary (the "Base Salary") at a rate of not less than $380,000 per year, payable in equal monthly installments. Once increased, such higher salary shall constitute Executive's Base Salary. (c) Bonus. During the Employment Term, Executive shall be ----- eligible to participate in any annual bonus plan maintained from time to time by the Company for senior executives. For the year ending September 30, 1995, Executive's target bonus payout under the Company's Management Incentive Plan shall be increased from 45% to 60% of Base Salary (in addition to the 30% increase provided in Annex B to the Merger Agreement), resulting in an aggregate target bonus payout of 78% of Base Salary. For subsequent years during the Employment Term, Executive's target bonus payout shall be at least 60% of Base Salary. (d) Retention Bonus. In consideration of Executive's services --------------- hereunder, on the second anniversary of the Effective Date, provided that Executive is employed by the Company on such date, the Company shall pay Executive a bonus in an amount equal to $760,000. Notwithstanding the foregoing, at the election of Executive, to be made prior to the first anniversary of the Effective Date, Executive shall participate in a supplemental pension arrangement in lieu of the retention bonus described in the immediately preceding 3 sentence. Under such supplemental pension arrangement, the specific terms of which shall be negotiated in good faith by Executive and SNI, (i) the right to receive supplemental pension benefits shall vest on the second anniversary of the Effective Date and (ii) the aggregate actuarial present value of such supplemental pension benefits determined as of the second anniversary of the Effective Date shall be $760,000. 5. Employee Benefits. ----------------- (a) General. Executive shall be included in all employee benefit ------- plans, programs or arrangements (including, without limitation, any plans, programs or arrangements providing for retirement benefits, incentive compensation, profit sharing, bonuses, disability benefits, health and life insurance, automobile (or automobile allowance), vacation and paid holidays) which shall be established by the Company for, or made available to, its senior executives, or shall be entitled to benefits comparable to such plans, programs or arrangements. With respect to Executive's participation in any phantom equity or long-term incentive program established in accordance with paragraph (b) of Annex B to the Merger Agreement, assuming that three-year long-term incentive target performance is achieved as set forth in Exhibit A hereto and subject to Executive's continued employment, Executive shall be entitled to a plan payment of at least $1,000,000, it being understood and agreed that the targets set forth on Exhibit A may be adjusted by mutual agreement of Executive and the Company in connection with the detailed development of the phantom equity or long term incentive program in accordance with paragraph (b) of Annex B to the Merger Agreement. (b) Reimbursement of Expenses. The Company shall reimburse ------------------------- Executive for all out-of-pocket expenses reasonably incurred and paid by him in the performance of his duties pursuant to this Agreement. Such reimbursement shall be in accordance with the Company's policies and documentation required to support the deductibility of such expenses for federal income tax purposes. 6. Termination of Employment. ------------------------- (a) Termination without Cause; Resignation for Good Reason. ------------------------------------------------------ (i) General. Subject to the provisions of Section 6(a)(ii) and 6(a)(iii), if, prior to the expiration of the Employment Term, Executive's employment is terminated by the Company without Cause (as defined in Section 6(c) of this Agreement), or if Executive resigns from his employment hereunder for Good Reason (as defined in Section 6(d) of this Agreement), the Company shall pay Executive cash severance in an aggregate amount equal to (A) if such termination occurs on or prior to the second anniversary of the Effective Date, two (2) times the sum of (x) the Executive's Base Salary at the annualized rate for the year coinciding with the year of payment and (y) the average of the annual cash 4 bonus received by the Executive for the three (3) years immediately preceding or ending coincident with the year of payment (whichever average produces the higher amount) or (B) if such termination occurs following the second anniversary of the Effective Date, the sum of (x) the Executive's Base Salary at the annualized rate for the year coinciding with the year of payment and (y) the average of the annual cash bonus received by the Executive for the three (3) years immediately preceding or ending coincident with the year of payment (whichever average produces the higher amount). Any severance payments to which the Executive is entitled pursuant to this section shall be paid in a lump sum within thirty (30) days of the Executive's termination. In addition, for a period of twenty-four (24) months (or twelve (12) months if such termination occurs following the second anniversary of the Effective Date) after any termination under this Section 6(a)(i) (the "Severance Period"), the Company shall be obligated to continue to make available to the Executive and to pay for all health and medical benefit, life and other similar insurance plans existing on the date of the Executive's termination. Executive shall have no further right to receive any other compensation, or to participate in any other plan, arrangement, or benefit, after such termination or resignation of employment, except as provided in the previous sentence, and except as may be required by applicable law, including, but not limited to, any rights Executive may have under Title I, Part 6 of the Employee Retirement Income Security Act of 1974, as amended. (ii) Conditions Applicable to the Severance Period. If, --------------------------------------------- during the Severance Period, Executive materially breaches his obligations under Sections 8, 9, or 10 of this Agreement, the Company may, upon written notice to Executive, offset the damages it incurs as a consequence of such breach against any further payments or benefits due Executive pursuant to this Section 6(a). (iii) Death During Severance Period. In the event of ----------------------------- Executive's death during the Severance Period, the Company shall have no further obligations under this Agreement, other than the provision to Executive's dependents of continued health and medical benefit and similar insurance plans for the balance of the Severance Period. (iv) Date of Termination. The date of termination of ------------------- employment without Cause shall be the date specified in a written notice of termination to Executive. The date of resignation for Good Reason shall be the date specified in the written notice of resignation from Executive to the Company. (b) Termination for Cause; Resignation Without Good Reason. ------------------------------------------------------ (i) General. If, prior to the expiration of the ------- Employment Term, Executive's employment is terminated by the Company for Cause, or if Executive resigns from his employment hereunder other than for Good Reason on or prior to the first anniversary of the Effective Date, Executive shall be entitled only to payment of all amounts earned or owing to Executive through and including the date of termination or resignation, it 5 being specifically understood and agreed that Executive shall have no right to any full or partial annual bonus for the year in which such termination occurs. Executive shall have no further right to receive any other compensation, or to participate in any other plan, arrangement, or benefit, after such termination or resignation of employment, except as provided in the previous sentence, and except as may be required by applicable law, including, but not limited to, any rights Executive may have under Title I, Part 6 of the Employee Retirement Income Security Act of 1974, as amended. (ii) Resignation Without Good Reason Following the First --------------------------------------------------- Anniversary of the Effective Date. If, prior to the expiration of the Employment - --------------------------------- Term but the first anniversary of the Effective Date, Executive resigns from his employment hereunder other than for Good Reason, Executive shall receive, for the lesser of one year from the date of resignation or until Executive secures new full-time employment, compensation continuation payments paid in accordance with the Company's customary salary payroll practices at an annualized rate equal to the sum of the Executive's Base Salary annualized for the year coinciding with the year of resignation and the average of the annual cash bonuses received by Executive for the three (3) years immediately preceding or ending coincidental with the year of resignation (whichever average produces the higher amount). In addition, for the period Executive is receiving compensation continuation payments pursuant to this Section 6(b)(ii), the Company shall be obligated to continue to make available to the Executive and to pay for all health and medical benefit, life and other similar insurance plans existing on the date of the Executive's resignation. Executive shall have no further right to receive any other compensation, or to participate in any other plan, arrangement, or benefit, after such termination or resignation of employment, except as provided in the previous sentence, and except as may be required by applicable law, including, but not limited to, any rights Executive may have under Title I, Part 6 of the Employee Retirement Income Security Act of 1974, as amended. (iii) Date of Termination. The date of termination for Cause shall ------------------- be the date of receipt by Executive of a written Notice of Termination provided for in Section 6(b)(iv). The date of resignation without Good Reason shall be the date specified in the written notice of resignation from Executive to the Company, or if no date is specified therein, 10 business days after receipt by the Company of written notice of resignation from Executive. (iv) Notice of Termination. Termination of Executive's employment --------------------- for Cause shall be communicated by delivery to Executive of a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the entire membership of the Board at a meeting of the Board called and held for such purpose (a "Notice of Termination"). For purposes of this Agreement, no purported termination of Executive's employment for Cause shall be effective without delivery of such Notice of Termination. 6 (c) Cause. Termination for "Cause" shall mean termination of ----- Executive's employment because of Executive's (i) involvement in fraud, misappropriation or embezzlement related to the business or property of the Company, (ii) conviction for, or guilty plea to, a felony, (iii) willful material breach of this Agreement, (iv) breach of Sections 8, 9, or 10 of this Agreement, or (v) willful and continued failure to substantially perform his duties hereunder (other than as a result of illness); provided, however, that if -------- ------- such Cause is reasonably curable, the Company shall not terminate Executive's employment hereunder unless the Board first gives notice of its intention to terminate and of the grounds for such termination, and Executive has not, within thirty (30) days following receipt of the notice, cured such Cause. (d) Good Reason. For purposes of this Agreement, "Good Reason" shall ----------- mean (i) the assignment to Executive of any duties, or the reduction of Executive's duties, either of which results in a material diminution in Executive's duties and responsibilities as set forth in Section 2 hereof, (ii) a reduction by the Company in the Base Salary of Executive as in effect immediately prior to such reduction, (iii) a material reduction by the Company in the kind or level of employee benefits to which Executive is entitled immediately prior to such reduction with the result that Executive's overall benefits package is significantly reduced (other than a reduction applicable to senior executives generally), (iv) a failure to pay or provide any material item of compensation or benefits in accordance with the terms of this Agreement or any applicable employee plan in which Executive participates, (v) the relocation of Executive to a facility or a location more than 50 miles from Executive's then present location, without Executive's express written consent or (vi) any Change of Control (as hereinafter defined) of the Company occurring after the Effective Date; provided, however, that if such Good Reason is reasonably -------- ------- curable, Executive shall not resign from employment hereunder unless Executive first gives notice of his intention to resign for Good Reason and of the grounds for such resignation, and the Company has not, within thirty (30) days following receipt of the notice, cured such Good Reason, as determined in good faith by Executive. "Change of Control" shall mean the occurrence of any of the following events as used herein, after the Effective Date: (i) any "person" (as such term is used in Sections 13 (d) and 14 (d) of the Securities Exchange Act of 1934, as amended) other than SNI or its affiliates (a "Third Party") is or becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company's then outstanding voting securities; (ii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation that is a Third Party, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or (iii) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the 7 sale or disposition by the Company of all or substantially all the Company's assets to a Third Party. 7. Death or Permanent Disability. ----------------------------- (a) Death. If Executive's employment hereunder is terminated by ----- death, Executive's estate shall be entitled only to payment of all amounts earned or owed to Executive through and including the date of Executive's death. Notwithstanding the foregoing, if Executive dies prior to the second anniversary of the Effective Date, Executive's estate shall also receive, within 60 days of Executive's death, a pro rata retention bonus determined by multiplying $760,000 by a fraction, the numerator of which is the number of days elapsed between the Effective Date and the date of Executive's death, and the denominator of which is 730. The Company shall have no further obligations under this Agreement, except as provided in the previous sentence, and except as may be required by applicable law, including, but not limited to, any rights Executive may have under Title I, Part 6 of the Employee Retirement Income Security Act of 1974, as amended. (b) Permanent Disability. In the event Executive shall become -------------------- permanently disabled (as defined below), Executive shall be entitled only to payment of Executive's Base Salary earned through and including the last day of the six-month period referred to below. The Company shall have no further obligations under this Agreement, except as may be provided under the Long-Term Disability Policy maintained by the Company or as may be required by applicable law, including, but not limited to, any rights Executive may have under Title I, Part 6 of the Employee Retirement Income Security Act of 1974, as amended. Notwithstanding the foregoing, if Executive becomes permanently disabled prior to the second anniversary of the Effective Date, Executive shall also receive, within 60 days of Executive's termination by reason of permanent disability, a pro rata retention bonus determined by multiplying $760,000 by a fraction, the numerator of which is the number of days elapsed between the Effective Date and the date of termination by reason of permanent disability, and the denominator of which is 730. Executive shall be considered permanently disabled if Executive is absent from employment or unable to render services hereunder on a full-time basis by reason of physical or mental illness or disability for six (6) months or more in the aggregate in any twelve (12) month period during the term of this Agreement. Any question as to the existence or extent of Executive's disability upon which Executive and the Company cannot agree, shall be determined by a qualified independent physician selected by the Company and approved by Executive. 8. Trade Secrets; Non-solicitation. ------------------------------- (a) Trade Secrets. During the Employment Term and at all times ------------- thereafter (unless such secrets or information become part of the public domain, other than through Executive's breach of this Section 8), Executive shall hold in secrecy for the 8 Company, SNI and their respective subsidiaries and affiliates (the "Group") all trade secrets and other confidential information relating to the Group's business and affairs that may come to his knowledge or have come to his knowledge while heretofore employed by the Company or its subsidiaries, including but not limited to matters of a technical nature, such as scientific, trade or engineering secrets, "know-how," formulae, secret processes or machines, inventions, and research projects, and matters of a business nature, such as information about costs, profits, markets, sales, lists of customers and suppliers, and other information of a similar nature, and plans for future development. Except as required in the performance of his duties to the Company under this Agreement, Executive shall not use for his own benefit or disclose to any person, directly or indirectly, such matters unless such use or disclosure has been specifically authorized in writing by the Company in advance. (b) Non-Solicitation. For a period of one year following the ---------------- termination of Executive's employment hereunder for any reason except a resignation by Executive for Good Reason, Executive shall not, without the prior written consent of the Company, directly or indirectly, as a sole proprietor, member of a partnership, stockholder or investor, officer or director of a corporation, or as an employee, associate, consultant, independent contractor or agent of any person, partnership, corporation or other business organization or entity other than the Company or any other member of the Group (i) solicit or endeavor to entice away from the Group any person or entity who is, or, during the then most recent 12-month period, was, employed by, or had served as an agent or key consultant of, the Group, or (ii) solicit or endeavor to entice away from the Group any person or entity who is, or was within the then most recent 12-month period, a customer or client (or reasonably anticipated (to the general knowledge of Executive or the public) to become a customer or client) of the Group. 9. Return of Documents and Property. Upon the termination of Executive's -------------------------------- employment by the Company, or at any time upon the request of the Company, Executive (or his heir or personal representative) shall deliver to the Company (a) all documents and materials containing trade secrets and other confidential information relating to the Group's business and affairs, and (b) all other documents, materials and other property belonging to the Group that are in the possession or under the control of Executive. 10. Inventions. Without further consideration, Executive shall (a) ---------- promptly notify, make full disclosure to and assign to the Company, any and all inventions, discoveries and improvements ("Inventions"), made or developed by him, wholly or in part, at any time during his employment with the Company that pertain to the business carried on or products or services being sold or developed by the Group during such period, whether patentable or not, (b) assist the Company in obtaining for itself at its own expense United States of America and foreign patents and other rights on any and all of the Inventions which Executive is obligated to disclose to the Company, and (c) at the Company's expense promptly execute, whether during his employment or thereafter, all applications or other 9 endorsements necessary or appropriate to obtain said patents and other rights for the Company and to protect its title thereto. Any Inventions made or developed by Executive within six months after termination of employment with the Company that pertain to the business carried on or products or services being sold or developed by the Group at the time of such termination shall, as between Executive and the Company, be conclusively presumed to have been made during Executive's employment with the Company. The foregoing provision shall not require Executive to assign any Invention that would cause the foregoing provision to be void or unenforceable under Section 2870 of the California Labor Code, and Executive acknowledges receipt of the notification required by Section 2872 of the California Labor Code. 11. Remedies. Any breach, violation or evasion by Executive of the terms -------- of this Agreement, including specifically, but not limited to, Sections 8, 9, or 10, will result in immediate and irreparable injury and harm to the Company and will cause damage to the Company in amounts difficult to ascertain. Accordingly, the Company shall be entitled to the remedies of injunction and specific performance, or either of such remedies, as well as all other remedies to which the Company may be entitled, at law, in equity or otherwise. 12. Limitation on Payments. ---------------------- (a) Basic Rule. Subject to Section 12(c) below, in the event that any payment or benefit received or to be received by Executive pursuant to this Agreement or otherwise (collectively, the "Payments") would (i) be treated as a "parachute payment" within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), or any similar or successor provision to 280G and (ii) but for this Section 12(a), be subject to this excise tax imposed by Section 4999 of the Code or any similar or successor provision to Section 4999 (the "Excise Tax"), then, subject to the provisions of Section 12(b) hereof, such Payments shall reduced to the largest amount which would result in no portion of the Payments being subject to the Excise Tax. The determination of any required reduction pursuant to this Section 12(a) (including the determination as to which specific Payments shall be reduced) shall be made initially by Executive in consultation with the Company. If Executive and the Company shall disagree upon the amount of such reduction, then the Company shall, at its expense, promptly call upon Ernst & Young, independent accountants, to make such determination, and such determination shall be conclusive and binding upon Executive and the Company or any related corporation for all purposes. The Company and its related corporations waive all claims and rights against Executive with respect to such determination except as specifically set forth in the next sentence. If the Internal Revenue Service (the "IRS") determines that Payments are subject to the Excise Tax, then the Company or any related corporation, as their exclusive remedy, shall seek to enforce the provisions of Section 12(b) hereof. Such enforcement of Section 12(b) hereof shall be the only remedy against Executive, under any and all applicable state and federal 10 laws or otherwise, for the failure to reduce the Payments so that no portion thereof is subject to the Excise Tax. The Company or related corporation shall reduce Payments in accordance with Section 12(a) only upon written notice to Executive indicating the amount of such reduction, if any, and Executive's agreement to the amount of such reduction (subject, in the event of disagreement, to a determination by Ernst & Young on the basis provided above). (b) Remedy. If, notwithstanding the reduction described in Section 12(a) hereof, the IRS determines that Executive is liable for the Excise Tax as a result of the receipt of Payments, then Executive shall, subject to the provisions of this Agreement, be obligated to pay to the Company (the "Repayment Obligation") an amount of money equal to the "Repayment Amount." The Repayment Amount with respect to Payments shall be the smallest such amount, if any, as shall be required to be paid to the Company so that Executive net proceeds with respect to Payments (after taking into account the payment of the Excise Tax imposed on Payments) shall be maximized. Notwithstanding the foregoing, the Repayment Amount with or more than zero would not eliminate the Excise Tax imposed on Payments. If the Excise Tax is not eliminated through the performance of the Repayment Obligation, Executive shall pay the Excise Tax. The Repayment Obligation shall be performed within 30 days of either (i) the Employee entering into a binding agreement with the IRS as to the amount of the Executive's Excise Tax liability or (ii) a final determination by the IRS or a court decision requiring the Employee to pay the Excise Tax with respect to Payments from which no appeal is available or is timely taken. (c) Special Rule in the Event of a Termination Without Cause or ----------------------------------------------------------- Resignation for Good Reason. Notwithstanding the foregoing provision of this - --------------------------- Section 12, in the event Executive's employment is terminated by the Company without Cause or Executive resigns for Good Reason and any amounts or benefits to be received by Executive pursuant to Section 6(a) of this Agreement causes any Payments, as reasonably determined by the Company with the advice of nationally recognized tax counsel or accounting firm, to be subject to Excise Tax, the provisions of this Section 12(c) shall apply instead of Sections 12(a) and 12(b). In the event this Section 12(c) applies, Executive shall receive an additional payment from the Company (the "Additional Payment") in the amount necessary so that, after application of the Excise Tax and state, federal and local income taxes to the Payments and the Additional Payment, Executive shall receive the same aggregate after-tax benefit that he would have received had the Payments not been subject to the Excise Tax. 13. Assignment. Executive's rights and obligations under this Agreement ---------- shall not be assignable by Executive. The Company's rights and obligations under this Agreement shall not be assignable by the Company except as incident to the transfer, by merger, liquidation, or otherwise, of all or substantially all of the business of the Company. 14. Notices. Any notice required or permitted under this Agreement shall ------- be given in writing and shall be deemed to have been effectively made or given if personally 11 delivered, or if telegraphed, telexed, cabled, or mailed to the other party at its address set forth below in this Section 14, or at such other address as such party may designate by written notice to the other party hereto. Any effective notice hereunder shall be deemed given on the date personally delivered or on the date telegraphed, telexed, cabled or deposited in the United States mail (sent by certified mail, return receipt requested) mailed, as the case may be, at the following address: (i) If to the Company: PYRAMID TECHNOLOGY CORPORATION 3860 N. First Street San Jose, California 95134 Attention: with a copy to: SIEMENS NIXDORF INFORMATIONSSYSTEME AG Otto-Hahn-Ring 6 81739 Munich Fax # 011 4989 636 42922 Attention: G. Schulmeyer (ii) If to Executive: John S. Chen PYRAMID TECHNOLOGY CORPORATION 3860 N. First Street San Jose, California 95134 15. Disputes. Any disputes under this Agreement between the parties -------- hereto shall be settled by arbitration in San Francisco, California under the auspices of, and in accordance with the rules of, the American Arbitration Association, by an arbitrator who is mutually agreeable to the parties hereto, or, if the Company and Executive cannot agree on the selection of the arbitrator, then before three arbitrators, one of which shall be appointed by Executive, one of which shall be appointed by the Company, and the third of which shall be chosen by the American Arbitration Association (such arbitrator or arbitrators hereinafter referred to as the "Arbitrator"). The decision in such arbitration shall be final and conclusive on the parties and judgment upon such decision may be entered in any court having jurisdiction thereof. The parties hereby agree that the Arbitrator shall be empowered to enter an equitable decree mandating specific enforcement of the terms of this Agreement, including an injunction restraining the Executive from engaging in activities prohibited in Section 8, 9 or 10. The Company and Executive shall share equally all expenses of the 12 Arbitrator incurred in any arbitration hereunder; provided however, that the -------- ------- Company or Executive, as the case may be, shall bear all expenses of the Arbitrator and all of the legal fees and out-of-pocket expenses of the other party if the Arbitrator determines that the claim or position of such party was frivolous and without reasonable foundation. Executive hereby agrees and submits to jurisdiction before each and every court for purposes of enforcing the provisions of this Section 15. 16. Severability. If an arbitrator or a court of competent jurisdiction ------------ determines that any term or provision hereof is invalid or unenforceable, (a) the remaining terms and provisions hereof shall be unimpaired and (b) such court shall have the authority to replace such invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision. 17. Entire Agreement. This Agreement represents the entire agreement of ---------------- the parties and shall supersede any and all previous contracts, arrangements or understandings between the Company and Executive. The Agreement may be amended at any time only by mutual written agreement of the parties hereto. 18. Withholding. The Company shall be entitled to withhold, or cause to ----------- be withheld, from payment any amount of withholding taxes required by law with respect to payments made to Executive in connection with his employment hereunder. 19. Governing Law. This Agreement shall be construed, interpreted, and ------------- governed in accordance with the laws of California without reference to rules relating to conflict of law. 20. Successors. This Agreement shall be binding upon and inure to the ---------- benefit of, and shall be enforceable by Executive and the Company, their respective heirs, executors, administrators and assigns. In the event the Company is merged, consolidated, liquidated by a parent corporation, or otherwise combined into one or more corporations, the provisions of this Agreement shall be binding upon and inure to the benefit of the parent corporation or the corporation resulting from such merger or to which the asset shall be sold or transferred, which corporation from and after the date of such merger, consolidation, sale or transfer shall be deemed to be the Company for purposes of this Agreement. In the event of any other assignment of this Agreement by the Company, by operation of law or otherwise, the Company shall remain primarily liable for its obligations hereunder. This Agreement shall not be assignable by Executive. 13 21. Headings. The headings of sections herein are included solely for -------- convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Agreement. 22. Counterparts. This Agreement may be executed by either of the parties ------------ hereto in counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. PYRAMID TECHNOLOGY CORPORATION By: /s/ Richard H. Lussier ---------------------------------- NAME Richard H. Lussier TITLE Chairman EXECUTIVE /s/ John S. Chen --------------------------------------- John S. Chen Exhibit A (to Management Retention Agreement) Three-Year Long Term Incentive Target Performance
$ Million FY95 FY96 FY97 Sum - -------------------------------------------------------------------------------- Profit before tax 10 20 45 75 Revenue 280 400 560 1,240 - --------------------------------------------------------------------------------
Notes: 1) Profit before taxes is net of payouts under all bonus plans including MIP and the long-term incentive plan. 2) Appropriate adjustments shall be made to the FY95 plan target levels to eliminate the effect of expenses uniquely related to this transaction which shall include legal, investment banking and other extraordinary fees and expenses incurred by the Surviving Corporation as a consequence of the transactions effected pursuant to this Agreement and the preparation and negotiations leading thereto. 3) Target levels for each year will be adjusted to eliminate expenses arising from certain provisions of Annex B to the Agreement and Plan of Merger, specifically: (i) increases in payments under the terms of the Management Incentive Plan, with no limit, (ii) payments under an Incentive Plan for Selected Non-MIP Employees, to a maximum of $2 million over 3 years, and (iii) payments for Retention Bonuses, to a maximum of $3 million over 3 years. 4) The target levels for each year will be adjusted to eliminate the impact of payments under the Signing Bonus and Retention Bonus provisions of this Agreement. -----END PRIVACY-ENHANCED MESSAGE-----